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Abstract:
Bangladesh Bank, the central bank of Bangladesh, has to manage the monetary and credit
system of Bangladesh with a view to stabilizing domestic monetary value and
maintaining a competitive external per value of the Bangladeshi Taka. It also aims at
fostering growth and development of the productive resources of the country. But the
desired objectives are not met/achieved through its present resources. Besides it remains
far behind from global dynamic standard. To match and march with the global dynamic
monetary and financial system and to achieve its objectives, as specified, Bangladesh
Bank moves through a strengthening process under a foreign aided project. By this time,
with a view of human resource development it has introduced a modern and target based
performance management systems for evaluating its employees performance since 1st
April, 2006 replacing its traditional performance management system known as Annual
Confidential Report (ACR).
In the above context a comparative study has been made to find out the effectiveness of
traditional performance management system and newly introduced performance
management system in Bangladesh Bank.
Key words: Bangladesh Bank (BB), Annual confidential Report (ACR), Performance
Management System (PMS), Management by Objective (MBO). Central Bank
Strengthening Project (CBSP)
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Introduction
With a view to develop human resources, a modern performance based promotion has
been formulated for the officers/employees of the Bangladesh Bank. For evaluation of
their performance a modern and target based Performance Management System (PMS)
has been effective since 1 April 2006. Bangladesh Bank since establishment follows
Establishment Manual-1965 of State Bank of Pakistan on Staff and establishment
matters. According to this manual, Bangladesh Bank had been followed a confidential
report system to judge the various qualities of its employees and their suitability or
otherwise for retention, confirmation or promotion in service till 31st March 2006.
This system for evaluating employees’ performance is old and most traditional one. It is a
subjective measure. It may have a problem- providing the opportunity for bias. It may
include rater biases-The halo effect, the error of central tendency, Personal prejudice,
Leniency and strictness bias, and the recency effect.
Besides it covers feedback but does not perform the purpose of employees performance
legal documentation, even does not result any employees development. Bangladesh Bank
realized the matter and introduced a new employee’s performance evaluation system
named Performance Management System (PMS).The new system is supported by
management by objectives (MBO). Since the system is just introduced, so we can not
study the effect of new system though the new system has more advantages over the old
system. The employees of the Bangladesh Bank are in a hesitation whether the new
system will bring a good luck for them or not. This situation encourages us to take a
study between Bangladesh Bank’s traditional. Employee’s performance management
system and newly introduced Performance.
The study utilized both primary and secondary sources of information. Primary data were
collected during January and February 2007 through personal interview with the
responsible personnel of the Bangladesh Bank. BB has 5515 employees (as on 31st March
2006). In the study 100 respondents ( 01 General Manager, 03 deputy General Manager,
06 Joint Director, 10 Deputy Director,20 Assistant Director,40 Officers and 20 Staffs)
were the primary sources of information and sample were selected in simple random
basis for the interview. Hence the interaction with the interviewees is more informal, and
involves two way communications. The secondary sources of data gathered from
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different manuals and books, files & records, annual report, different publications and
statements of Bangladesh Bank and data also collect from different HR books, Journal
etc.
Literature Review
The first known appraisal system was developed in the U.S. by its federal government.
The U.S. Congress enacted a legislation in 1842 requiring that heads of executive
departments make an annual review to determine whether clerks were “usefully
employed” (Mayer, 1974). However it was not until after World War II that formal,
regular and written performance appraisal system were widely adopted by government
and business organization. According to Flippo (1976), the term ‘performance appraisal’
is generally means a systematic, periodic and so far as humanly possible, an impartial
rating of an employee’s excellence in matters pertaining to his present job and to his
potentialities for a better job. Today, employment usually begins with an appraisal and it
continues throughout the employee’s working life. Though much of the discussion is
informal, every working day goes by with some discussion of the performance of
personnel. However, Yoder and Standohar (1982) said performance appraisal refers to
the formal procedures used in organizations to evaluate the contribution and potentials of
organization members. Cummings (1972) reported the overall objective of performance
appraisal is to improve the efficiency of an enterprise by attempting to mobilize the best
possible efforts from individual employed in it. Such appraisals achieve four basic
objectives including the salary reviews, the development and training of individuals,
planning job rotation and assist in promotions. Siddique (1984) observed that
performance appraisal within executive ranks has become quite a popular practice in
many organizations during the last three decades or so and many more have been
introducing the system as an important step toward management development program
and compensation administration. Cambel et al. (1973) distinguish the concept of
behavior, performance, and effectiveness because some performance appraisal schemes
focus on behavior, and some focus on performance. Behavior refers to people do in their
work. Performance refers to the outcomes of behavior or behavior that have been
evaluated. Effectiveness, like performance, refers to organizational outcomes for which
the individual is responsible. The difference between performance and effectiveness is
that the later is a function of additional factors not under the control of the individual.
The above statements make it clear that performance appraisal is important for both
employees and organization. But many organizations do not define clearly the factors
used for performance appraisal. In most of the cases, the results of performance appraisal
are kept confidentially. For that reason, the employees cannot be diligent to improve
themselves.
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Discussions of the study
The traditional performance management system named ACR system including it’s forms
has been found in the establishment manual, 1965 of State Bank of Pakistan.
Bangladesh Bank followed this establishment manual, 1965 from the beginning of its
operation. Later on in 1982 keeping the establishment manual, 1965 same the form was
edited and made in Bangla. The later edition was in action till 31st March, 2006.The
revised form included thirteen behavioural competencies. These are- Personality,
Integrity (Intellectual & Moral), Timeliness, Initiative/ Perspective/ Drive, Judgment
&sense of Proportion, Diligence & Devotion to Duty, Intelligence & Mental Alertness,
Sense of responsibility(General &Finance), Power of Expression(Speaking
&Writing),.Cooperation & Behaviour, Quality of Leadership, Promptness& capacity to
take various assignments, Ability & Aptitude to use Bangla. Besides the form includes:-
• The living standard (living within the known income or not) of the
employees.
Bangladesh Bank aims at becoming a modern and dynamic Central Bank. Effective
performance management is one of the means to this end. PMS is a useful tool for
fulfilling Bangladesh Bank’s vision and goal. It is also an instrument to reinforce
Bangladesh Bank’s performance especially in turning Bangladesh Bank’s strategy into
plans into actions into results. Bangladesh Bank introduced an improved objective system
PMS replacing the subjective ACR system of employees performance evaluation. Newly
Performance Management System (PMS) is a process-based approach, which will
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develop the Bangladesh Bank’s employees to perform their duties effectively and
efficiently. Newly PMS is a process of aligning the goals of the individual to that of the
goals of Bangladesh Bank. It provides congenial environment for the supervisor and
employee to agree on the goals. It assists the employee in creating a competent level of
performance through continuous monitoring, reviewing, providing feedback, coaching
and counseling. This process includes twenty competencies. Competency means a
combination of observable and applied skills, knowledge and behaviors that is important
for the success of the organization, personal performance and enhanced contribution.
Generally different sets of competencies are required to perform tasks within a particular
function with competence. Most of the times, they differentiate the behavioral patterns
from one function/position to another.
Competencies are measurable and will have series of behavioral indicators for
performance. It will be measured based on the individual ability to demonstrate the
required level (gap) as specified in the competency matrix (Bangladesh Bank has adopted
position based competency model) and competency dictionary.
Competency Matrix:
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awareness
Total no of 11 11 11 12 12 12 11
competencies.
Team work:
Team work reflects a genuine desire to work willingly as a team within the department or
other departments as opposed to working separately or comparatively. Sincerity in one’s
desire to work with people to achieve results towards common goals of the team,
division, and organization.
2 Solicits input:
• Participates willingly in making decisions & accomplishing tasks as a
group .
• Solicits ideas and input from other section/divisions/teams on issues
and problems & works for solutions that members can support.
• Flexible enough to accommodate others views for the interest of
organization.
• Promotes inter/ intra team cooperation.
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• Makes people feel good about being part of the group & brings out the
best of people.
• Acts to promote a friendly climate, good morale and cooperation
(high performance work environment) to maximized members
contribution.
• Promotes / protects group reputation and outsiders.
• Does not hide or avoid issues.
• Strives for mutually agreeable “win-Win” solutions on sensitive and
high-stake issues with relevant parties using negotiation skills.
This newly introduced performance appraisal process also helps to identify the
employees’ opportunities for career progression and development. The basic features of
this system are given below-
The Annual Confidential Report (ACR) of Bangladesh Bank which was in force
till 31st March 2006, is a system based approach. It is a subjective measure based
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on absolute performance standards for the job. The system is based on Graphic
Rating Scales to facilitate employees evaluation on different performance
dimensions, each of which is continuum made up of clearly defined scale points.
In ACR system the rater describes an employee as falling at some point on a
performance continuum- such as excellent, very good, good, satisfactory & below
satisfactory.
On the other hand the Performance Management System (PMS) of Bangladesh
Bank which is introduced on 1st April 2006, is a process based approach. It is a
combination of objective and subjective measure based on individual performance
of the job. The system is based on Management by Objective to facilitate aligning
the goals of individual to that of the goals of BB. The measurement of goals, the
important part of the PMS is objective measure. But the other part of PMS, the
measurement of competencies is subjective measure.
The goal setting part of newly introduced PMS is very new idea for BB; which
makes difference between ACR& PMS. This goal setting part increases BB’s
employee performance.
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the evaluation of competencies are subjective. In the process, first of all, the
required minimum level of competencies of an employees are determined to
achieve individual’s goals and after a systematic completion of appraisal period,
the appraisee’s actual level of competencies are judged by the appraiser.
But PMS is a continuous event. Before the beginning of the appraisal period
(Appraisal Year, April-March) the performance planning is completed. This
performance planning involves both appraisee & appraiser. Both the Party settle
the appraisee’s goals to be achieved ; the competencies which level requires to
improve to attain the goals and sign on the Performance Planning Form.
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gaps,what resources and assistance are required to achieve the goals.The
Half Yearly Review (HYR) form records all the events.
The Annual Performance appraisal is to be done at the end of the year to measure
appraisee’ s actual performance against the agreed standards, targets and the
required competencies as agreed during the performance planning phase.
Like all the Government Employees, BB’s employees are in the service of the
State & Government. BB has specific objectives to achieve through the
involvement of its employees. If the employees’ job is translated in the form of
goals/objectives to align the same with BB’s goal the employees may find more
interest in his job.
ACR system loosely associated with BB’s objectives. But PMS allows for
alignment with organizational objectives.
ACR system does not follow the Appraisal process ; PMS follows the Appraisal
process. ACR system does not involve individual employee (appraisee). It
runs through under the control of Supervisor without the involvement of the
individual employee. But the PMS involves individual employee. It runs with the
involvement of supervisors & employees.
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by the appraisee. He is informed his final rating. As the PMS is just in
implementation, we can not say, what will be actual situation in advance but we
hope for the best.
In ACR system, supervisor gather performance data of his subordinate through his
direct observation.On the other hand, in PMS, supervisor gather performance data
of his subordinate through:-
• Self report( the employee himself is a source of performance data).
• Direct Observation.
• Written Material.
• Third-Party report.
In ACR system, supervisor does not record his observations about the
performance of his subordinate. As a result the appraisal may be affected by
recency effect, contrast error and biasness. Even positive or negative impression
management effects on performance rating. On the other hand, in PMS,
supervisor records his observations about the performance of his subordinate. As
a result the appraisal trends to be free from all biasness. In ACR system there are
three types of Annual Confidential/ Appraisal Form:-
The overall environment of BB is not much favorable for managing excellent and
empowering employees. BB like other govt institutes can not yet avoid bureaucracy
which harpers individual’s creativity and ‘Divide and rule’ strategy creates conflict and
causes the failure of team working reducing team sprit. The success of PMS depends on
top management commitment to the system and their confidence/ faith on their
employees.
Bangladesh is a developing country. The country is running through a medium process to
meet abound in all respect. BB, the Central Bank of Bangladesh, the head of Monetary
System & the advisor of Fiscal System is not isolated one. So BB has taken Central Bank
Strengthening Project (CBSP) which is a high ambitious project of $43.46 million. PMS
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is a product of CBSP. Top management of BB will take all needful to implement the
project and we hope BB will drive to automation within 2008. By this time PMS will be
habitual with a view of managing excellence in all respect.
To observe the real impact of PMS in BB later, after two or three years a further study
may be made. We wish over all success of PMS on Human Resource Development in
Bangladesh Bank.
In BB, The General Managers are the Department/ Office heads. They are responsible for
all activities of the department/ office. They use their power in different styles, e.g.
autocratic, consultative and participative. The departmental head who uses autocratic
style in major areas creates an autocratic office environment; majority employees of
the department/office may be affected, while some of the employees may be gained.
In such position, PMS may be hampered.
After the departure of that departmental head, the new departmental head may use
consultative/ Participative styles in major areas; the environment will be changed
respectively where the PMS may run as expected.
The top management must give more support to the PMS and with their support more
effective training schedules should be prepared for the appraisers training. The
appraiser must realize and identify of his appraisee’s goals, their measurement, their
target &their weight age.
An employee is ones appraiser and again he is appraisee. It is seen, the copy of a PPF of
certain officer of certain section is taken as a basis of PPF of another officer of
another section. In many cases before setting department/ office goals, sections
goals& higher officers’ goals; initiating officers’ goals are settled. Then their
supervisors’ goals are to be settled. This is bottom- up approach and contrary with
the philosophy of PMS. So goal setting should be based on Top-Down approach.
Some officers take PMS as a burden. It is observed that they perform their duties in the
office just putting their signs in the file; all are made ready by his subordinates. They
are accustomed to evaluate employees by putting only initials on the ACR form.
They are also not capable of performing independently and they are leaded by their
sub-ordinates. They are influenced by positive impression management. These types
of employees should be sorted and takes a different motivation plan for them.
The PMS has goals and competencies. Appraiser/ Moderator should know:
Competencies are input of an employee and goals are output of an employee. There
should have a balance between the evaluation of performance (goals) and
competencies.
If an employee’s performance rating is excellent; his competencies rating should be
excellent. Ultimately his overall performance will be excellent.
• If his performance rating is excellent but his competencies rating is not
excellent (very good), this makes to think either his performance is over
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rated or competencies are under rated. The subjective evaluation of
competencies may be affected by biasness or any other error.
• Again if his performance rating is not excellent but his competencies
rating is excellent, this means that his performance is under rated or
competencies are over rated or he is not well motivated to achieve his
goals though he has excellent level of competencies. If this, the system
should recheck again to find the procedural shortage.
References:
Ahmed M. F. (& Others) 1993. Foreign Banks in Bangladesh: Performance &
Limitations, Dhaka University Journal of Business Studies, Vol. XIV, No. 1, June: 185-
198.
Ahmed F. (& Bhuiyan) 2003. Performance Appraisal Practices in the Telecom Industry
of Bangladesh: A Study of Cases, Dhaka University Journal of Business Studies, Vol.
XXIV, No. 1, June: 153-157.
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Akkas M. A. (& Khan) 1990. An Appraisal of the Promotion System in the Nationalized
Commercial Banks in Bangladesh, The Dhaka University Studies, Part C, Vol. X1, No. 1,
June: 139-154.
Alam K. S. (& Mohiuddin) 1997. Compensation System of the Private Commercial
Banks in Bangladesh, Dhaka University Journal of Business Studies, Vol. XVIII, No.1,
June: 219-232.
Abdul Aziz, Y. (1999), Performance Appraisal: Concepts and Applications, Sinaran
Bross, Kula Lumpur.
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