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Documenti di Professioni
Documenti di Cultura
05 December, 2010
Sir,
This report is done to find how compensation system operating in Bangladesh. We are working
on bank we find how employee get compensation. This report has helped me to find those
employees are happy with their compensation.
We sincerely hope that you will enjoy reading this report as much as we enjoyed it writing. If
you need any further clarification interpreting our analysis please feel free to ask.
Sincerely
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HRM-370 Compensation System of DBL & UCBL
Acknowledgement
We would like to thank Mr. Monzoor Morshed our faculty who has supported us, assisted us and
guided us through the preparation of this report. He has been patient and understanding of all
our queries and problems, and we are very grateful to him for his help.
We would also like to thank all the employees of Dhaka Bank Limited and United Commercial
Bank Ltd. They have been very helpful throughout the preparation of the report & responding to
all our queries.
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HRM-370 Compensation System of DBL & UCBL
Executive Summary
Since „„Dhaka Bank Limited” and “United Commercial Bank Ltd” are the leading Banks in the
bank business and are efficiently broadening their horizon, we thought it would be interesting to
know about their practices and their strategies which they apply in their day to day activities in
controlling the compensation system and human resource and also planning policies to reach the
goals in time.
„‟Dhaka Bank Limited” and “United Commercial Bank Ltd” follows stable compensation
system, for this reason „Dhaka Bank Limited” and “United Commercial Bank Ltd” goes for long
term planning, also the strategies „Dhaka Bank Limited” and “United Commercial Bank Ltd”
followed in their Human Resource Planning is flexibility. We know in compensation system
Human Resource planning organization go for reactive HRP. As we know „Dhaka Bank
Limited” and “United Commercial Bank Ltd” is in now Growth stages.
To estimate future demand and supply of employees “Dhaka Bank Limited” and “United
Commercial Bank Ltd” use Managerial Judgment. To forecasting the internal supply of
employees they used their own software which is HRIS. For external supply how employees
they take fresh University Graduates.
Banks maintains 100% privacy to their employee‟s personal information. „Dhaka Bank Limited”
and “United Commercial Bank Ltd” is now growth stage Company. So, their business has
expended dramatically. For that reasons they never face the situation like employee‟s surplus.
„Dhaka Bank Limited” and “United Commercial Bank Ltd” sometimes faces labor shortage
problem. In that situation the company go for hire temporary employees and employees are
given overtimes.
In the case of compensation system they follow all the process like at first they make a plan then
develop a strategy after that they go for searching and screening at last the evaluate the whole
compensation system process. For this analysis we, focused on the compensation system
practiced by two private banks of Bangladesh.
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HRM-370 Compensation System of DBL & UCBL
Table of Contents
1. INTRODUCTION ......................................................................................................................................... 6
1.1 Background of the Study .................................................................................................................... 6
1.2 Objectives of the Study ....................................................................................................................... 6
1.2.1 to discover the Practice of Compensation System in the selected organization ........................................ 6
1.2.2 to relate classroom study with that of real life situation .......................................................................... 7
1.3 Scope of the Study ............................................................................................................................... 7
1.4 Methodology ....................................................................................................................................... 8
1.5 Limitations .......................................................................................................................................... 9
2. Brief Discussion ..................................................................................................................................... 10
2.1 AN OVERVIEW OF BANKING SECTOR IN BANGLADESH .................................................... 11
2.1.1 Bangladesh Bank................................................................................................................................. 11
2.1.2 Specialized Banks ............................................................................................................................... 11
2.1.3 Nationalized Banks ............................................................................................................................. 12
2.1.4 Private Commercial Banks .................................................................................................................. 13
2.1.5 Foreign Commercial Banks ................................................................................................................. 13
3. THE SEGMENTS OF PAY COMPONENTS .............................................................................................. 14
3.1 MONTHLY GUARANTEED CASH ...................................................................................................... 14
3.2 ANNUAL GUARANTEED CASH .......................................................................................................... 15
3.3 ANNUAL VARIABLE CASH ................................................................................................................. 15
3.4 TERMINAL BENEFITS ......................................................................................................................... 16
3.5 MONTHLY COST OF BENEFITS......................................................................................................... 16
3.6 Fringe Benefits ......................................................................................................................................... 18
RETIREMENT RELATED ................................................................................................................................. 18
INSURANCE RELATED ................................................................................................................................... 18
PAYMENT FOR TIME NOT WORKED ............................................................................................................ 18
OTHERS............................................................................................................................................................. 18
4. Dhaka Bank Limited ............................................................................................................................... 19
4.1 Background of Dhaka Bank Limited (DBL) ........................................................................................... 19
4.2 Mission & Vision ...................................................................................................................................... 19
4.2.1 Goals of the Bank ................................................................................................................................ 20
4.2.2 Values................................................................................................................................................. 20
4.3 Management Committee .......................................................................................................................... 20
4.4 Total Compensation and Benefits Package of DBL................................................................................. 23
4.4.1 Objectives ........................................................................................................................................... 23
4.4.2 Salary Structure................................................................................................................................... 23
4.4.3 Revision of Pay Elements .................................................................................................................... 23
4.4.4 Employee Compensation Records ........................................................................................................ 23
4.5 Basic Employee Benefits for Permanent Employees ............................................................................... 24
4.5.1 Provident Fund .................................................................................................................................... 24
4.5.2 Group Term Life Insurance ................................................................................................................. 24
4.6 Bonuses..................................................................................................................................................... 25
4.7 Meal Facilities .......................................................................................................................................... 25
4.7.1 Branches ............................................................................................................................................. 25
4.7.2 Head Office:........................................................................................................................................ 26
Executives: ......................................................................................................................................................... 26
4.8 Accommodation ....................................................................................................................................... 26
4.9 Utilities Allowances .................................................................................................................................. 26
Executives between grades J to M4:.................................................................................................................. 26
Executives of grades M5 and above: ................................................................................................................. 26
4.10 Medical Benefits ..................................................................................................................................... 27
4.10.1 Medical Benefits for the Executive Staff ............................................................................................ 27
4.11 Transportation Facilities and Car Purchase Scheme ............................................................................ 28
4.11.1 Transportation Facilities for the Executives ........................................................................................ 28
DBL Branches: .................................................................................................................................................. 28
Head Office:....................................................................................................................................................... 28
Top Executives................................................................................................................................................... 32
4.12 Leave Entitlements................................................................................................................................. 32
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HRM-370 Compensation System of DBL & UCBL
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HRM-370 Compensation System of DBL & UCBL
1. INTRODUCTION
During the late nineties the banking sector of Bangladesh saw a sudden shift of expansion as the
government approved operation of a good number of new Private and Foreign Commercial
Banks. This expansion irresistibly brought in greater benefits to the consumers because of the
highly competitive market condition. The period has seen emergence of some dynamic and
high-tech banking services of which our consumers were deprived of. This new era of banking
services include:
One Stop Utility Service
Automated Teller Machine
Phone Banking
Credit Card
On-line Banking
Syndicated loan
But these advancements in banking technology didn‟t solely benefit the customers. It brought
greater challenge in parts of the employees or bankers who were designated with high profile
jobs with tougher goals to meet, a dynamic career with attractive remuneration, greater benefits
and stunning status. This report will take an attempt to study the career private commercial
banks of our country through the evaluation of the employee maintenance functions as practiced
in this sector.
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HRM-370 Compensation System of DBL & UCBL
Although we hear people saying that they do not care for money but they do care for the feeling
of belongingness to their organization it goes without saying that money is a major motivator. It
is through compensation by which a relatively effective and satisfied working force is sustained.
The maintenance of employee co-operation is largely dependent upon the answers of following
questions:
Whether the company‟s compensation rates are better than those of the segment
market?
Whether these policies are transparent to the employees and practiced without
any distortion?
We have basically judged the organizations on the basis of the above criteria. The report will
first focus on the overall banking sector of our country trying to describe, note and list the banks
currently operating in our country. As it is beyond our scope to focus on each and every bank,
we have chosen two PCBs (Private Commercial Banks) - one from the first generation and the
other from the second generation. Because of the request of the authority for anonymity we will
describe the two banks as Dhaka Bank Limited and United Commercial Bank Ltd. respectively.
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HRM-370 Compensation System of DBL & UCBL
In this report, we have covered the different aspects of human resource maintenance functions.
Since the reward system of an organization is the primary maintenance tool in human resource
management area, we have specifically focused our discussion on this area. Definitely there is a
difference between the maintenance functions of Foreign and Local commercial banks. We will
try to find out if there is any such difference and if any, what are these differences. The reward
system includes both intrinsic and extrinsic rewards. But intrinsic rewards are completely
qualitative and very hard to measure. It requires a lot of research work. So we have excluded
intrinsic rewards from our discussion. Our discussion will be about the extrinsic rewards both
monetary and non-monetary. We will discuss about the base salary, incentives and benefits
under the monetary rewards. We will also try to find out what non-monetary rewards are given
in the selected organizations.
The report will thus gather information, classify them and eventually lead to the comparison
between the two strongest banking sectors of Bangladesh.
1.4 Methodology
To find out the compensation system of an organization we select two companies (BANK) one
is Dhaka Bank Limited and another one is United Commercial Bank. The office held on Dhaka
and so many places. Data used in this study were collected from the following source
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HRM-370 Compensation System of DBL & UCBL
Primary source
face to face interview
survey using questionnaires
personal observation while visiting the company
Data collection
Employee were interviewed through structured questionnaire in different outlets
Designing questionnaire
Structured questionnaires have been used for this study in with multiple choice and open ended
question.
Secondary data
annual report
internet
newspaper
1.5 Limitations
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HRM-370 Compensation System of DBL & UCBL
2. Brief Discussion
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HRM-370 Compensation System of DBL & UCBL
The Banking Industry in Bangladesh is a complex and competitive one. The sector can be
diagramed as follows:
Bangladesh Bank
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HRM-370 Compensation System of DBL & UCBL
Grameen Bank
Sonali Bank
Janata Bank
Agrani Bank
Rupali Bank
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AB Bank Limited
HSBC
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HRM-370 Compensation System of DBL & UCBL
While computing Annual Guaranteed Cash, items like Performance Bonus, which is variable,
and Terminal Payments have not been taken into account though these have been considered for
the purpose of Annual Cost to the Company.
~ Basic Salary
Actual average basic salary of the benchmarks has been taken.
No employer agrees to provide actual individual salary for the benchmark jobs as this is
confidential between the employer and the employee. Where a job is held by one person, the
individual‟s actual salary has been shown. Where 2/3 benchmark jobs fall under one grade,
actual average of that grade has been taken. Where actual average has not been available, the
meaningful point of the salary range, applicable to the job grades of the benchmark has been
taken.
~ House Rent Allowance
Specific amounts or percentage of basic salary paid in cash for each matched job have been
taken.
~ Domestic Aid’s Wage
Specific amounts paid in cash for each matched job have been taken.
~ Utilities / Maintenance
Specific amounts paid as cash allowance have been taken.
~ Transport Allowance
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HRM-370 Compensation System of DBL & UCBL
Specific amounts paid in cash for each matched job have been taken.
~ Medical Allowance
A specific amount paid in cash has been used.
~ Personal / Special / Other Allowance
Specific amounts paid in cash as allowances have been utilized.
Quite a few costs are lumped into this and paid in cash. With reduction of personal tax slabs,
employers are opting for a more transparent pay system conforming to the tax regulations.
~ Meal Allowance
Specific amounts paid in cash as allowance have been used.
~ Children Education Allowance
Specific amount paid in cash has been used.
~ Annual Bonus
This is a deferred wage not linked to profitability. Actual amount paid under this head has been
used.
~ Festival Bonus
Actual amount paid under this head has been used.
~ Leave Fare Assistance
Actual amounts paid to the employees have been taken.
~ Performance Bonus
Actual amounts paid have been taken. This is paid by the employers in different forms based on:
Employee‟s performance only
Combined performance of the group, business unit and the employee
Company performance
~ Profit Bonus
Actual amounts paid, based on company profitability, have been taken.
~ Incentive Bonus
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HRM-370 Compensation System of DBL & UCBL
SMC pays an incentive bonus to its all its employees. The incentive amount is a fixed sum for
each grade.
~ Provident Fund
Actual payments made by the employers to the Fund have been used.
~ Gratuity
Actual amounts provided by the employers in the Books of Accounts have been used.
~ Pension Fund
Actual payments made by the employers to the Fund have been used.
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HRM-370 Compensation System of DBL & UCBL
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HRM-370 Compensation System of DBL & UCBL
Employee benefits, sometimes called fringe benefits, are those rewards that employees receive
for being members of the organization and for their position in the organization unlike wage,
salaries and incentives, benefits are usually not related to employee performance.
The term fringe benefits was coined over 40 years ago by the war labor Board, Reasoning that
employer provided benefits such as paid vacation, holidays and pensions were on the fringe of
wages , are agency exempted them from pay controls. It has been argued that this action, more
that any single event, led to the dramatic expansion of employee benefits that has since occurred.
However, because of the significance of benefits to total compensation, many employers have
dropped the word fringe for fear that it has a minimizing effect.
Following is the list showing the types of benefits that employees can receive from the
company:
PAYMENT
RETIREMENT INSURANCE
FOR TIME OTHERS
RELATED RELATED
NOT WORKED
Pension fund Medical insurance Vacation Company discounts
Disability
Disability insurance Military leave Severance pay
retirement
Legal service
Financial counseling
Recreation facilities
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HRM-370 Compensation System of DBL & UCBL
Dhaka Bank Limited (DBL) has started its Business with all the features of a Corporate Bank
and the Products of both Corporate and Retail Banking System; to facilitate the daily clientele
requirements. DBL is always trying to improve their Customer Services in every sector, but in
today‟s Competitive Business World, Banks need to offer additional concentration to the
Clients‟ requirements in order to stay at the top. Therefore, besides dealing with the general
attributes of Different Products, they have been trying to put more emphasis on the Customer
Benefits and other Customer related Facilities.
“The stars in the seven skies sparkle in brilliance and twinkle in blissful beauty. We wonder at
them in profound admiration and speculation.
At Dhaka Bank we draw our inspiration from the distant stars. Our team is committed to assure
a standard that makes every banking transaction a pleasurable experience. Our people, products
and processes are aligned to meet the demand of our discerning customer. Our goal is to achieve
a distinction like the luminaries in the skies. Our prime objective is to deliver a quality that
demonstrates a true reflection of our vision - Excellence in Banking.”
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HRM-370 Compensation System of DBL & UCBL
Long-term Goal:
To be the Market Leader both in terms of Deposits and good advances among Private
Commercial Banks in Bangladesh by the year 2009.
Short-term Goal:
Financial Goal:
4.2.2 Values
Customer Focus
Integrity
Team Work
Respect for Individual
Quality
Responsible Citizenship
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HRM-370 Compensation System of DBL & UCBL
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4.4.1 Objectives
This chapter outlines the rules relating to compensation structure and the benefit
package of the Bank and gives detailed procedures for exercising them in order to
promote fair treatment and consistency within the organisation.
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HRM-370 Compensation System of DBL & UCBL
maintained by the departments. These records are confidential and should not be
accessible to any unauthorised persons (authorisation defined by HR or Personnel &
Admin dept. head).
The Bank's Provident Fund is a funded scheme. All confirmed and permanent
employees are entitled to be members of the Provident Fund. The employee
contribution, equal to 10% of the basic salary, is deducted each month through the
payroll. The Bank contributes an equal amount and both the employees' and the
organization's contributions are paid to the Fund each month. In the Provident Fund
Ledger, both the employee's and the Bank's contributions are credited to the
individual employee's account.
The membership of the Trustees of the Provident Fund must include at a minimum:
The Bank provides coverage of life insurance to all Permanent employees after their
joining with the organization effective on the date of joining. To participate in the
Group Term Life Insurance policy, all employees are required to fill up "Group Term
Life Insurance Registration Form", and submit to HR/Personnel & Admin dept for
processing. To change the beneficiary at any time, the employee must complete the
“Beneficiary Change Form”, and submit to the Human Resource Department or to the
Personnel & Admin dept for making the changes.
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HRM-370 Compensation System of DBL & UCBL
In the event of the death of an employee while in the bank‟s service, other than: 1)
death by suicide, 2) death by criminal prosecution, or 3) death by taking part in any
activities subversive of the state, the bank depending on the classification of
employees shall pay benefits on normal death and accidental death from insurance
bank as follows:
Detail of compensation other than death (partial disability) will be determined as per
calculation within the purview of insurance coverage policy. No recovery or
adjustments of loans or salary advances etc. shall be made from the insurance claim
benefits. In addition to this coverage of insurance benefits compensation will also be
made as per "Workman's Compensation Act 1923" in the case of death/disability of
employees.
4.6 Bonuses
All confirmed Permanent employees of Dhaka Bank Limited are entitled to one
Annual Bonus each equivalent to “Basic Salary” under the following conditions:
The following facilities are provided in each of the organisation under Dhaka Bank
Limited:
4.7.1 Branches
Executives:
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HRM-370 Compensation System of DBL & UCBL
4.8 Accommodation
Telephone
Water
Electricity Gas (Local &
(Limit/Mont NWD)
Designation (Limit/Month) (Limit/Month)
h)
Taka Taka (Limit/Month)
Taka
Taka
Manager /
Sr.
Manager 2,500 At Actual At Actual At Actual
EVP and
At Actual At Actual At Actual At Actual
above
To get reimbursed for utilities bills, complete “Expense Reimbursement Form”, and
submit to the Accounts Department. The Accounts Department will make
reimbursement payment to the employee within 45 days from the date of submission.
Telephone bill has to be forwarded to the IT department, so payments can be made by
the company, if it is in the name of the Bank.
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HRM-370 Compensation System of DBL & UCBL
(ii) Dental treatment included as preventative measures, the Bank will reimburse
for „Upper and Lower‟ dental cleaning twice a year.
(iii) Reimbursement of the cost will be restricted to the treatment of the executive,
spouse and children.
(iv) Relevant details including names and dates of birth of spouse and the eligible
children should be sent to HRD for record.
(vii) Expenses Cannot not be claimed: The Bank will not reimburse the following
expenses:
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HRM-370 Compensation System of DBL & UCBL
4.11.1.1 Executives
DBL Branches:
There are no transportation facilities provided for the Executives between grade J to
M4
Head Office:
There are no transportation facilities provided for the Executives between grades J to
M4. For business purpose travel, Pool Car can be provided based on availability.
Employees in this grade, which is Managers, Senior Managers, and Vice President,
are eligible to apply for a Car Purchase Scheme upon the expiry of one month after
the date of joining in the Bank. To initiate the request for participating in this Car
Purchase Scheme, the employee is required to write a note to the HR Department. The
Human Resource Department then gets necessary approvals and then forwards the
request to the Head Office Admin department.
The objective of the scheme is to provide financial assistance to bank executives for
the purchase of cars and thus to provide executives with transport necessary for
carrying out their duties.
An employee who has acquired a car under this scheme will not be eligible to apply
again for a period of five (5) years. The following are the approved specification of
the transport and benefit given to the employee:
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HRM-370 Compensation System of DBL & UCBL
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HRM-370 Compensation System of DBL & UCBL
The company, bank or a leasing company may finance the purchase of the car. The
car will be initially registered as follows:
The employee‟s 50% contribution towards the cost of the car will be paid by him to
the Bank in equal monthly instalments over a period of three years if the car is
financed by the Bank, or over a period equal to the currency of the loan or leasing
contract, as the case may be.
If the car is acquired through a leasing contract or a bank loan, the employee will be
required to contribute 50% of the lease payments or loan instalments every month
until the expiry of the lease period.
If the price of the car exceeds Tk 1,000,000 the employee will pay the amount in
excess of Tk 1,000,000 to the company in cash.
The Bank‟s 50% contribution to the cost of the car will be amortised over a period of
five years. After the expiry of this period, or the expiry of the leasing contract if the
car has been leased, or the repayment of the bank loan if the car has been acquired
through a bank loan, and subject to prior receipt of the final instalment of his
contribution, the ownership of the car will be transferred to the employee. Costs
incurred in connection with the transfer will be payable by the employees.
In the event that the employee leaves the Bank before the expiry of five years, he shall
have the option to purchase the car from the Bank at the written down value in the
books of the Bank, plus the total of the unpaid instalments towards, his own
contribution. This option to purchase will only be available to an employee who has
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HRM-370 Compensation System of DBL & UCBL
been with the company for a minimum period of two years. In case he does not
choose to exercise the purchase option, the Bank will reimburse the employee 75% of
the amount contributed by him/her towards the cost of the car, and the car will then
remain in or be transferred to the ownership of the Bank.
The employee will be expected to use the car for the Bank‟s business as well as for
fulfilling his private transport needs, including the transport of children to school, etc.
Employees who have availed for this scheme are expected to meet all their
transportation needs with the vehicle provided under scheme. No other transport will
be provided to an employee who has availed of this scheme. However, if the
employee is asked to travel outside Dhaka on Bank‟s business, he will be reimbursed
at Tk. 6/- per km, subject to prior permission from his department head, plus an
allowance of Tk. 100/- per day for the driver. Tolls and other expenses will be paid at
actual.
Repairs and maintenance of the vehicle will be the responsibility of the employee. A
maintenance allowance will be paid as explained earlier in this section.
All taxes, fees, duties, registration costs, and insurance will be paid by the Bank. The
employee must inform the Admin Department one month prior to the due date for
Fitness/Insurance and the Admin Department will take full responsibilities to
complete the said tasks.
The Bank‟s approval to participate into this scheme will be based on the nature of the
employee‟s job and on the availability of funds with the Bank, at the time when the
application to join the scheme is made.
The employee may choose to select a car that is presently in the name of the Bank and
if made available to the employee for purchase. The administrative department will be
responsible to identify the market value of the car, get approval from the HR
Department, and make an offer to the employee. For the purchase of the company car,
the employee shall be liable to pay 50% of the market value of the vehicle, in equal
monthly instalments to the Bank over a period of three (3) years. All other terms and
conditions shall remain the same.
The Management reserves the right to change, modify, amend, cancel or waive any or
all of the provisions of this scheme at its absolute discretion and without any prior
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HRM-370 Compensation System of DBL & UCBL
notice and also to withhold or reject any application to join the scheme, without
assigning any reason whatsoever.
Top Executives
Top Executives of grade M6 and above, i.e. Sr. Vice President and above are entitled
to 24 hours company paid transportation. The company also pays for the fuel at cost,
Driver‟s salary, and for all necessary maintenance/repair and administrative cost of
the vehicle.
All Permanent Executives of the Bank are entitled to various types of Leaves that are
calculated based on calendar year and prorated from the date of joining the Bank's
service for the first year. Leave entitlements of expatriate (Contract) employees shall
be governed by their respective terms of employment with the company specified in
the Appointment Letter.
For Employees the leave entitlements are calculated in accordance with "The Shops
and Establishment Act 1965", Factories Act 1965 and the Factory Rules 1979.
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HRM-370 Compensation System of DBL & UCBL
The following are the Basic Leave entitlements for the Executives at Head Office:
The following are the Basic Leave entitlements for the Executives at Branches:
Public Holidays for Head Office worker are governed by the policy of the Board of
Directors of the Bank and is based on the list of holidays declared by Govt. For
Branch employees, the Management determines the Public Holidays (minimum 10
days) and it is announced at the beginning of the year.
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HRM-370 Compensation System of DBL & UCBL
Casual leave cannot be availed for more than three days at a time. Also, it cannot be
carried forward to the following year or cashed. Casual Leave can be taken with
Weekends, Public Holidays, Earned Leaves, etc. but be limited to only 3 days.
Though Earned Leave is counted from the date of joining but it cannot be taken until
the employee passes the probationary period receiving confirmation.
The following sections explain some additional leave options that an employee may
exercise depending on the need.
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HRM-370 Compensation System of DBL & UCBL
Married woman employees are entitled to Maternity Leave benefit as per "The
Maternity Benefit Act, 1939". The period of Maternity Leave shall be 84 actual days
of absence which shall include the Public Holidays and Weekends (non-working
days) and including the day of delivery. The entitlement to maternity leave is to be
availed as follows:
Six weeks or 42 days immediately preceding and including the day of delivery.
A woman shall not be entitled to maternity leave unless she has been employed
by the Bank for a period of not less than nine months immediately preceding the
date of delivery.
An Executive may be granted Study Leave, with or without pay, entirely at the bank‟s
discretion, once s/he has been in the bank for at least one year. Study leave is
normally granted if the course of study which the employee intends to pursue is likely
to benefit the Bank‟s operations. Study Leave can be given for up to a maximum
period of two years.
A Permanent Executives who intends to perform Hajj at his own expenses, upon
completion of one year of service, may be allowed for a 45 days Hajj Leave with pay
at the sole discretion of the management. This leave can only be availed once in the
entire period of service.
Similar leave may be granted for employees other than Muslims, if the occasion is a
once in a life time holy event significant to the believers.
Special leave may be granted to the Permanent or Contract employees with or without
pay and allowances at the sole discretion of the management. Application for special
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HRM-370 Compensation System of DBL & UCBL
Executives before leaving the Bank due to resignation, retirement or termination are
allowed to cash the Earned and Compensatory Leave due to them up to a maximum of
30 days, while for workers it is 20 days plus the prorated entitlement for the current
year. The amount paid on encashment includes only the employee's last drawn basic
salary for the period. Allowances are not included in this amount.
4.14.1 Objectives
To meet various emergency and incidental expenses, the Bank provides financial
assistance in the form of advance payment of salary and loan against provident fund
to its employees. The following sections give detailed procedures for salary advances
and loan sanctions under Financial Assistance Schemes.
4.14.2 Priorities for Loan against Provident Fund (PF) or Salary Advance
The following priorities will be maintained for PF loan or salary advance request
processing:
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HRM-370 Compensation System of DBL & UCBL
5. Rental advance
6. Own marriage
7. Other emergencies
8. Marriage of siblings
9. Education
4.14.3 Loan against Provident Fund (PF) or Salary Advance Eligibility and
Limits
2. All Permanent employees who are members of the Contributory Provident Fund
and have been in the Bank for more than 3 years but less than 4 years, are eligible
to take loan against the provident fund equal and up to 100% of the employee’s
own contribution.
3. All Permanent employees who are members of the Contributory Provident Fund
and have been in the Bank for more than 4 years but less than 5 years, are eligible
to take loan against the provident fund equal and up to 70% of the total
contribution (employee‟s own contribution + Bank‟s contribution).
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HRM-370 Compensation System of DBL & UCBL
4. All Permanent employees who are members of the Contributory Provident Fund
and have been in the Bank for more than 5 years are eligible to take loan against
the provident fund equal and up to 75% of the total contribution (employee‟s
own contribution + Bank‟s contribution).
One month‟s grace period is given to the employee before the repayment starts. The
employee, through automatic deductions by the Accounts Dept. from his/her Pay-
check, makes the payment. The following are some guidelines for repayments:
1. If financial situation permits, the employee is asked to pay the money back with 6
equal monthly payments.
2. If the financial situation does not permit, the employee is given the opportunity to
pay back with 12 equal monthly instalments.
3. If the amount of loan is large and the repayment imposes hardship on the
employee, it may be considered to extend the repayment schedule to a maximum
of 24 equal instalments. In such cases, the Department Head of the employee must
recommend the accounts department to do so.
4. If the loan or advance is related to medical payments and the employee is eligible
for medical benefit, the advance/loan will be applied towards the eligible benefit
once the treatment is received. Upon receipt of all medical vouchers, the employee
is required to submit “Medical Bills Reimbursement Form”, as per guidelines
provided in Section 6.12.2 and apply the advance/loan towards the refund. Any
excess amount taken as advance/loan must be paid back immediately after the
treatment is over.
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HRM-370 Compensation System of DBL & UCBL
The employee completes a “Loan Application Form”, and upon receiving an approval
from the Department Head, submits to the Accounts Department. The Accounts Dept.
personnel review the application, discuss with the employee if necessary, and let the
employee know about the outcome. At the time of processing the loan/advance
request, the Accounts Dept. identifies the repayment agreement discussing with the
employee.
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HRM-370 Compensation System of DBL & UCBL
With its firm commitment to the economic development of the country, the Bank has already
made a distinct mark in the realm of Private Sector Banking through personalised service,
innovative practices, dynamic approach and efficient Management. The Bank, aiming to play a
leading role in the economic activities of the country, is firmly engaged in the development of
trade, commerce and industry thorough a creative credit policy.
5.3 Management
The Bank has in its Management a combination of highly skilled and eminent bankers of the
country of varied experience and expertise successfully led by Mr. M. Shahjahan Bhuiyan, a
dynamic banker, as its Managing Director and well educated young, energetic and dedicated
officers working with missionary zeal for the growth and progress of the institution.
SENIOR MANAGEMENT
Managing Director
Mr. M. Shahjahan Bhuiyan
Additional Managing Director
(Operation)
Mr. Shafiqul Alam
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HRM-370 Compensation System of DBL & UCBL
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HRM-370 Compensation System of DBL & UCBL
maintained by the departments. These records are confidential and should not be
accessible to any unauthorised persons (authorisation defined by HR or Personnel &
Admin dept. head).
The Company's Provident Fund is a funded scheme. All long-established and enduring
employees are at liberty to be members of the Provident Fund. In the Provident Fund Ledger,
both the employee's and the Company's contributions are accredited to the individual employee's
account.
5.5.2 Bonuses
All confirmed Permanent employees of United Commercial Bank Limited are entitled to one
Annual Bonus each equivalent to “Basic Salary” under the following conditions:
5.5.3 Accommodation
The Bank on the basis of requirements and availability provides accommodation to UCBL‟s Top
Executives at their own established facilities in Dhaka city. Outside the Dhaka city, the Bank
provides expenses for the accommodation.
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HRM-370 Compensation System of DBL & UCBL
Manager /
Sr.
Manager 2,500 At Actual At Actual At Actual
EVP and
At Actual At Actual At Actual At Actual
above
Other
1500 450 1000 No
employees
The Accounts Department will make compensation payment to the employee within 30 days
from the date of submission. Telephone bill has to be forwarded to the HR department, and then
they forwarded that bill to IT department, so payments can be made by the company, if it is in
the name of the Bank.
The mobile phone is to be used first and foremost for business purpose, though can be utilised
for being in contact with the family members, if necessary with logical discretion due to the high
cost of mobile phone usage.
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HRM-370 Compensation System of DBL & UCBL
The bank will compensate the cost of authorised medical treatments in Bangladesh including
hospitalisation, surgical and childbirth subject to the conditions mentioned here. The Bank
reserves the right to approve the Medical Practitioner consulted.
Dental treatment included as defensive measures, the Bank will reimburse for „Upper and
Lower‟ dental cleaning twice a year. Reimbursement of the cost will be restricted to the
treatment of the executive, spouse and children. Expenditure on medical treatment of Executives
is reimbursed by the company. Every employees are not get the medical benefits.
LOAN SCHEME – All employees are eligible to any purpose loan provided they have served
the organization for 2 years
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HRM-370 Compensation System of DBL & UCBL
The following are the Basic Leave entitlements for the Executives at Head Office:
The following are the Basic Leave entitlements for the Executives at Branches:
Casual Leave can be taken with Weekends, Public Holidays, Earned Leaves, etc. but be limited
to only 3 days.
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HRM-370 Compensation System of DBL & UCBL
Leave that an employee can avail in a year. If an employee is sick on Weekend or on a Public
Holiday, that day will not be counted as a sick day and the number of Sick Leave taken out of
his/her allocated days will be excluding those days.
Though Earned Leave is counted from the date of joining but it cannot be taken until the
employee passes the probationary period receiving confirmation.
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HRM-370 Compensation System of DBL & UCBL
6. CONCLUSION
This study research has been focused on the compensation system, practiced by two private
banks of Bangladesh. There are some components that are taken into consideration during pay in
our country, but it varies significantly among banks regarding pay. It could have been better, if
we might have worked with all types of banks. Here in our study we have worked with only one
type of bank. In our study we have tried to focus on the pay differences, possible reasons of
using different pay components used by the banks in our country. Finally, we came up with
some recommendations, which can be used for both of the banks so that they can perform better.
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HRM-370 Compensation System of DBL & UCBL
7. Appendix
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HRM-370 Compensation System of DBL & UCBL
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HRM-370 Compensation System of DBL & UCBL
Please put the tick mark into your choices and write your opinions where necessary
3. Do you believe that your job profile is benchmarked with the same jobs in the
industry and market place?
6. Does your company utilize a traditional salary grade system? Yes� No�
If yes, please answer the following questions.
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HRM-370 Compensation System of DBL & UCBL
7. Does your company have a formal employee merit review process? Yes� No�
11. What is the waiting period before benefits are paid? _______weeks
14. What is the maximum reimbursement amount an employee can receive per year?
Tk.________
15. Are you permitted time off from work to attend classes?
Yes, with pay� Yes, without pay� Only in special cases� No�
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HRM-370 Compensation System of DBL & UCBL
8. REFERENCES
~ Richard I. Henderson, Compensation Management in a Knowledge Based World, 10 th
Edition, Pearson.
~ Websites of both DHAKA BANK LIMITED & United Commercial Bank Ltd.
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