Human Resource Management Policy of Al Arafah Islami Bank

HRM POLICY & PROCEDURE OF AIBL
Internship Report on
Human Resource Management Policy of Al-

Arafah Islami Bank
This report is an outcome of attaint expression of my knowledge on Human

Resources Department of Al-Arafah Islami Bank Limited (AIBL). Al-Arafah Islami
Bank Limited (AIBL) is one of the leading private commercial banks among the
financial institutions of Bangladesh started from 2002. The main objective of the
bank is to be the bank of choice for its valued customers as well as for all of its
stakeholders. This report divided into two major parts; firstly the organizational
part recognizes the mission, vision, objectives, financial condition, different
division, current activities and the products and services of the organization. And
the later part based on the learning part outlined with different aspects of Human
Resources Department of Al-Arafah Islami Bank Limited (AIBL).
Learning part is the heart of this report based on different Human Resources
aspects and practices in Banking Business in perspective of Al- Arafah Islami Bank
Limited (AIBL) outlined with the objectives of the department, its core functions,
structure, visions, problem identification and recommendations. To be more
precise this report mostly pointed out the operations of Human Resources. This
part mainly describes the major functions of Human Resources Department, which
are; Recruitment and Selection, Training and Learning, Compensation and\
Benefits etc. The main vision of this department is to motivate employees for
efficient performance and ensuring a fun working environment. Like any other
business units, Human Resources Department of Al-Arafah Islami Bank
Limited(AIBL) lies on some fundamental problems regarding its identical Human
Resources Policy, modern Human Resource Management System, Human Resource
planning, Learning and Development, Constant Performance Evaluation Process,
lack of linkage with other functional units to add superior value to the organization
etc.
The study and practices of Human Resource Management got paramount

importance in this era of high competition and professionalism. The indispensable
problems lies in the Human Resources Department could be mitigated with the
proper initiatives taken by the higher management throughout its Recruitment
process, Training and Development, Compensation and Benefits, Reward and
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Recognitions and the overall development of the department as it can act as HR

Business Partner in near future.
Background of the study

There is no doubt that the world of work is rapidly changing. As part of an
organization then, HRM must be prepared to deal with the effects of the changing
world of work. For them, this means understanding the implications of
globalization, technology changes, workforce diversity, changing skill
requirements, continuous improvement initiatives, contingent workforce,
decentralized work sites and employee involvement. We should look how this
change is affecting HRM goals and practices.
The current challenge of HRM is to integrate programs involving human resources

with strategic organizational objectives. More and more, organizations are under
tremendous competitive pressure worldwide. HR managers must find ways to
develop effective programs to meet this challenge. Another important aspect of
HRM is the need to ensure cost effectiveness of programs and policies through the
optimal utilization of human resources.
Objective of the Study

The general objective of this study is to fulfill the requirement of internship
report.
Specific Objectives:
The specific or the main objectives of this report will be:
1. To focus on the employee selection techniques.

2. To focus on the recruitment policies and media.
3. To focus on the compensation and maintenance of the employees.
4. To focus on the motivational factors for employees and management.
5. To focus on employee evaluation for performance appraisal.
6. To focus on the performance rewards.
7. To focus on the turnover ratio and causes.
8. To focus on employee and management relation.
9. To focus on the short-term and long-term training and development
programs
10.To know how to deliver Human Resource Management practices.
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11.To develop and retain a quality work-force through an effective human

Resources Management System.
12.To ensure optimum utilization of all available resources.
13.To pursue an effective system of management by ensuring compliance to
ethical norms, transparency and accountability at all levels.
Methodology of the Report
In order to make a comprehensive and informative project report very simple

methodology has been used. The basic method of the report is using some
questionnaire for collecting the basic information the primary data from both the
HR executives and some reliable worker. Again, the secondary data has been
collected by the other sources of information. Different data and information are
required to meet the goal of this report. Those data and information were collected
from various sources, such as primary and secondary which is showed below.
Primary sources of Data:
 Observing various organizational procedures.

 Conversation with the bank officer s and staffs.
 Informal conversation with the clients
 Manuals of Bank
 Face to face conversations with the employees at various fields.
Secondary sources of Data:
 Annul report of Bank

 Several types of Academic test books.
 Different publication regarding Banking functions.
 Information about the organization from their company profile.
 Web sites of Bangladesh Bank, etc.
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Theoretical Framework
HRM
HRM deals with the design of formal system in an organization to ensure effective
and efficiency use of human talents to accomplish organizational goals.
Human Resource Management (HRM) is to refer to the philosophy, policies,

procedures and practices related to the management of people within an
organization.
Hr management functions through which manager recruit, select, train and

develop organization members.
Recruiting & Selection

Recruiting is the process of discovering potential candidates for actual or
anticipated organizational vacancies. It involves searching and sourcing for viable
job candidates.
Recruitment is the process of finding qualified people and encouraging them to

apply for work with the firm.
On the other hand, selection is the process of choosing among those who do apply.
Once an effective recruitment program has supplied enough applicants’ pool the
organization faces the task of choosing the best ones for specific jobs.
The Recruiting and Selection Process

The recruitment process – putting the right people in the right positions at the
right times- is one of the most critical tasks any organization faces. Throughout the
recruitment process the organization attempts to “sell” itself to the more
promising candidates – that is, to convince them that the organization is a good
place to work.
Personnel selection is a process of measurement, decision-making and evaluation.

The goal of personnel selection system is to bring into organization individuals who
will perform well on the job.
Training & Development
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Training is a planned effort by an organization to facilitate employee’s learning of

job related knowledge and skills for the purpose of improving performance.
Training is the process of teaching new employees the basic skills they need to
perform their job.
Training is a learning experience that seeks a relatively permanent change in

individuals that will improve their ability to perform on the job.
The training function, now popularly called HR development. Employee

development, by design is more future oriented and more concentrated with
education than employee job – specific training. Development therefore, focuses
more on the employee’s personal growth.
Compensation & Employee Benefits

Once employees have done their jobs and been appraised, they expect to be paid.
Employee compensation refers to all forms of pay or rewards going to employees
and arising from their employment. It has two main components: (1) Direct
financial payments (wages, salaries, incentives, commissions and bonuses), and (2)
Indirect payments (financial benefits like employer-paid insurance and vacations,
child care facilities).
In addition to compensation in the form of wages and salaries, HRM provides

workers with various services and programs known as employee benefits.
Promotion
In the Promotion the employees& executives have to work a specific duration in
the certain level. They have to work that level to get promotion.
ORGANIZATIONAL PROFILE
History of Al-Arafah Islami Bank Limited(AIBL)
With the achieving of success life here and hereafter following the way directed by
the holy Quran and the path shown by rasul(SM) al Arafah Islami bank Ltd was
established as public limited company on 18 June 1995.The inaugural ceremony
took place on 27 september 1995.The authorized capital of the bank is Tk. 5000.00
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million and the paid up capital is tk.1798.95 million as on 31.12.2009.Renowned

Islamic Scholars and pious businessmen of the country are sponsors of the bank.
100% of paid up capital is being owned by local shareholders.
ABOUT BRANCH OFAl-Arafah Islami Bank limited(AIBL)

Al-Arafah Islami Bank Limited (AIBL), Dilkusha Branch has been started its
operation on 15th December
, 2005. This is the 42nd Branch of Al-Arafah Islami bank.
Limited (AIBL).
I have completed my Internship at Dilkusha branch, which is started on February

1, 2009 with the 40 efficient & responsible employees. Although this branch has
past only four years, it has created positive image not only to the Bank but also to
the customer. There are some efficient and effective bankers in this branch. The
management of this branch always tries to provide better service to its customer
and behave well with them.
Vision and Mission
Vision
To be a pioneer in Islami banking in Bangladesh and contribute significantly to the
growth of the national economy.
Mission
 Achieving the satisfaction of Almighty Allah both here and hereafter
 Proliferation of Shariah based banking practices.
 Quality financial services adopting the latest technology
 Fast and efficient customer service.

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 Balanced growth
 Maintaining high standard of business ethics.
 Steady and competitive return on shareholders equity
 Attract and retain quality human resources
 Extending competitive compensation packages to the employees.,
 Involving more in micro and SME financing.
Objectives of Al-Arafah Islami Bank Limited(AIBL)
 To become more shariah compliant
 Increasing the profit
 Raising capital and reserve fund
 Business and product diversification (both deposit and investment)
 To reduce the non- performing asset below 1%

 Sound financial management
 Thurst in SME investment performing asset below 1%
 Expand and diversification customer base
 Introduction of first mutual fund
 Up gradation of online banking
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 Increase foreign inward remittance
 Opening of 10 new branches
 Opening of 8 SME branches
 Stable dividend
 Development skill manpower through imparting training as part of CSR

activities.
Status of the Bank:
Islam provides us a complete lifestyle. Main objective of Islamic lifestyle is to be

successful both in our mortal and immortal life. Therefore in every aspect of our
life we should follow the doctrine of Al-Qur’an and lifestyle of Hazrat Muhammad
(Sm.) for our supreme success. Al-Arafah Islami Bank started its journey in 1995
with the said principles in mind and to introduce a modern banking system based
on Al-Qur’an and Sunnah.Bangladesh is one of the largest Muslim countries in the
world, its people are deeply devoted to Islamic way of life as enshrined in the Holy
Quran and the sunnah. Al-Arafah Islami Bank Ltd was established in 1995 under
the companies Act, 1994 as a banking Company with limited Liability by shares. It
is an interest frees Shariah bank of Bangladesh rendering all types of commercial
banking service under the regulation of Bank Companies Act, 1991. The Bank
conducts its business on the principles of Musaraka, Bai-Murabaha, Bai-muazzal
and Hire Purchase transactions approved by Bangladesh Bank. Naturally its modes
and operations are substantially different from those of other conventional
commercial banks. There is a Shariah Council in the bank who maintains constant
vigilance to ensure that the activities of the bank are being conducted on the
precepts of Islam. The Shariah Council consists of prominent Ulema, reputed
Bankers, renowned Lawyers and eminent Economist
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Distinguishing Features of Islamic Banking:
An Islamic bank has several distinctive features as compared to its

conventional counterpart. Six essential differences as below:
 Since Riba is prohibited in the Holy Quran and interest in all its form
being akin to Riba as, confirmed by Fukaha and Muslim economists
with rare exceptions, the first distinguishing feature of an Islamic
bank must be that it is interest-free, while the abolition of Riba
would be the first and essential difference between the conventional
interest-based commercial banks and Islamic banks, if would not the
constitute the only difference between them. The nature, outlook and
operations of an Islamic bank would have to undergo a complete
transaction.
 Activity of commercial banks being primarily based on the use of
public funds, public interest rather than individual or group interest
will be served by Islamic commercial banks. The Islamic banks
should use all deposits, which come from the public for serving
public interest and realizing the relevant socio-economic goals of
Islam. They should play a goal-oriented rather than merely a profit-
maximizing role and should adjust themselves to the different needs
of the Islamic economy.
 Another substantial distinguishing feature is that Islamic banks will
be universal or multi-purpose banks and not purely commercial
banks. These banks are conceived to be a crossbreed of commercial
and investment banks, investment trusts and investment
management institutions and would offer a variety of services to
their customers. A substantial part of their financing would be for
specific projects or ventures. Their equity-oriented investments
could not permit them to borrow short and lend long. This should
tend to make them less crisis-prone compared to their capitalist
counterparts. Since the overnight, call loan or very short-term inter-
bank market may be available to them only to a limited extent, they
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may have to make a greater effort to match the maturity of their

liabilities with the maturity of their assets.
 Another very important feature of an Islamic bank is its very careful
attitude towards evaluation of applications for equity oriented
financing. It is customary that conventional banks evaluate
applications, considers collateral and avoids risks as far as possible.
Their main concern does not go beyond ensuring the security of their
principle and interest receipts. Since the Islamic bank has in built
mechanism of risk-sharing, it would need to be careful more careful.
It adds a healthy dimension in the whole lending business and
eliminates a whole range of undesirable lending practices
 Profit-Loss-Sharing being a distinctive characteristic of an Islamic
bank if fosters closer relations between banks and entrepreneurs. It
helps develop financial expertise in non-financial firms also enables
the banks to assume the role technical consultants and financial
advisors and act as catalysts in the process of industrialization and
development. The bank would take care of all the responsible and
agreed financial needs of their clients thus relieving them of the
need to run around for funds to overcome their normal liquidity
shortages.
Functions of Al-Arafah Islami Bank Limited(AIBL)
 All activities of the bank are conducted according to Islamic shariah where
profit is the legal alternative to interest.
 The banks investment policy follows different modes approved by Islamic

shareah based on Quaran & Sunnah.
 The bank is committed towards establishing welfare oriented banking

system, economic upliftment of the law- income group of people, create
employment opportunities.
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 According to the needs and demands of the society and the country as a
whole the bank invests money to different halal business. The bank
participates in different activities aiming at creating jobs, implementing
development projects taken by the government and developing
infrastructure.
 To render improved services to the clients imbued with Islamic spirit of
brotherhood, peace and fraternity and by developing an institutional
cohesion.
 The bank is contributing to economic and philanthropic activities side by

side. Al-Arafah English Medium Madrasah and Library are among mention
worthy.
Financial Highlights of the company:

(In million taka)
Particulars 2006 2007 2008 2009
Authorized Capital 1000.00 1000.00 2500.00 2500.00
Paid up Capital 586.99 677.94 854.20 1153.18
Reserve Fund 488.00 542.22 835.98 1091.95
Shareholders Equity 957.26 1220.16 1690.18 2037.50
Deposit 10108.28 11643.66 16775.34 23009.13
Investment 8150.16 11474.41 17423.19 22906.37
Import 9337.49 12631.60 1882.14 27042.72
Export 3639.34 4932.90 914.27 12714.91
Total Income 1120.85 1452.68 2172.48 2955.61
Total Expenditure 771.96 904.48 1202.71 2199.43

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Profit before Tax 348.89 548.20 855.47 756.18
Profit after Tax 158.76 262.90 470.02 347.31
Income Tax 157.00 215.10 385.45 235.53
Total Assets 12874.61 15336.89 21368.17 30182.32
Fixed Assets 195.17 208.00 215.11 334.48
Earning per share (Taka) 263.68 387.80 550.24 30.12
Profit Earning Ratio 4.89
Dividend per share 15.5% 26.00% 35% 20%
Bonus .
No. of Shareholders 5379 5402 4487 12013
Number of Employees 803 771 912 1033
Number of Branches 40 41 46 46
Manpower per Branch 20 19 20
Source- Web-site Of Al-Arafah Islami Bank Limited(AIBL)
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3.8PERFORMANCEofAl-Arafah Islami Bank

Limited(AIBL)
Deposit Mix 2009
Products Taka in million
a) Al wadia current Account

4701.41
b) Mudaraba saving Deposit
5489.24
c) Other mudaraba Deposit
8454.91
d) Mudaraba term Deposit
19205.14
e) Bills payable 504.80
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Liability Purchase by Al-Arafah Islami Bank

Limited(AIBL) :
Fixed capital of Investment:
At the end of the year 2009the amount of investment of the bank was Tk.17423.19
million in comparison to tk.11474.41 million of the last year 2005. The amount of
investment has increased 5948.78 million taka within this period, which is around
5184%. The bank extends investments to the clients under the following modes of
investment under Islamic Shariah:
 Murabaha
 Bai-Muazzal
 Bai-Salam
 Hire Purchase (HPSM)
 Mudaraba
 Musharaka
 Qard
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 Special Investment
 Murabaha:
Murabaha mode of finance means purchase of commodities as per request of
the client permissible by Sharia and sale thereof with profit to the client i.e.
cost plus sale of a commodity to the investment client. The commodity is
procured at the instance of the investment client from a third party/firm.
Purchase price and profit are disclosed to the client. Goods are kept under
bank’s custody as security and the client lifts the same gradually or at a time on
payment of sale price of the commodity.
 Bai-Muazzal:
Bai-Muazzal means cost plus sale of the commodity on deferred payment basis
against adequate collateral. The commodity is procured at the instance of the
investment client from a third party as per firm agreement between the client
and the bank and sale price( bank’s dues) is paid by the client within stipulated
period of time. After having possession of the goods, the bank delivers the same
to the client on credit which is required to be paid at a specified future date
(adjust proportionately) with the progress of sale of goods within the given
period.
 Bai-Salam (Advance Sale):

Under this mode, the bank buys the goods from the producer/supplier on
payment in advance after entering a firm contract and the goods are delivered/
supplied to the bank at a future specified date. In the contract of Bai- Salam
quantity, quality, shape, size, price and time of delivery of the goods are clearly
specified.
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 Hire Purchase Sherkatul Melk (HPSM):

Durable items, like vehicle, machinery, equipment, etc., are purchased on
equity participation by both the bank and the client and the same is handed
over to the investment client on rental basis entering into an agreement with
the client that principal amount shell be paid within a certain period of time by
installments. Rent is to be paid on the principal outstanding till the ownership is
transferred to the client on payment of the entire principal amount.
 Al-Arafah Islami Bank

Limited(AIBL)offersfollowingcategories of HPSM:
Entire capital is provided by the bank against firm assurances of the
entrepreneur that he will manage the business properly and efficiently. The
entrepreneur manages the business as Manager. Profit is shared to the bank
and entrepreneur as per agreed ration while the loss, if any, is borne by the
bank alone. Bank can supervise such investment if and when desired/ required
but cannot participate in the management of the business.
 Industrial
 Commercial
 Transport
 DDIS
 SSBI
 HPSM Real State
 Staff House Building Investment
 HPSM Car (for executives of )
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 Musharaka:
Capital is provided by both bank and investment client on the basis of Shirkatul
Innan principal of Islamic Shariah Partnership. Profit is shared as per agreed
ratio and equity ratio. The bank supervises the utilization of investment and
participates in decision making.
 Quard:
The bank also allows Qard in very special cases on obtaining proper security.
Service charge equal to cost of fund is recovered on Qard amount
Sector wise investment 2009
Sectors Taka in million
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a)Agriculture Fishing and Forestry

568.40
b)Industry
10277.03
c)Construction
1812.86
d)Water Works and Sanitary Services 9.27
e)Transport and communication

1235.76
f)Storage 13.99
g)Trade finance
23884.46
h)Miscellaneous
664.25
Total(including profit receivable)

38466.03
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CHAPTER FOUR
HUMAN RESOURCE POLICY AND PROCEDURE

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4.1 INTRODUCTION
Employee’s are the core resources of any organization, without them, one can not
run their organization, and human resources is conducted with the growth of
development of people toward higher level of competency, creativity and
fulfillment. It help employee’s become better more responsible person and then it
tries to create a climate in which they contribute to the limits of their improved
abilities. It assumes that expanded capabilities and opportunities for people with
lead directly to improvements in operating effectiveness. Essentially, the human
resource approach means that people better result. Bank always determine what
jobs need to be done, and how many and types of workers will be required.
Human Resource Department is responsible for the main dimension of people of

the organization. It is responsible for hiring competent people, training them,
helping them perform at high levels and mechanisms to ensure that these
employees maintain their productive affiliation with the organization. Human
Resources Department of AIBL Bank Limited is solely responsible mainly for
recruitment, training and development, ensuring compensation and benefits of
staffs, performance appraisals and rewards. With all those core functions Human
Resources Department linkage its operations meet the organization’s objectives.
Human Resources Department of Bank Limited

Human resources Department of is one of the most valued departments with the
responsibilities of staffing, training and development, organization development,
performance appraisals, rewarding, control and maintenance etc. With the start of
The Human Resources Department of experienced executives to carry out the
whole responsibilities. The Human Resources Department of stands in its Head
Office at Motijil, People Insurance Bhaban under the direct supervision of the top
management.
Organogram of the Human Resources Department of Al-Arafah

Islami BankLimitrd(AIBL)
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VP HR
AVP/Director Compensation
AVP/Director Training &
AVP/Director Recruitment & Benefits
Development AVP/Director of employee AVP/director labor relation
and Selection
A
Figure: Structure of HR Department in a Large Organization
Objectives of the Human Resources Department of Al-Arafah

Islami Bank Limited
The objective of HRM can be described as follows-
 To hire the right person for the job
 To reduce employee turnover
 To motive people to perform at high effort levels.
 Not to waste time with useless interviews.
 To remove unfair labor practices.
 To maintain a high morale & better human relations inside the

origination.
 To maintain organizational peace.
 To attract competent people and retain them in the organization.
 To recognize and satisfy individual needs.
Basic Principles of HRM
 Treat people with respect and dignity;
 Deal with people as complete individuals.
 Treat all employees with justice.

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 Provide people with justice.
 Make people feel that they are most valuable asset for the
organization.
 Rewards should be earned, not given.
 Not to underestimate the potentials of people.
 Provide people with all relevant information.
Functions of the Human Resource Department.
♦ To control the administration of human resources of the bank

♦ To access and collect compatible personnel who will be perfect for the bank
♦ To take program and implement for developing human resources.
♦ To make appointment, promotion and appraising skill of officer and stuff
♦ .To maintain relationship with government and other institution
♦ To access and grant retirement facilities at the time of retirement
♦ To communicate with e union scrutinizing their demands
♦ To give loan for house building, car, motorcycle and ensure their proper
Utilization
♦ To give medical facilities to the staff.
♦ To maintain and grant leaves without regular leave
♦ To coordinate and evaluate the branch office
♦ To prepare and implementation policy about human resources and related
activities.
♦ To perform the activities assigned by the department head
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Core Functions of Human Resources Department in Al-Arafah Islami

Bank Limited(AIBL)
CORE HR PROCESS
Recruitment and selection Training and Development Compensation and benefits
Figure: Core HR Process in HR department of backed by the Human Resources

Manual.
4.2 Recruitment and Selection

Recruitment and selecting are some of the importance inputs to healthy
organizational activities. Recruitment procedure commences within the bank due
to turnover, promotion, retirement, new business strategy, etc. Bank’s philosophy
is to retain and develop the in house talents and hire the best performers in the
industry. The recruitment procedure includes Internal Job watch and from external
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sources. Set of skills, need availability, education, job description are the
prerequisite criteria for a successful recruitment.
Authority of Recruitment
As per Bangladesh Bank BRPD Circular 2009, “Appointments to the services of the
bank up to the two levels below the rank of the Managing Director shall be made
by the Board of Directors of the Bank. All other appointments shall be made by the
Managing Director of the bank as required under the organogram of the Al-Arafah
Islami Bank Limited (AIBL) bank duly approved by the Board
Recruitment Process in Al- Arafah Islami Bank Limited(AIBL):

In the recruitment process Al-Arafah Islami Bank Limited (AIBL) follows two ways
to recruit new employees. One is External Recruitment and the other is Internal
Recruitment. In my report I have tried to focus both of these ways and described
activities under them.
Recruitment Process
The good design of the recruitment process is a key to the successful recruitment
and staffing process. The HRM Function has to focus on the design of the process
and to cooperate with all the involved parties - managers, employees, agencies and
web recruitment services. The recruitment process is unique for each organization
and the HRM Function has to make adjustments in the general design of the
recruitment process, which can be taken from any source. The recruitment process
design is not an easy job, but the HR Recruiter has to be smart enough to bring the
recruitment design, which will fit the organization’s need. The recruitment process
of Al-Arafah Islami Bank Limited (AIBL) is like the following flow chart-
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1. First a vacancy arises. This is due to the creation of a new job, on other
occasions it may be because an existing member of staff has been promoted
or is retiring.
2. The job description is updated and an employee specification is written. The
job description lists the duties of the job whilst the employee specification
gives details of the experience, skills and abilities needed to carry out the
job.
3. A vacancy advertisement is written and is circulated via the recruitment
channel that the bank uses. The channels including newspapers, internet
recruitment sites, corporate web-site.
4. A shortlist (According to CV) is compiled of applicants who are going to be
invited to attend for interview. This is done by the recruitment panel that
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compares each application form with the requirements of the employee

specification.
5. Interviews are held. The panel will use the same set of questions with each
interviewee. The interview includes a selection test.
6. Then references are requested for check.
7. Appoint the successful candidates and arrange induction.
External Recruitment
The External Recruitment is the source of the fresh blood for the organization. As a
very critical HR Process, the external recruitment process has to be set up very
carefully. The external recruitment is a process, which is very sensitive to changes
on the external market like unemployment rate, labor-market conditions, economic
factors and others and the managers are very sensitive about that as well.
In Al-Arafah Islami Bank Limited (AIBL) HR managers are mainly concern about
how to be successful with external recruitment and an obvious job market analysis.
External Recruitment Channels

Al-Arafah Islami Bank Limited(AIBL) uses external recruitment channels to
communicate job vacancies to the public audience and the correct usage of the
external recruitment channel brings the right candidate for the particular job
position. Generally the HRM is responsible for monitoring the job market and react
appropriately to the changes on the job market with the proper use of the channels
used to bring the expected level and number of candidates at the affordable costs.
Al-Arafah Islami bank Limited (AIBL)generally uses the following recruitment
channels-
a. Corporate Web-site
b. Newspaper
c. Job Web-site
d. Interns (Less frequently used)
HR managers in the bank has to make critical decision based on the some criteria
for above recruitment channels which are like speed, cost, quality, available
external recruitment budget. This means managers have to decide whether there
is people willing to do job or not, what channel will cost how much to the company,
what will be the quality and is there resources to bring new people in organization.
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To use the external recruitment channel HRM department has to prepare the
recruitment plan in the beginning of the year so that the bank can allocate funds
per channel. The entire HR department has to be the decision maker as this
department is responsible for the cost and quality of the delivered candidates.
Internal Recruitment
Internal recruitment refers to the filling of job vacancies from within the business
-where existing employees are selected rather than employing someone from
outside.
Sources of Internal Recruitment

In Al-Arafah Islami Bank Limited (AIBL)it has several sources of recruiting
internally. The following are the most commonly used methods of recruiting people
in Al-Arafah Islami Bank Limited (AIBL)
 Promotions & Transfers: This is a method of filling vacancies from
within through transfers and promotions. Transfer is a lateral movement
within the same grade, from one job to another. It may lead to changes in
duties and responsibilities, working conditions, etc., but not necessarily
salary.
Promotion, on the other hand, involves movement of employee from a
lower level position to a higher level position accompanied by changes in
duties, responsibilities, status and value. Organizations generally prepare
transfer lists or a central pool of persons from which vacancies can be
filled for manual jobs. Such persons are usually passed on to various
departments, depending on internal requirements.
 Job Posting: Bank uses another way of internal recruitment which is
Job Posting, another way of hiring people from within. In this method, the
organization publicize job opening on bulletin boards, staff notice board,
in-house magazine. One of the important advantages of this method is
that the bank enjoys a chance to highly qualified applicants working
within the company to look for growth opportunities within the company.
29
 Employee Referrals: Employee referral means using personal

contacts to locate job opportunities. In Bangladesh most of the people
gets job by using employee referrals. It is a recommendation from a
current employee regarding a job applicant. Employees working in the
organization are encouraged to recommend the names of their friends,
working in other organizations for a possible vacancy in the near future.
In fact, this has become a popular way of recruiting people highly
competitive job markets nowadays.
Internal Recruitment Benefits

The internal recruitment process has some benefits for the bank. Internal benefits
for Al-Arafah Islami Bank(AIBL) are like following:
 Economical: The cost of recruiting internal candidates is minimal. No
expenses are incurred on advertising.
 Suitable: The organization can pick the right candidates having the
requisite skills. The candidates can choose a right vacancy where
there talents can be fully utilized.
 Reliable: The organization has the knowledge about suitability of a
candidate for a position. The bank can identify who will be more
reliable for the known position. Because the bank believes ‘Known
devils are better than unknown devils’.
 Satisfying: Internal recruitment within the bank is a policy of
preferring people from within offers regular promotion for employees.
It motivates them to work hard and earn promotions.
 Retention: Internal recruitment is a way to retain most potential
employees in Al Arafah Islami Bank Limited(AIBL).
Internal Recruitment Weakness

At one side Al-Arafah Islami Bank Limited (AIBL)enjoys the benefits of internal
recruitment also simultaneously it has some weakness. The main weakness for the
bank are-
30
 Limited choice: The internal recruitment of the employees reduces

the area of choice. The reduction in the area of choice means less
number of applicants. The choice is to be made out of people working
in the bank. It discourages entry for talented people, outside the
organization.
 Encourages Favoritism: Internal source encourages favoritism in
this system. Most of the time it is seen that the superiors usually
select their favorites. The worst part of this system brings sometimes
huge loss for the bank as a less capable person is appointed for the
post.
 Restriction on Fresher: The defect of the internal source of
recruitment is that the young people fully equipped with the modern
technical knowledge but they remain excluded from entry. As a result,
old people run the bank with their old ideas and thinking.
Selection
Selection in theoretical term: Selection is the process of picking individuals who

have relevant qualifications to fill jobs in an organization. The basic purpose is to
choose the individual who can most successfully perform the job from the pool of
qualified candidates.
The purpose of selection is to pick up the most suitable candidate who would meet
the requirements of the job in an organization best, to find out which job applicant
will be successful. To meet this goal, the company obtains and assesses
information about the applicants in terms of age, qualifications, skills, experience,
etc. The most suitable person is then picked up after eliminating the unsuitable
applicants through successive stages of selection process. Any mismatched in this
regard can cost an organization a great deal of money, time and trouble.
Selection Process
Selection is usually a series of hurdles or steps. Al-Arafah Islami Bank Limited

(AIBL) follows its own established Selection process for selecting appropriate
candidates. In this process each of the steps are successfully cleared before the
applicant proceeds to the next one.
31
Selection Process of Al-Arafah Islami Bank Limited (AIBL) starts with the
screening of available resumes for a particular job.
1. Screening of resumes is done for figure out totally undesired or unqualified

candidates. It is essentially a sorting process in which the necessary
information is elicited from the candidates about their education, skills,
experience.
2. After sorting interview HR personnel of the bank sort out the eligible
candidate for the position and are being asked for sitting in written exam. In
written test of Al- Arafah Islami bank Limited(AIBL) it takes several tests.
These are-
a. Conceptual Test: In conceptual the candidate is given a case study.
In that the bank can measure how effectively the candidates respond
to the given scenario.
b. Informal Test: Informal test is kind of a candidate may have to act in
a role play. Sometimes candidates are given a scenario and are asked
to what he or she would do if the situation arises.
c. Intelligent Quiz Test: Intelligent quiz test is like MCQ type.
Candidates are some kind of mathematical problem in MCQ type and
have to answer those.
32
d. General Knowledge: In written test of Mutual Trust bank candidates

have to face general knowledge test. In this test candidates have be
aware about the current affairs of the country as well as
internationally. Also some historical facts have to answer.
3. Interview is an essential element of selection and no selection procedure is
complete without interviews. And Al-Arafah Islami bank Limited (AIBL) is no
exceptional from this step. In the interview candidates are asked questions
related with their educational background, past work history, training
attended and other which are filled in their resume. In Al-Arafah Islami bank
Limited (AIBL) when a candidate sits for interview the panel takes some test
of the candidates. These are like-
a. Intellectual Test: These are mental ability tests. The interview panel
measure the candidate’s learning ability and the ability to understand
instructions and make judgments. These tests also measure several
abilities such as memory, vocabulary, verbal fluency etc.
b. Skill Test: Skill test measure an individual’s potential to learn certain
skills like accounting, mechanical, mathematical, etc. This test
indicate whether or not an individual has the capabilities to learn
a given job quickly and efficiently.
c. Personality Test: Interview panel of Al-Arafah Islami Bank
Limited(AIBL)measures a candidate’s personality test generally
through the style of him/her. Candidate’s dress-up, grooming style,
way of behave and talking all those reflects personality and this is an
important factor for hiring the selected candidate.
d. Integrity Test: This test is taken to measure the applicant’s honesty.
The applicants are expected in this test to answer in “yes” or “no”.
4. Reference check in selection process is an important point. Here candidates

are asked to mention in his application form, the names and addresses of
two or more persons who know him well. These may be his previous
employers, heads of education institutions. These people are requested to
provide their frank opinion about the candidate without incurring any
liability.
5. After the interview candidates are short listed by the department and are
finally approved by the executive of concerned department.
33
6. After final approval, employment is offered in the form of an appointment

letter mentioning the post, the rank, the salary grade, the date by which the
candidate should join and other terms and conditions in brief.
7. Induction is done in bank after joining of a new employee. Induction is the
process of receiving employees when they begin work, introducing them to
the company and to their colleagues, and informing them of the activities,
customs and traditions of the company by the branch manager.
Selection & Staffing process

General Policy:
Al-Arafah Islami Bank Limited (AIBL) is committed to selecting and employing the
most suitable person(s) for the available position(s) by the way of-
a) Effective and appropriate screening and selection;

b) Selection standards are relevant to skills, training, experience, education
and knowledge necessary for successful job performance;
c) The hiring procedure conforms to the organization’s requirements and
organization’s policies and procedures;
d) Under no circumstances, a person employed with any other organization is
appointed as full time regular or on contract in Al- Arafah Islami Bank
Limited (AIBL).
e) All regular appointments in Al- Arafah Islami Bank Limited (AIBL) shall
conform to its existing positions and salary structures.
No one who is below 18 years of age can be hired as an employee for Al-Arafah
Islami Bank Limited (AIBL) either regular, contract, temporary or casual status.
Survey Analysis
Frequently used External Recruitment Sources
34
Corresponding to this data I have drawn a pie chart. According to the responder
most of them answered newspaper is mostly used for recruiting people externally.
Frequently used Internal Recruitment Sources
From the answer given by different employees in the bank most of them had
responded in case of internal recruitment employee referrals is widely used.
Best way to recruit People
35
The employees at Al-Arafah Islami Bank Limited (AIBL) expressed their varied
views about the best way, to recruit people. The employees in bank bear an opinion
(about 40%) that advertisement is the best way to recruit people. Advertising helps
to define exactly the need of the company, and what separates it from its
competitors.
Willingness to do Job
From the chart it can be understood that most of the employees are inspired by the
reputation of the bank. Also the respect in banking job matters for people to job
according to the respondents.
36
Effectiveness of Recruitment Process
From the above chart it is seen that most of the respondents think that the current
process of recruitment is effective for the organization. Some think that the bank
should be more economic when it is about to advertise vacancy in publicly.
Effectiveness of Selection Process
37
Almost all of the respondents are satisfied with the process of selection of the bank
which is seen from the graph.
Most Reliable Source of Recruitment
In term of reliable source the attitude of the respondents were in favor of external
because they think candidates from outside are more experienced and skilled. Less
were in favor of internal source of recruitment.
4.3 Training and Develpoment Porocess of Al-Arafah Islami

Bank(AIBL)
38
Define Training and Development
Training to new employees is important for the reason that they need to acquire
basic skills related to the particular job in which he is employed and development
mean aims to increase abilities in relation to some future position or job-usually
management.
Objectives of training
Like every organization, Al-Arafah Islami Bank Limited(AIBL) and the employees or
human resources of this organization have some objectives. The organizational and
individual objectives are complementary. So a training program is directed toward
the accomplishment of both organizational and individual objectives. We can
classify the objectives in two major headings.
Objectives of training related to Bank
♦ Achieving efficiency in operation.

♦ Improving knowledge on new method.
♦ informing the banking policy
♦ providing knowledge on bank-customer relationship.
♦ Change of attitude toward the job.
♦ Reduction of employee turn-over.
♦ Improving quality of work.
Objectives of training related to individual.
1. Reducing inherent fear about jobs: Training is reducing inherent fear about jobs.
2. Updating Knowledge: Technological advancement, business environmental

changes and new management philosophies have now made it imperative for the
organization to renew and update the knowledge and skills of the employees so
that they do mil become redundant for obvious functional incompetence. The first
and foremost need for manpower training therefore, is to renew and update
knowledge and skills of employees to sustain their effective performance and so
also to develop them for future managerial positions.
3. Avoiding Obsolescence: the second important need for training is to avert

functional obsolescence.
39
4. Improving Performance; Continuous training being required to renew and

update knowledge and skills of employees, it makes them functionally effective.
The- third need is therefore, to make employees effective in their performance
through continuous training.
5. Developing Human Skills: Apart from emphasizing on technical and

Conceptual skills, new training programmed also emphasize on developing human
skills of employees. Such human skill is necessary for effective interpersonal
relations and sustaining healthy work environment. This need for training
therefore also cannot be altogether ignored.
6. Imparting Trade-specific Skills: In industrial employment, the convention is

to recruit workers and employees through compulsory apprenticeship training-
Such apprenticeship training enables an organization to impart industry and trade
specific skills to workers. This also, therefore, is an important need for manpower
training.
7. Stabilizing the Workforce: Throughout the world the importance of training is

now increasingly felt for stabilizing the workforce to withstand the technological
change and for making the organization dynamic in this changed process.
Management theorists now unanimously agree that it is the responsibility of the
organization to train and develop their manpower as continuous process.
Methods of Training used by Al-Arafah Islami Bank

Limited(AIBL):
Methods are the ways through which employees are trained. Al-Arafah Islami Bank
Limited (AIBL) uses several methods of training depending on the situation and
training objectives. However, the methods of training can primarily classify into
two types.
Managerial On-the-Job Training
40
On –the – job training is not just for non managers. Managerial on –the –job
training methods include job rotation the coaching/unduerstudy approach, and
action learning.
1. Job Rotation
Job rotation means moving management trainees from department to department

to broaden their understanding of all parts of all parts of the business and to test
their abilities. The trainee – often a resent college graduate may spend several
months in each department. The person may just be an observer in each
department, but more commonly gets fully involved in its operations. The trainee
thus learns the department’s business by actually doing it, while discovering what
jobs he or she prefers.
2. Coaching/Understudy Approach
Here the trainee works directly with a senior manager or with the person he or she
is to replace, the latter is responsibly for the trainee’s coaching. Normally, the
understudy relieves the executive of certain responsibilities, giving the trainee a
chance to learn the job.
3. Action Learning
Action learning programs give managers and others released time to work full-time
on projects, analyzing and solving problems in departments other than their own.
The basics of a typical action learning program include. Carefully selected teams of
five to 25 members; assigning the teams real world business problems that extend
beyond their usual areas of expertise and structured learning through coaching
and feedback. The employer’s senior managers usually choose the projects and
decide whether to accept the teams’ recommendations.
Off The job Training Methods
41
1. Lectures
Lecturing has several advantages. It is a quick and simple way to provide

knowledge to large groups of trainees as when the sales force needs to learn the
special features of a new product. You could use written materials instead, be they
may require considerable more production expense and won’t encourage the give-
and-take questioning that lectures do.
2. Programmed Learning
Whether the medium is a textbook, computer, or the Internet, programmed Leering

(Or programmed instruction) is a step-by-step, self-leaning method that consists of
there parts.
1. Presenting questions facts or problems to the learner

2. Allowing the person to respond
3. Providing feedback on the accuracy of answers.
Generally, programmed learning presents facts ad follow-up questions. The learner
can then respond, and subsequent frames provide feedback on the accuracy of his
or hear answers. What the next question is often is often depends on the accuracy
of the learner’s answer to the previous question. Programmed learning’s main
advantage is that it reduces training. It also facilitates learning because. It lets
trainees learn at their own pace, provides immediate feedback and (from the
learner’s point of view) reduces the risk of error.
3. Audiovisual-Based Training
Audiovisual-based training techniques like, PowerPoint’s, vide conferencing,

audiotapes, and videotapes can be very effective and are widely used. The Ford
Motor Company uses videos in its dealer training sessions to simulate problems
and sample reactions to various customer complaints, for example. Audiovisuals
arc more expensive than conventional lectures hut offer some advantages. Of
course, they usually tend to be more interesting. In addition, consider using them
in the following situations:
42
1. When there is a need to illustrate how to follow a certain sequence over time,
such as when teaching fax machine repair. The stop-action, instant replay, and
fast- at slow-motion capabilities of audiovisuals can be useful here.
2. When there is a need to expose trainees to events not easily demonstrable in

live lectures, such as a visual tour of a factory or open-heart surgery.
3. When you need organization wide training and it is too costly to move the
trainers from place to place.
4. Simulated training (occasionally called vestibule training) is a method in which

trainees learn on the actual or simulated equipment they will use on the job, but
are actually trained off the job. This is a necessity when it is too costly or
dangerous to train employees on the job. Putting new assembly-line workers
right to work could slow production, for instance, and when safety is a concern
—as with pilots—simulated training may be the only practical alternative.
Simulated training may take place in a separate room with the same equipment the
trainees will use on the job. However, it often involves the use of equipment
simulators. In pilot training, for instance, airlines use flight simulators for safety',
learning efficiency, and cost savings, including sayings on.
5. Case Study: Case study method helps students to learn on their own by
independent thinking. A set of data or some descriptive materials are given
to the participants asking them to analyze, identify the problems and also
tc5 recommend solutions for the same.
Benefits for Employees
 The opportunity for promotion and self-improvement;

 Improved job satisfaction through better job performance
 A challenge: the chance to learn new things;
 Adaptability: greater ability to adapt to and cope with changes
 Increase job scope and allow for job rotation.
43
Benefits for the Organization
 Higher productivity through better job performance, more efficient use of

human resources;
 Goals and objectives more effectively met;
 Reduced costs due to less labor turnover, errors, accidents etc.
 A more capable, mobile workforce;
 Existing staff more easily retained; An insurance policy; employees are
better able to cope with organization
Training institutes of Al-Arafah Islami Bank Limited

(AIBL)
Al-Arafah Islami Bank Limited (AIBL) training institution was established in 2002.
Since then, institute has been conducting various types of training programs on
different banking affairs in order to develop knowledge, skill, and attitude of the
employees of Al-Arafah Islami bank. Limited (AIBL).
Objectives of Training Institutes
The major objectives are:-

♦ To enrich both theoretical and practical knowledge in banking and also
developing managerial skills of the employees of bank.
♦ To impact training programs based on day-to-day banking needs.
♦ To raise the standard of performance of the work force employed in the bank.
Activities of Al-Arafah Islami Bank Limited Training

Institutes(AIBLTI), DHAKA
Officers/staff trained since its

inception
Year No. of
officers’/staff
2006 500
2007 1000
2008 1200
2009 1300
2010 800
44
Figure: Officers/staff trained since it’s inception

Source: Annual course calendar 2009.
4.4 Compensation and Benefits for Al-Arafah Islami Bank

Limited(AIBL)
Employee compensation refers or all forms of pay or rewards going to employees
and arising from their employment. Thus compensation means what employee
receives in exchange for their work.
Benefits are indirect financial payments given to employees. They may include
health and life insurance, vacation, pension, education plans, and discounts on
company Products or instance.
Compensation and Maintenance of the Employees

House Rent Allowance:
a) 50% of Basic pay from SVP to DMD

b) 50% of Basic pay from FAVP to VP
c) 50% of Basic pay from officer to JAVP
Allowance of the probationary officer:
a) Probationary officer : Tk. 20,000/- (consolidated)

(To be absorbed as FEO offer satisfactory completion 1 year service)
b) Officer on probation: Tk. 15000/- (consolidated).
Car loan schemes:
a) DMD to MD: One full time car with fuel, driver & maintenance expense. In
addition, 1 car provided as per rank. Existing car loan scheme.
b) AVP to SEVP: Car will be providing as par the Bank existing car loan
scheme.
45
Ceiling for Furniture:
a) DMD Tk. 400,000/-

b) SEVP Tk. 325,000/-
c) EVP Tk. 275,000/-
d) SVP Tk. 225,000/-
e) VP Tk. 200,000/-
f) SAVP Tk. 175,000/-
g) AVP Tk. 150,000/-
LEA (Leave Fare Assistance) :
 LFA pay after completion of 1 year confined service.
Bonus/incentive :
Every employee get 1+1 =2 Festival Bonus in a year, which is 100% of the basic
salary. Beside this, they also get incentive bonus that is given on the profit of the
Bank, generally they get 4-8 incentive bonus, which is Also 100% of their basic
salary
Several Types of Leave in Al-Arafah Islami Bank

Limited(AIBL)
♦ Ordinary leave (with full payment)
♦ Leave on half pay
♦ Advance leave
♦ Leave without pay
♦ Special disability leave
♦ Maternity leave
♦ Casual leave
There is a welfare trust in Al-Arafah Islami bank. Limited (AIBL) the compensation
is determined according to the nature of case.
Al –Arafah Islami bank has been providing treatment facilities for its personnel’s.
There are two doctors in the head office for the employees.
For example, if anybody needs open heart surgery he/she will get taka for
treatment.
46
Pay scales of Al-Arafah Islami Bank Limited (AIBL)
Al-Arafah Islami Bank Limited (AIBL)has pay scales for its own employee’s .It
follows the pay structured of it’s won Bank.
Gratuity Calculations
Gratuity Tables
Amount of Basic (As per Grade) Rate of Gratuity Amount of

Gratuity
Tk. 43450(SVP) 1
TK43450
Tk. 31500(AVP) 1
Tk. 31500
Tk. 26000(SPO) 1
Tk. 26000
Tk. 29750 ( PO) 1
Tk.29750
Tk. 29750 (PO) 1
Tk. 29750
Tk.21950 (PO) 1
Tk. 21950
Tk. 20750 (PO ) 1
Tk.20750
Tk. 19600(SR.OFFICER) 1
Tk19600
Tk. 14900(OFFICER) 1
Tk.14900
Tk.12, 875 (JUNIOR Officer) 1
Tk.12875
Tk. 13500 (ASSTT.Officer) 1 Tk.1350
47
Budget of welfare division
Yearly budget of the welfare division of Al-Arafah Islami Bank

Limited (AIBL)are as below
Figure: Budget of Welfare Division

Source: welfare Division
48
4.5 Promotional Policies of Al-Arafah Islami Bank

Limited(AIBL)
Define Promotion
Promotion is defined as a movement to a position in which responsibilities and
prestige are increased. Promotion satisfies the needs of human beings in the
organization. Since the promotion depends upon capabilities and good
performance, people will try for that if the venues for promotion exit. We also mean
that refers to the filling of a vacancy at an upper level of the organization by the
internal movement of a present employee from an immediate
Lower level, the new position having higher pay, status and job conditions as
compared with the old. Very simply promotion is a higher position at a higher level
from people within the organization itself.
Objectives of promotion
Following are the objectives of promotion

♦ Reward of good employee.
♦ Recognition of outstanding achievements.
♦ Meet the career objective of an employee
49
♦ Meet the organizational objective by utilizing special skill and knowledge

Gained through T & D
♦ Attract and retain right talents in the organization.
♦ Improve morale, motivation and, job satisfaction of employees.
♦ Empowerment of employees through competence, interest and commitment.
General Promotional Policy

Promotion policy is the guidelines of promoting employees within the organization.
Policy varies with organization. Since promotion is a sensitive issue to the
employees, it is very essential, that promotion policies are clearly stated, widely
circulated and fully explained to their employees. Some criteria requiring policy of
promotion are given below:
♦ Length of service
♦ Weight age on seniority
♦ Procedure for promotion
♦ Responsibility allocation to department to initiate and handle cases of
promotion.
Promotional Policies:
a) Promotional Line
There are two promotional lines and these are—
1. Clerical:
The clerical category includes Junior Clerks, Senior Clerks, Sub-Accounts and
Junior Officer. A junior clerks can move up to junior officers, senior officers.
2. Officers and Managers
For promotion at officer levels, a quota system operates 50% of the vacancies for
Junior and senior officers are filled through internal promotions and the remaining
50% through fresh recruitment from outside.
b) Determination of promotional opportunities
50
Promotional opportunities in Al-Arafah Islami Bank Limited (AIBL)) are assessed on

an annual basis through a committee headed by the General Manager
(Administration). It considers these factors
Such as:
Normal retirement
♦ Dismissal
♦ Suspension
♦ Discharge
♦ these all can create vacancies and provide promotional opportunities.
c) Promotion criteria followed

These criteria are depicted here—
♦ Minimum service in the present post for about three years.
♦ Passing of Banking Diploma Examination.
♦ Merit to be measured through Annual Confidential Report (ACR)
d) Rating Procedure
Promo table employees are rated as below—
Criteria Points
ACR 20
Academic Qualification 70
Banking Diploma Certificate 05
Training Received 05
51
Figure: Rating procedure of Al-Arafah Islami Bank Limited(AIBL)

Source:Al-Arafah Islami Bank Limited (AIBL) employees service
regulations, 2008
Rating Procedure of Al-Arafah Islami Bank Limited

(AIBL)is shown by a pie chart
Figure: Rating procedure of Al-Arafah Islami Bank Limited (AIBL)

regulations, 2008
For preparing ACRs, two ACR forms are used-
1. For the staff people:
The ACR form used for them is very brief and contains these items
♦ Intelligence and mental alertness.
♦ Initiative and drive.
♦ Quality and output of works..
52
♦ Punctuality & observance of security measures.

♦ Integrity
♦ Forecast capacity
♦ Discipline
♦ Morality
Evaluation is done on this basis-

Criteria Marks
Outstanding 10
Above average 07
Average 05
Below average 03
Poor 01
Figure: Rating procedure of Al-Arafah Islami Bank Limited(AIBL)

regulations, 2008
2) For the officer:
The ACR form for the officers is quite lengthy and comprehensive and it has three
Major parts such as
a) Evaluation of officer:
On the basis of some criteria—

Criteria Grade
Good A
Average B
Below average C
Figure: Grading system for the officer

regulations, 2009
b) Information contains about the progress of the branch Spaces for recording
information on the conduct of the officer
On academic qualifications, the points are distributed as below—
Criteria Points
53
SSC 03
HSC 03
Simple Graduation 03
Honors 02
Masters 02
Banking Diploma 05
Training Taken 02
Every one year of service 03
SPO 20 as Viva
Figure: Pint’s distribution for the officer

regulations, 2009
54
CHAPTER FIVE
ANALYSIS and FINDINGS
55
5.1 SWOT ANALYSIS:
Strength:
 All activities of the bank are conducted according to Islamic shariah where
profit is the legal alternative to interest.
 Using up to date software in all the subsection of foreign exchange Section
that will reduce time and labor of employee.
 Skilled manpower and efficient employees are being involved in busy
subsection of this section to meet the client’s satisfaction.
 The total deposit of the bank was TK.16775.33 million at 31 st December
2009. At the same time in the last year 2005, the amount of total deposits
was 11643.66 million taka. In this area the growth rate is 44.07%. So
deposit is a good strength of Al-Arafah Islami Bank (AIBL).
Weakness:
 Al-Arafah Islami Bank Limited (AIBL) is one of a new generation bank.

Upon established of these banks total number of bank stands in our more
than 50. In addition to that a huge number of financial institution
working besides commercial Banks of our country. As such their business
is becoming more and more vital weakness of because our financial
market is not expanding in comparison with the establishment of new
banks.
 In another weakness of the new generations banks are branch network
which are very smaller in number through they are spreading very
sharply. But this weakness will be come-up in the span of time and the
authority is very serious to solve this weakness.
 Risk Management system is not strong. The bank has already exposed to
a variety of risks the most important of which are credit risk, market risk
and liquidity risk.
 IT Division is not strong because bank put due importance to utilization
of technology-based service to the customers. In line with this, IT
56
Division of the Bank is engaged in designing various Software’s to

facilitate services. Through this Division a number of Branches have
already been brought under On-Line Banking and some other Branches
will also be brought under this umbrella soon.
 Liquidity risk is the risk that the Bank in unable to meet payments
obligations and potential payment obligation as and when these fall due
without incurring unacceptable losses. This is not out of this weakness.
Opportunity:
 Favorable business climate for commercial banks in the country in

comparison with other business.
 High finding cost for lending is great opportunity for the bank. Due to lack
of poor performance of NCB’s in our country though they are grabbing an
huge deposits from the market, PCB’s are fulfilling the high demand of the
financial marketing lending money towards deficit sources in
 High rate of interest. So PCB’s are making well done in regards of lending
and besides deposit collection from the market. Govt. Banks are not able to
fulfill market demand and this opportunity is taking by the PCBs.
 Another mentionable opportunity of the PCB’s is high grades of services in

regards of customer service. Besides the NCB’s service is very poor and so
much traditional. As a result of which it has easily achieved public respond
easily creating their positive approach day by day.
 Another opportunity is the establishment of new banks is very vital point.

Any body or organization cannot easily establish a commercial collecting
paid-up capital and govt. is fully retracted in regards of giving permission to
commercial bank in the country. Moreover, in our country there are no
57
closing rules for commercial banks. As a result of which as an existing

commercial banks of Al-Arafah Islami Bank have a great opportunity and
potential for its favorable business opportunity.
Threats:
 This is a threat for Al-Arafah Islami Bank Limited (AIBL) because the
financial market strength of our country is not so strong. As such to recover
the lending money is a great threat. Because in our country’s business chain
like other countries is dependable each other. So, if the monetary flow faces
any obstacle it hampers the running of full chains. As a result recovery face
a great threat for commercial banks of Al-Arafah Islami Bank Limited (AIBL)
and this is not out of this threat.
 Another major obstacle for banks is its classified loan. Through this picture
is not new for this particular bank it is exists to all commercial banks
throughout the world. But in our country this bad culture created by the
NCBs and its impacts comes to the PCBs also. But over viewing the bank’s
performance we found that it is still in safe side in comparison with others
but in should be careful to overcome this threat.
 It is the order of the day to deliver prompt service to the customers taking
assistance of modern facilities. We have recognized this and taken all
possible steps to introduce technology-based Banking service to the
customers. It is a greatest threat for Al-Arafah Islami Bank Limited (AIBL) .
 We recognize that Bank’s are not mere profit earning institutions rather they
have great responsibility towards the society in which they are operating. In
this respect, I am happy that our Bank has been able to make its presence
felt in the national level. A number of seminars have been arranged under its
auspices on the topics of economic and social aspects which provided a way
of looking at the picture from different perspectives.
 As per guidelines and prudential guidelines of Bangladesh Bank, appropriate
measures have been taken to manage core risks in 06 major areas of
Banking operation as identified in the said guidelines namely, Credit Risk,
58
Foreign Exchange Risk, Asset Liability Management Risk, Prevention of

Money Laundering, Information Technology Risk. Bank has a separate cell to
Core Risk Management.
 Corporate Governance establishes specific responsibility to ensure
accountability and fairness in functions of the company and also to comply
with the requirements of regulatory agencies; care has been taken to
improve Corporate Governance. As part of this the bank should now follow
the corporate governance principles.
5.2 Findings
Findings:
After analyzing my report I have found several findings. In these findings I have
figured out some problems in bank’s recruitment and selection process.
1. After doing the report it is seen that employee referral of internal

recruitment is practiced significantly. Although this system often brings less
capable employees.
2. In the bank the recruitment budget is done only once in a year.
3. The whole recruitment and selection process is not computerized. The bank
does not use any kind of HRIS software for HR activities.
4. Often it is seen that after following the effective recruitment and selection
process, less reliable people are being hired for the lack of documenting the
data found during reference check.
59
5. Al-Arafah Islami bank Limited (AIBL) emphasizes more in advertising when

it goes for external recruitment.
6. The bank does not have separate employees only for recruitment purpose.
General HR personnel are involved in this process.
7. The orientation & basic Training programs for the Fresh employees only
cover the Banking operation, it does not emphasize on the employee
motivation, improve their skills and other ability
8. Al-Arafah Islami bank Limited (AIBL) does not use any recruitment agency
for recruitment purpose.
9. In the selection process of Al Arafah Islami bank limited (AIBL) they take
several tests. Some other tests might also be taken to measure the applicant’s
efficiency.
10. As it is stated before, Al Arafah Islami bank Limited (AIBL) does not use any
specific software for HR activities yet now. I think it becomes a problem for HR
personnel when they have to screen all the resumes or application in the
selection process.
11. In Orientation & basic training programs Al Arafah Islami bank Limited
(AIBL) provides knowledge on only basic Banking operation. They have not any
more training on improving their communication skills, manner etc.
12I have done my internship in Branch. There are no HR personnel in this
branch.
CHAPTER SIX
60
RECOMMENDATION
AND
CONCLUSION
Recommendation
Al Arafah Islami Bank Limited (AIBL) is one the leading banking institute in
Bangladesh. To recommend Al -Arafah Islami Bank Limited (AIBL) is quite difficult
thing for me as an internee. The HR function is adding more and more value to
modern organizations. I have found some points to be noticed to Recruitment and
selection section for betterment of this bank.
1. Employee referral is one of the most common scenarios in Bangladesh. Most

of the people gets job by this system. So when recruiting External source
61
should be given equal importance with internal source. By which new brain
will be inducted in the company with skill, talent, efficiency etc.
2. Al Arafah Islami bank Limited (AIBL) does recruitment budget at the
beginning of the year only once in a year. It should be done periodically
when bank needs to hire new employees.
3. The bank’s recruitment and selection process is not computerized. The bank
should use HR software to this recruitment and selection process to make it
smoother.
4. Sometimes after following the proper recruitment and selection process
reliable employees are not hired. So before employing the bank should
check the employee’s past employment histories for leaving the job.
5. For purpose of recruitment there are no separate HR employees. The bank
should assign employees who will do only recruitment and selection of HR
function.
6. Al Arafah Islami bank Limited (AIBL) spends a lot after advertising when
recruiting externally. The bank should promote employees and can design
training program to make them more capable. This can lower the budget for
external recruitment.
7. Al Arafah Islami bank Limited (AIBL) never uses any recruitment agency for
external recruitment. Sometimes it is beneficiary for the bank if they use
recruitment agency as the agency helps to find appropriate candidates.
8. To measure efficiency the bank can initiate some other test. Like available
applicants should be in a room for a while and there will be a panel to
monitor how they act with each other. Through this their mentality to co-
operate can be reflected.
9. Again Al Arafah Islami bank Limited (AIBL) should establish HR software to
make the selection process smother. HRIS software can make easy the task
of screening available resumes or applications which are sent via web.
10. Generally in Bangladesh HR department is limited in Head Office. All of the
branches should have HR department so that it can measure future
employment need and job analysis properly.
Conclusion
Human Resource Department is the most confidential department for any
organization as well as Human Resource Division in Al Arafah Islami Bank. Limited
62
(AIBL) Here as an intern I am allowed to get limited information for my study. I am

not allowed to get the information which is too much confidential for the Bank. So
in my report all the information that I give that I am allowed to take the
information. I have tried my best to make this report a worthy one.
Despite Al Arafah Islami Bank Limited (AIBL) follows modern recruitment policy.
There are avenues where some improvement can be done. The points I already
discussed before in the recommendation part of my report which may be
considered by the bank.
The study “Recruitment & Selection, Basic Training Procedure and

promotion and compensation and benefits of Al-Arafah Islami Bank
Limited (AIBL)” under HRD revealed that people are most valuable resources for
the progress of the organization. For the development of these valuable resources
there are many factors involved. A recruitment and selection procedure plays an
important role. Beside this to increase the productivity of an organization effective,
dynamic recruitment and selection procedure is essential and the proper
orientation & training procedure is also required that will help the organization to
reach the ultimate goal.
63
Bibliography
1. Annual Report of Al Arafah Islami Bank Limited (AIBL)
2. www.AIBL .com
3. www.google.com
4. Annual Report -2009
5. Web site – Bangladesh Bank, Bank.
6. Griffins (2003), Management, 7th edition
7. Gary Dessler, “Human Resource Management”, 10th Ed. 2005,

Prentice – Hall of India Private Limited, New Delhi- 110001.
8. A. DeCenzo and S. P. Robbins, “HUMAN RESOURCE MANAGEMENT”, 7 TH

Ed. 2003, John Wiley & Sons (ASIA) Pte Ltd.
64
Appendix
65
Questionnaire
1. According to you, why people will to do job in Al-Arafah Islami Bank

Limited?
a. Reputation of the Bank
b. Working Environment
c. Job Respect
d. Salary Package
2. What is the process of recruitment in your organization (Open Ended

Questions)?
Answer
3. Does the bank follow-

a. External Recruitment
b. Internal Recruitment
c. Both
If you’re above answer is “Both” then please answer the following
4. What are external recruitment sources?

a. Advertisement
b. Corporate Web Site
c. Job Web Portal
d. Recruitment Agencies
e. Walk-Ins (Internee)
f. If other please specify
5. What are sources of internal recruitment?

a. Job Posting
b. Employee Referrals
c. Transfer & Promotion
d. If other please specify
66
6. What benefits does the bank get by external recruitment (Open Ended
Questions)?
7. What possible disadvantages might the external recruitment have

(Open Ended Questions)?
8. What benefits does the bank is deriving by internal recruitment (Open

Ended Questions)?
9. What possible disadvantages might the internal recruitment (Open

Ended Questions)?
10. Is there any specific procedure followed for selection of a

candidate?
a. Yes
b. No
If you’re above answer is yes then please state the process in synopsis.
11. According to you, what is the best way to recruit people?

a. Advertisement
b. Job Portal
c. Employee Referral
d. Promotions
12. Do you think the current process of recruitment is effective?

a. Effective
b. Ineffective
c. Need to be changed
d. No Comments
13. Do you think the current process of selection is effective?

e. Effective
f. Ineffective
g. Need to be changed
h. No Comments
14. What is the promotion procedure?
15. What types of compensation and benefit is providing to employees?
67
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HRM POLICY & PROCEDURE OF AIBL

Human Resource Management Policy of Al-

This report is an outcome of attaint expression of my knowledge on Human

The study and practices of Human Resource Management got paramount

Recognitions and the overall development of the department as it can act as HR

Background of the study

The current challenge of HRM is to integrate programs involving human resources

Objective of the Study

The specific or the main objectives of this report will be:

1. To focus on the employee selection techniques.

11.To develop and retain a quality work-force through an effective human

Methodology of the Report

In order to make a comprehensive and informative project report very simple

Primary sources of Data:

 Observing various organizational procedures.

Secondary sources of Data:

 Annul report of Bank

Human Resource Management (HRM) is to refer to the philosophy, policies,

Hr management functions through which manager recruit, select, train and

Recruiting & Selection

Recruitment is the process of finding qualified people and encouraging them to

The Recruiting and Selection Process

Personnel selection is a process of measurement, decision-making and evaluation.

Training & Development

Training is a planned effort by an organization to facilitate employee’s learning of

Training is a learning experience that seeks a relatively permanent change in

The training function, now popularly called HR development. Employee

Compensation & Employee Benefits

In addition to compensation in the form of wages and salaries, HRM provides

million and the paid up capital is tk.1798.95 million as on 31.12.2009.Renowned

ABOUT BRANCH OFAl-Arafah Islami Bank limited(AIBL)

I have completed my Internship at Dilkusha branch, which is started on February

Vision and Mission

 Achieving the satisfaction of Almighty Allah both here and hereafter

 Proliferation of Shariah based banking practices.

 Quality financial services adopting the latest technology

 Fast and efficient customer service.

 Maintaining high standard of business ethics.

 Steady and competitive return on shareholders equity

 Attract and retain quality human resources

 Extending competitive compensation packages to the employees.,

 Involving more in micro and SME financing.

Objectives of Al-Arafah Islami Bank Limited(AIBL)

 To become more shariah compliant

 Increasing the profit

 Raising capital and reserve fund

 Business and product diversification (both deposit and investment)

 To reduce the non- performing asset below 1%

 Introduction of first mutual fund

 Up gradation of online banking

 Increase foreign inward remittance

 Opening of 10 new branches

 Opening of 8 SME branches

 Development skill manpower through imparting training as part of CSR

Status of the Bank:

Islam provides us a complete lifestyle. Main objective of Islamic lifestyle is to be

Distinguishing Features of Islamic Banking:

An Islamic bank has several distinctive features as compared to its

may have to make a greater effort to match the maturity of their

Functions of Al-Arafah Islami Bank Limited(AIBL)

 The banks investment policy follows different modes approved by Islamic

 The bank is committed towards establishing welfare oriented banking

 The bank is contributing to economic and philanthropic activities side by