IntroductionOrigin of the reportI am Lamia Nuzhat a student of BBA in United international University. I have done my major

in Human Resource Management. My instructor Farhana Rashid as assigned me a project which

is a requirement to complete my BBA. And to fulfill this requirement the topic that is given to

me is “HR Activities of Mercantile bank Limited”.

Objective of the reportThe main objective of the report is to understand the application of hr practices in a bank. And

for this reason I have chosen Mercantile Bank as my topic subject. The specific objectives of this

report is

• To identify the motivational forces of this bank

• To identify the training and development areas of this ban

• To find out the performance management system of this bank

• To get a clear idea about the employee welfare issues of this bank

• Identify the compensation management of this bank

• Identify the selection and recruitment process of this bank.

Scope of the reportI have chosen Mercantile Bank as my topic as it is one of the largest bank in Bangladesh. And it

has around branches overall in Bangladesh. So they have to maintain their HR activity in such a

manner so that so branches can suffer in HR related problem. And to know this information there

must need a key employee from HR in this bank. And as have have managed this so there is a

huge scope of working in this topic

MethodologyDifferent data and information are required to achieve 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

• Face to face conversation of the employees

• Taking interviews of Senior Executive Vice President of HR.

• Personal observation

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Secondary sources of data.

• Internet.

• Several kinds of our academic text-books.

• Annual Report

• Journals

• Online surfing

• Statistical tools.

• Various articles

• Blogs

• Analysis using Different program

Historical BackgroundThe history of banking begins with the first prototype banks of merchants of the ancient world,

which made grain loans to farmers and traders who carried goods between cities. This began

around 2000 BC in Assyria and Babylonia. Later, in ancient Greece and during the Roman

Empire, lenders based in temples made loans and added two important innovations: they

accepted deposits and changed money. Archaeology from this period in ancient China and India

also shows evidence of money lending activity.

Banking, in the modern sense of the word, can be traced to medieval and early Renaissance Italy,

to the rich cities in the north such as Florence, Venice and Genoa. The Bardi and Peruzzi

families dominated banking in 14th century Florence, establishing branches in many other parts

of Europe.Perhaps the most famous Italian bank was the Medici bank, established by Giovanni

Medici in 1397. The oldest bank still in existence is Monte dei Paschi di Siena, headquartered in

Siena, Italy, which has been operating continuously since 1472It is followed by Berenberg Bank

of Hamburg (1590).

Bangladesh is a third world country with an under developed banking system, particularly in

terms of the services and customer care provided by the government run banks. Recently the

private banks are trying to imitate the banking structure of the more developed countries, but this

attempt is often foiled by inexpert or politically motivated government policies executed by the

central bank of Bangladesh, Bangladesh Bank.

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Mercantile Bank Limited (MBL) incorporated as a public limited company on May 20, 1999.

Subsequently, it commenced business on June 02, 1999 with a vision for being finest corporate

citizen. MBL enlisted in Dhaka Stock Exchange (DSE) and Chittagong Stock Exchange (CSE)

on February 16, 2004 and February 26, 2004 respectively. MBL is the output of some visionary

entrepreneurs’ dream of contributing directly to the economy by catering various banking needs

to all segments of people living home and abroad.

MBL has been able to establish itself as a leading third generation private commercial bank by

dint of its prudent policy guidelines coupled with proper execution, wider range of banking

products and excellent customer services. The core activities of the Bank are to provide all kinds

of commercial banking services including deposits mobilization, providing loans, discounting

bills, foreign exchange business, off-shore banking, treasury function, card business and mobile

banking.

MBL has 2 (Two) subsidiaries namely Mercantile Bank Securities Limited (MBSL) and

Mercantile Exchange House (UK) Limited. MBSL formed on 27 June 2010 to deal with stock

dealing and broking. MBSL started its commercial operation on September 14, 2011 through

obtaining stock dealer and broker license from concerned authorities. Mercantile Exchange

House (UK) Limited, another subsidiary company of MBL incorporated as private limited

company on December 01, 2010. It commenced its business operation at Birmingham in UK on

December 06, 2011. Currently, it is operating with two branches, one in Birmingham and another

in London with a view to providing faster, easier and safer remittance services to the

Bangladeshi expatriates working in UK.

MBL has broad network coverage across the country. It has 86 (Eighty Six) branches including 5

(Five) SME/Krishi branches as on December 31, 2012. The Bank has 2 (Two) Off-shore

Banking Units operating at Gulshan and Chittagong EPZ areas. MBL has 115 ATM booths as on

December 2012 covering important business centers. Mercantile Bank Securities Limited

(MBSL), a subsidiary company of MBL dealing with stock dealing and broking has 7 (seven)

branches across the country. Mercantile Exchange House (UK) Limited, another fully owned

subsidiary company of MBL is facilitating inflow of remittance with 2 (two) branches in

Birmingham and London, UK.

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Theories and Concept of Human Resource"Human resource management is a process consisting of four functions-acquisition,

development, motivation and maintenance of human resources." by Gary Dessler. [1].

Human Resource Management includes conducting job analyses, planning personnel

needs,recruiting the right people for the job, orienting and training, managing wages and salaries,

providing benefits and incentives, evaluating performance, resolving disputes, and

communicating with all employees at all levels. Examples of core qualities of HR management

are extensive knowledge of the industry, leadership, and effective negotiation skills. Formerly

called personnel management.

Importence of Human resource Management [2]

Importance of Human Resources Management occur daily in workplaces.Some employees

regard HR as the policing, traumatizing, systematizing arm of executive management. These

employees see HR staff as gatekeepers, people who hold little interest in employee concerns.

They also see HR staff as supporting managers, not regular employees. They attribute

nefarious goals and motives to HR staff and talk about why they hate HR.

Part of the problem is that HR has to balance the interests of five different stakeholders,

so employees can feel their interests are ignored. And, HR needs to do a better job of

touting its own horn and educating staff about what they are contributing

A good HR department is critical to an employee oriented, productive workplace in

which employees are energized and engaged. Here are the reasons why.

HR monitors the culture. Some organizations say that HR owns the culture, but as in all

other employee relations matters, I recommend that the ownership is spread across all

employees.

HR owns the overall talent management processes. In conjunction with other managers,

HR leads the way in management development, performance management, succession

planning, career paths, and other aspects of talent management.

HR is responsible for the over all recruiting of a superior workforce. Once again, HR

cannot do it alone, but must provide support to hiring managers who are also responsible

for recruiting a superior workforce.

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HR recommends market-based salaries and develops an overall strategic compensation

plan. HR provides guidance to managers as they determine the salary ranges within their

organizations.

HR researches, recommends, and implements employee benefits programs that attract

and retain your best employees. HR is also responsible for controlling costs and

considering various options before recommending adoption.

HR is responsible for recommending and instituting strategies for people and the

organization that further the attainment of the organization's strategic goals.

The importance of HR is easily overlooked in the busy day-to-day in the workplace, but

without contributions in each of these areas, the organization would be less successful.

Activities of HRAs it is stated that HR is one of the most important part in any organization. so their activities

also very important in any organization.there are some activities of HR which is very important.

The activities are

• Employee Motivation

• Employee selection

• Recruitment

• Employee Welfare

• Pay roll

• Training and development

• Employee Retention

• Human resource planning

Now these Activities are discussed below

Employee MotivationMotivation is an employee's intrinsic enthusiasm about and drive to accomplish activities related

to work. Motivation is that internal drive that causes an individual to decide to take action. An

individual's motivation is influenced by biological, intellectual, social and emotional factors. As

such, motivation is a complex, not easily defined, intrinsic driving force that can also be

influenced by external factors.

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Employers understand that they need to provide a work environment that creates motivation in

people. But, many employers fail to understand the significance of motivation in accomplishing

their mission and vision. Even when they understand the importance of motivation, they lack the

skill and knowledge to provide a work environment that fosters employee motivation

Motivation can be defined as "the complex forces, needs, drives, tension states, or other

mechanisms within us that will create and maintain voluntary activity directed toward the

achievement of personal goals”. Employee motivation can be defined as "psychological forces

that determine the direction of a person's behavior in an organization, a person's level of effort

and a person's level of persistence". It is important to understand that employee motivation is a

separate and distinct topic apart from motivation. Vast articles and studies exist on this topic

indicating the level of importance employee motivation has in business success. [1]

Importance of Employee motivation[2]

When looked upon the first time, the link between employee motivation and performance seems

to be quite obvious. That’s because every time when we deem a task to be important and

valuable to us, we act with a high level of dedication and enthusiasm to its completion.

With that in mind, managers need to find creative ways in which to consistently keep their

employees motivated as much as possible. Motivation is highly important for every company due

to the benefits that it’s able to bring. (Importance of motivation,2013) Such benefits include:

Human Capital Management – a company can achieve its full potential only by making

use of all the financial, physical, and human resources that it has. It is through these

resources that the employees get motivated to accomplish their duties.

Meeting Personal Goals Help an Employee Stay Motivated and Feel About

Themselves to Continue to Produce – Motivation can facilitate a worker reaching

his/her personal goals, and can facilitate the self-development of an individual.

Greater Employee Satisfaction - Worker satisfaction is important for every company, as

this one factor can lead towards progress or regress. In the absence of an incentive plan,

employees will not fill ready to fulfill their objectives.

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Raising Employee Efficiency- An employee’s efficiency level is not strictly related to

his abilities and qualifications. In order to get the very best results, an employee needs to

have a perfect balance between ability and willingness.

Better Team Harmony – A proper work environment focused on cooperative

relationships is highly important for an organization’s success. Not only that it can bring

stability and profits, but employees will also adapt more easy to changes

Workforce Stability – Stability of the personnel is highly important from a business

point of view. The staff will stay loyal to the enterprise only they meet a sense of

participation within the management side. The abilities and potency of staff can be used

in their own advantage, but also in the benefit of the company. This may cause an honest

public image within the market which can attract competent and qualified individuals into

the business.

With all that said, it’s important also to point out that motivation is an interior feeling which

should target both the manager and the team members, as they can interact and feed off each

other, motivationally speaking

Motivation techniques for employees

Employee motivation techniques are the key to boosting team and business performance.

(Holmes,n.d) Often people stay in jobs because they like the company, their workmates, the pay

or it is close to home, but they stopped being engaged by the work that they do years ago. [3]

There are 5 employee motivation technique. They are

Provide Meaningful and Challenging Work

When people feel that the work they are doing is meaningful - makes a difference in some way -

and provides them with challenges that stretch them (but also mesh with their ability to achieve

them) they become internally motivated. In other words they don't need anyone standing around

coercing them into higher levels of performance.Regardless of the actual work that is being done,

people generally want to feel a sense of:

Achievement

Responsibility

Enjoyment

Recognition

Set Clear Targets and Expectations and Measure Performance

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Spelling out specific targets, goals, and expectations for behavior and performance need not be

anything complicated it just needs to be done and people need to get regular and timely feedback

on how they are performing against those goals.

Give Regular, Direct, Supportive Feedback

Feedback - both positive and performance improving - is vital to continuous improvement and

done well it motivates and inspires people to continually move toward using more of their

potential.Feedback needs to be timely, specific and presented in such a way that the individual is

clear about what behaviors or skills they need to modify in order to improve performance.

Design People's Roles So They Can Use Their Strengths

Assigning people to specific tasks and duties that play to their strengths is one of the best

employee motivation techniques. Research has shown, more than anything, people who are able

to make use of their strengths on a regular basis while at work are more likely to work in teams

that perform at higher levels.

Enable Input and Choice In How Work Gets Done

In many organizations managers turn the majority of their focus toward the 5% of people who

are allergic to work and then instigate rules, polices and practices (such as close supervision) to

control this 5%. As it c be imagined all that does is demean, annoy and demotivate the 95% who

are motivated to do their best. It is wasting the talent and natural motivation that the

overwhelming majority of people bring to the workplace

Employee Selection and RecruitmentEmployee SelectionThe process of interviewing and evaluating candidates for a specific job and selecting an

individual for employment based on certain criteria. Employee selection can range from a very

simple process to a very complicated process depending on the firm hiring and the position.

Certain employment laws such as anti-discrimination laws must be obeyed during employee

selection[5]

Importance of employee Selection

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The human resources, or HR, selection process is important because of the production and

performance value companies get by making good hires and the high costs of replacing

employees following bad hires. These considerations are especially heightened for small

businesses. HR has taken on a more strategic role in many early 21st century companies, with

hiring and selection integral to that role. [6]

• Basics

The HR selection process is the strategically planned procedural approach developed by human

resources professionals and implemented by organizations when recruiting, evaluating and hiring

new employees. The process typically begins when jobs are posted internally and externally.

Sometimes recruiting tools are used to draw top-qualified candidates for certain jobs

• Selection Criteria

One area of the selection process that is significant and sometimes under-valued is the

development of screening tools. The ultimate goal of selection is to hire the candidate who is the

best possible match for the job duties and the culture of the company.

• Costs

Along with finding the best hire, cost efficiency and legal concerns are two main reasons why

the HR selection process is so important. When companies make a bad hire, they pay to train and

orient a person who ultimately may cause more harm than good if he performs poorly and

negatively affects the workplace. The costs to replace a bad hire are astronomical in many

industries

• Legal Concerns

Any misalignment between the job and selection criteria could open the door for a candidate to

claim discrimination. Laws such as Title VII and the Americans with Disabilities Act mandate

equal opportunities for employees regardless of such traits as race, national origin, age, religion,

sexual orientation and disability

There is a danger that good selection can be viewed as a panacea, or a way of guaranteeing an

effective workforce. Hopefully, you will already be aware that this is not the case. If it was there

would be no need for any more modules in this course - which would make it easier, but less

interesting Imagine that an organization needs 1000 highly skilled nuclear power plant control

room operatives Selection might focus on identifying the people with the potential to develop

such skills. Factors affecting employee selection

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• Environmental Factors

Every organization is having some sort of environment which is constituted by some elements.

These elements of the environment may have impacts over every function that is being

performed in the organization. Few of the environmental factors are given below

HR functions, other than the selection and recruitment may affect the method of selection. The

comparison exists between the different departments and operations of the organization. The

competition mainly exists between the factors such as compensation packages, health or safety

facilities and so on.

Legal Considerations The legal considerations define the criteria for the selection of the

employees. These legal considerations are different for different jobs. These considerations are

necessary for shaping the eligibility criteria of the employees.

Speed of Decision Making The time period that is available for the selection and recruitment

process also affects the method of employee selection. Obviously, the method will be selected

that can be performed effectively in the given time period. There are many jobs that need the

employee quickly otherwise, the organization might not function properly. In such cases, it will

become necessary to choose the quickest selection method.

Organizational Hierarchy It is a fact that the nature of organization may also affect the

selection method to the large extent. Also, the levels at which the jobs are required also do have

impacts over the selection methods. There is a huge difference in selecting the method for the job

of chief executive and the data entry operator. For higher posts, the methods will be selected that

may overview the background properly along with some interviews.

Type of organization The organizations are of different kinds like private, public, semi private,

NGOs, government and so on. All types of organizations do have their own strategies. In private

sector, huge competition is observed and the method is chosen that can find out the best

employee who can provide the organization with large profit.

Probationary Period The trend of keeping a probationary period is now getting common in

many organizations. This period is set to examine the performance of the selected employee in

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the given time period. If the candidate is successful in performing according to the expectations

then no more selection methods will be required.

The above are the most common environmental factors that may influence the selection method.

All these factors are important and may have different affects.

• External Factors

There exist many factors that are not a part of the organizations. These factors are not under the

control of the organization as well. Such factors are named as external factors and these are also

having impacts over the employee selection method. The description of these factors is given

below

Supply and Demand The most important element for the selection and recruitment in any

organization is the current availability of work force. Also, the number of candidates that are

applying for the particular job holds equal importance for any organization. The selection

method is chosen according to the need of the company.

Labor Market The locations of the organization for which the employees are being selected

should be observed first in terms of employment condition. These conditions may affect the

process of selection to the large extent. If at the time of selection and recruitment the candidates

observe the conditions like surplus of workforce or any other informal attempt then naturally

their mind would be diverted towards the particular organizations.

Image or Good Will Obviously, the image of the organization is having its impacts over every

function or operation that is being performed. The organization that is having a strong positive

image is always likely to attract a large number of candidates to apply. So, this factor will affect

the selection method as it will be selected according to the number of candidates applying and

also based on the image of the organization.

Political, Legal and Social Environment In many organizations various political, social and

legal constraints are found in their laws and policies. These may also affect the recruitment

process. The union of any organization holds great importance and can be a great restriction for

the management in choosing the selection method.

Unemployment Rate The condition of the economy is again a very important factor. It is very

important to know that what the current rate of the economy is. It is also required to find out that

whether the economy is growing or not. These are important considerations as the status of the

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economy will allow the organizations to create more jobs. When the rate of unemployment goes

high then the selection method is very restrictive.

Competitors The organizations should also keep in mind about the policy of selection and

recruitment of the competitive organizations. Obviously, a large competition is existing in the

market so it is required that such policy and method should be chosen that is better than the one

selected y the competitive organizations.

The above stated are the external factors that may highly affect the selection methods. These

factors should be kept while deciding the selection policy and methods. Considering the external

factors is most important as these factors cannot be controlled by the organization. (External

factors affecting recruitment, 1, 2007)

• Internal Factors

There are many factors that exist inside the organization and may affect the process of selection

and recruitment. These factors are controlled by the organization itself and are known as the

internal factors. Following is the details of the internal factors affecting the employee selection

methods

Policy of Recruitment Every organization is having some special policy or rules for the process

of recruitment and selection. The purpose of the policy of selection and recruitment helps the

organization to clearly define the goals and objectives. The desired output from the process of

selection and recruitment is established and also it provides the framework that should be

followed for the implementation of the selection method

Organizational Objectives The objectives of the organization are also very important for

selecting the employee selection method. If the objective of the organization is to have a team of

professionals and creative people then the employees of that category will be selected. In such

situation, it is required that the applied method can easily judge these qualities of the candidates.

Human Resource Planning The Human Resource is the most effective department of any

organization. So, it is required that the planning of Human Resource should be very strong and

effective as well. The Human Resource planning helps a lot in finding out that what is the current

work force and what is the required. This planning may also allow finding out the required

qualities that may help to perform the job successfully. In short, Human Resource Management

plays a great role in the process of selection and recruitment.

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Size of the Organization The size of the organization is one of the main factors that are

considered while selecting the employee selection method. If the organization is large and having

a number of operations then obviously it will be requiring large number of workforce. In case of

small organization and limited number of operations the required workforce would also be

limited

Cost All the employee selection methods do involve some costs of performing those methods. It

is a fact that all the organizations will try to adapt the selection method that may bear the low

costs of implementing the particular method. A budget should be kept in mind that can be

applied by the company over a single candidate.

Growth and Expansion As it has been discussed earlier that if the organizations are aimed to

grow its businesses and operations then the need of more employees will be felt. At this level,

the method will be chosen according to the number of employees needed.

Need of Organization The selection method highly depends over the number of employees and

the level of employees needed by the organizations. If an organization is hiring a number of

employees then the selected method will be the one that can examine a number of candidates.

But, if only a couple of employees are to be selected then the chosen method will be the one that

can judge the employees in detail.

The above stated ate the internal factors of the organization that may have affects over the

Selection methods of the organization.

Selection process [7]

• Step 1

Study and know about employment laws that affect the selection process.

• Step 2

Conduct a position analysis. Learn everything possible about the job (processes, performance

factors, working conditions, etc.) to determine what the essential functions are and what is

required in terms of knowledge, skills and personal traits to perform the position's duties

satisfactorily.

• Step 3

Prepare application screening criteria and issue a vacancy announcement.

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• Step 4

Prepare questions and screening criteria for the selection interview.

• Step 5

Screen applications and, if necessary, conduct initial screening interview, based on established

criteria in Step 4 above. Select the top-ranking individuals for interviewing.

• Step 6

Conduct interviews based on established criteria in Step 5 above

• Step 7

Make your selection decision, and conduct reference checks

No selection method is perfect. At best we can make use information gathered during selection to

make some reasonably accurate predictions about future performance. In one sense, selection

might be viewed as a risk management procedure that helps organizations to avoid hiring

unsuitable applicants. It is important to recognise that there is much variability in work

performance that is not directly related to selection scores.

RecruitmentRecruitment refers to the process of attracting suitable candidates to apply for a vacancy arising

within an organization. When an organization needs individuals with certain skill sets, it taps the

market. It may require individuals to join the organization to supplement the existing skill or

complement the existing skills. In both the cases after careful job analysis and manpower

planning an organization develops a candidate profile..

Depending on the size and practices of the organization, recruitment may be undertaken in-house

by managers, human resource generalists and/or recruitment specialists. Alternatively, parts of

the process may be undertaken by either public-sector employment agencies, commercial

recruitment agencies, or specialist search consultancies[8]

Importance of Recruitment[9]

Human talent is the world’s most sought-after commodity and the process of searching and

attracting this commodity is at the heart of every organization. Recruitment is “the process of

searching out and attracting qualified job applicants, which begins with the identification of a

position that requires staffing, and is completed when resumes and/or completed application

forms are received from an adequate number of applicants.”

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Once the company identifies the need for hiring, the source and method of recruitment will be

chosen. Organizations can recruit from within the organization and/or outside the organization.

Many organizations begin by recruiting from within to enhance commitment, morale, and

performance. That said, if any vacant positions cannot be filled by eligible employees, the hiring

company must hire externally; most entry-level positions are also usually filled by external

candidates. Online recruiting, which includes accessing internet job boards, using corporate

websites, and using social networking websites, has become one of the most popular external

recruitment methods for many companies

Finally, the recruitment process is completed once a pool of qualified candidates is generated.

The next step is selection, which is the process of choosing among the candidates who have been

recruited.

For any organization, regardless of the size and field, the ability to recruit a qualified workforce

is crucial. As an organization’s workforce typically drives the organization’s productivity, the

organization’s level of performance and competitive advantage is largely dependent on the

quality of its workforce. If you are interested in recruitment or would like to learn more about the

recruitment process, please stay tuned for our upcoming event, Insider Edition: A Recruitment

Panel. This event will give you the opportunity to view career in recruitment from a recruiter’s

perspective and network with the recruiters present on that day. Be sure to stay connected with

us, as we will be updating with more information.

Recruitment Process[10]

Having the right person, in the right place, at the right time, is crucial to organizational

performance.

Therefore recruitment is a critical activity and should incorporate the following steps:

• Step 1 - What’s the job?

Gather information about the nature of the job. Think about:

The content (such as the tasks) making up the job

The job’s purpose

The outputs required by the job holder

How it fits into the organisation’s structure

The skills and personal attributes needed to perform the role effectively.

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This analysis can form the basis of a job description and person specification.

• Step 2 - Prepare a job and person profile

A person specification or job profile states the necessary and desirable criteria for selection.

Increasingly such specifications are based on a set of competencies identified as necessary for

the performance of the job. Include:

Skills, aptitude, knowledge and experience

Qualifications (which should be only those necessary to do the job - unless

candidates are recruited on the basis of future potential , for example graduates)

Personal qualities relevant to the job, such as ability to work as part of a team.

The document formed from the person specification can then be used to inform the criteria you

use to shortlist applicants.

• Step 3 – Finding candidates

Internal methods :

Staff referrals

Succession planning

Secondments

Job sharing

It is important not to forget the internal talent pool when recruiting. Providing opportunities for

development and career progression is an important factor for employee retention and motivation

External methods : There are many options available for generating interest from individuals

outside the organization.

Online recruitment

Press advertising

Networking

Open days

Advertising remains the most common means of attracting and recruiting. Advertisements should

be Clear and indicate the:

Requirements of the job

Necessary and the desirable criteria for job applicants

Nature of the organization’s activities

Job location

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Reward package

Job tenure (for example, contract length)

Advertisements should be genuine and relate to a job that actually exists. They should appeal to

all sections of the community using positive visual images and wording.

• Step 4 - Managing the application process

There are two main formats in which applications are likely to be received: the curriculum vitae

(CV) or application form. It is possible that these could be submitted either on paper or

electronically and the use of e-applications (Internet, intranet and email) is now part of

mainstream recruitment practices

Application forms

Application forms allow for information to be presented in a consistent format, and therefore

make it easier to collect information from job applicants in a systematic way and assess

objectively the candidate’s suitability for the job. Be aware that application form design is also

important under the Disability Discrimination Act 1995, it may be necessary to offer application

forms in different formats.

CVs

The advantage of CVs is that they give candidates the opportunity to sell themselves in their own

way and don’t have the restrictions of fitting information into boxes as often happens on an

application form. However, CVs make it possible for candidates to include lots of additional,

irrelevant material which may make them harder to assess consistently.

• Step 5 - Selecting candidates

Selecting candidates involves two main processes: short listing and assessing applicants to

decide who should be made a job offer.

Shortlisting

The process of short listing involves slimming down the total number of applications received to

a shortlist of candidates you wish to take forward to the more detailed assessment phase of the

selection process. When deciding who to shortlist, it is helpful to draw up a list of criteria using

the person specification. Each application can then be rated according to these standards, or a

simple scoring system can be used.

Assessment

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A range of different methods can be used to assess candidates. These vary in their reliability as a

Predictor of performance in the job and in their ease and expense to administer. Typical methods

include:

General interview

Competency based interview

In tray exercise

Role play

Presentation

• Step 6 - Making the appointment

Contract

Offers of employment should always be made in writing. But it is important to be aware that an

oral offer of employment made in an interview is as legally binding as a letter to the candidate.

References

A recruitment policy should state clearly how references will be used, when in the recruitment

process they will be taken up and what kind of references will be necessary (for example, from

former employers). These rules should be applied consistently.

Medical examinations

It is reasonable to require completion of a health questionnaire where good health is relevant to

the job. Any particular physical or medical requirement should be made clear in the job

advertisement or other recruitment literature.

• Step 7 – Induction

Induction is a critical part of the recruitment process, for both employer and new employee. An

induction plan should include:

Orientation (physical) - describing where the facilities are

Orientation (organizational) - showing how the employee fits into the team and

how their role fits with the organization’s strategy and goals

Health and safety information - this is a legal requirement

Explanation of terms and conditions

Details of the organization’s history, its products and services, its culture and

values

A clear outline of the job/role requirements

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This is the process of recruitment which employer may follow to recruit desired candidates

Performance Management[11]

Performance management (PM) includes activities which ensure that goals are consistently being

met in an effective and efficient manner. Performance management can focus on the

performance of an organization, a department, employee, or even the processes to build a

product of service, as well as many other areas.PM is also known as a process by which

organizations align their resources, systems and employees to strategic objectives and priorities.

Performance management originated as a broad term coined by Dr. Aubrey Daniels in the late

1970s to describe a technology (i.e. science imbedded in applications methods) for managing

both behavior and results, two critical elements of what is known as performance.A formal

definition of performance management, according to Daniels' is "a scientifically based, data-

oriented management system. It consists of three primary elements-measurement, feedback and

positive reinforcement." [11]

Application

This is used most often in the workplace, can apply wherever people interact — schools,

churches, community meetings, sports teams, health setting, governmental agencies,social events

and even political settings - anywhere in the world people interact with their environments to

produce desired effects. Armstrong and Baron (1998) defined it as a “strategic and integrated

approach to increase the effectiveness of companies by improving the performance of the people

who work in them and by developing the capabilities of teams and individual contributors.”

It may be possible to get all employees to reconcile personal goals with organizational goals and

increase productivity and profitability of an organization using this process.It can be applied by

organizations or a single department or section inside an organization, as well as an individual

person.

First, a commitment analysis must be done where a job mission statement is drawn up for each

job. The job mission statement is a job definition in terms of purpose, customers, product and

scope.

Following the commitment analysis is the work analysis of a particular job in terms of the

reporting structure and job description. If a job description is not available, then a systems

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analysis can be done to draw up a job description. The aim with this analysis is to determine the

continuous critical objectives and performance standards for each job.

Importance of Performance Management(Importance of Performance Employees are an integral and indispensable part of running your business smoothly and

efficiently. That's why, keeping in mind the crucial role of your employees, a recent trend known

as Performance Management has come into practice. Using performance management, you can

ensure that your employees not only fulfill their responsibilities, but do so to the best of their

abilities and up to your expectations. [12]

Performance management allows you to tap the full potential of your staff. In short, it can be

described as a comprehensive process starting from monitoring and developing the desired traits

to rating their progress and rewarding them for their achievements.

Involve Employees in the Planning Stage

The mere making of plans alone will not help you to run your business successfully. You must

also focus on the appropriate ways to get business tasks done. One way of doing this efficiently

is to involve your employees in the planning process. This will not only boost their morale and

confidence, but also help you avoid any communication gaps in the process.Additionally, it will

also help in providing them with a clear picture of what you expect from them and what they

need to accomplish.

Monitoring the Progress of Your Employees

Just as revision of business plans is sometimes necessary for the success of your business,

measuring the performance of every employee is also important. This ensures that tasks are

efficiently completed on time and on or under budget. It also points out to you any shortcomings

of either your staff or business plans, and helps you to take the appropriate corrective actions.

Ensuring All Around Development of Employees

Performance management gives you the tools to instill the desired qualities in your employees in

order to get the job done. Development is not limited to only individuals in your workplace, but

also addresses the performance of the team as a whole. All around employee development not

only ensures the personal and professional growth of your employees, but also the expansion and

improvement of your business.

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Evaluation of Individual Performance

Evaluating and rating the performance of your employees on an individual basis is essential. This

gives them a clear picture of where they presently stand, areas that they need to work on and

what they are good at. This way, they can focus more on their weaknesses and work to

strengthen those areas.

Rewarding Employees

Rewarding and appreciating your employees' efforts ensures that their level of their performance

and consequently the performance of business is not compromised. It ensures optimum

productivity, performance and maximum profitability.

Rewarding staff for a job well done not only enhance their performance but also serves as a tool

to keep them motivated. Therefore, performance management is an effective system that allows

you to achieve the financial goals of business.

Performance Appraisal

A performance appraisal (PA), performance review, performance evaluation,(career)

development discussion or employee appraisal is a method by which the job performance of an

employee is documented and evaluated. Performance appraisals are a part of career development

and consist of regular reviews of employee performance within organizations[13]

A performance appraisal is a systematic and periodic process that assesses an individual

employee’s job performance and productivity in relation to certain pre-established criteria and

organizational objectives.Other aspects of individual employees are considered as well, such as

organizational citizenship behavior, accomplishments, potential for future improvement,

strengths and weaknesses, etc.

Benefit of performance appraisal

There are a number of potential benefits of organizational performance management conducting

formal performance appraisals (PAs). There has been a general consensus in the belief that PAs

lead to positive implications of organizations.Furthermore, PAs can benefit an organization’s

effectiveness. One way is PAs can often lead to giving individual workers feedback about their

job performance.

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Other potential benefits include:

Facilitation of communication: communication in organizations is consideration

essential function of worker motivation. It has been proposed that feedback from PAs aid

in minimizing employees’ perceptions of uncertainty.

Enhancement of employee focus through promoting trust: behaviors, thoughts, and/or

issues may distract employees from their work, and trust issues may be among these

distracting factors. Such factors that consume psychological energy can lower job

performance and cause workers to lose sight of organizational goals.

Goal setting and desired performance reinforcement: organizations find it efficient to

match individual worker’s goals and performance with organizational goals.PAs provide

room for discussion in the collaboration of these individual and organizational goals.

Performance improvement: well constructed PAs can be valuable tools for

communication with employees as pertaining to how their job performance stands with

organizational expectations “At the organizational level, numerous studies have reported

positive relationships between human resource management (HRM) practices” and

performance improvement at both the individual and organizational levels.

CompensationCompensation is the total amount of the monetary and non-monetary pay provided to an

employee by an employer in return for work performed as required[14]

Compensation is based on:

Market research about the worth of similar jobs in the marketplace,

Employee contributions and accomplishments,

The availability of employees with like skills in the marketplace,

The desire of the employer to attract and retain a particular employee for the value they

are perceived to add to the employment relationship, and

The profitability of the company or the funds available in a non-profit or public sector

setting, and thus, the ability of an employer to pay market-rate compensation.

Compensation also includes payments such as bonuses, profit sharing, overtime pay,

recognition rewards and checks, and sales commission. Compensation can also include

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non-monetary perks such as a company-paid car, stock options in certain instances,

company-paid housing, and other non-monetary, but taxable, income items.

Importance of Compensation Management[15]

A good compensation is must for every business organization and helps in the following

way:

It tries to give proper return to the workers for their contributions to the organization.

It imparts a positive control on the efficiency of employees and encourages them to

perform better and achieve the specific standards.

It forms a basis of happiness and satisfaction for the workforce that minimizes the labour

turnover and confers a stable organization.

It augments the job evaluation process which in turn helps in setting up the more realistic

and achievable standards.

It is designed to comply with the various labour acts and therefore does not result in

disputes between the employee union and the management. This builds up a peaceful

relationship between the employer and the employees.

It arouses an environment of morale, efficiency and cooperation among the workers and

provides satisfaction to the workers.

It stimulates the employees to perform better and show their excellence.

It provides growth and advancement opportunities to the deserving employees.

Types of Compensations

Direct Compensation is typically made up of salary payments and health benefits. The

creation of salary ranges and pay scales for different positions within the company are the

central responsibility of compensation management staff. Direct compensation that is in

line with industry standards provides employees with the assurance that they are getting

paid fairly. This helps the employer avoid the costly loss of trained staff to a competitor.

Indirect Compensation focuses on the personal motivations of each person to work.

Although salary is important, people are most productive in jobs where they share the

company's values and priorities. These benefits can include things like free staff

development courses, subsidized day care, the opportunity for promotion or transfer

within the company, public recognition, the ability to effect change in the workplace, and

service to others.

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Components of Compensation

Wages and Salary: Wages represent hourly rates of pay, and salary refers to the

monthly rate of pay, irrespective of the number of hours put in by an employee. These

are subject to annual increments.

Allowances: Several allowances are paid in addition to basic pay. Some of these

allowance are given below:

Dearness Allowance: This allowance is given to protect real income against

inflation. Generally, dearness allowance (DA) is paid as a percentage of basic pay.

House Rent Allowance: Employers who do not provide living accommodation

pay house rent allowance (HRA) to employees. This allowance is calculated as a percentage

of basic pay.

City Compensatory Allowance: This allowance is paid generally to employees

in metros and other big cities where cost of living is comparatively high. City compensatory

allowance (CCA) is generally a fixed amount per month (30 per cent of basic pay in case of

government employees).

Transport Allowance/Conveyance Allowance: Some employers pay transport

allowance (TA) to their employees. A fixed sum is paid every month to cover a part of

traveling charges

Incentives: Incentive compensation is performance-linked remuneration paid with a view

to inspire employees to work hard and do better. Both individual incentives and group

incentives are used. Bonus, profit-sharing, commissions on sales are some examples of

incentive compensation

Fringe Benefits/Perquisites: These include employee benefits such as provident

fund, gratuity, medical care, hospitalization, accident relief, health and group

insurance, canteen, uniform, recreation.

Training and developmentPage | 24

Training and development is a function of human resource management concerned with

organizational activity aimed at bettering the performance of individuals and groups in

organizational settings. It has been known by several names, including "human resource

development", and "learning and development[16]

Training and development encompasses three main activities: training, education, and

development

Training: This activity is both focused upon, and evaluated against, the job that an

individual currently holds

Education: This activity focuses upon the jobs that an individual may potentially hold in

the future, and is evaluated against those jobs.

Development: This activity focuses upon the activities that the organization employing

the individual, or that the individual is part of, may partake in the future, and is almost

impossible to evaluate.

Importance of training Improves morale of employees- Training helps the employee to get job security and job

satisfaction. The more satisfied the employee is and the greater is his morale, the more he

will contribute to organizational success and the lesser will be employee absenteeism and

turnover.

Less supervision- A well trained employee will be well acquainted with the job and will

need less of supervision. Thus, there will be less wastage of time and efforts.

Fewer accidents- Errors are likely to occur if the employees lack knowledge and skills

required for doing a particular job. The more trained an employee is, the less are the

chances of committing accidents in job and the more proficient the employee becomes.

Chances of promotion- Employees acquire skills and efficiency during training. They

become more eligible for promotion. They become an asset for the organization.

Increased productivity- Training improves efficiency and productivity of employees.

Well trained employees show both quantity and quality performance. There is less

wastage of time, money and resources if employees are properly trained.

Addressing Weaknesses-Most employees have some weaknesses in their workplace

skills. A training program allows you to strengthen those skills that each employee needs

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to improve. A development program brings all employees to a higher level so they all

have similar skills and knowledge

Training Need AnalysisPerforming a training needs analysis is the first step in the training process and is critical for a

successful program. The purpose of a needs analysis is to determine that training is the best

solution and identify what training is needed to fill the skill gap. This step is often disregarded

for reasons such as time constraints or lack of perceived value by management. However,

skipping the training needs analysis can cause major problems. Time, resources and dollars may

be wasted on training that was unnecessary or [16]

Process of TNA

Step One – Identify Problem Needs: Here organization determine circumstance for

training request. They identify potential skill gap and set objectives.

Step Two – Determine Design of Needs Analysis: Here Organization establish method

selection criteria, and assess advantages and disadvantages for methods.

Step Three – Collect Data : To collect data organization conduct interviews, administer

surveys and questionnaires, observe people at work, review document.

Step Four – Analyze Data : Here organization conduct qualitative or quantitative

analysis and determine solutions and recommendations.

Step Five – Provide Feedback : Organization in this step write report and make oral

presentation.

Step Six – Develop Action Plan : Here organization use results as the basis for training

design, development and evaluation

Although conducting a step-by-step training needs analysis is recommended, the reality is that

time and resources are not always available for this type of effort. In these situations, don’t

simply write off the analysis completely

Methods of Training: [17]

The method of Training are

• Cognitive methods.

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• Behavioral methods.

• On job training

• Off job training

In cognitive method training are

Lecture : It is one of the oldest methods of training. This method is used to create

understanding of a topic or to influence behavior, attitudes through lecture. A lecture can

be in printed or oral form. Lecture is telling someone about something. Lecture is given

to enhance the knowledge of listener or to give him the theoretical aspect of a topic.

Training is basically incomplete without lecture.

Demonstration: This method is a visual display of how something works or how to do

something. As an example, trainer shows the trainees how to perform or how to do the

tasks of the job. In order to be more effective, demonstration method should be should be

accompanied by the discussion or lecture method.

Discussion : This method uses a lecturer to provide the learners with context that is

supported, elaborated, explains, or expanded on through interactions both among the

trainees and between the trainer and the trainees. The interaction and the communication

between these two make it much more effective and powerful than the lecture method.

Computer based training : With the worldwide expansion of companies and changing

technologies, the demands for knowledge and skilled employees have increased more

than ever, which in turn, is putting pressure on HR department to provide training at

lower costs. Many organizations are now implementing CBT as an alternative to

classroom based training to accomplish those goals.

The methods of training under behavioral approach are:

Games and Simulations : Games and Simulations are structured and sometimes

unstructured, that are usually played for enjoyment sometimes are used for training

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purposes as an educational tool. Training games and simulations are different from work

as they are designed to reproduce or simulate events, circumstances, processes that take

place in trainees’ job.

Behavior Modeling : : Behavior Modeling uses the innate inclination for people to

observe others to discover how to do something new. It is more often used in

combination with some other techniques.

Case Studies : Case Studies try to simulate decision making situation that trainees may

find at their work place. It reflects the situations and complex problems faced by

managers, staff, HR, CEO, etc. The objective of the case study method is to get trainees

to apply known concepts and ideologies and ascertain new ones.

Role play : Role play is a simulation in which each participant is given a role to play.

Trainees are given with some information related to description of the role, concerns,

objectives, responsibilities, emotions, etc. Then, a general description of the situation,

and the problem that each one of them faces, is given. For instance, situation could be

strike in factory, managing conflict, two parties in conflict, scheduling vacation days, etc.

The methods of training under on the job are:

Coaching

Mentoring

Job rotation

The methods of training under on the job are:

Sensitivity Training

Transactional Training

Lectures

Employee Welfare

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Welfare includes anything that is done for the comfort and improvement of employees and is

provided over and above the wages. Welfare helps in keeping the morale and motivation of the

employees high so as to retain the employees for longer duration. The welfare measures need not

be in monetary terms only but in any kind/forms. Employee welfare includes monitoring of

working conditions, creation of industrial harmony through infrastructure for health, industrial

relations and insurance against disease, accident and unemployment for the workers and their

families.Labor welfare entails all those activities of employer which are directed towards

providing the employees with certain facilities and services in addition to wages or salaries.

The basic features of labor welfare measures are as follows[18]

Labor welfare includes various facilities, services and amenities provided to workers for

improving their health, efficiency, economic betterment and social status.

Welfare measures are in addition to regular wages and other economic benefits available

to workers due to legal provisions and collective bargaining

Labor welfare schemes are flexible and ever-changing. New welfare measures are added

to the existing ones from time to time.

Welfare measures may be introduced by the employers, government, employees or by

any social or charitable agency.

The purpose of labor welfare is to bring about the development of the whole personality

of the workers to make a better workforce.

Scheme of employee Welfare:Organizations provide welfare facilities to their employees to keep their motivation levels high.

The employee welfare schemes can be classified into two categories viz. statutory and non-

statutory welfare schemes. The statutory schemes are those schemes that are compulsory to

provide by an organization as compliance to the laws governing employee health and safety.

These include provisions provided in industrial acts like Factories Act 1948, Dock Workers Act

(safety, health and welfare) 1986, Mines Act 1962. The non statutory schemes differ from

organization to organization and from industry to industry. [19]

Statutory Welfare Scheme

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Drinking Water: At all the working places safe hygienic drinking water should be

provided.

Facilities for sitting: In every organization, especially factories, suitable seating

arrangements are to be provided.

First aid appliances: First aid appliances are to be provided and should be readily

assessable so that in case of any minor accident initial medication can be provided to

the needed employee.

Latrines and Urinals: A sufficient number of latrines and urinals are to be provided in

the office and factory premises and are also to be maintained in a neat and clean

condition.

Canteen facilities: Cafeteria or canteens are to be provided by the employer so as to

provide hygienic and nutritious food to the employees.

Spittoons: In every work place, such as ware houses, store places, in the dock area

and office premises spittoons are to be provided in convenient places and same are to

be maintained in a hygienic condition.

Lighting: Proper and sufficient lights are to be provided for employees so that they

can work safely during the night shifts

Washing places: Adequate washing places such as bathrooms, wash basins with tap

and tap on the stand pipe are provided in the port area in the vicinity of the work

places.

Changing rooms: Adequate changing rooms are to be provided for workers to change

their cloth in the factory area and office premises. Adequate lockers are also provided

to the workers to keep their clothes and belongings.

Rest rooms: Adequate numbers of restrooms are provided to the workers with

provisions of water supply, wash basins, toilets, bathrooms, etc.

Non Statutory Welfare Scheme

Personal Health Care (Regular medical check-ups): Some of the companies provide the

facility for extensive health check-up

Flexi-time: The main objective of the flextime policy is to provide opportunity to

employees to work with flexible working schedules. Flexible work schedules are initiated

Page | 30

by employees and approved by management to meet business commitments while

supporting employee personal life needs

Employee Assistance Programs: Various assistant programs are arranged like external

counseling service so that employees or members of their immediate family can get

counseling on various matters.

Harassment Policy: To protect an employee from harassments of any kind, guidelines are

provided for proper action and also for protecting the aggrieved employee.

Maternity & Adoption Leave – Employees can avail maternity or adoption leaves.

Paternity leave policies have also been introduced by various companies.

Medi-claim Insurance Scheme: This insurance scheme provides adequate insurance

coverage of employees for expenses related to hospitalization due to illness, disease or

injury or pregnancy.

Employee Referral Scheme: In several companies employee referral scheme is

implemented to encourage employees to refer friends and relatives for employment in the

organization.

The very logic behind providing welfare schemes is to create efficient, healthy, loyal and

satisfied labor force for the organization. The purpose of providing such facilities is to make their

work life better and also to raise their standard of living.

Limitation• Dependency on secondary information,

• Wrong information provided by the organization,

• Usage of assumption

• Lack of Co operation to the employees.

• Refuse to proving all HR issues as they are confidential

• Time limitation

• Data redundancy

• Misinterpretation of questionnaire by some employees

• Less using of primary data source.

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Introduction

Chapter One

Page | 32

Chapter 1

Introduction1.1 Company profile

Mercantile Bank Limited is one of the famous & oldest private banks in Bangladesh. It is a

scheduled private commercial Bank established on May 20, 1999 under the Bank Company Act

1991 by Mr. Abdul Jalil (MP), & registered as a Public Limited Company under Companies Act,

1994. The Bank started commercial Banking operations for both organizations & individuals

from June 02, 1999. From then within a short time MBL established itself in a strong position in

the economy of the country having 35 branches all over the country. It has earned significant

reputation in the country’s Banking sector as a Bank & created a wide image in the eye of the

people by helping people in investing their money earn profits & serving different organizations

to save their money is secured place along with investing in different other businesses for profit,

organizational development, country’s economic growth & exchanging money & dealing

international business in foreign currency. The dream of creating MBL, which is ‘A Bank of

21st Century’, & fulfilling its will to become “Banglar Bank” as its title says has become

successful because of the initiative of some persons who are the sponsors of MBL. There are 30

sponsors in Mercantile Bank Limited and all of them are highly regarded for their entrepreneurial

competence.

1.2 Vision and Mission

Vision

Would make finest corporate citizen

Mission

Will become most caring, focused for equitable growth based on diversified deployment of

resources and nevertheless would remain healthy and gainfully profitable bank

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1.3 Objectives

1.3.i Strategic objectives

to increase shareholders' value

to achieve economic value addition

to be market leader in product innovation

to be one of the top three financial institutions in Bangladesh in terms of efficiency

to be one of the top five financial institutions in Bangladesh in terms of market

share in all significant market segments we serve

1.3.ii Financial objectives

To achieve 20% return on shareholders' equity or more, on average.

1.4 Core values

1.4.i For the customers

providing with caring services by being innovative in the development of new banking

products and services

For the shareholders

Increase shareholders' value

For the employees

Respecting worth and dignity of individual employees devoting their energies for the

progress of the bank

For the community

Strengthening the corporate values and taking environment and social risks and reward

into account

New technology

Adopting the state-of-the art technology in banking operations

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1.5 Organogram

Page | 35

Chairman

PresidentExecutive

Chief AdvisorBoard of Directors

Managing Director& CEO

Deputy Managing Director Company Secretary

Executive Vice

President

Senior Vice President Senior Executive Vice

President

Vice President

First Vice President

Assistant Vice President

First Assistant Vice

Principle Officer

Senior Executive Officer

Executive Officer

Officer

Assistant Officer

Trainee Asst: Officer

1.6 Products of Mercantile Bank limited

1.6.i SME Financing

SME Financing

Small and Medium Enterprises (SME) is considered as thrust sector of the economy. SME is the

Engine of Growth as this sector churns out 20%-25% of the country's GDP growth.

In order to promote the SMEs, MBL has following arrays of products befitting the requirements

of the diversified segments and sectors of the economy.

CHAKA (Term Loan)

To make business expansion and procure capital machinery and other fixed assets of the

business.

Loan Limit Tk 0.50 lac to Tk 100.00 lac.

Collateral free up to Tk 8.00 lac with the applicable conditions.

Repayment period- 12 months to 60 months.

Minimum 2 years experience in the respective field of business.

The project must be financially, economically and commercially viable.

SAMRIDDHI (Continuous Loan)

To meet up any acceptable working capital requirement of the business.

Loan Limit Tk 0.50 lac to Tk 100.00 lac.

Repayment period- 12 months, which is renewable.

Minimum 2 years experience in the respective field of business.

MOUSUMI (Short Term Seasonal Loan)

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To meet up short term seasonal need of the business.

Loan Limit Tk 0.50 lac to Tk 100.00 lac.

Repayment period- Maximum 9 (nine) months.

Minimum 2 years experience in the respective field of business.

The project must be financially, economically and commercially viable.

ANANNYA (Women Entrepreneur's Loan)

Loan Limit Tk 0.50 lac to Tk 50.00 lac @ 10% interest p.a.

Collateral free up to Tk 8.00 lac in case of Term Loan with the applicable

conditions.

Repayment period- 12 months to 60 months for Term Loan and 12 months

for Continuous Loan, which is renewable.

Minimum 2 years experience in the respective field of business.

The project must be financially, economically and commercially viable.

1.6.ii Retail Banking

Current Deposit Account

Current Deposit Account is the net flow of current transactions with no restriction. It is an easy-

to-use, convenient current account. Current Deposit Accounts are suitable for those customers

who need unlimited transactions because of no restriction on withdrawal either in amount or in

frequency.

Types of Current Deposit Account

Individuals

Two or more persons jointly

Sole Proprietorship Concerns

Partnership Firms

Limited Companies (Both Public and Private)

Societies / Clubs / Associations / Local Bodies

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Banks

Govt. / Semi Govt. Offices / Corporations / Autonomous bodies.

Others

Required Documents

Name of applicant(s) together with name(s) of parents and spouse(s).

Present and Permanent Address.

Date of Birth.

Nationality.

Duly attested photocopy of valid Passport / Employer’s Certificate ID

Card

Two copies of recent passport size Photographs of account holder duly

attested by the Introducer.

One copy of Passport Size Photograph of Nominee duly attested by the

Account Holder.

Copies of Utility Bills, viz. Electricity Bill / Land Phone bill / Cell Phone

Bill / Gas Bill / WASA Bill, etc. in the name of applicant

Saving Deposit Account

This account has been designed and developed for savers who want to save their income. There

are restrictions of withdrawal in both amount and frequency. Rate of Interest is 6.00%.Savings

Account may be opened in the name of

Individual (Single).

Two or more individuals (joint) who are not partners.

Minor jointly with Natural / Legal Guardian.

Clubs / Societies / Associations or Similar Institutions / non-profit

organizations.

Required Documemnts

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Name of applicant(s) together with name(s) of parents and spouse(s).

Present and Permanent Address.

Date of Birth.

Nationality.

Duly attested photocopy of valid Passport / Employer’s Certificate / ID

Card / Driving Licence / Voter ID Card / National ID Card or Certificate

about credentials by the local Ward Commissioner / Chairman of Union

Parishad.

Two copies of recent passport size Photographs of account holder duly

attested by the Introducer.

One copy of Passport Size Photograph of Nominee duly attested by the

Account Holder.

Copies of Utility Bills, viz. Electricity Bill / Land Phone bill / Cell Phone

Bill / Gas Bill / WASA Bill, etc. in the name of applicants

Special Noticed Deposit Account

Any individual or corporate body can open Special Notice Deposit Account, which is an interest

bearing deposit account, for a short period of time. However, 7 days of notice is required if the

customer wishes to withdraw money from this account.

Features & Benefits

Attractive Interest Rates

Customer has to notify 7 days before withdrawing money.

MICR Cheque Book with every SND account is a must.

Service Charge: NIL

Account Maintenance Fee: Maximum BDT 500.00 Only (half yearly

basis)

Account Closing Fee: Maximum BDT 300.00 Only

Fixed Deposit Account

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Unlike CD, SND and SB account, Branch shall accept deposit of fixed amount of money from

the customers for a fixed period of time with interest under the term plan time to time. FDR is

neither Transferable nor Negotiable and as such payment against this instrument with interest

shall normally be made to the depositor on maturity. Payment against FDR can also be made to

nominee or assignee after observing essential formalities.

Fixed Deposit Account can be opened in the name of

Individual (Single).

Two or more persons (joint).

Sole Proprietorship Concern.

Partnership Concern (Firm).

Limited Companies (both Public and Private).

Society / Club / Association / Local Bodies / Govt. / Semi

Govt. Organization, etc.

Opening of Fixed Deposit A/C

Required Documents

Name of applicant(s) together with name(s) of parents and spouse(s).

Present and Permanent Address.

Date of Birth.

Nationality.

TIN (if any).

Duly attested photocopy of valid Passport / Employer’s Certificate / ID

Card / Driving Licence / Voter ID Card / National ID Card or Certificate

about credentials by the local Ward Commissioner / Chairman of Union

Parishad.

Two copies of recent passport size Photographs of account holder duly

attested by the Introducer.

One copy of Passport Size Photograph of Nominee duly attested by the

Account Holder.

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Copies of Utility Bills, viz. Electricity Bill / Land Phone bill / Cell Phone

Bill / Gas Bill / WASA Bill, etc. in the name of applicants.

Double Benefit Deposit Scheme (DBDS)

Objectives

Give maximum benefit.

Help in meeting specific needs like education, marriage etc.

Deposit becomes double in Six years.

Mode

Tenure of the deposit is Six years.

Features

The Minimum amount of deposit is BDT 10,000.00(Ten Thousand) or its

multiples.

All taxes/duty/levy and /or any other surcharges presently in force or that may be

imposed by the Government of Bangladesh (GOB) from time to time will be

deducted/ recovered from the deposit account under this scheme.

Loan may be granted up to maximum 80% of the deposited amount but minimum

principle amount must be BDT 20,000.00.

Loan processing fee be realized BDT 50.00 only and usual stamp costs also be

realized.

Family Maintenance Deposit (FMD)

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Objectives

Help the retired persons for investing their retirement benefits.

Create investment opportunities for Non-Resident Bangladeshi.

Explore investment opportunities for school, college, university etc.

Give investment opportunities for Trust; Foundation etc.

Deposit a fixed amount of money for a minimum tenure of 03 (Three) year

to a maximum tenure of 05 (Five) years.

Features

The Minimum amount of deposit is BDT 50,000.00 (Fifty thousand) or its

multiples.

All taxes/duty/levy and /or any other surcharges persently in force or that may be

imposed by the Government of Bangladesh (GOB) from time to time will be

deducted/ recovered from the deposit account under this scheme.

In case of premature encashment interest will be paid on Saving A/C Rate.

Loan may be granted up to maximum 80% of the forced encashment value on the

date of loan processing.

Loan processing fee be realized BDT 50.00 only and stamp costs also be realized

Times Benefit Deposit Scheme

Under the ‘1.5 Times Benefit Deposit Scheme’ a deposit of minimum BDT 50,000.00 (fifty

thousand) or its multiples will be received for a period of 51 months (4 years & 3 months). On

maturity after 51 months.

Features

Page | 42

All taxes/duty/levy and /or any other surcharges presently in force or that may

be imposed by the Government of Bangladesh (GOB) from time to time will be

deducted/ recovered from the deposit account under this scheme.

In case of premature encashment interest will be paid on Saving A/C Rate.

However, no interest shall be paid if premature encashment take place before

expiry of 1 (one) year.

In the event of death of the depositor before the maturity, the deposit account

may be encased (premature) as per rule or may be continued up to maturity on

written approach by the nominee(s).

A saving account will be needed to be maintained to receive quarterly benefit

payment.

Loan processing fee be realized BDT 50.00 only and usual stamp costs also be

realized.

1.6.iii Loans

Consumers Credit Scheme

Objectives

Help fixed-income people for buying house hold durable.

For the amount up to Tk. 1,00,000 the period is two years.

Interest rate will be charged quarterly rest.

Doctors' Credit Scheme

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Objectives

Help new F.C.P.S. or post-graduate doctors for setting up chambers and buying

medical equipment.

Help experienced doctors for refurbishing chambers and buying medical

equipment.

Assist private clinics for acquiring modern medical equipment.

Minimum income

Tk. 25,000.00 for General Practitioner.

Tk. 40,000.00 for Specialized doctor.

Work Experience

For general practitioners having practice length of 3 years.

For specialized Doctors having practice length of 5 years.

Down Payment

10% of general practitioners

20% of the specialized doctors.

30% of owners, hospital or diagonstic center

Interest rate

The interest rate is subject to change based on the market conditions and policy of

the Bank.

Education Loan

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Mercantile Bank Limited Education Loan may be availed by any student of Bangladeshi

National with excellent educational track record to provide financial assistance for furthur

educational purposes like study abroad or within the country.

Eligibility

Applicant must be enrolled as a student in Public/Private University in case of pursuing higher

studies in home for undergraduate and post-graduate program.

Age Limit

Age of the Applicant should be in between 18 to 30 years 9at the time of disbursement of loan)

Qualification

Holds excellent result in SSC/HSC/O-Level/A-Level or equivalent from any

recognized educational instituition at home or abroad for pursuing undergraduate

course in home.

Holds excellent result in SSC/HSC/O-Level/A-Level or equivalent from any

recognized educational instituition at home or abroad for pursuing post-graduate

courses in home or abroad as well.

Educational program must commensurate with the career prospect of the

borrower.

Loan Limit

For Studies in Bangladesh: Maximum Tk. 5.00 Lac

For Studies Abroad: Maximum Tk. 20.00 Lac

Expenses considered for Loan

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Fees payable to University/College/Hostel

Examination/Library/Laboratory Fee

Purchase of Books/Equipments/Instruments/Uniforms

Travel Expenses/Passage money for studies abroad

Purchase of Computers - essentials for completion of the course

Boarding and lodging expenses in recognized Boarding Houses/private

accommodations

Any other expense required to complete the course - like study tours, project

work, thesis, etc.

Car Loan

The facility is designed with easy repayment schedule, that gives you the opportunity to own a

new/Reconditioned Car, to materialize your cherished dream.

Eligibility

Govt. Officials

Semi-Government Officials

Employees of Autonomous Bodies

Employees of Banks and other Financial Institutions

Employees of Multinational Companies

Employees of reputed Private Organizations

Professionals: Doctors / Engineers / Accountants

Teachers and staff of Public / private Universities

Businessmen & Others

Loan Limit

Upto Tk. 15.00 Lac for Reconditioned Cars &

Upto Tk 20.00 Lac for Brand New Cars

Home Loan

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Residing at own home/flat is a long cherised dream to everyone. To materialize this dream,

Mercantile Bank Ltd is beside you offering easy to avil competitive Home Loan with lucrative

features.

Our Strength

We ensure smooth and prompt disposal of the loan for your dream house to turn

into reality.

We offer most competitive interest rate with easy to access terms and conditions.

Purpose

Purchase of Flats/Apartments.

Construction of House.

Extension of House.

Renovation of House.

Finishing Works of Building.

Taking over of regular House Building from other Banks/Fls.

Eligibility

Bangladeshi National

Regular Employees of Govt. / Semi/Autonomous Bodies / Multinational

Companies/ Public Ltd. Co. / Private Ltd. Companies etc.

Self employed Professionals.

Businessman.

Teachers of Universities / Colleges / Schools and established educational

institutions in the Public and Private Sectors.

Age limit 21-60 years (including repayment period).

Cottage Loan

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Purpose

For individual to build up or construct of semi-pucca building of 2 types along with pure

drinking water facility:

- Foundation up to plinth level, pucca floor, brick wall, roof of corrugated iron sheet/tiles, or

- Foundation up to plinth level, pucca floor, corrugated iron sheet fencing, root of corrugated iron

sheet/tiles.

Loan limit

Up to 70% of the total cost of semi-pucca/ corrugated iron sheet fencing construction and pucca

floor space along with pure drinking water facility/tube-well will be inclusive in the project cost.

However total loan amount shall not exceed Tk. 10 lac in any case.

Age limit

From 21 years to 60 Years

Note: Age bar may be relaxed/waved by the Managing Director & CEO of the Bank on

acceptable grounds.

Loan Processing Fee

0.50% of the loan amount plus 15% VAT on the processing fees.

Interest rate

Interest Rate

Overseas Employment Loan

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Features

Purpose: To support for smooth departure for overseas employment of unemployed

youths from the country & to save them & their families from borrowing money at higher

rate of interest from illustrious class or village mohajon

Eligibility: Any Bangladeshi National intends to go abroad for employment

Loan Limit: Maximum Tk.2.50 lac

Tenure: Max. 03 years with 01 month’s grace period

Age Limit: 18-45 years

Interest, Fees & Charges:

- 14% interest p.a.

- Tk.200/- for loan application form

- 1% above over the prescribed rate on overdue amount as penal interest

- 2% on outstanding amount for early settlement

Criteria for selection of borrower

Any Bangladeshi permanent inhabitant of a particular locality intends to go abroad for

employment

Analysis of Credit Proposal/Feasibility study

Status of guardian

Net-worth of guardian

Status of guarantor

Required Documents

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Bio-Data of the applicant with 02 referees

Photocopy of valid Bangladeshi Passport

Copy of work permit

Copy of clearance from the Bureau of Manpower, Employment &

Training (BMET)

Copy of appointment letter

Clean/satisfactory CIB

Credit Cards

MBl Visa Gold

MBL Visa Classic

MBL International Credit Cards

Debit Cards

Master card Debit Card

ATM cards

1.6.iv Online Banking

Online Banking have been activated in all Branches of the Bank from January 01, 2006. Online

service is now available for all customers - Both Cash deposit and withdrawals, Cheque Deposits

and Transfer in CD, SB, STD, Loan accounts (Cheque Bearing within limit) and Monthly

Savings Scheme (MSS).

1.6.v Mobile Banking

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Like in many other countries, people in Bangladesh started believing in mobile banking. With

the approval of Bangladesh Bank, MBL is going very speedy to introduce mobile banking

throughout the country. In Mobile Banking system, basic mobile handsets are being used as bank

accounts and will serve as a wallet for the transaction of money, especially for the un-banked

people. As 99 percent of the people of Bangladesh are under the mobile phone network, almost

all will have access to the formal fi nancial channel. If the banks can reach out to the unbanked

people, the dream of more people having bank accounts can be fulfill

1.6.vi SMS Banking

Features

Your Bank at your Fingertip

As the time goes by, life style changes. To keep up, MBL welcomes you to SMS Banking

Service, one of the most modern banking services. MBL SMS banking Service is convenient,

safe, low-cost, fast and available round the clock.

MBL SMS Banking Service offers:

Access to account balance

Last 3 transaction inquiry

Cheque status inquiry

Application Formality

Fill in the attached form clearly and completely and just send in or drop it to the branch that

maintains your account.

SMS format and Key words

Response: All commands and SMS format will be sent to your mobile phone.

Write: Help#PIN#Keyword

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Send to : 01713044838

Response: Keyword usages and details.

1.6.vii Corporate Banking

Short Term Finance

Short-term loans are used to finance inventory, account receivables or other current assets i.e. to

finance the working capital requirement. Forms of short-term loan are given below:

a. Cash Credit (CC):

Cash credit account is like a current account with a limit up to which one can withdraw from the

bank. Cash credit is normally sanctioned for a period of one year where a regular limit is

sanctioned against goods to meet day to day expenses of business.

b. Secured Overdraft (SOD-General):

Under this, a regular limit is sanctioned to meet day to day expenses of business. This form of

credit is given to the business where maintenance of stock on a regular basis is not possible. The

account is adjusted by the sale proceeds or from own source of the customer.

c. Bill Discounted and Purchased:

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Mercantile Bank gives advances to customers by discounting or purchasing their bills of

exchange. Such bills of exchange arise out of commercial transactions both in inland trade and

foreign trade

1.6.viii Long Tern Finance

Long-term loans are used to finance equipment, real estate and other fixed assets. The forms of

long-term loan are given below:

a. Lease Financing:

Under lease financing we cover equipment/vehicle financing. It is a term financing repayable

through lease rental in the form of equal monthly installments. Ownership of the leased out

vehicle under the lease agreement covering comprehensive risks belongs to the Bank.

b. Hire Purchase:

This is also given to procure equipment/vehicle. Ownership of the equipment/vehicle to be

purchased under the Hire-Purchase agreement covering comprehensive risks belongs to both the

Banker and the customer. Hire-Purchase facility is repayable by depositing equal monthly

installments (including principal and interest amount).

d. Term Loan for NBFIs:

Term loan for NBFIS is provided to enable their financing activities to others. It is given as per

instruction of Bangladesh Bank circulars and at a lower interest rate based on some grading of

the NBFIs.

1.6.ix Import Finance/Trade Finance

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a. Letter of Credit (L/C):

Importers are given this sort of facility to import different commodity items, capital machinery

and any other permissible items. L/C related shipping document is kept as primary security. Cash

margin and counter guarantee are obtained from the customer to secure its position.

b. Loan against Trust Receipt (LTR):

Loan against Trust Receipt (LTR) is a funded facility provided to importer to retire L/C related

shipping documents. Advance against a LTR obtained from the customer is allowed when the

documents covering an import shipment are given without payment. The customer holds the

goods or their sale proceeds in trust for the bank until the LTR is fully paid off. Letter of Trust

Receipt is kept as primary security, which creates the banker's lien on the goods.

1.6.x Work Order Financing/Construction Business

This form of credit facilities is allowed to contractors to participate in tenders under different

authorities and to complete their awarded works. The following types of facilities fall under this

category –

a. Earnest Money Financing Scheme- SOD (EMF):

Under this, bank guarantee or undertaking is issued by our bank in the form of SDR/PO on

behalf of customers (mostly contractors) to enable to submit his bid in a tender invited by

different Government/ Semi-Govt. Organizations, Autonomous Bodies or other organizations

accepted to the Bank.

b. Bid Bond:

Under this, bank guarantee or undertaking issued by our bank on behalf of its customers (mostly

contractors) to enable to submit his bid in a tender invited by different Government/ Semi-Govt.

Organizations, autonomous bodies or other organizations accepted to the Bank.

c. Performance Guarantee (PG):

Page | 54

A performance guarantee is given after the tender or bid of a particular customer is accepted by

the authority. It is a guarantee where the Bank gives an undertaking to the authority that

customer will complete the job as per terms of the tender or to pay damage up to the guarantee

amount.

d. Shipping Guarantee:

Under this, Bank give guarantee / indemnity to shipping company for release of goods in the

absence of shipping documents, in case goods arrive before receipt of such documents by the

consignee and are incurring demurrage or original shipping documents have been lost after

retirement from Bank.

1.6.xi Structured Finance

Mercantile Bank offers customized, friendly, and flexible financial solutions to customers and

strives to ensure financing package in a cost-effective manner.

a. Project Finance:

Project Finance is a long-term credit arrangement with a debtor related to the development and

construction of infrastructure or a large commercial or industrial project. The technique involves

mobilization of debt, equity, contingent equity, hedges and a variety of limited guarantees

through a newly organized company, partnership or contractual joint venture, often referred to as

Special Purpose Vehicle ("SPV"), for the purpose of building a capital intensive facility and

operating a discrete business activity.

b. Syndication:

"Syndicated Loan" as loans extended by multiple banks where the overall credit involved

exceeds an individual lender’s legal lending or other limits. It is made available by a group of FIs

in pre-defined proportions under the same credit facility following common loan documentation

formalities

1.7 CSR

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MBL believes that, true success does not consist in profit maximization only rather in doing

something for the betterment of deprived part of the society. With this consideration, MBL has

established a foundation in the name and style, “Mercantile Bank Foundation” in 2000, just after

a year of its inception, to work for the distressed and disabled people. Mercantile Bank

Foundation has always been playing an imperative role in the social life of the country hroughout

its course of Compassionate operation.

Investment in CSR programs is always supported and encouraged by the Board of Directors.

Additionally, Bank has a separate “CSR Desk” to support such activities.Segment wise

contribution under CSR activities of Mercantile Bank Foundation in 2012 is furnished below:

1.7.i Objectives of Mercantile Bank Foundation

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16%

20%

3%31%

2%

27%

CSR Contribution

EducationDisaster ManagementSports HealthArt & CultureOther

Figure 1.1 CSR Contribution

Mercantile Bank Foundation has been formed with the aim of achieving some underlying

objectives including:

To take possible initiatives in increasing social wellbeing and poverty alleviation.

To support education by establishing new educational institutions, providing stipends/

scholarships to the poor but brilliant students.

To provide awards to Scholars in different significant arenas for their outstanding

contribution, as they uphold nation’s pride brightly even across the geographical boundaries

To assist research activities on Bengali Literature through Bangla Academy.to assist the

unemployed young to make them self sufficient.

To assist the rootless and distressed orphans and mentally retarded children through

taking appropriate steps for their mental perfection and self-support

1.7.ii MBL’s Responsibilities to the Society

There is no question, through our day-to-day business operations; we are adding values to the

society and the economy. Ultimate goal of CSR activities of MBL is “Building a Sustainable

Society”.

Community outreach: a helping hand for disaster response

MBL is fully dedicated to providing opportunities for economically disadvantaged communities

by fostering economic development and supporting local communities..

Distribution of winter clothes among the poor people: MBL has distributed winter clothes

among the distressed people of different cold affected areas of the country. About 58,225

pieces of new winter clothes including blankets, shawls worth BDT 11.39 million has

been distributed in different cold affected areas of the country.

MBL continues financial support to BDR mutiny-affected families: BDR mutiny in

February, 2009 caused an irreparable loss to the nation

Donation to various tragedy victims: MBL has donated BDT 0.50 million to BAB to aid

the fire effected workers of “Tazreen Fashion”. MBL also donated 65 bundle tin sheets

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worth BDT 0.20 million to fire victims of Boubazar and BDT 0.44 million to Chittagong

Baddarhat tragedy.

Health and Medical

From the beginning, each year the Bank provides financial support to different medical and

health institutions.. In 2012, Bank contributed BDT 26.80 million to different individuals and

hospitals. Following are the major contribution of MBL in same arena:

Donation of BDT 1.50 million to Liver Foundation of Bangladesh for purchasing medical

equipments.

Donation of BDT 1.20 million to Rawnok Diadetes Shastha Sheba, Feni.

Donation of BDT 0.28 million to National Heart Foundation

Donation of BDT 10.98 million to Naogaon General Hospital to establish dialysis unit.

Education: teaching the young and spreading knowledge.

MBL Foundation is continuing its supports to the education sector as before. From 2011, every

year Mercantile Bank Abdul Jalil Education Scholarships are provided to the meritorious poor

students. In addition, the Bank has provided financial assistant of BDT 3.80 million to 51

meritorious students for their higher studies.

The Arts: preserving cultural heritage and sponsoring the performing arts

As a recognized benefactor of culture, MBL takes some non-profit initiatives every year. In

2012, as earlier, MBL contributed to organize and celebrate different cultural and traditional

festivals. In this regard, in 2012 MBL contributed BDT 1.80 million for different cultural affairs.

Traditional Games and Sports

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MBL always encourages the development of games and sports of the country. In different times,

the Bank has contributed to organize a variety of traditional games and sports. In 2012, the Bank

contributes a total amount of BDT 2.40 million to different institutions/clubs to arrange games

and sports such as:

Bangladesh Carrom Federation

Wari Club, Dhaka

Feni District Sports Association

District Sports Association, Nilphamary

Special Olympic For Autistics

Deaf Sports Fedaration

1.7.iii Playing part in the Economy

The Bank has contributed to the economy by generating employment of 1,981 full time

employees. It also plays a vital role in creating job opportunities by financing the productive

sectors. The Bank recruits a number of fresh graduates and experienced officers every year. In

the intermediation process, the Bank mobilized resources of BDT 132,093.64 million from the

surplus economic unit and deployed BDT 93,610.87 million in 2012 to deficit group.

Care to Environment: Care to Environment: Encouraging new thinking about

Environmental Challenges

Our obligation to Corporate Social Responsibility maintains a long-term point of view to make

economically sound, environmentally responsible and socially supportive decisions. We believe

that every small 'GREEN' step taken today would go a long way in building a green future and

that each one of us can work towards a better global environment. Going Green in our Bank can

not only bring awareness among our customers and our employees but also build awareness and

consciousness to our society. The core business model of MBL clearly expresses its

sustainability towards environment and unveils its eco-friendly motives i.e. not to harm or

damage ‘Green Life Belt’ of mother nature which eventually ensures a pollution free breathing

atmosphere for our future generations. MBL has established a separate unit to turn our Bank as a

‘Green Bank’. A lot of measures have been adopted including green financing, creating

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Analysis &Interpretation

Chapter Two

awareness among the employees for efficient use of water, electricity & paper and giving

preference to eco friendly financing.

Involving Employees in the CSR approach

As a “Corporate Citizen”, Mercantile Bank Limited is striving to play its responsibility in this

regard. The involvement of employees in the CSR approach is one of the most effective ways to

CSR awareness. In the new CSR strategy, we have developed activities to keep employees up-to-

date with our CSR goals and principles. We believe that they will put their knowledge to both at

work place and in their personal life. MBL’s employees are also kept updated about day-to-day

CSR events, and are invited to exchange views on new issues and the Bank’s actions in this area.

Page | 60

Chapter 2Page | 61

Analysis and Interpretation2.1 AnalysisA systematic examination and evaluation of data or information, by breaking it into its

component parts to uncover their interrelationships. An examination of data and facts to uncover

and understand cause-effect relationships, thus providing basis for problem solving and decision

making.

While the word “analysis” sounds all detached and, well, analytical, it is actually a kind of

insight, or inspired thought. The Greek roots of the word mean “to break up”; analysis is where

to break the subject into small, detailed parts, and where, by looking closely at those parts, to

find something about the whole that wasn’t obvious or didn’t seem to be there when started.

Here I have visited to bank and talked to the Senior Executive Vice President of the bank about

some Issues of hr activities. And from that I have get information about Hr activities of

Mercantile bank.

2.1.i Analysis on HR activities

In present competitive banking industry, delivering timely and efficient customer service is very

important. Employees of the banks play significant role in providing better customer service. A

talented officer can win the heart of a customer by providing efficient service blended with

personal care which eventually builds a strong and ever-lasting business relationship with that

customer.

Their people are their most valuable asset, embodying their commitment to maximizing wealth

of the Bank. They rely on them to communicate this value to many stakeholders. With the Bank

stepping up to entrenching its business strength, Bank Human Capital initiatives continued to

focus on building capacity and confidence to keep up the momentum and employees’ resilience

in pursuit to become most caring and gainfully profitable Bank. Finding the right employees,

developing, rewarding and retaining them are some of our highest priorities. Their talent

management strategy is a multi-pronged one that includes essential employee value proposition

with a competitive reward package.

2.1.i (a) Employee Motivation

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Motivation is the driving force that causes the change from desire to will in life. So if an

organization can motivate employee it will reach the highest level. So it is very important to

motivate employee. Mercantile bank also motivate their employees as they know that it will

increase performance of employees as well as reduce turnover.

To motivate their employee they do several things:

There remain periodical increases in salary each year.

They provide job security to the employee. They provide written notice or warning to

employees if they need to fire them. But if the consequence is worst then they directly

fire the employee without giving any notice.

There remain a friendly environment within the ban between the employees

Mercantile bank provide promotional activities and/or this reason employees become

motivated to reach the target.

To boost motivation, they recognize and reward top performers, long service employees,

best managers, executives and officers on the day of MBL Day Celebration on the

Foundation Day of the Bank, Annual Business Conference and other events.

Methods of Motivation:

Mercantile Bank Ltd Training Motivation does not mean to provide financial reward or increase

to the employees . some times employee can be motivated with non monetory terms.so there are

some ways that can motivate employees.

Personal thanks: A simple "thank you" employees for doing a good job-one on one, in

writing, or both, still goes a long way in motivating employees. And this bank try to

maintain this.

Give praise in public: Acknowledge an employee's achievements in a public forum such

as a staff meeting. This is great for the individual's morale and motivational to others.And

this bank is concern to acknowledge the work

Feedback and respond: Supervisor provide feedback or give respond on performance

of the person, the department and the organization

Environment: the working environment is also work as a motivational tool for

employee. And here I can see that employee who worked here are provided with good

environment.

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Clear Direction: In this bank employees get a clear direction to their work as well as

reporting person.

Employees Development: when an employee feel that there is an opportunity to develop

themselves they feel motivated. And this bank has training institute and throughout the

year Institute training continues in different subject to motivate the employees

With a diagram we can see there can be so many ways to motivate employee

Figure2.1: Ways to motivate employee

Motivation process

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To motivate employee there remains a process which this bank sometimes follow. Generally this

process is followed when there need to motivate employee in monetary ways. The process is:

Figure2.2:Motivation Process

Need Identification: Here organization identifies need on employee perspective. Here

the organization see what is the need the employee need to be fulfill to be motivated. It

can be increasing salary, promotion, bonus, increment, recognition etc.

Searching ways to satisfy need: here organization searching the ways to satisfy the need

of the employee to motivate him. It can be providing increment instead of increasing

salary.

Selecting goals: Here origination select goal for the employee to reach target to get the

reward. If an employee needs an increment then organization give him a target end if the

employee achieve this target then he will get tht reward.

Employee performance: When organization select goal for employee then o is also

important to observe the performance of employee which lead him to reach his goal.

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Consequence of performance: it should be clear that if employee reach the goal then he

will be rewarded but if he fail to achieve that he will not be rewarded or he might get

negative reinforcement.

So this is the process that this bank follow before provide any motivational tool for employee.

2.1.ii(b)Training and Development

It is a learning process that involves the acquisition of knowledge, sharpening of skills, concepts,

rules, or changing of attitudes and behaviors to enhance the performance of employees.Training

is about knowing where to stand (no matter how good or bad the current situation looks) at

present, and where you will be after some point of time.

Training is about the acquisition of knowledge, skills, and abilities (KSA) through professional

development. Training is defined as learning that is provided in order to improve performance on

the present job. Training is the act of increasing the knowledge and skills of an employee for

performing the job assigned to him. It is a short-term process.

In this bank they have training institution through which they trained there employee.Training

institute in Bijoynagar has embarked on several “need based” trainings sessions for its officers

working mainly in the desks of the branches. It has a principal, vice-principal & a team of

trainers from the VPs, & guest lecturers, they are the board of the institute & the training

programs to take place are decided by the HR & management divisions. Objectives of this

venture were to upgrade & update the officers on the recent changes in the area if any, & to make

them moiré capable & competent to deliver proficient services so that the bank can attain

escalating growth.

The selection of trainee based on

Newly recruitment

Special purpose

Need based purpose

New appointment

To identify training need they uses some methods. For this they

Page | 66

They use opinion survey. To do this they take opinion from the employee about what

they are week and then according to this they arrange training.

They analysis the job description of employees and from that they get ideas that whuich

job require which training

And also if any incident occur for which they require training then they arrange training

Training Need Analysis

A training need is a shortage of skills or abilities, which could be reduced or eliminated by

means of training and development. Training needs hinder employees in the fulfillment of their

job responsibilities or prevent an organization from achieving its objectives. They may be caused

by a lack of skills, knowledge or understanding, or arise from a change in the workplace.

Training needs analysis identifies training needs at employee, departmental or organizational

level in order to help the organization to perform effectively. The aim of training needs analysis

is to ensure that training addresses existing problems, is tailored to organizational objectives, and

is delivered in an effective and cost-efficient manner.

Figure2.3 Training Need Analysis

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Here AOP is the Actual Performance Gap and EOP is the Expected Performance Gap. And when

AOP is less than EOP then there occur Performance Gap(PG). when an organization found that

there occurs performance gap in their employees they do analysis in three stages

Organizational Analysis:

Organizational Analysis looked at the internal level of environment of the organization. and sees

that employee performance fit to the organizational goals and objectives. It is a process by which

an organization's systems, capacity, and functionality are assessed in order to increase

its efficiency, performance, and output. 

Operational Analysis

An operation analysis is a procedure used to determine the efficiency of various aspects of a

business operation. Most reports include a careful scrutiny of a company's production methods,

material costs, equipment implementation and workplace conditions. Professional consultants are

often brought in from outside a company to perform an unbiased operational analysis, which

provides a company with hard data concerning waste issues and operational risks. Many

companies use the information from such an analysis to decide on what changes need to be made

to improve operations.

Individual level

In personnel level they also do some analysis when developing training need analysis model. The

method they used in this level are

Performance appraisal

Organization frequently used this method on individual level analysis. performance appraisal is

a systematic and periodic process that assesses an individual employee’s job performance and

productivity in relation to certain pre-established criteria and organizational objectives

Critical incident

The Critical Incident is a set of procedures used for collecting direct observations of human

behavior that have critical significance and meet methodically defined criteria. These

observations are then kept track of as incidents, which are then used to solve practical problems

and develop broad psychological principles. A critical incident can be described as one that

makes a significant contribution ,either positively or negatively, to an activity or phenomenon.

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Critical incidents can be gathered in various ways, but typically respondents are asked to tell a

story about an experience they have had.

Observation

Organization frequently used this method. Here they observe the behavior of selected employess

and decide whether they want training need or non training need.

Structured interviews

Organization also arrange structured interview for the employees when creating training need

analysis model . for this they make a structured questionnaire and take interview to the selected

employees and decided which type of trainind the employee need or which type of non training

aid the employee required,

Generally Training need Analysis is done by this organization when there is new policy, new

recruitment, need of increase in performance & branch based purpose etc. When it’s seen that

there is a new technology or method of working going to be adopted by the bank then it’s called

organizational need.When trainee assistant officer, probationary officers or any senior executive

is recruited they are sent to the “general training for bankers” and to identify training need

analysis organization uses a TNA form. This is stated later.

Sample of TNA

Page | 69

Figure2.4: TNA Sample

Training courses of MBL & their duration

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Training Program Name DurationAnti money laundering 1 dayBranch Management (Need Based) 1 dayGeneral Banking (Special) 1 dayDocumentation on loans & advances 2 daysCase study of General Banking 1 dayPrevention of fraud, forgeries & malpractices 2 daysBangladesh Bank ICT compliances & awareness 1 dayRecovery of loans, treatment of NPA & filling of suits with fore closure

1 day

Basel-II Implementation 2 daysBasic training for TAOs 18 daysTrade finance & swift payment 2 daysBasic Accounting course 1 dayCredit Management 10 daysInternal control & compliance 2 daysSME & Micro credit 2 daysMoney laundering prevention act 2009 1 dayForeign exchange & foreign trade 10 daysBasic training for Assistant officers 30 daysExport import finance 2 daysBasic training for bankers 30 daysLeadership, team building & negotiation skills 1 dayBangladesh bank compliances awareness amongst the branches

1 day

Computer training for IT division 1 dayBasel II & credit risk grading (CRG) 2 daysAccounting non-accountants 2 daysManaging banking risks 1 dayCorrespondent banks services in Bangladesh 4 daysCorrection of CL(classified loan) reporting 1 dayFinancing readymade garments (RMG) 1 dayInternational trade payment methods 1 dayOffsite reporting to Bangladesh bank 1 day

Table2.1: Training courses of MBL & their duration

Process of Training

Page | 71

Figure 2.5:Process of training

Formally informing employees

Employees need to be formally informed about the training program. The subject, time, duration

and trainer of the training program have to be given to the employee.

In MBL the general practice of informing employees is to use an inter office memo send to the

head of the department with carbon copies (CC) send to employees. Also, a session guide is

given to the trainee in order to give them a sort of preview to the program, some time employees

are informed informally i.e. through telephone, e-mail.

The employees of MBL are enthusiastic about the training program. They instantly accept the

training program generally. In fact the employees are eager to learn new ways, and develop their

skills.

Methods used in training

Page | 72

Coaching

Coaching is one of the training methods, which is considered as a corrective method for

inadequate performance.

Mentoring

Mentoring is an ongoing relationship that is developed between a senior and junior employee.

Mentoring provides guidance and clear understanding of how the organization goes to achieve its

vision and mission to the junior employee.

Job Rotation

This approach allows the manger to operate in diverse roles and understand the different issues

that crop up.It is the process of preparing employees at a lower level to replace someone at the

next higher level.

Job Instruction Technique (JIT)

Job Instruction Technique (JIT) uses a strategy with focus on knowledge (factual and

procedural), skills and attitudes development.

Off The Job Training

There are many management development techniques that an employee can take in off the job.

The few popular methods are:

Sensitivity Training

Sensitivity training is about making people understand about themselves and others reasonably,

which is done by developing in them social sensitivity and behavioral flexibility.

Transactional Analysis

Transactional Analysis provides trainees with a realistic and useful method for Analyzing and

understanding the behavior of others. In every social interaction, there is a motivation provided

by one person and a reaction to that motivation given by another person

Face to face Lectures

Lecture is given to enhance the knowledge of listener or to give him the theoretical aspect of a

topic. Training is basically incomplete without lecture

Case study method :

Page | 73

A development method in which the manager is presented with written description of an

organizational problem to diagnose and solve.Trainer is used Internal, external and faculty

members. MBTI conducts various courses, workshops covering all diverse courses for banking,

finance, managements, laws etc. for officers and executives of the Bank. During 2012, the MBTI

fulfill its yearly target by training a large number of employees through different training

programs.

2.1.ii(c)CompensationCompensation (also known as Total Rewards) can be defined as all of the rewards earned by

employees in return for their labour. Compensation Management is more than just the means to

attract and retain talented employees. In today’s competitive labor market, organizations need to

fully leverage their human capital to sustain a competitive position.. This includes:

Cash: Direct financial compensation consisting of pay received in the form of wages,

salaries, bonuses and commissions provided at regular and consistent intervals

Benefit: including all financial rewards that are not included in direct compensation and

understood to form part of the social contract between the employer and employee such

as benefits, leaves, retirement plans, education, and employee services

Non-financial compensation: Referring to topics such as career development and

advancement opportunities, opportunities for recognition, as well as work environment

and conditions.

Compensation Package

Page | 74

Figure2.6: Compensation Package

In Mercantile bank limited employees are provided direct, indirect and Non financial

compensation Cash, benefit and additional reward.. They are provided bonuses according to

government rules. They are also provided with an increment of each year which range is 500-

5000 which varies according to the position. They are provided paid leave, training

opportunities, team building, pleasant working environment.

Page | 75

2.1.ii(d)Selection and recruitment

Employment selection strategy theorizes that by matching companies' needs to the candidate best

suited for the job, that can reduce employee turnover and increase employee productivity, saving

time and money. A company’s human resources department will develop and oversee the

staffing process, from recruitment to selection.

Selection Process

Application Blank—The application blank is invariably used as one of the selection

tools. The applications are the starting point of the selection process. Where application

forms i.e., application blanks are used the data can become a part of the employee's

record is hired. Further it provides factual information needed for evaluating the

candidate's suitability. Application blank contains written record of the following

information.

Preliminary Interview—Preliminary or initial interview is often held in case of "at the

gate" candidates. This interview is usually of a short duration and is aimed at obtaining

certain basic information with a view to identifying the obvious misfits or unqualified. If

the candidate seems to be possessing the basic minimum requirements for efficient job

performance, he is given an application form for being filled out by him.

Screening application forms—Information on application form is used for selection

purposes. Sometimes, detailed information is sought for the prospective employees. The

criteria for the contents of the application form are generally to get data that are primarily

factual.

Employment Tests—An employment or a selection test is an instrument designed to

measure selected qualities and abilities of a prospective incumbent in terms of job

specifications. Such tests provide a sample behavior that is used to draw inferences about

the future behavior or performance of an individual. The use of tests in wide spread and

hence there is a long list of tests.

Interviewing- Interviewing is the most widely used selection technique by all kinds of

organizations. It is relied upon to a great extent in accepting or rejecting a candidate.

Page | 76

Despite the relative subjectivity and unreliability of interviewing as a selection technique,

the fact remains that intangible personality variables left to be evaluated by the

interviewer are important for job success and some evaluation is better than no

evaluation. The basic objective of the interview is to measure the applicant against the

specific requirements of the job. It, being a two way communication, also permits the

applicant to ask questions about the job and organization.

Reference Checks—Reference checks serve as an important selection technique, if

conducted properly. The applicant is asked to mention the names and addresses of his

former employers and also of two or three persons known but not related to him. If

references are checked in the correct manner, a great deal can be learned about a person

that an interview or tests cannot elicit. Referees may be called upon to give detailed

informations about candidate's capabilities.

Selection—If a candidate successfully overcomes all the obstacles or tests given above

he would be declared selected. An appointment letter will be given to him mentioning the

terms of employment, pay scales, post on which selected etc.

Figure 2.7: Selection Process

Recruitment Process

Page | 77

Recruitment is the process of finding candidates, reviewing applicant credentials, screening

potential employees, and selecting employees for an organization. Effective recruitment results

in an organization hiring employees who are skilled, experienced, and good fits with your

corporate culture. Recruitment methods should ensure engaged, competent, productive

employees who are loyal to your organization.

Process of Recruitment is:

Determine ideal recruiting target

Understanding target’s decision criteria

target’s job search process

Posting jobs for active candidates

Providing prospects with additional information

The job application process

Sorting applications by job

The initial screening of applications and resumes

Interviewing and selling qualified applicants

The final interview

The reference checking process

The offer process

The post-offer acceptance process

The on boarding process

Feedback and new hire monitoring

Recruitment Process diagram

Page | 78

Figure2.8 Process of Recruitment

For selection employees HR of Mercantile Bank always do proper job analysis

From this they identify

Job description which is based on objective information obtained through job analysis, an

understanding of the competencies and skills required to accomplish needed tasks, and the needs

of the organization to produce work.

Job Specification is a statement of employee characteristics and qualifications required for

satisfactory performance of defined duties and tasks comprising a specific job or function. Job

specification is derived from job analysis.

In order to set their business up for success over the long term, MBL recognizes the importance

of attracting and retaining the best talent. MBL recruits fresh graduates from different academic

backgrounds of renowned universities, which act as a source of creativity. Fresh graduates are

Page | 79

recruited through comprehensive written test and Viva voce. MBL also recruits experienced

bankers from the industry having sound banking knowledge and expertise.

Performance Standard: A performance standard is a management-approved expression of the

performance threshold(s), requirement(s), or expectation(s) that must be met to be appraised at a

particular level of performance. A Fully Successful (or equivalent) standard must be established

for each critical element and included in the employee performance plan.

To recruit employees Mercantile bank use

External Sources

Personal Application

Fresh Graduates

Newspaper Advertisement

Internet

Internal Sources:

Transfer

Promotion

Recommendation

Retained Employee

And to recruit them they first take a written test. Then the candidates who are selected are asked

to come for certificate verification. After that selected candidates have to face 2-3 interviews and

then they are selected as an employee.

Page | 80

Page | 81

2.1.ii(e)Performance ManagementPerformance Management is the process of motivating employees through setting goals,

measuring progress, giving feedback, coaching for improved performance, and rewarding

achievements. So performance management is very important for any organization. In this bank

Performance management system is clearly defined. When goals are set for an employee the goal

is set mutually. In job description it is clearly defined the KSA’s on which performance is rated.

So it become easy to an employee to understand

Performance Management Process

Figure2.9: Performance Management Process

The process is described below:

Prerequisites: There are two important prerequisites that must exist before the

implementation of a successful performance management system.

Organization’s mission and strategic goal

Job Analysis

Page | 82

Performance Planning: It includes

Key accountabilities: Broad areas of a job for which the employee is responsible

for producing results.

Specific objectives: It is the statement of the outcome and it is very important and

it should be measurable.

Performance standards : “Yardstick” to evaluate how well employees have

achieved each objective.

Performance Execution: To execute the performance both employee and employer have

some responsibilities. For employees:

Commitment to goal achievement

Ongoing requests for feedback and coaching

Communication with supervisor

Collecting and sharing performance data

Preparing for performance reviews

For Employer:

Observation and documentation

Updates

Feedback

Resources

Reinforcement

Performance Assessment: Performance assessment is important it increase employee

ownership, improve commitment, provide information.

Performance Review: To review the performance organization organization see past

behavior and result, in present compensation to be received and set new goals and

development plan.

Performance renewal and reconstructing: Uses insights and information from previous

Phases and from here performance cycle begin again.

Page | 83

Examples of Performance Management

Figure 2.10: Examples of Performance Management

Methods of Performance Management

Rating Scales: Rating scales consists of several numerical scales representing job

related performance criterions such as dependability, initiative, output, attendance,

attitude etc. Each scales ranges from excellent to poor. The total numerical scores are

computed and final conclusions are derived.

Critical Incidents Method: The approach is focused on certain critical behaviors of

employee that makes all the difference in the performance. Supervisors as and when

they occur record such incidents.

Page | 84

Behaviorally Anchored Rating Scales: statements of effective and ineffective

behaviors determine the points. They are said to be behaviorally anchored. The rater is

supposed to say, which behavior describes the employee performance

Confidential Records: Mostly used by government departments, however its

application in industry is not ruled out. Here the report is given in the form of Annual

Confidentiality Report (ACR) and may record ratings with respect to following items;

attendance, self expression, team work, leadership, initiative, technical ability, reasoning

ability, originality and resourcefulness etc

Essay Method: In this method the rater writes down the employee description in detail

within a number of broad categories like, overall impression of performance, promote

ability of employee, existing capabilities and qualifications of performing jobs, strengths

and weaknesses and training needs of the employee.

Management By Objectives: It means management by objectives and the performance

is rated against the achievement of objectives stated by the management. MBO process

goes as under.

Establish goals and desired outcomes for each subordinate

Setting performance standards

Comparison of actual goals with goals attained by the employee

Establish new goals and new strategies for goals not achieved in previous year.

360-Degree Feedback: It is a technique which is systematic collection of performance

data on an individual group, derived from a number of stakeholders like immediate

supervisors, team members, customers, peers and self. In fact anyone who has useful

information on how an employee does a job may be one of the appraisers. This technique

is highly useful in terms of broader perspective, greater self-development and multi-

source feedback is useful.

Page | 85

Figure2.11: Performance Appraisal Technique

Key Result Area

Key Result Areas refer to general areas of outputs or outcomes for which the department’s role is

responsible. KRA (Key Result Area) is the output of an individual or section or department that

Page | 86

will serve as an input for another or contributes toward organization success. It is a task or

activity that must be done to ensure success (primary job responsibilities).

Importance of KRAs.

• Set goals and objectives

• Prioritize their activities, and therefore improve their time/work management

• Make value-added decisions

• Clarify roles of department or individual

• Focus on results rather than activities

• Align their roles to the organization’s business or strategic plan

• Communicate their role’s purposes to others

KRA List

Figure2.12:List of KRA

Page | 87

Key Performance Indicator

Key Performance Indicators, also known as KPI or Key Success Indicators (KSI), help an

organization define and measure progress toward organizational goals.

Once an organization has analyzed its mission, identified all its stakeholders, and defined its

goals, it needs a way to measure progress toward those goals. Key Performance Indicators are

those measurements.

What Are Key Performance Indicators (KPI)

Key Performance Indicators are quantifiable measurements, agreed to beforehand, that reflect the

critical success factors of an organization. They will differ depending on the organization.

A business may have as one of its Key Performance Indicators the percentage of its income

that comes from return customers.

A school may focus its Key Performance Indicators on graduation rates of its students.

A Customer Service Department may have as one of its Key Performance Indicators, in line

with overall company KPIs, percentage of customer calls answered in the first minute.

A Key Performance Indicator for a social service organization might be number of clients

assisted during the year.

Whatever Key Performance Indicators are selected, they must reflect the organization's goals,

they must be key to its success,and they must be quantifiable (measurable). Key Performance

Indicators usually are long-term considerations. The definition of what they are and how they are

measured do not change often. The goals for a particular Key Performance Indicator may change

as the organization's goals change, or as it gets closer to achieving a goal.

Page | 88

Key Performance Indicators Reflect The Organizational Goals

An organization that has as one of its goals "to be the most profitable company in our industry"

will have Key Performance Indicators that measure profit and related fiscal measures. "Pre-tax

Profit" and "Shareholder Equity" will be among them. However, "Percent of Profit Contributed

to Community Causes" probably will not be one of its Key Performance Indicators. On the other

hand, a school is not concerned with making a profit, so its Key Performance Indicators will be

different. KPIs like "Graduation Rate" and "Success In Finding Employment After Graduation",

though different, accurately reflect the schools mission and goals.

Key Performance Indicators Must Be Quantifiable

If a Key Performance Indicator is going to be of any value, there must be a way to accurately

define and measure it. "Generate More Repeat Customers" is useless as a KPI without some way

to distinguish between new and repeat customers. "Be The Most Popular Company" won't work

as a KPI because there is no way to measure the company's popularity or compare it to others.

It is also important to define the Key Performance Indicators and stay with the same definition

from year to year. For a KPI of "Increase Sales", you need to address considerations like whether

to measure by units sold or by dollar value of sales. Will returns be deducted from sales in the

month of the sale or the month of the return? Will sales be recorded for the KPI at list price or at

the actual sales price?

You also need to set targets for each Key Performance Indicator. A company goal to be the

employer of choic

e might include a KPI of "Turnover Rate". After the Key Performance Indicator has been defined

as "the number of voluntary resignations and terminations for performance, divided by the total

number of employees at the beginning of the period" and a way to measure it has been set up by

collecting the information in an HRIS, the target has to be established. "Reduce turnover by five

Page | 89

percent per year" is a clear target that everyone will understand and be able to take specific

action to accomplish.

A Key Performance Indicator (KPI) is a measureable value that demonstrates the effectiveness of

a business process at contributing to the attainment of key business objectives. By monitoring the

right KPIs and business metrics, you gain valuable insight into the performance of your business

and, more importantly, gain the strategic awareness you need to make the right decision at the

right time. Use these KPI examples and templates to cultivate a data-driven culture within your

organization.

KPI Process

Figure 2.13: Process of KPI

Page | 90

List of KPI

Figure2.14: List of KPI

Process of Performance Appraisals in Mercantile Bank Limited

Page | 91

Part 1

Personal data(name ,age, gender, religion ,maritalsatus, address), educational qualification(name

and result of educational institution) ,job history (past job experience, job time obtained in this

bank),training and workshop(name and number of training employee completed along with the

result) ,and reward record(previous performance record as well as if any reward is given here).

Part 2

Personal trait(Analytical skill, leadership, communication, professionalism, Self-management,

Ease with technology), subject rating(personal aspects, subject aspects etc)

Evaluation system

Probationary officer and officers are evaluated in he following grading system

Grade A: 85% or above mark obtained. It is recognized as outstanding performance

Grade B: 75%-84% mark is obtained. It is recognized as very good and competent employee.

Grade b is bestowed for obtaining that mark

Grade C: The employee who obtained 65%-74% mark. It is recognized only competent

employee.

Grade D: The employee who obtained 55%-64% mark they are put on this grade. They are

recognized as incompetent employee.

Page | 92

2.1.ii(f)Employee WelfareEmployee welfare is a term including various services, benefits and facilities offered to

employees by the employers. The welfare measures need not be monetary but in any kind/forms.

This includes items such as allowances, housing, transportation, medical insurance and food.

Employee welfare also includes monitoring of working conditions, creation of industrial

harmony through infrastructure for health, industrial relations and insurance against disease,

accident and unemployment for the workers and their families. Through such generous benefits

the employer makes life worth living for employees.

There are 2 types of Employee Welfare:

Page | 93

Intramural Facilities Extramural Facilities Drinking water Toilets Cr?ches Washing & bathing facilities Rest shelters Uniforms Protective clothing Recreating facilities Canteens Subsidized food Medical aid

Housing Education facilities Maternity benefits Transportation Sports facilities Leave travel Vocational training Holiday homes Cooperative stores Fair price shops Social insurance

Table2.2 Types of Employee Welfare

Benefits of Employee Welfare Measures

They provide better physical and mental health to workers and thus promote a healthy

work environment.

Facilities like housing schemes, medical benefits, and education and recreation facilities

for worker's families help in raising their standards of living. This makes workers to pay

more attention towards work and thus increases their productivity.

Employers get stable labor force by providing welfare facilities. Workers take active

interest in their jobs and work with a feeling of involvement and participation.

Employee welfare measures increase the productivity of organization and promote

healthy industrial relations thereby maintaining industrial peace.

The social evils prevalent among the labors such as substance abuse, etc are reduced to a

greater extent by the welfare policies.

Figure2.15:Factors to promote and undermine welfare

Mercantile bank is also concern for employee welfare.The working hour of the organization is

well maintained. All holidays are provided to the employees. Sitting arrangement is also

comfortable for the employees. Time to time they are provided with refreshment like tea, coffee.

And for this there are few attendants who work in this purpose. Leave policy is according to the

government rules and regulation. They also offer a group insurance. From which employees are

helped when they need any financial help. Employees are also provided with loan according

some rules and regulation. Health and safety measures are in place to ensure that employee have

an optimum work environment. Time to time, the Bank conducts a variety of safety and wellness

Page | 94

activities. The Bank also extended the maternity leave from 03 months to 06 months for its

female employees.

Transport facility : top management get this facility. Bank provides car under this scheme.

Housing investment Scheme : the employee can make arrangement for comfortable living.

This bank provide this facility to top management employees

Provident fund: all the employees of this bank get this facility.

Recreational pay and tour : for this employee get 15 days paid leave and an annual picnic

is organized by this bank for the employee of this bank along with their family.

2.1.ii Trend Analysis2.1.ii(a)Financial ReviewOperating Profit

The operating profit of the Bank stood at BDT 3,350.78 million in 2012 as against BDT 3,501.67

million in 2011. Net Interest Income of the Bank stood at BDT 3,650.93 million in 2012 as

against BDT 2,697.56 million in 2011.

(BDT in million)

Page | 95

Table2.3 Operating Profit

Total Income

Total income increased to BDT 16,667.55 million in 2012 from BDT 14,124.38 million in 2011.

Interest income accounted for 85.24%, exchange gains 3.32%, commission 4.90% and other

income 6.54% to total income in 2012 as against 75.89%, 4.92%, 5.27% and 13.92%

respectively in 2011.

(BDT in million)

Components Amount % of TotalInterest Income 14,207.72 85.24%Exchange Gains 554.04 3.32%Commission 816.15 4.90%Other Income 1,089.64 6.54%Total 16,667.55 100.00%

Table2.4 Operating Income

Page | 96

Operating ProfitTotal Interest Income 14,207.72Less: Interest Expenses 10,556.79Net Interest Income 3,650.93Add: Non- Interest Income 2,459.83Total Operating Income 6,110.76Less: Non Interest Expenses 2,759.98Operating profit 3,350.78

Interest Income

Interest income increased from BDT 10,719.69 million in 2011 to BDT 14,207.72 million in

2012. Interest on loans and advances accounted for 88.06%, interest on Treasury bill and Bond

11.70% and Other Interest Income 0.24% in 2012.

Interest on Loans and Advances

Interest on Treasury Bill &

Bond Other Interest

Income

0.00%10.00%20.00%30.00%40.00%50.00%60.00%70.00%80.00%90.00%

Interest Income

Figure2.17: Interest Income

Interest Expenses

Page | 97

Interest Income

Exchange Gains

Commission Other Income0.00%

10.00%20.00%30.00%40.00%50.00%60.00%70.00%80.00%90.00%

Total Income

Figure2.16:Total Income

Interest expenses moved up from BDT 8,022.13 million in 2011 to BDT 10,556.79 million in

2012.

Net Interest Income

Net interest income increased from BDT 2,697.56 million in 2011 to BDT 3,650.93 million in

2012. Gross interest income of the Bank amounted to BDT 14,207.72 million and interest

expenses amounted to BDT 10,556.79 million in 2012.

Net Interest Margin (NIM)

Bank’s net interest margin, which is derived from net interest income divided by average earning

assets, was 2.99% in 2012

Non-Interest Income

Non-interest income stood at BDT 2,459.83 million in 2012 against BDT 3,404.69 million of

2011. Among the constituents of Non-Interest Income, Exchange gains contributed 22.52%,

commission 33.18%, income on investment 0.26%, and other non-interest income 44.04% in

2012 as against 20.41%, 21.84%, 20.10% and 37.64% respectively in 2011.

Exchan

ge ga

ins

Commission

Income on In

vestm

ent

Other non-in

terest

inco

me0.00%

10.00%

20.00%

30.00%

40.00%

Non-interest ncome

Figure2.17:Non Interest Income

Total Expenses

The total expenses of the Bank stood at BDT 13,316.77 million during 2012 as compared to

BDT 10,622.70 million during 2011. Interest expenses accounted for 79.27%, salaries and

allowances 10.24%, rent, rates, taxes etc. 2.55%, depreciation and repairs 1.41%, stationary,

Page | 98

printing and advertisements 1.19%, postage, stamp and telecommunication 0.39%, and other

expenses 4.93% of total expenses in 2012 as against 75.52%, 12.16%, 2.65%, 1.53%, 1.17%,

0.58% and 6.39% respectively in 2011.

Figure2.18:Total Expense

Dividend

The Board of Directors recommended 15% dividend (7% Cash & 8% Stock) for the year 2012.

The Bank paid out 23% stock dividend to the shareholders in 2011.

Earnings Per Share (EPS)

Since the inception and enlistment in Stock Exchange, the Bank has been making positive EPS.

Earnings per share stood at BDT 2.26 as on December 31, 2012.

Operating Efficiency Ratio

Operating Efficiency Ratio stood at 79.90% in 2012 as against 75.21% in 2011. This measures

how much operating expenses are incurred to generate operating revenues.

2.1.ii(b)Key performance indicator of the bank from CFO’s StatementDuring the year 2012, MBL showed satisfactory performance in almost all segment of banking

business including deposits mobilization, providing loans and advances, maintaining strong

capital base against total risk weighted assets, corporate clients’ credit rating, controlling cost of

fund, yield on advances and efficient liquidity management

Page | 99

0.00%30.00%60.00%

Total Expenses

(BDT in million)

Particulars 2011 2012 Growth(%)Deposits 102,262.02 132,093.64 29.17%Loans and Advances 79,999.80 93,610.87 17.01%Total Assets 116,553.01 154,040.18 32.16%Paid-up Capital 4,968.10 6,110.75 23.00%Shareholders' Equity 9,659.33 10,924.55 13.10%Operating Profit* 3,501.67 3,350.78 -4.31%Import 95,008.70 113,434.10 19.39%Export 81,311.80 81,477.10 0.20%Remittance 7,150.00 15,792.80 120.88%

Table2.5 Performance indicator

2.1.ii(c)MBL’s Financial Performance in 2012The year 2012 was challenging for the banking industry and for this Bank as well. High cost of

deposits, sluggish trend in the country's capital market, cautious monetary policy and lower

import payments affected us adversely.

Bangladesh Bank’s new rules for loan classification and provision in 2012 required more

provisions against classified loan. To comply with Bangladesh Bank’s guideline a larger amount

of provision was to be kept to safeguard Bank’s health. MBL’s operating profit reduced to BDT

3,350.78 million in 2012 from 3,501.67 million in 2011. Due to the higher requirement of

provisioning against classified loan, net profit before tax reduced to BDT 2,381.45 million in

2012 from BDT 3,004.17 million in 2011

2.1.ii(d)Achievement in International BusinessMBL made noteworthy contribution in facilitating the import and export of the economy. Import

business of the Bank increased to BDT 113,430.10 million during 2012 as compared to BDT

95,008.70 million in 2011 indicating 19.39% growth. The Bank handled BDT 81,477.10 million

of export business in 2012. In terms of remittance business, the growth of 120.88% in 2012 over

Page | 100

2011 was spectacular. The bank procured BDT 15,792.80 million of inward remittance in 2012

as compared to BDT 7,150.00 million in 2011.

2.1.iii SWOT AnalysisStrength

Competence & Commitment.

Mass usage of technology

Sufficient man power

Updated training programs

Implementation techniques

High energy level

Good working environment.

Sufficient resources.

Automated Human Resource Information System(HIRS)

Weakness

Lack of good career Management Process and Job security.

Sometimes bank doesn’t want to spend money for training or logistics facility in branches

Many times failing to distribute work & duty

Lack of trainers for some particular types of trainings

Spending money to send trainees outside the bank for training & bringing guest lecturers

Other departments not always supportive to HR activities

Lack of Recognition for work accomplished and Lack of employee satisfaction.

Less maintaining tendency of chain of command

Mentality to avoid responsibility

Opportunity

Grow as an HR professional.

New systems & procedures going to be started soon in training & development

Usage of technology is going to increase

Develop inter communication

Have HR study background professionals

Page | 101

Attract and retain good talents.

Simplify the processes.

Automated HR processes.

Financial growth due to high rate of return in saving account services & collection of

recovery from loans provided

Threat

More competitors are coming.

Loss of competent employees.

Not increasing criteria to work for HR

Less importance to develop training programs than others

No particular field for HR to control operations

Lack of trainers

Less qualified employees

Not improving work environment

Not having organizational behavior pattern

Not concentrating in maintaining chain of command

Other banks are improving these sectors.

Page | 102

2.1.iv COPE Analysis5

0 5

Figure 2.19: COPE Analysis

Page | 103

Laggers

(Mercantile

Bank Limited)Champion

Outcast Defiant

Con

dditi

oditi

on

Performance

From this chart we can see that there are four stages in this analysis. And here I am putting

Mercantile Bank in Laggard position because of some reason.

Banking market for Bangladesh is very attractive,

People are becoming more concern on banking activity.

Now people are relying more on bank on their day to day transaction

Mercantile Bank has lot of product but they are not performing good

The requirement for using their product sometimes customer feel uncomfortable.

Now market is competitive but they are not coming up with new product

So with the basis of this fact this bank is kept in Laggards as they have low performance

products in high attractive market.

2.2 InterpretationIs there reasonable periodical increase in salary?

*Sample Size :20

Page | 104

Criteria NO.of Employee

Strongly Agree

0

Agree 12

Neutral 6

Disagree

2

Strongly Disagree

0

Figure2.20 Reasonable periodical increase in salary

From this chart we can see that among 20 employees there are 12 employee are agree that there

is periodical increase in their salary and 6 is neutral on this statement. And we can also see that 2

employee said that they are disagreeing with this statement.

Do you have job Security?

*Sample Size:20

Page | 105

Strongly Agree

Agree Neutral Disagree Strongly Disagree

02468

1012

0

12

6

20

Reasonable periodical increase in salary

Criteria No. of Employee

Strongly Agree

0

Agree 20

Neutral 0

Disagree

0

Strongly Disagree

0

Figure2.21Job Security

Here we see that 20 employee says that they have their job security.

Is there good Relationship with other staff members?

*Sample Size:20

Page | 106

Strongly Agree

Agree Neutral Disagree Strongly Disagree

02468

101214161820

0

20

0 0 0

Job Security

Criteria No.of Employee

Strongly Agree

4

Agree 8

Neutral 6

Disagree

2

Strongly Disagree

0

Figure2.22: Good Relationship with other staff members

On this graph we see that 4 employee is agreed that there remain a good relationship with the

staff members , 8 agreed on this , 6 is neutral and 2 put disagree that there remain good

relationship with staffs.

Is there effective promotional opportunities?

*Sample Size:20

Page | 107

Strongly Agree

Agree Neutral Disagree Strongly Disagree

012345678

4

8

6

2

Good Relationship with other staff members

Criteria No.of Employees

Strongly Agree

0

Agree 6

Neutral 12

Disagree

2

Strongly Disagree

0

Figure2.23: Effective promotional opportunities

When we come to that whether there are effective promotional opportunities then 6 employee

agreed that there remain promotional opportunities. 12 remain neutral and 2 are disagreed here.

Does organization recognizes and acknowledges your work?

*Sample Size:20

Page | 108

Strongly Agree

Agree Neutral Disagree Strongly Disagree

02468

1012

0

6

12

20

Effective promotional opportunities

Criteria No.of Employees

Strongly Agree

0

Agree 14

Neutral 6

Disagree

0

Strongly Disagree

0

Figure 2.24: Organization

recognize and acknowledge work

In this statement there 14 employee who agreed that organization recognize their work and 6

neutral that organization recognize and acknowledge their work

Are you satisfied with the incentives provided by the Organization?

*Sample Size:20

Page | 109

Strongly Agree

Agree Neutral Disagree Strongly Disagree

02468

101214

0

14

6

0 0

Organization recognize and acknowledge work

Criteria No.of Employee

Strongly Agree

4

Agree 6

Neutral 10

Disagree

0

Strongly Disagree

0

Figure2.25: Satisfied with

the incentives provided by the Organization

Here in this chart we can see that among 20 employees there are 4 employee are strongly agree 6

employee are agree that there is periodical increase in their salary and 10 is neutral on this

statement. And we can also see that no employees are showing disagree or strongly disagree in

this statement.

Do you receive non benefit facilities?

*Sample Size:20

Page | 110

Strongly Agree

Agree Neutral Disagree Strongly Disagree

02468

104

6

10

0 0

Satisfied with the incentives provided by the Organization

Criteria No. of Employee

Strongly Agree

5

Agree 9

Neutral 6

Disagree

1

Strongly Disagree

0

Figure2.25: Receive non benefit facilities

Here in this chart we can see that among 20 employees there are 5 employee are strongly agree 9

employee are agree that there is non cash facilities and 1 employee stated disagree and about this

statement

Is there general increase in compensation company provide in a year?

*Sample Size:20

Page | 111

Strongly Agree

Agree Neutral Disagree Strongly Disagree

0123456789

5

9

6

10

Receive non benefit facilities

Criteria No. of Employee

Strongly Agree

3

Agree 12

Neutral 5

Disagree

0

Strongly Disagree

0

Figure 2.26: General increase in compensation company provide in a year

In this chart we can see that among 20 employees there are 3employee are strongly agree12

employee are agree and 5 are neutral that there is increase in salary provided in each year. No

one show disagrees on this statement.

Does organization is using satisfactory methods of interview?

*Sample size: 20

Page | 112

Strongly Agree

Agree Neutral Disagree Strongly Disagree

02468

1012

3

12

5

0 0

General increase in compensation company provide in a year

Criteria No. of Emploee

Strongly Agree

2

Agree 8

Neutral 10

Disagree 0

Strongly Disagree

0

Figure2.27: Using satisfactory methods of interview

In this chart we can see that among 20 employees there are 2 employee are strongly agree8

employee are agree and 10 are neutral that Organization using satisfactory method of interview..

No one show disagrees on this statement.

Is organization does employee verification before and after selection?

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Strongly Agree

Agree Neutral Disagree Strongly Disagree

0

2

4

6

8

10

2

8

10

0 0

Using satisfactory methods of in-terview

Criteria No. of Employee

Strongly Agree

10

Agree 6

Neutral 4

Disagree

0

Strongly Disagree

0

Sample size: 20

Figure2.28: Organization do employee verification before and after selection

Through this chart we can see that among 20 employees there are 10 employee are strongly agree

6 employee are agree and 4 are neutral that Organization does employee verification before and

after selection.. No one show disagree on this statement

Is the Performance Management System is clearly defined in the

organization?

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Strongly Agree

Agree Neutral Disagree Strongly Disagree

02468

1010

64

0 0

Organization do employee verifi-cation before and after selection

Criteria No. of Employee

Strongly Agree

3

Agree 4

Neutral 13

Disagree 0

Strongly Disagree

0

*Sample size: 20

Figure2.29: Performance Management System is clearly defined in the organization

Through this chart we can see that among 20 employees there are 3 employee are strongly agree

4 employee are agree and 13 are neutral that Performance Management System is clearly defined

in the organization.. No one show disagree on this statement

Are you satisfied with the current performance Evaluation system?

*Sample size: 20

Page | 115

Strongly Agree

Agree Neutral Disagree Strongly Disagree

02468

101214

3 4

13

0 0

Performance Management Sys-tem is clearly defined in the or-

ganization

Criteria No. of Employee

Strongly Agree

5

Agree 4

Neutral 9

Disagree 2

Strongly Disagree

0

Figure2.30: Satisfied with the current performance Evaluation system

Through this chart we can see that among 20 employees there are 5 employee are strongly agree

4 employee are agree and 9 are neutral that they are satisfied with the current performance

Evaluation system. No one show disagree on this statement.

Does the Working Environment of the Organization is well?

*Sample size: 20

Page | 116

Strongly Agree

Agree Neutral Disagree Strongly Disagree

02468

105 4

9

20

Satisfied with the current per-formance Evaluation system

Criteria No. of Employee

Strongly Agree

12

Agree 5

Neutral 3

Disagree 0

Strongly Disagree

0

Figure2.31: The Working Environment of the Organization is well

Through this chart we can see that among 20 employees there are 12 employee are strongly agree

5 employee are agree and 3 are neutral that they are satisfied with the current performance

Evaluation system. No one show disagrees on this statement.

Is the working Hours of the Organization is Flexible?

Sample size: 20

*Sample size: 20

Page | 117

Strongly Agree

Agree Neutral Disagree Strongly Disagree

02468

1012

12

53

0 0

The Working Environment of the Organization is well

Criteria No. of Employee

Strongly Agree

0

Agree 3

Neutral 12

Disagree 5

Strongly Disagree

0

Figure2.32: Working Hours of the Organization is Flexible

Through this chart we can see that among 20 employees there are 3 employees who are agree on

this , 12 are neutral and 5 employee are disagree on that working hour of the organization is

flexible.

Does Company takes safety measures for employee safety?

Sample size

*Sample size :20

Page | 118

Strongly Agree

Agree Neutral Disagree Strongly Disagree

02468

1012

03

12

5

0

Working Hours of the Organi-zation is Flexible

Criteria No. of Employee

Strongly Agree

2

Agree 13

Neutral 5

Disagree 0

Strongly Disagree

0

Findings, Recommendations & Conclusion

Chapter Three

Findings, Recommendations & Conclusion

Chapter Three

Figure2.33: Company takes safety measures

Through this chart we can see that among 20 employees there are 2 employees who strongly

agree , there are 13 employees who are agree and 5 employees who are neural that company

takes safety measures for them.

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Strongly Agree

Agree Neutral Disagree Stroongly Disagree

02468

101214

2

13

5

0 0

Company takes safety measures

Chapter3

Findingd,Recommendation,Conclusion

3.1 Findings

After visiting Mercantile Bank and analyzing some facts about this bank I have some finding

based on my visit and analysis

Most of the work done thorough using technology

They provide good working environment

HR department use Automated Human Resource Information System(HIRS)

There is opportunity of periodical increases in salary

There are no extra benefits for performance because organization provides promotion

after 3 years later; there is no chance to get a promotion for extra performance.

There is both positive and negative side for fair evaluation, the positive side is all the

employees become happy because organization evaluate them fairly but other side the

most talent employees become de-motivated.

Most of time the manager face difficulties to take any decision because of management

hierarchy.

In this organization fresh employee’s training is compulsory but other employees training

are not compulsory.

There are a less opportunity for cyclic change in duties and responsibilities, because in

the bank every day employees doing same work, for the reason that sometimes

employees feel boring in the work place.

The mid level employees starting at senior principle officer (SPO) to top level employees

starting at vice president (VP) are fully motivated because of strong compensation

package, decision making power and benefits packages.

Page | 120

There are some general finding about Mercantile Bank is

Customer service quality given by Mercantile Bank is not satisfactory at all

The bank also does not apply any marketing strategy like advertisement or any kind

of promotional activities to attract deposit or increase export-import business of the

bank.

Sometimes managers are not concern abut the activities of staffs

Some of the employees are not motivated about relationship with supervisor or

subordinate except few employees.

Some employee are not concerned about the performance appraisal

3.2 Recommendation: Mercantile Bank limited should concern more on career management process

Arrange skill trainers for specific training

As top management rarely go to training so some training should be arranged for top

management

As there are so many competitors so try to reduce their weaknesses

Only top management get transport facility. so organization should take steps for it

Working hour of this bank should be redesigned

Performance management system should be clearly defined and employees should

have clear idea abut which their performance is rated.

Page | 121

3.3 Conclusion

The world is very competitive in this new millennium. And to survive in this

competition organization should be smart enough to cope up with all the

challenges from outside organization should make their human resource strong

enough. And to make it sure organization should focused more on their HR

activities.

From the analysis about the HR practices of Mercantile Bank we come to know

about various information about their HR activity. Mercantile Bank Limited

(MBL), a bank for 21st century, it is not a mere slogan. The bank has been manned

with talented and brilliant personnel, equipment with most modern technology so

as to most efficient to meet the challenges of 21st century.

Though there are some weaknesses and challenges for this bank regarding the HR

activities but if they can come up with this and make their weaknesses into strength

and challenges as opportunity then one day this bank will become one of the top

banks in Bangladesh.

Page | 122

References

Book

1. Gary Dessler, (11th ed.). (2007). Human Resource Management.2. P.Nick Blanchard.,James W.Thacker., V.Anand Ram., (4th ed.). (2012). Effective

Training. India. Pearson.3. George T. Milkovich., Jerry M. Newman., C. S. Venkata Ratnam., (9 th ed.). (2013).

Compensation Management. New Delhi. Tata Mcgraw Hill & Book house.

Online1. Employee Motivation (n.d.). Wikipedia. Retrieved april 4,2014,

from http://en.wikipedia.org/wiki/Employee_motivation

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http://trainingstation.walkme.com/why-is-employee-motivation-so-important-for-

performance/

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http://www.makeadentleadership.com/employee-motivation-techniques.html

4. Employee Selection(.nd) businessdictionary. Retrived April 4,2014 from

http://www.businessdictionary.com/definition/employee-selection.html

5. Employee selection.(n.d). Wikipedia Retrieved april 4,2014, from

http://en.wikipedia.org/wiki/Personnel_selection

6. Neil k.(n.d) . Human resource selection Process important Retrived April 4,2014

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http://smallbusiness.chron.com/human-resource-selection-process-important-

14399.html

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http://www.nd.gov/hrms/managers/guide/selproc.html

8. Recruitmnet(n.d) Wikipedia Retrieved April 4,2014, from

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9. Importence of recruitment.(2012) The strategic importance of recruitment

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http://sfuhrsa.com/the-strategic-importance-of-recruitment/

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http://www.freshhr.co.uk/editor/files/Recruitment%207%20Steps.pdf

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http://en.wikipedia.org/wiki/Performance_management

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http://www.morebusiness.com/running_your_business/management/Performance-

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http://en.wikipedia.org/wiki/Performance_appraisal

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http://bmmanhum1115.blogspot.com

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Appendix

Strongly Agree

Agree Neutral Disagree Strongly Disagree

Reasonable periodical increase in salaryJob SecurityGood Relationship with other staff membersEffective promotional opportunitiesOrganization recognize and acknowledge your work.satisfied with the incentives provided by the OrganizationReceive non benefit facilities

general increase in compensation company provide in a yearorganization is using satisfactory methods of intervieworganization do employee verification before and after selectionPerformance Management System is clearly defined in the organizationSatisfied with the current performance Evaluation systemthe Working Environment of the Organization is wellthe working Hours of the Organization is Flexiblecompany takes safety measures for employee safety

Questionnaire for EmployeeDepartment

Designation

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