TERM PAPER On Compensation Management Practices in MEGHNA BANK LTD
TERM PAPER On Compensation Management Practices in MEGHNA BANK LTD
TERM PAPER On Compensation Management Practices in MEGHNA BANK LTD
MANAGEMENT
PRACTICES IN MEGHNA
BANK LIMITED
A report on,
Compensation Management Practices in Meghna Bank Limited
Submitted to:
Senior Lecturer
Submitted By:
Name ID
Sanjida Yasmin 2015-1-10-327
Mohammad Rahat Hossen Khan 2013-3-10-029
Md. Manna Sarder 2014-1-10-193
Nelove Chowdhury 2013-2-10-087
Date of Submission:
August 5, 2018
LETTER OF TRANSMITTAL
August 5, 2018
Tamanna Parvin Eva
Senior Lecturer
Department of Business Administration
East West University
Dear Madam,
It is our pleasure to submit the report on “Compensation Management Practices in Meghna
Bank Limited, Bangladesh” that you asked us to conduct. This report was assigned to us as a
partial fulfillment of “Compensation Management” course requirements. We came across
many hurdles and pleasant experiences while making this report. It helped us gain real life
knowledge on this course.
We sincerely hope that the report will meet your approval and its appraisal would
demonstrate our ability to prepare formal assignment report. There might have been some
errors or omissions in this report. We would like to seek your apology for that.
Thank you for your guidance and constant supervision to fulfill this report. We hope this
report will be up to the level of your satisfaction and open to any clarification on the report.
Sincerely yours,
At first, our heartiest gratitude to our reverend teacher and advisor of this course, Tamanna
Parvin Eva, whose enthusiastic guidance and critical comments during the entire phase of the
study made it possible for us to prepare this term paper. Without her supervision, co-
operation and detailed instructions, our research on the Compensation Management Practices
of Meghna Bank Limited, Bangladesh would not come to the light. Our debt to her is warmly
acknowledged.
We would also like to convey our sincerest gratitude to those websites through which we
have gotten many data and information for preparing this term paper. Finally, our deepest
appreciation and regards to Mr. Asif Iqbal Tamim, principal officer of Human Resources
Division of Meghna Bank Limited for his help.
EXECUTIVE SUMMARY
1.0 INTRODUCTION...............................................................................................................1
1.1 Background of the Study..................................................................................................1
1.2 Objective of the Study......................................................................................................1
1.3 Methodology of the Study................................................................................................1
1.4 Scope of the Study............................................................................................................2
1.4 Limitations of the Study...................................................................................................2
2.0 COMPANY OVERVIEW...................................................................................................3
2.1 History of Meghna Bank Limited....................................................................................3
2.2 Vision, Mission and Goal.................................................................................................4
2.3 Organogram......................................................................................................................5
2.4 Services of Meghna Bank Limited...................................................................................6
3.0 LITERATURE REVIEW....................................................................................................7
4.0 ANALYSIS..........................................................................................................................8
4.1.0 Analysis of the Compensation system procedures........................................................8
4.1.1 Procedure of Fixing the Pay Rates.............................................................................8
4.1.2 Procedures of Developing Incentive Programs.........................................................9
4.1.3 Sequence of Practicing the Benefit Packages:.........................................................10
4.1.4. Procedure of Managing Total Compensation System to Ensure Accurate Pay......11
4.2 Analysis of pay for performance and financial incentives of Meghna Bank.................12
4.3 Analysis of Meghna Banks Compensation Objectives, Policy and Techniques............12
4.4 Analysis of Meghna Bank’s Benefit Options.................................................................13
5.0 FINDINGS.........................................................................................................................15
5.1 Strengths of Meghna Bank from the Analysis Part:.......................................................16
5.2 Weaknesses of Meghna Bank from the Analysis Part:..................................................17
6.0 CONCLUSION AND RECOMMENDATION.................................................................17
6.1 Conclusion......................................................................................................................17
6.2 Recommendation............................................................................................................18
7.0 REFERENCES...................................................................................................................19
8.0 APPENDIX........................................................................................................................20
1.0 INTRODUCTION
This report was assigned to us by our course instructor Tamanna Parvin Eva as a practical
requirement of the course “Comepensation Management” under Bachelor of Business
Administration in the East West University. We are glad that we got the opportunity to make
this research on the compensation management system of Meghna Bank Limite. We got the
informations form Mr. Asif Iqbal Tamim, the principal officer of the human resource
department of Meghna Bank Limited. The report will enhance the knowledge of other
students to have an insight into the Compensation practices on a service organization.
Without objective nothing can be counted as a successful one. My internship program was
also directed to serve some particular objectives. The objective of the study is to gather
practical knowledge regarding over all compensation and benefit practices on a service
organization. Theoretical classes of BBA provide us theories regarding different subjects
where as practical training gives us the chances to view those systems and their operations.
Broad Objective:
The main objective of this paper is to analyze the pay structure, benefits of employees of
Meghna Bank ltd.
Specific Objective:
•To evaluate the compensation structure of Meghna Bank in terms of its overall acceptability
•To point out the job satisfaction of employees due to the salary package which will lead to
understand the motivation.
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packages, pay for performance and financial incentives, compensation objectives, policy and
techniques, questions related to benefit options etc. questions have been covered.
The study will focus on the compensation management of Meghna Bank Limited; how they
perform and maintain compensation management. Also It will be discussed the current
compensation practices and policies of the same. I am lucky that I had a great opportunity to
have an in depth knowledge of compensation management practiced by the Meghna bank
Limited.
While compiling the term paper, we faced some limitations which may affect the result of the
study a bit. Still we tried to make the study as authentic as possible.
More time is necessary to understand all the complexities involved in the procedures;
Difficulty in relating theory to practice;
Limited knowledge and ability on our part to conduct the study more effectively
Insufficient information is found from the annual report, company’s website regarding
the topic
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2.0 COMPANY OVERVIEW
Meghna Bank Limited is a fourth generation bank which commenced its operations from
May 9, 2013. The memorandum and articles of association was signed by the sponsors in
March 2, 2013. The company was officially incorporated in March 20, 2013. The same day
the company received its certificate of commencement of business. The license was issued by
Bangladesh bank in 28 March, of the same year. The bank was enlisted as a scheduled bank
in 3rd April, 2013. The formal launching of the bank was held in April 21, 2013. The same
year, on May 8, the organization’s license was issued for opening the first branch- Principal
branch.
The company milestones are listed below-
Particulars Date
License issued for opening the first branch- Principal Branch May 8, 2013
Currently the bank has 47 branches across different locations in Bangladesh. Their head
office is situated at Gulshan. It has 16 ATM locations in Bangladesh.
The Bank provides all types of support to trade, commerce, industry and overall business of
the country. Meghna Bank Limited’s finances are also available for the entrepreneurs to set
up new ventures and BMRE of existing industrial units.
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2.2 Vision, Mission and Goal
Vision:
Mission:
Meghna Bank Limited’s mission is to be among the best service provider in the industry by
ensuring complete customer satisfaction through the application of technology,
professionalism & nursing.
Goal:
Their pay-off line “Together We Sail” exemplifies their commitment to contribute towards
building up an enlightened and prosperous nation.
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2.3 Organogram
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2.4 Services of Meghna Bank Limited
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3.0 LITERATURE REVIEW
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According to an article of Joanne Sammer, Some workers welcome being paid for overtime
hours worked; others felt demoted when told that they would be paid hourly. For employees
who like their change to nonexempt status, it might be worthwhile to keep it in place, even
though the Department of Labor's new overtime rule raising the salary limit has been put on
hold. But if employees felt demeaned by being reclassified as nonexempt, consider reverting
them back to exempt status, an employee relations expert advised.
4.0 ANALYSIS
Meghna Bank Limited has well organized and properly communicated compensation system.
They try to provide a competitive and fair compensation and benefits to the employees of all
level of the organization.
According to the questionnaire, we have tried to divide the whole compensation management
practise of Meghna Bank limited in four major parts. Those are-
1. The analysis of compensation system procedures
2. The analysis of pay performance and financial incentives
3. The analysis of compensation objectives, policy and techniques
4. The analysis of benefit options
Meghna Bank Limited do have a compensation and benefit policy for the betterment of the
employees and the organozation itself as well. Their main comoensation objectives is to
increase the efficiency of the organization as well as to ensure fairness as well as to maintain
legal compliances.
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FIGURE 2: SEQUENCE OF FIXING PAY RATES
5. Develop Policy Lines: Finally they develop a policy line to identify pay grades and pay
ranges
6. Fixing Pay rates: In this step, they fix pay rates through developing pay level and pay
mix for employees.
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FIGURE 3: PROCEDURE OF DEVELOPING INCENTIVE PROGRAM
1. Investigate the market: They investigate the market to know competitor’s available
benefit packages so that they can match with the market.
2. Identify Legal Provisions: Meghna Bank then identifies the legal provisions regarding
the employee benefits so that it can comply with all the rules.
3. Decide and Create List of Monetary and Non-Monetary Benefits: Here they decide
what types of monetary and non-monetary benefits they are ready to pay and then create a
list of those benefits.
4. Determine Common Benefits: Then they determine some common benefits for all the
employees of their organization.
5. Recognize Job Specific Benefits: At this stage they recognize the job specific benefits
based on the nature of the particular jobs.
6. Evaluate and Adapt Changes: They periodically evaluate the benefit packages and
adapt any kind of changes that are needed as per market trend.
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FIGURE 5: PROCEDURE FOR MANAGING TOTAL COMPENSATION SYSTEM TO ENSURE ACCURATE PAY
1. Assessment of Compensation System: First of all they assess the total compensation
system through creating proper balance between cost and contribution.
2. Implementation: Then they effectively implement the compensation plan after overall
assessment to achieve the objectives of compensation system.
3. Communication: At this stage, they communicate their compensation system to their
employees by providing them with exact information about the system so that no one is
dissatisfied.
4. Periodical Changes: Whenever any new situation arises, they adopt periodical changes
to meet the situation.
4.2 Analysis of pay for performance and financial incentives of Meghna Bank
Regarding the pay for performance and financial incentives, Meghna Bank has the following
practices-
The bank has individual merit pay program
It offers some non-financial and recognition awards depending on both individual
performance and team performance
The organization practices both years of service and performance based promotion
activities
The organization has a profit sharing program of 5%
Meghna Bank does not offer any stock-option schemes to its employees
It does not have any gain sharing plans for employees
It does not pay anything for overtime work
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4.3 Analysis of Meghna Banks Compensation Objectives, Policy and Techniques
According to the survey answers, Meghna Bank Limited’s compensation and benefit schemes
comply with the government regukations. It’s compensation syste is able to attract, motivate
and retain tallented employees. They believe that the compensation system has a positive
impact one the quantitative and qualitative employee performance. And it als helps to reduce
employee turnover, absenteeism and industrial conflict. Their compensation system is also
linked with their business strategic plans and thus able to create shareholder’s value.
Employee devotion and commitment are infuenced by this compensation system. It is also
believed that their compensation system makes a progressive contribution to the overall
effectiveness of the organization. They also claimed that their compensation system has been
designed to ensure equity and employee satisfaction. A good compensation system helps to
ensure organizational citizenship behavior of employees. They believe that a well designed
and competitive compensation system helps to create an employment brand in the market.
Compensation policy is able to create balance between organization cost and employee
contribution.
According to their answers, Meghna Bank Limited’s Pay Model is shown in the next page-
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Contributory Provident Fund: Meghna Bank Limited to provide provident fund to their
employees, but this is contributory provident fund. Means the employees contribute to
their own provident fund. An amount is cut each month from their salary to contribute to
provident fund. Actually 10% of the basic are deducted from each employee for the
provident fund along with this 10% another 10% provided by the company total 20% is
installed as the payment of provident fund. This fund is given to their employees at the
end of their service. If any employees leave the organization before completing three
years of employment he will get the provident fund induce from the 10% of the basic that
will calculated upon his service period which means those employees will not be able to
claim the other 10% provided by the company
Health and Medical Insurance: Meghna Bank provides some health and medical
insurance to their employees. But they do not provide any free medical services to the
employees.
Free Training Workshops: Meghna Bank arranges some training workshops for the
development of their employees. And these workshops are completely free of cost for the
employees.
Car and Motor Cycle Loan: The employees of Meghna Bank are allowed to take loan
for car or motorcycle form the bank at a low interest rate. But to be eligible for that loan,
an employee has to work for minimum 3 years in the company. Also, this loan is not
applicable for all positions.
Maternity Leave: Meghna Bank provides 6 months with pay maternity leave to its
female staffs. On this leave, no salary is cut. And on returning, they are assigned to their
previous positions.
Study leave: There is a fantastic opportunity for the employee of Meghna Bank Limited.
The employees who perform extensively well and show gratitude of benefits that they can
contribute for the sake of company are entitled for recommendation to study. Generally,
the employees are recommended to get 3 years paid leave for their studies but all the
employees do not get this advantage because it is for those who are really high performer
are to authorize to get the full payment to continue their studies.
Sick Leave: 14 days sick leave with pay is provided to the staffs of Meghna Bank each
and every year.
Disability Leave: If any employee faces unusual accident or physical challenge, then
they are provided leave granted by the company which is called disability leave but for
this leave the salary of them will not be deduced which means these are paid leave.
Accidental Leave: Every employee can take this leave due to accident in workplace, in
case of hospitalized because of accident or surgery issues. Meghna Bank Limited
provides 3 weeks with pay for accidental leave for accidental or surgical issues to its
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employees. It more leave is required on this purpose, employees can take more leave, but
that extra leave will be unpaid leave.
Festival Bonus: Meghna Bank Limited provide 2 festival bonuses to its employees. One
in Eid-Ul-Azha and another in Eis-Ul-Fitr. Festival bonus is paid to all confirmed
officers/staff at one month basic salary which is reimbursed twice in each calendar year.
Weekly Holiday: Two holidays (Friday & Saturday) per week for the employees of
Meghna Bank.
5.0 FINDINGS
Meghna Bank Limited is striving towards achieving its goal of being the best quality bank in
Bangladesh and providing a superior and consistent banking services to all the customers.
The bank not only focuses on the needs of the customers but also on the needs of the
employees. To keep all the employees satisfied, they try to provide a good compensation
system which maintain fairness and equity. From the analysis of the compensation
management practices of Meghna Bank Limited, we have found that the bank maintains a
very well designed and well implemented compensation program. The finding that we can
highlight are-
While fixing the pay rates, Meghna Bank Limited follows a procedure which has 6 main
steps. They first conduct a job analysis where they collect information about different job
aspects, compare similarities and dissimilarities among jobs and prepare job description
and job specification. Then they conduct job evaluation to identify the value of each job
for internal pay structure. Then they select benchmark jobs. After that they conduct
market survey to know what their competitors are paying for those benchmark jobs. The
finally, they develop policy lines and decide pay level and fix pay rates.
Meghna Bank also follows a systematic way in developing the incentive programs for
their employees. To maintain external competitiveness, they conduct market survey to
identify the incentive packages provided by their competitors. Meghna Bank gives
seniority based pay and also provides individual incentives to the best performers to
motivate them. Team incentives are also provided to the best performing team.
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While practicing the benefit packages, Meghna Bank follows 5 sequential steps. They
first investigate the market to know competitor’s available benefit packages. Then they
identify legal provisions and make a list of monetary and non-monetary benefits
accordingly. They determine some common benefits for all the employees and also
decide job-specific benefits. Last but not the least, they adapt periodical changes to match
with the situation.
Meghna Bank manages its total compensation system by following four main steps. They
first assess the total compensation system, implement compensation plan, then
communicate all the information to the employees to maintain transparency and adapt
periodical changes.
Through their compensation system, Meghna Bank tries to increase the overall
performance of the employees and thus of the organization, to satisfy the customers and
stakeholders, to maintain fairness and to comply with law and legislation regarding
compensation.
There are many strengths of Meghna Bank Limited. Among those, the major strengths are
listed below-
Provides excellent banking services to all of its customers
Meets the needs of a variety of customers such as students, senior citizens, women,
farmers and other enterprises
Makes sure that the right person is getting the right compensation
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Both individual and team incentives are provided for motivation
Their compensation policy has maintained balance between organization cost and
employee contribution
After implementing the compensation, they communicate the compensation system to the
employees to maintain transparency
They provide many benefits such as gratuity, car and motorcycle loan, health and
medical insurance, termination benefit, free training workshops, festival bonus etc.
They provide many paid leave such as maternity leave, sick leave, accidental leave,
disability leave, study leave etc.
As the bank is new and so is its HR department, so there are still some lacking in terms of
experience
Meghna Bank does not provide any life insurance policy to any of its employees. The
absence of life insurance may discourage the employees to settle there
The bank does not provide any long service awards, which may discourage the senior
employees
There is no children day care facilities for the employees which may discourage the
female employees who have children
The bank follows a completely top down approach for deciding compensation and other
benefits
There is no flexible benefit option. All benefits are standardized for all employees
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6.0 CONCLUSION AND RECOMMENDATION
6.1 Conclusion
Meghna Bank Limited is always trying hard to satisfy both their customer and employees.
Because without satisfying the employees, customer satisfaction can never be achieved. In
order to keep the employees satisfied and motivated, Meghna Bank Limited practices a well-
designed and well implemented compensation system. They try to follow a systematic
procedure in all the activities related to compensation such as, fixing pay rates, developing
incentive programs, practicing benefit packages and managing the total compensation system.
They try to remain up to date with the external market so that they can maintain external
competitiveness. While designing the compensation and benefit packages, they make sure
that it is aligned with their corporate strategy. They always comply with government laws
related to compensation. And through effective compensation management, they have
ensured good performance of the employees and organization, satisfaction of customers and
all stakeholders and also fairness has been maintained. But still there are some lacking in
their overall compensation system which has been discussed earlier. If Meghna Bank limited
can improve those things then its compensation system will become more effective and
employee satisfaction and performance will further increase.
6.2 Recommendation
Based on our observation, we have found some lacking in Meghna Bank’s overall
compensation system. To overcome those shortcomings, we have made the following
recommendations-
Meghna Bank should arrange some training programs for its compensation managers to
be more efficient in this matter
Stock options should be made available. If it is not possible to offer it to all the
employees, then at least executive level employees should be provided with this option so
that they feel a sense of ownership and put more effort for the success of the organization
They should pay for working overtime. There are many methods to decide overtime
payment. The bank can select any one of those methods
They should follow a bottom up approach in deciding the compensation packages so that
all the employees are satisfied.
Meghna Bank can offer flexible benefit program, such as cafeteria approach so that the
employees can choose their own benefits according to their needs. Here the bank can fix a
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budget for each employees benefit, but the benefits will be chosen by the employees
themselves.
The bank may introduce long service awards in order to encourage the employees to stay
with the organization for a long time
They can provide child care benefits so that female employees can maintain work-life-
balance.
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7.0 REFERENCES
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8.0 APPENDIX
1. Business Card
2. Questionnaire
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