Вы находитесь на странице: 1из 70

Chapter-1

introduction

1.1 Origin of the report


The report has been prepared as a fulfillment of the partial requirement of the internship program
as authorized by BBA, Southeast University. The primary goal of the internship prospectus is to
provide on the job coverage to the student and an opportunity for translation of theoretical
conceptions in real life situation. Students are placed in enterprises, organizations, research
institutions as well as development projects. The program covers an overall period of
approximate 12 weeks of organizational attachment, with report finalization work.

1.2 Problem statement


The topic the researcher conducted the dissertation on is how effective performance appraisals
systems are according to the employees who are involved the appraisal. Whether an appraisal
system is effective or not may have either a positive or negative effect on the employees and the
organization.
From the training the employees improves their effectiveness which enables them working in
different branches in different banking jobs. The training programs organized by MBL are also
tend to increase employee performance, so that the employees can serve the organization well
and serve the customers with zero complain. Performance appraisal plays an important role in
employee who develops motivation, potential, commitment and loyalty towards organization

1.3 Objective of the research


The objectives of the orientation are:

a. To study various desk works of the Mirpur-10 Branch of Mercantile Bank Limited.
b. To analyze overall performance of the branch as well as Mercantile Bank
limited.

Broad Objective
To learn about the performance appraisal system of MBL.

Specific Objectives:

To know the inner side of Mercantile Bank Limited banking culture.

Provide information on MBL.

1.4 Scope of the research


Mercantile Bank Limited is one of the new generation banks in Bangladesh. The scope of the
study is limited to the Mirpur-10 Branch only. The report covers the organizational
structure, background, functions and the performance of the bank.

1.5 Limitations of the study


I had to face different problems while preparing this internship research. At the same time I tried
to make an adjustment with those problems.
Those problems are as follows;

It was very difficult to collect the information from various personnel for the job
constrain.

Bank policy was not disclosing some data and information for various reasons.

The department people always remain busy due to lack of supporting employees so they
could not dedicate their full efforts

The annual report is the main secondary source of the information but this information
was not enough to complete the report and it was not identified clear idea about this bank.

Because of the limitation of information some assumption was made. So there may be
some personal mistake in this research.

The times 3 months are not sufficient to know all activities of the branch to prepare the
report.

Chapter 2
LITERATURE REVIEW

2.1 Performance Appraisal:


Performance Appraisal may be defined as a structured formal interaction between a subordinate
and supervisor, that usually takes the form of a periodic interview (annual or semi-annual), in
which the work performance of the subordinate is examined and discussed, with a view to
identifying weaknesses and strengths as well as opportunities for improvement and skills
development.
A critical factor related to an organizations long-term success is its ability to measure how well
employees perform and then use that information to ensure that performance meets present
standards and improves over time. This process is referred to as performance appraisal or
performance evaluation. It can also be defined as the process by which an employees
contribution to the organization during a specified period of time is assessed. If used effectively,
it can improve employee motivation and performance.

Once the employee has been selected, trained and motivated, he is then appraised for his
performance. Performance Appraisal is the step where the Management finds out how effective it
has been at hiring and placing employees. If any problems are identified, steps are taken to
communicate with the employee and remedy them. Performance Appraisal is a process of
evaluating an employee performance in terms of its requirements.

Performance Appraisal can also be defined as the process of evaluating the performance and
qualifications of the employees in terms of the requirements of the job for which he is employed,
for purposes of administration including placement, selection for promotions, providing financial
rewards and other actions which require differential treatment among the members of a group as
distinguished from actions affecting all members equally. Performance appraisal is a formal
system that evaluates the quality of a workers performance.

An appraisal should not be viewed as an end in itself, but rather as an important process within a
broader performance management system that links:

Organizational objectives

Day-to-day performance

Professional development

Rewards and incentives

2.2 History of Performance Appraisal


The history of performance appraisal is quite brief. Its roots in the early 20th century can be
traced to Taylor's pioneering Time and Motion studies. But this is not very helpful, for the same
may be said about almost everything in the field of modern human resources management. As a
distinct and formal management procedure used in the evaluation of work performance, appraisal
really dates from the time of the Second World War - not more than 60 years ago. Yet in a
broader sense, the practice of appraisal is a very ancient art. In the scale of things historical, it
might well lay claim to being the world's second oldest profession!

Appraisal system has been defined by Dulewicz (1989) as a basic human tendency to make
judgments about those one is working with as well as about oneself." Appraisal, it seems, is both
inevitable and universal. In the absence of a carefully structured system of appraisal, people will
tend to judge the work performance of others, including subordinates, naturally, informally and
arbitrarily.
The eminent management expert, McGregor defined the performance appraisal system as the
formal performance appraisal plans are designed primarily to meet the organizational needs and
to provide systematic judgments.

Appraisal also tells the employees as to how they are doing and about the required changes in
their behavior, attitudes, skills or job knowledge, in other words, making the employees aware as
to where they stand in the eyes of superiors. These form the basis for the coaching and
counseling of employees by their bosses.

The human inclination to judge can create serious motivational, ethical and legal problems in the
workplace. Without a structured appraisal system, there is little chance of ensuring that the

judgments made will be lawful, fair, defensible and accurate. Performance appraisal systems
began as simple methods of income justification. That is, appraisal was used to decide whether
or not the salary or wage of an individual employee was justified. The process was firmly linked
to material outcomes. If an employee's performance was found to be less than ideal, a cut in pay
would follow. On the other hand, if their performance was better than the supervisor expected, a
pay rise was in order. Little consideration, if any, was given to the developmental possibilities of
appraisal. If was felt that a cut in pay, or a rise, should provide the only required impetus for an
employee to either improve or continue to perform well. Sometimes this basic system succeeded
in getting the results that were intended; but more often than not, it failed.

For example, early motivational researchers were aware that different people with roughly equal
work abilities could be paid the same money and yet have quite different levels of motivation
and performance. These observations were confirmed in empirical studies. Pay rates were
important, yes; but they were not the only element that had an impact on employee performance.
It was found that other issues, such as morale and self-esteem, could also have a major influence.

As a result, the traditional emphasis on reward outcomes was progressively rejected. In the 1950s
in the United States, the potential usefulness of appraisal as tool for motivation and development
was gradually recognized. The general model of performance appraisal, as it is known today,
began from that time.

In modern times Performance appraisal may be defined as a structure formal interaction between
a subordinate and supervisor, that usually takes the form of a periodic interview (annual or semiannual), in which the work performance of the subordinate is examined and discussed, with a
view to identifying weaknesses and strengths as well as opportunities for improvement and skill
development .
In many organizations but not all appraisal result are used, either directly or indirectly, to help
determine reward outcomes. That is, the appraisal results are used to identify the better
performing employees who should get the majority of available merit pay increases, bonuses,
and promotions (Goel, 2008).

2.3 360Appraisal:
360 degree appraisal is an approach to performance appraisal that involves gathering
performance information from people on all sides of the manager above, beside, below and so
forth (De Nisi & Griffen, 2008). This approach allows management to 18 match the strengths
and weaknesses from each perspective and gain a more accurate, rounded view of a persons true
performance (Conway, 1996). Rees and Porter (2003, p.83) define 360 degree appraisal as a
process that involves the key people in a persons network of working relationships making
assessments of a persons performance. They subordinate being appraised is then given
structured feedback; this may involve feedback from subordinates and any key outside parties, if
it is practicable.

Some of the subordinates that may give feedback are the immediate manager, other management
in the organization, peers, internal and external customers and suppliers.

360 degree appraisal can be used to reduce the bias of the appraisal process by removing top
down ratings by managers. This is done by replacing them with a multisource assessment (Grint,
1993). However, Prowse and Prowse (2009, p.73) argued that a manager in 360-degree appraisal
collates feedback rather than judges performance and summarizes evaluations and so the
validity of upward appraisal means the removal of subjective appraisal ratings.

Using the 360 degree appraisal technique can mean there will be more negative feedback given,
and this is known to demotivate staff. It is therefore vital that the managers are using the
feedback received from the other raters wisely and ensure it is consistent and unbiased (De Nisi
and Griffen, 2007, Prowse and Prowse, 2009).

De Cenzo and Robbins (2007) feel that appraisers should only rate in those areas in where they
have substantial job knowledge. They should be as close as possible to the organizational level of
the employee being evaluated. If the appraiser is not in 19 positions where they can observe the
persons work behavior then there is a greater chance of inaccuracies.

2.4 Importance and Purpose:


Performance Appraisal has been considered as the most significant an indispensable tool for an
organization, for the information it provides is highly useful in making decisions regarding
various personnel aspects such as promotion and merit increase. Performance measures also link
information gathering and decision making processes which provide a basis for judging the
effectiveness of personnel sub-divisions such as recruiting, selection, training and compensation.
Accurate information plays a vital role in the organization as a whole. They help in finding out
the weaknesses in the primary areas. Formal Performance Appraisal plans are designed to meet
three needs, one of the organization and the other two of the individual namely:

They provide systematic judgments to back up salary increases, transfers, Demotions or


terminations.

They are the means of telling a subordinate how he is doing and suggesting needed changes
in his behavior, attitudes, skills or job knowledge. They let him know where he stands with
the Boss.

Superior uses them as a base for coaching and counseling the individual. On the basis of
merit rating or appraisal procedures, the main objectives of Employee Appraisal are:

To enable an organization to maintain an inventory of the number and quality of all managers
and to identify and meet their training needs and aspirations.

To determine increment rewards and to provide reliable index for promotions and transfers to
positions of greater responsibility.

To suggest ways of improving the employee s performance when he is not found to be up to


the mark during the review period.

To identify training and development needs and to evaluate effectiveness of training and
development programmers.

To plan career development, human resource planning based potentials.

10

2.5 Effective Performance Appraisal:


From reviewing the literature, there appears to be no one single best method of Performance
Appraisal, although there are certain common elements throughout all effective methods.
Effective performance appraisals are commonly associated with clear goals that are attached to
specific performance criteria and are well-accepted by both appraiser and appraisee (Mustapha
& Daud, p.158). All effective performance appraisals include elements such as linking appraisal
to rewards, the supervisor and employee working together to identify goals, performance goals
clearly defined, feedback given to the appraiser on their effectiveness and compliance with legal
requirements (Rankin & Kleiner, 1988).

2.6 Fundamentals of an Appraisal system:


In order to be effective, an appraisal system needs to be perceived by workers as:

Relevant and applicable to everyday work.

Acceptable and fair.

A mutual collaboration between management and workers.

A performance appraisal system that meets these criteria is likely to have the greatest impact on
workers satisfaction with the appraisal process and their motivation to improve performance.

2.7 Appraisal Methods


In a landmark study, Performance appraisal system has been classified by Locher & Teel (1977).
He found that the three mast common performance
Appraisal methods in general use are:
1. Rating scales (56%)
2. Essay method (25%) and
3. Result oriented or MBO methods (13%).
Certain technique in performance appraisal have been thoroughly investigated , and some have
been found to yield better result than others.

11

Encourage Discussion
Research studies show that employees are likely to feel more satisfied with their appraisal result
if they have the chance to talk freely and discuss their performance. It is also more likely that
such employees will be matter able to meet future performance goals. Employees are also more
likely to feel that the appraisal process is fair if they are given a chance to talk about their
performance. This especially so when they are permitted to challenge and appeal against their
evaluation.

Constructive Intention
It is very important that employees recognize that negative appraisal feedback is provided with a
constructive intention to help them overcome present difficulties and to improve their future
performance. Employees will be less anxious about criticism, and more likely to find it useful,
when the believes that the appraiser's intentions are helpful and constructive. In contrast , other
studies ( Baron 1988) have reported that destructive criticism which is vague , ill informed
, unfair or harshly presented - will lead to problems such as anger , resentment , tension and
workplace conflict , as well as increased resistance to improvement , denial of problems, and
poorer performance .

Set Performance Goals


It has been shown in numerous studies that goal-setting is an important element in employee
motivation. Goals can stimulate employee effort, focus attention, increase persistence, and
encourage employees to find new and better ways to work. The useful of goals as a stimulus to
human motivation is one of the best supported theories in management (Locher , 1977) .It is also
quite clear that gols which are specific , difficult and accepted by employees will lead to higher
level of performance than easy , vague goals (such as do your best ) or no goals at all (Harris
1914) .

Appraiser Credibility
It is important that the appraiser (usually the employee's supervisor) be well-informed and
credible. Appraisers should feel comfortable with the techniques of appraisal, and should be
knowledgeable about the employees job and performance (Teel , 1977) . When these conditions

12

exist, employees are more likely to view the appraisal process as accurate and fair. They also
express more acceptances of the appraisers feedback and a greater willingness to change.

2.8 Performance Appraisal Techniques/Methods:


There are many types of performance appraisal methods. Those are divided in two parts

Traditional Methods

Modern Methods

2.9 Rating Scales:


The rating scale method offers a high degree of structure for appraisals. Each employee trait or
characteristic is rated on a bipolar scale that usually has several points ranging from "poor" to
"excellent" (or some similar arrangement). The traits assessed on these scales include employee
attributes such as cooperation, communications ability, initiative, punctuality and technical
(work skills) competence. The nature and scope of the traits selected for inclusion is limited only
by the imagination of the scales designer, or by the organizations need to know. The one major
provision in selecting traits that they should be in some way relevant to the appraisers

job.

The traits selected by some organizations have been unwise and have resulted in legal action on
the ground of discrimination (Torre, 1996)

2.10 Advantages:
The greatest advantage of rating scales is that they are structured and standardized. This allows
ratings to be easily compared and contrasted - even for entire workforces.
Each employee is subjected to the same basic appraisal process and rating criteria, with the same
range of responses. This encourages equality in treatment for all appraise and imposes standard
measures of performance across all parts of the organization (David, 1993). Rating scale
methods are easy to use and understand. The concept of the rating scale makes obvious sense;

13

both appraiser and appraise have an intuitive appreciation for the simple and efficient logic of the
bipolar scale.
This result is widespread acceptance and popularity for this approach.

2.11 Disadvantages:
Trait Relevance
Are the selected rating-scale trait clearly relevant to the jobs of all appraises? It is inevitable that
with a standardized and fixed system of appraisal that certain traits will have a greater relevance
in some jobs than in others. For example, the trait "initiative" might not be very important in a
job that is tightly defined and rigidly structured. In such cases, a low appraisal rating for
initiative may not mean that an employee lacks initiative. Rather, it may reflect that fact that an
employee has few opportunities to use and display that particular traits ( Mckellin , 1993) . This
relevance of rating scales is therefore said to be context sensitive. Job and workplace
circumstances must be taken into account.

Systemic Disadvantage
Rating scales, and the traits they purport to measure, generally attempt to encapsulate all the
relevant indicators of employee performance. There is an assumption that all the true and best
indicators of performance are included, and all false and irrelevant indicators are excluded
(Torre, 1996). This is an assumption very difficult to prove in practice. It is possible that an
employees performance may depend on factors that have not been included in the selected traits.
Such employees may end up with rating that do not truly or fairly reflect their effort or value to
the organization. Employees in this class are systemically disadvantaged by the rating scale
method.

Perceptual Errors
This includes various well-known problems of selective perception (such as the horns and halos
effect) as well as problems of perceived meaning. Selective perception is the human tendency to
make private and highly subjective assessments of what a person is "really like and then seek
evidence to support that view (while ignoring or downplaying evidence that might contradict it).

14

This is a common and normal psychological phenomenon (Torre, 1996). All human beings are
affected by it. In other words, we see in others what we want to see in them. An example is the
supervisor who believes that an employee is inherently good (halo effect) and so ignores
evidence that might suggest otherwise.
Instead of correcting the slackening employee, the supervisor covers for them and may even
offer excuses for their declining performance. On the other hand, a supervisor may have formed
the impression that an employee is bad (horns effect).
The supervisor becomes unreasonably harsh in their assessment of the employee, and always
ready to criticize and undermine those (Sanches, 1996). The horns and halo effect is rarely seen
in its extreme and obvious forms. But in its more subtle manifestation, it can be a significant
threat to the effectiveness and credibility of performance appraisal.

Perceived Meaning
Problems of perceived meaning occur when appraisers do not share the same opinion about the
meaning of the selected traits and the language used on the rating scales. For example, to one
appraiser, an employee may demonstrate the trait of initiative by reporting work problems to a
supervisor. To another appraiser, this might suggest an excessive dependence on supervisory
assistance - and thus a lack of initiative. As well, the language and terms used to construct a scale
as Performance exceeds expectations or below average Skill may mean different things to
different appraisers (De La Torre, 1996).

Rating Errors
The problem here is not so much errors in perception as errors in appraiser judgment and motive.
Unlike perceptual errors, these errors may be (at times deliberate. The most common rating error
is central tendency. Busy appraisers, or those wary of confrontations and repercussions, may be
tempted to dole out too many passive, middle-of-the-road ratings (e.g., "satisfactory" or
"adequate"), regardless of the actual performance of a subordinate. Thus the spread of ratings
tends to clump excessively around the middle of the scale (Sanches, 1996). This problem is
worsened in organizations where the appraisers do not feel confident with the task of appraisal.

15

2.12 Essay Method:


In the essay method approach, the appraiser prepares a written statement about the employee
being appraised. The statement usually concentrates on describing specific strengths and
weakness in job performance. It also suggests courses of action to remedy the identified problem
areas (Harry, 2007).
The statement may be written and edited by the appraiser alone or it can be composed in
collaboration with the appraise.

2.13 Results Method Management by Objectives


(MBO)
It aims to increase organizational performance by aligning goals and subordinate objectives
throughout the organization. Ideally, employees get strong input to identify their objectives, time
lines for completion, etc. MBO includes ongoing tracking and feedback in the process to reach
objectives. Management by Objectives (MBO) was first outlined by Peter Drucker in 1954 in his
book 'The Practice of Management'. In the 90s, Peter Drucker himself decreased the
significance of this organization management method, when he
is not the great cure for management

said: Its just another tool. It

inefficiency Management by objectives work if you

know the objectives, 90% of the time you dont.

2.14 Core Concepts


According to Drucker managers should "avoid the activity trap", get so involved in their day to
day activities that they forget their main purpose or objective? Instead of just a few top
management all managers should Participate in the strategic planning process, in order to
improve the implement ability of the plan and implement a range of performance systems,
designed to help the organization stay on the right track.

16

2.15 Main Principle


The principle behind Management by Objectives (MBO) is to make sure that everybody within
the organization has a clear understanding of the aims, or objectives, of that organization, as well
as awareness of their own roles and responsibilities in achieving those aims. The complete MBO
system is to get managers and empowered employee acting to implement and achieve their plans.

2.16 Benefits of performance appraisals


Performance appraisals can be used to:

Make employment decisions such as determining pay and promotions.

Identify professional development needs.

Identify factors in the work environment that help or hinder performance effectiveness.

2.17 Motivation and Satisfaction:


Performance appraisal can have a profound effect on levels of employee motivation and
satisfaction - for better as well as for worse. Performance appraisal provides employees with
recognition for their work efforts. The power of social recognition as an incentive has been long
noted. In fact, there is evidence that human beings will even prefer negative recognition in
preference to no recognition at all.
If nothing else, the existence of an appraisal program indicates to an employee that the
organization is genuinely interested in their individual performance and development (Dewakar,
2008). This alone can have a positive influence on the individual's sense of worth, commitment
and belonging.
The strength and prevalence of this natural human desire for individual recognition should not be
overlooked. Absenteeism and turnover rates in some organizations might be greatly reduced if
more attention were paid to it. Regular performance appraisal, at least, is a good start.

17

2.18 Employee Evaluation:


Though often understated or even denied, evaluation is a legitimate and major objective of
performance appraisal. But the need to evaluate (i.e., to judge) is also an ongoing source of
tension, since evaluation and development priorities appear to frequently clash. Yet at its most
basic level, performance appraisal is the process of examining and evaluating the performance of
an individual (Goel, 2008). Though organizations have a clear right - some would say a duty - to
conduct such evaluations of performance, many still recoil from the idea. To them the explicit
process of judgment can be dehumanizing and demoralizing and a source of anxiety and distress
to employees.
It is been said by some that appraisal cannot serve the needs of evaluation and development at
the same time; it must be one or the other. But there may be an acceptable middle ground, where
the need to evaluate employees objectively, and the need to encourage and develop them, can be
balanced.

18

Chapter Three
Overview of the Organization

19

3.1 Historical background of Mercantile Bank limited


Mercantile Bank Limited is a scheduled private commercial bank established on May20, 1999
under the Bank Company Act, 1991 and incorporated as a Public Limited Company under
Company Act, 1994. The Bank started commercial banking operations from June 02, 1999. During
this short span of time, the Bank has been successful to position itself as a progressive sand
dynamic financial institution in the country.
The Bank had been widely welcome by the business community, from small entrepreneurs for
forward-looking business outlook business outlook and innovative financing solutions. Thus,
within this very short period it has been able to create an image for itself and has earned
significant reputation in the countrys banking sector as a bank with vision. The company
Philosophy -Efficiency is our strength has been exactly the essence of success of this Bank.
Mercantile Bank Limited has been licensed by the Government of Bangladesh as a scheduled
Bank in the private sector in the process of the policy of liberalization of banking and financial
services or Bangladesh. In view of the above, the Bank has, within a period of eight years of its
operation, achieved a remarkable success and has always met up capital adequacy requirement
set by Bangladesh Bank.
There are twenty-seven sponsors involved in creating Mercantile Bank Limited; the sponsors of
the Bank have a long heritage of trade, commerce and industry. They are highly regarded for
their entrepreneurial competence. The sponsors happen to be member of different professional
groups among whom are also renowned banking professionals having vast range of banking
knowledge. There are also members who are associated with other financial institution like
companies, leasing companys etc.
The board of directors consists of 21 members elected from the sponsor of the bank. And the
board of directors is the apex body of e bank. All route matters beyond delegated owners of
management are decided upon by or routed through the executive committee, subject to
ratification by the board of directors.

20

3.2 Objectives of the Mercantile Bank Limited


Objectives:

Strategic objective

To achieve positive Economic value added (EVA) each year

To be market leader in product innovation

To be one of the top three financial institutions in Bangladesh in terms of cost efficiency.

To be one of the top five financial institutions in Bangladesh

In terms of market share in all significant market segments we serve.

Financial objectives
To achieve a return on shareholders.
Equity of 20% or more on average.

3.3 Mission, vision and core values of Mercantile


bank limited
Mission of MBL:
Will become most caring, focused for equitable growth based on diversified deployment of
resources, and nevertheless would remain healthy and gainfully profitable Bank.

Vision of MBL:
Would make finest corporate citizen MBL dreams to become the Bank of Choice of the
general public that includes both the consumer and the corporate clients. It has created a cadre of
young professionals in banking profession which has helped boosting productivity in the bank.

21

Core values:
For the customers:

Providing with caring services by being innovative in the development of new


banking products and services.

For the shareholders:

Maximizing wealth of the bank.

For the employees:

Respecting worth and dignity of individual employees devoting their energies of the
progress of the bank.

For the community:

Strengthening the corporate values and taking environment and social risks and reward into
account.

3.4 At a glance of Mercantile bank limited

Name

Mercantile Bank Limited

Date of incorporation

20th May, 1999

Date of inauguration of operation

2nd June, 1999

Registered Office

61, Dilkusha Commercial Area


Dhaka 1000, Bangladesh
Tel-02-9559333, 0171-1535960
Fax: 880-2-09561213
Telex: 642480 MBLMB BI
Mercantile Bank Limited
efficiency Is our strength

Logo
Name of the Chairman of the Board

A.K.M. Shahidul Haque

Name of the managing Director

A.K.M. Shahidul Haque

22

Number of branches

65

Services provided

Deposit Scheme, credit facility and


foreign exchange services

Diversification of Product And

Corporate banking, Retail Banking

Services
Paid up capital

4072.206(Million)

Profit after tax & provision

1425.338(Million )

Publicly Traded Company

Shared quoted daily in DSE & CSE

Credit Card

Member of Master Card

Banking operation system

Both conventional and foreign exchange


system

Technology used

Member of SWIFT, online banking,


UNIX based computer system

Market value per share

415.61

Earnings per share

41.04

E-mail

mbl@bol-online.com

Website

www.mblbd.com

SWIFT

MBLBBDDH

Table: At a Glance of M B L

3.5 The corporate structure


Board of directors
Board of Directors, the apex body of the Bank, formulates policy guidelines, provides strategic
planning and supervises business and performance of management while the Board remains
accountable to the company and its shareholders. The Board is assisted by the Executive
Committee and Audit Committee

23

Board of Directors

Executive Committee

M.S. Ahsan, Chairman

Mohd. Selim, chairman

MD. Anwarul Haque, Vice chairman

MD. Anwarul Haque, Vice chairman

A.K.M. Shaheed Reza, Director

A.K.M. Shaheed Reza, Director

Mohd. Selim, Director

Al-haj Akram hossain, Director

Dr. Mahmood Osamn Imam, independent

Morshed Alam, M.P, Director

Director
Md. Shahabuddin Alam, Director

Md. Abdul Hannan, Director

Md. Abdul Hannan, Director

A.S.M. Feroz Alam, Director

Morshed Alam, M.P, Director


DR. Md. Rahmat ullah, Director
M. Amanullah, Director
Alhaj Mosharred hossain, Director

3.6 Network of the Branches


Mercantile Bank has 65 existing branches and some other proposed branch all over Bangladesh
to provide better services to their valuable customer. The objective of MBL is not only to earn
profit but also keep the social commitment and to ensure its co-operation to the persons of all
levels, to the businessmen, industrialists-specially who are engaged in establishing large scale
industries by consortium and the agro-based export oriented medium and small scale industries
by self-inspiration. MBL as the largest private bank is committed to continue its endeavor by
rapidly increasing the investment of honorable shareholders into asset.

24

Dhaka
Division

Chittagong

Rajshahi

Division

Division

EXISTING
BRANCHES

No Branch

Sylhet
Division

In Barisal

Khulna
Division

Figure: Network of the Branches

25

Figure: Map of the MBL Branches

26

3.7 The organizational structure


The organization structure and corporate of Mercantile Bank Limited (MBL) strongly reflect its
determination to establish, uphold and gain a stronger footing as an organization which is
customer-oriented and transparent in its management.

Board of Directors
The Board of Directors consists of 21 member elected from the sponsors of the Bank.
The Board of Directors is the apex body of the bank.

Board Committees
The Board of Directors who also decides on the composition of each committee determines the
responsibilities of each committee.

Executive Committees
All routine matter beyond delegated powers of management are decided upon by or routed
through the Executive Committee, subject to ratification by the Board of Directors.

Policy Committee
All mater relating to the principles, policies, rules, and regulation, ethics etc. for operation and
management of the bank are recommended by the Committee to the Board of Directors.

3.8 Strengths of Mercantile Bank Limited:

Well- capitalized Bank with potential to increase capital base.

Homogenous Board of Directors.

Computerized customer services.

Customers faith as a stable and dependable Bank

27

3.9 Management Hierarchy of MBL


The board of directors consists of eminent personalities from commerce and industry of the
country. Mr. Md. Abdul Jalil, the Founder Chairman of this Bank, is the member of parliament
of the National Assembly and a businessperson, besides being an eminent personality of the
country. Highly qualified and efficient professionals manage this bank. Board of Directors who
also decides the composition of each committee determines the responsibilities of each
committee. All routine matters beyond delegated powers of management are d decided by or
routed through the executive committee, subject to rectification by the board of directors.

Management Hierarchy of MBL


Board Of Directors

CHAIRMAN

Chief Advisor

Managing director -HRD


Deputy Managing Director

Deputy Managing Director


Executive Vice President

Senior Vice President

Senior Vice President

Senior Vice President

Vice President

Senior Asstt. Vice


President
Asstt. Vice President
F.A.V.P
Principal Officer
Senior Executive Officer
28

Abbreviations
GSD
CAD
ASI
CB
D&M
ID
R&P

General Service Division


Central Account Division
Audit and Inspect
Central bank
Developing & Marketing
International Division
Research and Planning

Executive Officer
Officer

Asst. Officer

Figure: Management Hierarchy of MBL

3.10 Division of MBL


MBL, being one of the best financial intermediaries in the country, blended in operation in
conventional banking, Merchant banking and Retail banking. The blending has been done with
the objective of diversifying the operations for catering to the needs of the customers of the
different sterna of the society from one viewpoint and for having sustainable growth in
profitability and business with the least possible risk. The banks operations were diversified into
the following areas of activities as a dynamic financial intermediary.

Conventional Banking operation

Lease finance operation

Merchant banking

Retail banking

In order to carry out the above operations of Mercantile Bank Ltd has set up the following
divisions, departments and units in its head office. For the operations by the above-mentioned
divisions, the bank has established the following divisions to provide support and internal
services.

29

Human resource division

General service division

Information Technology division

Marketing division

Public relation division

Share/customer care division

Financial administration division

Branches control division

Table: Division of MBL

3.11 Product and Services


MBL has launched a number of financial products and services since its inception. These
products and services are categorized in five sectors i.e. Retail Banking, Corporate Banking,
SME Banking, Foreign Trade Business & E-banking

2.5.1. Retail Banking Service


a) Deposits

b) Loan

c) Cards

Current Deposit Account

Consumer credit scheme

Dual card

Saving Deposit Account

Doctor credit scheme

Debit Card

Fixed Deposit Account

Rural planning scheme

Prepaid Card

Double Benefit Deposit Scheme

Lease Financing

Supplementary Card

Mashik Sanchay Prakalpa

Any purpose loan

Visa Card

Family maintenance Deposit

Educational loan

Quarterly Benefit Deposit Scheme Car loan


1.5 times Benefit Deposit Scheme

Home loan

Advance Benefit Deposit Scheme

House furnishing loan

Special Savings Scheme

Cottage loan

School Banking

Polli loan

Educational Planning Deposit


Scheme
Super Benefit Deposit Scheme

30

3.12 Corporate Banking Service

Short term finance

Long term finance

Real estate finance

Import finance

Work order finance

Export finance

Structured finance

Loan syndication

3.13 E-banking Service

Online banking

Mobile banking

SMS banking

SWIFT

Locker Facility

3.14 Departments of Mercantile Bank Limited


In branch level, MBL has three departments. This are1. General Banking
2. Credit Department

3.15 Foreign Exchange Department


Major Functions of General Banking

Account opening

Issuance of Demand Draft/Telegraphic Transfer/Pay Order/Fixed Deposit Revenue

31

Interbank Transaction, Inter Branch Credit

3.16 Major Functions of Credit Department

Credit Proposals and Credit Processing

Documentation and Loan Disbursement

32

Chapter-4
Research and methodology

33

4.1 Research Design


The purpose of this study is to Effectiveness of Performance Appraisal System of Mercantile
Bank Limited, Mirpur-10 branch. To perform the study data, sources were identified. At first I
selected the topic than make questionnaire and did a survey on employ of MBL Mirpur -10
branch.

4.2 Methodology of the Research


In the preparation of this report, data has been collected from both primary and secondary
sources. In-depth interviews of some of the employees of the HR Division and branchs
employee of MBL have been conducted to gather necessary information. Also, the Effectiveness
of Performance Appraisal System of MBL has been consulted in preparing this report.
Moreover, text books, the internet, the annual report of MBL etc. have been used to collect
information.

4.3 Population and Sampling Techniques


Number of respondents: 25 employees working at Mercantile Bank Limited, Mirpur-10 branch,
15 of them are Male and 10 are female.
Questionnaires were used to survey employee feedback on the Mercantile Bank Limited, Mirpur10 branch.

4.4 The research Instrument


The researcher designs a self-administered questionnaire for the data gathering process to get
qualitative and quantitative data. The primary aim of the questionnaire is to determine the
strategy. This research will use a mixture of closed questions and more open comments in the
questionnaire. A closed question is one that has pre-coded answers. The simplest is the

34

dichotomous question to which the respondent must answer yes or no. Through closed
questions, the researcher will be able to limit responses that are within the scope of this study
Thus, the set of questionnaire was structured using the Liker format with a five-point response
scale. A Liker Scale is a rating scale that requires the subject to indicate his or her degree of
agreement or disagreement to a statement. In this type of questionnaire, the respondents were
given five response choices. These options served as the quantification of the participants'
agreement or disagreement on each question item. Below are the designated quantifications used
in the questionnaire?

strongly Disagree

Disagree

Neither Disagree Nor Agree

Agree

strongly Agree

4.5 Data Collection


For achieving the objectives of this study, data were gathered form both primary and secondary
sources

Primary sources:

Direct conversation with the respective officers of the Departments.

Face to face conversation with the employees.

Employees opinion collected through Questions.

Observation of the HR activities.

35

Questionnaire consisted of 21 questions, included statements those responses were asked on


5 point liker type scale. Respondent had to just encircle the appropriate choice. Where 1=
Strongly Disagree, 2= Disagree, 3= Neutral, 4= Agree, 5= Strongly Agree

Secondary Sources:

Various records of the bank.

Different Types of brochures.

Website of Mercantile-Bank-Limited

Different newsletters of Mercantile-Bank-Limited

4.6 Data Analysis


The ability to analyze data is a powerful skill that helps you make better decisions. Microsoft
Excel is one of the top tools for data analysis and the built-in pivot tables are arguably the most
popular analytic tool I have used for data analysis by MS word and MS Excel. This software
helps me to find out the right data and result.

36

Chapter 5
Results and findings

37

5.1 Results of data analysis


Question:
1. Are you satisfied with the appraisal process of the organization

Table: 1
Response
Strongly Disagree

Number of Respondent
0

Percentage
0%

Disagree

8%

Neither Disagree Nor Agree

12

48%

Agree

10

40%

Strongly Agree

4%

Total sample

25

100%

Are you satisfied with the appraisal process of the


organization?
4%
40%

0%
8%

storngly Disagree
Disagree
48%

Neither Disagree Nor Agree


Agree
storngly Agree

Figure 1
From the table above and graph charts above point out those 25 respondent representing
48% of the management and staff said that they feel neutral about of the work, they have
no objection. 40% agreed, 4% strongly agree and 8% did not agree. Most of the employee
thinks that appraisal process is not bad or not good. Its medium performance.

38

2. The performance appraisal method is visible and standard?

Table: 2
Response
Strongly Disagree

Number of Respondent
0

Percentage
0%

Disagree

4%

Neither Disagree Nor


Agree
Agree

32%

14

56%

Strongly Agree

8%

Total

25

100%

The performance appraisal method is visible and standard?


storngly Disagree
8%0%4%

Disagree

32%

Neither Disagree Nor


Agree
Agree

56%

Figure 2
From the table above and graph charts above point out those 25 respondent representing
32% of the management and staff said that they feel neutral about of the work, they have
no objection. 56% agreed, 8% strongly agree and 4% did not agree, no one has strongly
disagreed. Most of the employee thinks that appraisal process is not bad or not good.
Most of the person is agreed about the performance.

39

3. Employees are fully aware of performance appraisal system

Table: 2
Response

Number of Respondent Percentage

Strongly Disagree

0%

Disagree

12%

Neither Disagree Nor


Agree
Agree

20%

12

48%

Strongly Agree

20%

Total sample

25

100%

Employees are fully aware of performance


appraisal system?
storngly Disagree
20%

Disagree

0% 12%
20%

Neither Disagree
Nor Agree
Agree

48%

storngly Agree

Figure 3
From the table above and graph charts above point out those 25 respondent representing
20% of the management and staff said that they feel neutral about of the work, they have
no objection. 48% agreed, 20% strongly agree and 12% did not agree, no one has
strongly disagreed. Most of the employee thinks that appraisal process is not bad or not
good. Most of the person is agreed about the performance.

40

4. Supervisor provides me feedback with necessary guidelines to improve the


performance

Table: 4
Response
Strongly Disagree

Number of Respondent
0

Percentage
0%

Disagree

0%

Neither Disagree Nor


Agree
Agree

4%

19

76%

Strongly Agree

20%

Total sample

25

100%

Supervisor provides me feedback with necessary


guidelines to improve the performance
storngly Disagree
20% 0%

4%
0%

Disagree

76%

Neither Disagree Nor


Agree
Agree
storngly Agree

Figure 4
From the table above and graph charts above point out those 25 respondent representing
4% of the management and staff said that they feel neutral about of the work, they have
no objection. 76% agreed, 20% strongly agree and 0% did not agree, no one has strongly
disagreed. Most of the employee thinks that appraisal process is not bad or not good.
Most of the person is agreed about the performance.

41

5. The Performance Appraisal System helps identify areas for development

Table: 5
Response

Number of Respondent Percentage

Strongly Disagree

0%

Disagree

8%

Neither Disagree Nor


Agree
Agree

32%

10

40%

Strongly Agree

20%

Total sample

25

100%

The Performance Appraisal System helps identify


areas for development
storngly Disagree
20%

0% 8%

Disagree
32%

40%

Neither Disagree Nor


Agree
Agree

Figure 5
From the table above and graph charts above point out those 25 respondent representing
32% of the management and staff said that they feel neutral about of the work, they have
no objection. 40% agreed, 20% strongly agree and 8% did not agree, no one has strongly
disagreed. Most of the employee thinks that appraisal process is not bad or not good.
Most of the person is agreed about the performance.

42

6. I am allowed to formally communicate with supervisor regarding the appraisal


results

Table: 6
Response

Number of Respondent Percentage

Strongly Disagree

0%

Disagree

0%

Neither Disagree Nor


Agree
Agree

20%

17

68%

Strongly Agree

12%

Total sample

25

100%

I am allowed to formally communicate


with supervisor regarding the appraisal
storngly Disagree
results
0%

Disagree

12% 0% 20%

Neither Disagree Nor


Agree
Agree

68%

storngly Agree

Figure 6
From the table above and graph charts above point out those 25 respondent representing
20% of the management and staff said that they feel neutral about of the work, they have
no objection. 68% agreed, 12% strongly agree and 0% did not agree, no one has strongly
disagreed. Most of the employee thinks that appraisal process is not bad or not good.
Most of the person is agreed about the performance.

43

7. I feel more motivated after performance appraisal

Table: 7
Response

Number of Respondent Percentage

Strongly Disagree

0%

Disagree

0%

Neither Disagree Nor


Agree
Agree

32%

13

52%

Strongly Agree

16%

Total sample

25

100%

I feel more motivated after performance


appraisal
storngly Disagree
16% 0%
0%

Disagree
32%

Neither Disagree
Nor Agree
Agree

52%

Figure 7
From the table above and graph charts above point out those 25 respondent representing
32% of the management and staff said that they feel neutral about of the work, they have
no objection. 52% agreed, 16% strongly agree and 0% did not agree, no one has strongly
disagreed. Most of the employee thinks that appraisal process is not bad or not good.
Most of the person is agreed about the performance.

44

8. It improves the relationship with my manager

Table: 8
Response

Number of Respondent Percentage

Strongly Disagree

0%

Disagree

4%

Neither Disagree Nor


Agree
Agree

24%

12

48%

Strongly Agree

24%

Total sample

25

100%

It improves the relationship with


my manager
24%

0%4%

storngly Disagree
24%
Disagree

48%
Neither Disagree Nor
Agree

Figure 8
From the table above and graph charts above point out those 25 respondent representing
24% of the management and staff said that they feel neutral about of the work, they have
no objection. 48% agreed, 24% strongly agree and 0% did not agree, no one has strongly
disagreed. Most of the employee thinks that appraisal process is not bad or not good.
Most of the person is agreed about the performance.

45

9. Performance Review improves job performance

Table: 9
Response

Number of Respondent Percentage

Strongly Disagree

0%

Disagree

0%

Neither Disagree Nor


Agree
Agree

24%

13

52%

Strongly Agree

24%

Total sample

25

100%

Performance Review improves job performance


storngly Disagree
24%

0%
0%

24%

Disagree
Neither Disagree Nor
Agree

52%

Agree
storngly Agree

Figure 9
From the table above and graph charts above point out those 25 respondent representing
24% of the management and staff said that they feel neutral about of the work, they have
no objection. 52% agreed, 24% strongly agree and 0% did not agree, no one has strongly
disagreed. Most of the employee thinks that appraisal process is not bad or not good.
Most of the person is agreed about the performance.

46

10. I would be happy to work at the organization until I retire

Table: 10
Response

Number of Respondent Percentage

Strongly Disagree

0%

Disagree

0%

Neither Disagree Nor


Agree
Agree

28%

13

52%

Strongly Agree

20%

Total sample

25

100%

I would be happy to work at the


organization until I retire
20%

0%
0%

storngly Disagree
28%
Disagree

52%

Neither Disagree Nor


Agree
Agree

Figure 10
From the table above and graph charts above point out those 25 respondent representing
28% of the management and staff said that they feel neutral about of the work, they have
no objection. 52% agreed, 20% strongly agree and 0% did not agree, no one has strongly
disagreed. Most of the employee thinks that appraisal process is not bad or not good.
Most of the person is agreed about the performance.

47

11. Promotion is purely based on Performance Appraisal

Table: 11
Response

Number of Respondent Percentage

Strongly Disagree

0%

Disagree

0%

Neither Disagree Nor


Agree
Agree

12%

15

60%

Strongly Agree

28%

Total sample

25

100%

Promotion is purely based on


Performance Appraisal
28%

storngly Disagree

0% 12%
0%

Disagree
60%

Neither Disagree Nor


Agree
Agree

Figure 11
From the table above and graph charts above point out those 25 respondent representing
12% of the management and staff said that they feel neutral about of the work, they have
no objection. 60% agreed, 28% strongly agree and 0% did not agree, no one has strongly
disagreed. Most of the employee thinks that appraisal process is not bad or not good.
Most of the person is agreed about the performance.

48

12. Performance Goals are clearly defined in the appraisal process

Table: 12
Response

Number of Respondent Percentage

Strongly Disagree

0%

Disagree

0%

Neither Disagree Nor


Agree
Agree

28%

32%

Strongly Agree

10

40%

Total sample

25

100%

Performance Goals are clearly


defined in the appraisal process
storngly Disagree
0%
40%

28%

0%

32%

Disagree
Neither Disagree Nor
Agree
Agree
storngly Agree

Figure 12
From the table above and graph charts above point out those 25 respondent representing
28% of the management and staff said that they feel neutral about of the work, they have
no objection. 32% agreed, 40% strongly agree and 0% did not agree, no one has strongly
disagreed. Most of the employee thinks that appraisal process is not bad or not good.
Most of the person is strongly agreed about the performance.

49

13. Performance appraisal makes me better understand what I should be doing

Table: 13
Response

Number of Respondent Percentage

Strongly Disagree

0%

Disagree

0%

Neither Disagree Nor


Agree
Agree

20%

14

56%

Strongly Agree

24%

Total sample

25

100%

Performance appraisal makes me


better understand what I should
storngly Disagree
be doing
Disagree
24%

0% 20%
0%
56%

Neither Disagree
Nor Agree
Agree
storngly Agree

Figure 13
From the table above and graph charts above point out those 25 respondent representing
20% of the management and staff said that they feel neutral about of the work, they have
no objection. 56% agreed, 24% strongly agree and 0% did not agree, no one has strongly
disagreed. Most of the employee thinks that appraisal process is not bad or not good.
Most of the person is strongly agreed about the performance.

50

14. Performance appraisal in my company is fair

Table: 14
Response

Number of Respondent Percentage

Strongly Disagree

0%

Disagree

0%

Neither Disagree Nor


Agree
Agree

13

52%

36%

Strongly Agree

12%

Total sample

25

100%

Performance appraisal in my
company is fair
storngly Disagree

12% 0%
0%
36%

52%

Disagree
Neither Disagree Nor
Agree

Figure 14
From the table above and graph charts above point out those 25 respondent representing
52% of the management and staff said that they feel neutral about of the work, they have
no objection. 36% agreed, 12% strongly agree and 0% did not agree, no one has strongly
disagreed. Most of the employee thinks that appraisal process is not bad or not good.
Most of the person is strongly agreed about the performance.

51

15. Employees are allowed to formally communicate with supervisor regarding the
appraisal results

Table: 15
Response

Number of Respondent Percentage

Strongly Disagree

0%

Disagree

0%

Neither Disagree Nor


Agree
Agree

8%

19

76%

Strongly Agree

16%

Total sample

25

100%

Employees are allowed to formally communicate with


supervisor regarding the appraisal results
16%

storngly Disagree

0% 8%

Disagree
Neither Disagree Nor
Agree

76%

Agree

Figure 15
From the table above and graph charts above point out those 25 respondent representing
8% of the management and staff said that they feel neutral about of the work, they have
no objection. 76% agreed, 16% strongly agree and 0% did not agree, no one has strongly
disagreed. Most of the employee thinks that appraisal process is not bad or not good.
Most of the person is strongly agreed about the performance.

52

16. Supervisor provides employees with a useful performance appraisal

Table: 16
Response

Number of Respondent Percentage

Strongly Disagree

0%

Disagree

0%

Neither Disagree Nor


Agree
Agree

12%

11

44%

Strongly Agree

11

44%

Total sample

25

100%

Supervisor provides employees with


a useful performance appraisal
storngly Disagree

0% 12%
44%

Disagree
44%
Neither Disagree Nor
Agree
Agree

Figure 16
From the table above and graph charts above point out those 25 respondent representing
12% of the management and staff said that they feel neutral about of the work, they have
no objection. 44% agreed, 44% strongly agree and 0% did not agree, no one has strongly
disagreed. Most of the employee thinks that appraisal process is not bad or not good.
Most of the person is strongly agreed about the performance.

53

17. Bank provides individual attention in any work?

Table: 17
Response
Strongly Disagree

Number of Respondent Percentage


0
0%

Disagree

0%

Neither Disagree Nor


Agree
Agree

20%

14

56%

Strongly Agree

24%

Total sample

25

100%

Bank provides individual attention in


any work?
storngly Disagree
24%

0%

20%
Disagree
Neither Disagree Nor
Agree

56%

Agree

Figure 17
From the table above and graph charts above point out those 25 respondent representing
20% of the management and staff said that they feel neutral about of the work, they have
no objection. 56% agreed, 24% strongly agree and 0% did not agree, no one has strongly
disagreed. Most of the employee thinks that appraisal process is not bad or not good.
Most of the person is strongly agreed about the performance.

54

18. You satisfy the employee behavior of your Bank?

Table: 18
Response

Number of Respondent Percentage

Strongly Disagree

0%

Disagree

0%

Neither Disagree Nor


Agree
Agree

32%

13

52%

Strongly Agree

16%

Total sample

25

100%

You satisfy the employee behavior


of your Bank?
16% 0%

storngly Disagree
32%
Disagree

52%

Neither Disagree Nor


Agree
Agree

Figure 18

From the table above and graph charts above point out those 25 respondent representing
32% of the management and staff said that they feel neutral about of the work, they have
no objection. 52% agreed, 16% strongly agree and 0% did not agree, no one has strongly
disagreed. Most of the employee thinks that appraisal process is not bad or not good.
Most of the person is strongly agreed about the performance.

55

19. Does performance appraisal process help to raise organizations total output

Table: 19
Response

Number of Respondent Percentage

Strongly Disagree

0%

Disagree

0%

Neither Disagree Nor


Agree
Agree

16%

13

52%

Strongly Agree

32%

Total sample

25

100%

Does performance appraisal


process help to raise
organizations total output?
32%

storngly Disagree

0% 16%

Disagree
52%
Neither Disagree Nor
Agree

Figure 19
From the table above and graph charts above point out those 25 respondent representing
16% of the management and staff said that they feel neutral about of the work, they have
no objection. 52% agreed, 32% strongly agree and 0% did not agree, no one has strongly
disagreed. Most of the employee thinks that appraisal process is not bad or not good.
Most of the person is strongly agreed about the performance.

56

20. Is there any conflict arise between employees after performance appraisal is made?

Table: 20
Response

Number of Respondent Percentage

Strongly Disagree

0%

Disagree

0%

Neither Disagree Nor


Agree
Agree

10

40%

36%

Strongly Agree

24%

Total sample

25

100%

Is there any conflict arise


between employees after
performance appraisal is made?
24%

storngly Disagree

0%
40%

Disagree
36%
Neither Disagree Nor
Agree

Figure 20
From the table above and graph charts above point out those 25 respondent representing
40% of the management and staff said that they feel neutral about of the work, they have
no objection. 36% agreed, 24% strongly agree and 0% did not agree, no one has strongly
disagreed. Most of the employee thinks that appraisal process is not bad or not good.
Most of the person is strongly agreed about the performance.

57

21. Is 360 degree appraisal process undertaken in the organization?

Table: 21
Response

Number of Respondent Percentage

Strongly Disagree

0%

Disagree

0%

Neither Disagree Nor


Agree
Agree

12%

13

52%

Strongly Agree

36%

Total sample

25

100%

Is 360 degree appraisal process


undertaken in the organization?
storngly Disagree

0% 12%
36%

Disagree
52%

Neither Disagree Nor


Agree
Agree

Figure 21
From the table above and graph charts above point out those 25 respondent representing
12% of the management and staff said that they feel neutral about of the work, they have
no objection. 52% agreed, 36% strongly agree and 0% did not agree, no one has strongly
disagreed. Most of the employee thinks that appraisal process is not bad or not good.
Most of the person is strongly agreed about the performance.

58

5.2 Findings
After my own work experiences as well as discussion with honorable officers I have found in my
study that there are several important problems that need to focus on for better performance
appraisal procedures of MBL.The findings of my study are-

Employees perception about PAS is very positive in MBL.

The appraisal system facilitates growth & learning of employees and it

moderately distinguishes performers and non-performers in the organization.

Existing PAS helps the management to identify potentiality of the employees.

The PAS criteria are well communicated with all stakeholders related with PAS.

Lack of knowledge about PAS for lower level employees

No training facilities for ground level employees.

Its difficult to understand PAS for some of the employees.

Current PAS practicing in MBL is complex and complicated towards many

employees.

Modification and clarification of different areas like monetary incentives,

standard of evaluation and a clear appraising procedure is required.

Miss match between employees expectation and current PAS practicing in MBL.

Confusing and conflicting aspect of PAS creating miscommunication among

management level to various levels of employees.

Majority of the employees are not significantly satisfying about the current PAS.

59

Chapter 6
SWOT analysis

60

6.1 SWOT analysis


Strengths:

Mercantile Bank Limited has nationwide image of providing quality service. It provides
excellent and prompt services with higher degree of secrecy to corporate and mass level of
customers even internationally.

It has an excellent management team and disciplined workforce.

MBL abides by a set of core values that reflects high commitment to customer:
1. Responsive to customers needs.
2. Flexible in approach
3. Professional in manner
4. Strive for service excellence.

A group of qualified experienced, dedicated and well-trained personnel employing the best
effort to accomplish the organizational objective.

Strong network throughout the country and correspondent relationship with almost all
international and local banks operating in Bangladesh created a good accessibility and
relationship with people.

It also has advanced their technology with modernized Terminus Software.

MBL has devoted much more in CSR activities

They have adopted Green Banking an ecofriendly move by placing solar panel.

Weakness:

Most to the employees are not properly trained.

The appropriate employees are not in the appropriate position.

Online Banking quality and service is poor than the other private bank.

ATM booths are not available like DBBL, Prime Bank etc.

61

Opportunities:

Bonus is given for more than one time in a year this is another reason of the employees
satisfaction.

Promotion system of MBL is perfectly structured for the employees inspiration. Generally
promotion has been every three years after.

Incentives are given to the employees from profit.

Threats:

Some foreign and private banks are becoming so advanced that can be a threat to
mercantile Bank Ltd. At present in retail banking Standard Chartered Bank and in business
banking American Express Bank, Hong Kong Shanghai Banking Corporation are going
well.

Bangladesh bank provides some rules and regulations for all banking institutions. Whether
the rules and regulations suit the organization or not, it must obey these that sometimes
impose barriers on daily normal operation.

Also some private banks like Dutch Bangla Bank, Prime Bank, Bank Asia, etc. had
introduced Shariah based banking which is a new concept that attracts almost every level
people towards them.

62

Chapter 7
Recommendations and
conclusions

63

7.1 Recommendations
As I have gone through all the departments under Human Resources Management. I have come
up with some points, which can improve the efficiency as well as quality of the work. Though
the bank was found as a productive concern, the study reveals that the bank could do much more
if it was handled more efficiently. Also sonic problems of the Bank were given above. However,
some steps may be taken to improve the efficiency and to increase the performance of the Bank
in future which are given below-

Appraising method should be unbiased and real performer should be appreciated

based on his or her performance evaluation.

New performance appraisal such as 360 degree should be introduced.

Training facilities should be given to all level of employees

Evaluation result should be disclosed to all the employees.

Promotion should be based on performance rather than seniority or other.

The aims and Objectives of performance appraisal need to be well communicated

from top level to bottom level management.

An unbiased and clear appraising method should practice so that only actual

performer could be rewarded.

Monetary incentive should be improve.

A well and friendly corporate atmosphere should create among HRD and various

department of the organization so that confliction and complexity about appraising


procedure could be reduced and minimized.

64

7.2 Conclusions
As an organization the MBL is much more structured compared to any other listed bank
operation in Bangladesh. Mercantile Bank Limited is a customer oriented financial institution. It
remains dedicated to meet up with the ever growing expectations of the customer.
In MBL, Board of directors formulates banks policies, management functions on approved
policies In addition, board of directors takes care the interest of shareholders & all other
stakeholders, management remains compliant with the policies, regulations, laws given by board
of directors, Bangladesh bank, other regulators However, MBL gives importance on their
customers, employees and shareholders. They want to achieve strong corporate growth through
financial inclusion. They try providing solutions at a minimum cost based on a high level of
satisfaction of all segments of our customers, thus also contributing to the prosperity of our
employees and shareholders.

MBL is trying to develop innovative and technologically advanced products and services that
satisfy their customer needs.

There are many benefits to implementing a regular and systematic performance appraisal system
within an organization. In order to gain the most benefit from performance appraisals it is
recommended that a system is developed in consultation with workers and managers, and clear
links are established between appraisals and valued rewards and outcomes. If resources permit,
information on work performance should be obtained from multiple sources. Performance
appraisals can be a powerful tool for increasing motivation and improving work practice if
conducted in a constructive, open and supportive manner.

Finally if the MBL control their expense by HRM and take proper steps to overcome their little
limitations, they will become a first rows bank of Bangladesh.

65

Chapter 8
References and Appendix

66

8.1 References
Reference Book:
Dewakar Goel (2008)
Performance Appraisal And Compensation Management: A Modern Approach. pp 8 - 272.
Dulewicz V. (1989)
Performance appraisal and counselling, in Herriot, P., Assessment and selection in
organizations: methods and practices for recruitment and appraisal, John Wiley & Sons, New
York, pp645-649.
Baron, R.A. (1988)
Negative effects of destructive criticism: impact on conflict, self-efficacy, and task performance,
Journal of Applied Psychology, Vol 73, pp199-207.
Bannister, B.D. & Balkin, D.B. (1990)
Performance evaluation and compensation feedback messages: an integrated model, Journal of
Occupational Psychology, Vol 63, June, British Psychological Society.
Heneman, R.L., Greenberger, D.B. & Anonyou C., (1989)
Attributions and exchanges: the effects of interpersonal factors on the diagnosis of employee
performance, Academy of Management Review, Vol 32, No 2.
Larson, J.R. (1989)
The dynamic interplay between employees' feedback-seeking strategies and supervisors' delivery
of performance feedback, Academy of Management Review, Vol 14, No 3.
Cash, M. (1993)
[in] Collins, R. (1993) (Ed.), Effective Management, CCH International, Sydney.

67

Harris, D.M. & DeSimone, R.L. (1994) Human Resource Development, Dryden Press, Forth
Worth.
Bernardin, H. J., Kane, J. S., Ross, S., Spina, J. D., and Johnson, D. L. (1996)
"Performance Appraisal Design, Development, and Implementation." In Handbook of Human
Resource Management, Gerald R. Ferris, Sherman D. Rosen, and Darold T. Barnum ed.,
Cambridge, Mass: Blackwell, pp462-493.
Illgen, Daniel R., Barnes-Farrell, Janet L., and McKellin, David B. (1993)
"Performance Appraisal Process Research in the 1980s: What Has It Contributed to Appraisals
in Use?" Organizational Behavior and Human Decision Processes, 54: pp321-368.

Websites:
www.mblbd.com
www.bangladesh-bank.org
www.performanceappraisalprocess.com
http://www.humanresources.hrvinet.com/graphic-rating-scales/
www.performanceappraisalprocess.com

Other References
Annual Statement of MBL
Monthly Reports of MBL
Statement of Affairs
Different Types of Forms of MBL

68

8.2 Appendix
QUESTIONNAIRE OF PERFORMANCE APPRAISAL
Personal Information
Name:
Organization:
Designation:

Age:

Below 25

Gender:
Marital status:

25-35

Male

35-40

40-45

More than 45

Female
Single

Married

How long have you been working for this organization:


Less than 3 years

3 5 Years

More than 5 years

Instructions
Please read the following statements and indicate the extent of your agreement with the
statements on a five point Liker-scale. Please mark your answer.
1 = Strongly Disagree (SD), 2 = Disagree (D), 3 = Neither Disagree Nor Agree (N), 4 =
Agree (A) 5 = Strongly Agree (SA)
No.

Items

Scale
1

1.

Are you satisfied with the appraisal process of the organization

2.

The performance appraisal method is visible and standard

3.
4.

Employees are fully aware of performance appraisal system


Supervisor provides me feedback with necessary guidelines to
improve the performance

69

5.

6.

The Performance Appraisal System helps identify areas for


development

I am allowed to formally communicate with supervisor regarding


the appraisal results

7.

I feel more motivated after performance appraisal

8.

It improves the relationship with my manager

9.

Performance Review improves job performance

10.

I would be happy to work at the organization until I retire

11.

Promotion is purely based on Performance Appraisal

12.

Performance Goals are clearly defined in the appraisal process

13.

Performance appraisal makes me better understand what I should


be doing

14.

Performance appraisal in my company is fair

15.

Employees are allowed to formally communicate with supervisor


regarding the appraisal results
Supervisor provides employees with a useful performance
appraisal

16.
17.

Bank provides individual attention in any work?

18.

You satisfy the employee behavior of your Bank?

19.

Does performance appraisal process help to raise organizations


total output?
Is there any conflict arise between employees after performance
appraisal is made?
Is 360 degree appraisal process undertaken in the organization?

20.
21.

THANK YOU FOR YOUR COOPERATION.

70