Compensation

Practices
Management in ACI
ltd.
1.Introduction of the report:
This report creates a unique opportunity for the student to apply their theoretical knowledge into
practice and gain valuable in the real world, the student can also realize existing business internal
compensation conditions. After completion of this course, we can find out what compensation is
providing in an organization. For visual experience, we meet an HR executive at ACI Limited, and
he ensures us to provide information about what compensation they get So we selected the ACI
Limited which is one of the leading chemical industries in our country.

2. Significance of the report:

This report, “Employee compensation & benefits package of ACI Limited” has been prepared to
fulfill the partial requirement of this course. While preparing this report, I had a great opportunity to
have in-depth knowledge about the employee compensation & benefits of ACI Limited.

The main reason for this report is to become familiar with the real business world and to attain
practical knowledge about the employee compensation & benefits package of ACI Limited. It is
known that there is no alternative to practical knowledge which is more beneficial than theoretical
aspects.

3. Scope of the report:

ACI or Advanced Chemical Industries is one of the largest Bangladeshi conglomerates. The
company operates through three reportable segments: Pharmaceuticals, Consumer Brands and
Agribusiness. This company follow a well structure compensation policies .

The report covers the Employee compensation & benefits package of ACI Limited. The report
presents employee compensation, allowance, incentives, Provident fund, gratuity, insurance,
employee leave & medical facilities of ACI Limited.

4.The objective of the study:

Broad objective:

To know about the employee compensation and benefits package of ACI Limited.

Specific objectives:

 To know about the employee benefits plan of ACI Limited.

 To illustrate various types of allowances and other compensation-related facilities provided
by ACI Limited.
 To identify the problems of employee compensation & benefits package of ACI Limited.
 To suggest some possible recommendations to overcome the problems.

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5.The methodology of the report:
Type of Research:

This report is a descriptive type of research in nature and it administered by collecting both primary
and secondary data. It has tried to use both the primary and secondary sources of collecting
information and some are to make the report presentable with as little abstraction as possible.

Types of data collection:

In order to attain the objective of the report, all necessary information is prepared by collecting both
primary & secondary sources of data. These are:

Primary data:

Primary data collected directly to provide the ACI Limited companies employees compensation &
benefits package through face-to-face interaction. Several sources of data collection are used to make
this report. The source of data is-

 Face to face communication.

 Telephone interview.

Secondary data:

Some secondary data collected to make the report more concrete. These data have been collected
from:

 Internet sources
 Articles from magazines, journals, and newspapers after the event
 Literature reviews and review articles (e.g., movie reviews, book reviews)
 History books and other popular or scholarly books
 Works of criticism and interpretation
 Commentaries and treatises
 Textbooks and class materials .

6.Limitations of the report:

The report is not free from some practical limitations. Following limitations have faced during the
report and the time of working & data collection:

 In many cases, the relevant authorities are not helpful to provide information.
 Lack of facilities to get proper information.

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  Lack of Records, Enough books, unavailable information on the website. These constraints
narrowed the scope of accurate analysis.
 The employees of the company were so much busy with their jobs, which lead a little time
to consult with us.

7.History of ACI Limited:

ACI’s mission is to achieve business excellence through quality by understanding, accepting,
meeting and exceeding customer expectations. ACI follows the International Standards on Quality
Management System to ensure the consistent quality of products and services to achieve customer
satisfaction. ACI also meets all national regulatory requirements relating to its current businesses and
ensures that current Good Manufacturing Practices (CGMP) as recommended by the World Health
Organization are followed properly. ACI has been accepted as a Founding Member of the
Community of Global Growth Companies by the World Economic Forum which is the most
prestigious business networking organization.

Advanced Chemical Industries (ACI) was established as the subsidiary of Imperial Chemical
Industries (ICI) in the then East Pakistan in 1968. After independence, the company has been
incorporated in Bangladesh on the 24th of January 1973 as ICI Bangladesh Manufacturers Limited
and as Public Limited Company. This Company also obtained listing with Dhaka Stock Exchange on
28 December 1976 and its first trading of shares took place on 9 March 1994. Later on 5 May 1992,
ICI plc divested 70% of its shareholding to local management. Subsequently, the company was
registered in the name of Advanced Chemical Industries Limited. Listing with Chittagong Stock
Exchange was made on 22 October 1995.

Advanced Chemical Industries (ACI) Limited is one of the leading conglomerates in Bangladesh,
with a multinational heritage. The company has diversified into three major businesses.

8.Mission, Vision & Values of ACI Limited:

Mission:

ACI’s mission is to enrich the quality of life of people through responsible application of knowledge,
skills, and technology. ACI is committed to the pursuit of excellence through world-class products,
innovative processes and empowered employees to provide the highest level of satisfaction to its
customers.

Vision:

 Endeavor to attain a position of leadership in each category of its businesses.

 Attain a high level of productivity in all its operations through effective and efficient use of
resources, adoption of appropriate technology and alignment with our core competencies.
 Develop its employees by encouraging empowerment and rewarding innovation.
 Promote an environment for learning and personal growth of its employees.

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  Provide products and services of high and consistent quality, ensuring value for money to its
customers.
 Encourage and assist in the qualitative improvement of the services of its suppliers and
distributors.
 Establish a harmonious relationship with the community and promote greater environmental
responsibility within its sphere of influence.

Values:

 Quality
 Customer Focus
 Fairness
 Transparency
 Continuous Improvement
 Innovation

9.The business of ACI Limited:

Pharmaceuticals:

In 1973, the UK based multinational pharmaceutical company, ICI plc, established a subsidiary in
Dhaka, known as ICI Bangladesh Manufacturers Limited. In 1992, ICI plc divested its share to local
management, and the company was renamed Advanced Chemical Industries (ACI) Limited.

ACI formulates and markets a comprehensive range of more than 387 products covering all major
therapeutic areas, which come in tablet, capsule, powder, liquid, cream, ointment, gel, ophthalmic
and injection forms. ACI also markets world-renowned branded pharmaceutical products like
Arimidex, Casodex, Zoladex, Atarax, etc. from world-class multinational companies like
AstraZeneca, UK, and UCB, BELGIUM in Bangladesh.

ACI is actively engaged in introducing newer molecules and Novel Drug Delivery Systems (NDDS)
to meet the needs of the future.

ACI introduced the concept of quality management system by being the first company in Bangladesh
to achieve ISO 9001 certification in 1995 and follows the policy of continuous improvement in all its
operations.

Aligned with the concept that a pharmaceutical must ensure effective management of the
environment, ACI complies with standard environment management policy, thus adorned with EMS
14001 in 2000.

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ACI maintains a congenial and supportive relationship with the healthcare community of
Bangladesh, with the belief that business excellence can only be achieved through the pursuit of
quality by understanding, accepting, meeting and exceeding customer expectations.

The management of ACI, a competent team of professionals, thus operates with a progressive
attitude to provide effective solutions to satisfy the customers’ needs, through its products and
services of uncompromising quality.

Consumer Brands & Commodity Products:

ACI Consumer Brands was initiated in 1995 with two major brands of the company – ACI Aerosol
and Savlon. These are two of the most prestigious products that are enjoying the leadership position
in the market. The division started to take new businesses through offshore trading as well as local
manufacturing. In this process, ACI Consumer Brands launched many new products and also bonded
with Joint Venture business relationships with ‘Dabur India’ and ‘Tetley UK’ and attained
international alliances with world-renowned companies.

The Consumer Brands Division boasts in having an unequivocal presence in consumers’ hearts with
the market-leading brands like ACI Aerosol, Savlon, ACI Mosquito Coil & ACI Pure Spices and
Flour. With close to 80% market share in its own categories, ACI Aerosol and Savlon are the
persistent performers in keeping the household clean and free from germs and harmful insects. The
ACI mosquito coil has also emerged as a formidable opponent to both the mosquito and the
competition, by providing an effective and affordable solution to the conscious people of
Bangladesh.

A sound mind goes with a sound body-ACI believe in this age-old proverb and our young generation
needs to grow up with a healthy physique and sound mind who will lead the nation in the future.
With this belief, ACI has entered into the commodity food business with the “ACI Pure” Brand. The
aim is to provide purest of the food products to Bangladeshi consumers at affordable prices for which
ACI has invested in a very large scale in state-of-the-art manufacturing facilities for daily kitchen
essentials like vacuum evaporated edible Salt, Spices, and Flour. The products are delighting the
consumers by providing 100% dirt-free, pure and natural food ingredients that can compete against
any international products.

ACI Consumer Brands is successfully serving the consumer demand for foreign products in the
household and personal care category with the world-renowned product range of Colgate, Nivea &
Dabur. With the proper distribution and marketing by ACI consumer brands, the world’s No. 1 tea
brand “Tetley” is now available to the consumers of Bangladesh.

As a successful business, The ACI Consumer Brands is focused on achieving the consistent growth
required to continue the success and to make ACI an even stronger company. Consumer Brands
believe this is the best way to benefit the consumers, people and the shareholders of ACI.

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ACI Consumer Brands Strategic Business Unit is headed by the Executive Director, Mr. Syed
Alamgir. Mr. Alamgir is regarded as an authoritarian personality in the area of Sales and Marketing
in the Bangladesh market. His track record has many successful brands which reached a leadership
position in different categories in the FMCG market. He is supported by a competent group of
professionals working in the Marketing and Sales operations.

Agribusinesses:

ACI Agribusiness is the largest integrator in Agriculture and Livestock and Fisheries. These
businesses have subunits like Crop Protection, Seed, Fertilizer, Agrimachineries, and Animal Health.
These businesses have a glorified presence in Bangladesh.

CC & PH supplies crop protection chemicals, Seed supplies Hybrid Rice, vegetable and Maize seeds,
Fertilizer Supplies Micronutrient and Foiler fertilizer, Agrimachineries supplies Tractors, Power
Tiller and Harvester and Animal Health supply high quality Nutritional, Veterinary and Poultry
medicines and vaccines.

ACI Agribusiness is having a strong partnership with national and international R & D companies,
universities and research institutions. Before introducing any product, it is elaborately tested in the
laboratory and farmer's field.

ACI Agribusiness has a large, knowledgeable and highly skilled Field Force provides training and
technical advice to the farmers. ACI is significantly contributing to national food security through its
Agribusinesses division, which is the leading agricultural integrator of the country. ACI
Agribusinesses is providing a complete solution to the farmers need. This division has five separate
SBUs. They are Seeds, Fertilizer, Motors, Crop Care & Public Health, and Animal Health. Farmers
have developed confidence in our products for quality and economics. Farmers have also come to
expect proper knowledge-based service from our field force.

10.Subsidiaries of ACI Limited:

 ACI Formulations Ltd.

 ACI Agrochemicals
 Apex Leathercrafts Limited
 ACI Salt Limited
 ACI Pure Flour Limited
 ACI Foods Limited
 Premiaflex Plastics Limited
 Creative Communication Limited
 ACI Motors Limited
 ACI Logistics Limited

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11.Findings:
Finding a result of research or report. We conduct a report on the compensation system of the ACI
Company.

The objectives of compensation management of ACI are:

 To acquire qualified personal
 To retain present employee
 To ensure equity
 To reward desired behavior
 To control cost to comply with legal laws
 To enhance or improve productivity

To achieve those objectives ACI fellows a strict motivational compensation package for employees.

Factors of compensation: ACI also consider internal alignment, pay model, get laws, trade union
demand and other factors for compensation ACI also use pay model for their compensation system.
they consider the alignment (the job skill), competitiveness (they give a competitive salary)
contribution (organization also contribute some pay to the employee ) and management ( some policy
which ACI has to follow ). This model has some following techniques to ensure efficiency, fairness

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and compliance.

internal alignment helps to support organizational strategies, workflow, fairness and motivational
behavior. ACI also follow some strategies for designing internal alignment. such loosely coupled,
hierarchical and career path differentials.

ACI also considers performing an appraisal, educational qualification, age, interpersonal skill,
problem-solving capacity, IT skill, experience, job analysis, etc.

After analysis all of this factors the director of Human Resource department Md. Moinul Islam
determined the compensation by discuss with the top management of ACI ltd .

Compensation: compensation refers to all forms of financial and nonfinancial returns and tangible
service and benefits employees receive as part of an employment relationship. the different forms of
compensation provide by the ACI are present below:

ACI usually gives two types of reward or compensation.

1. Intrinsic reward: Intrinsic rewards are ones that come from within the employee. An
employee who is motivated intrinsically is working for his/her own satisfaction and may

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 value challenging work he/she perceives to be meaningful to the company. These rewards are
intangible in nature. Some intrinsic reward of ACI are below:
 Participate in decision making: if the manager can find the potential employee,
then the manager gives him or her such opportunities. they also practice job
enrichment.
 More responsibility: if any employee achieves the goal or target in a proper manner
and shows more interest in more work. the company motivated that employee by
giving more workload or responsibilities.
 Opportunities for personal growth: Training activities of ACI are focused on
transforming its human capital to achieve business excellence by increasing the
bandwidth of the ACI workforce. ACI company provides training and development
for personal growth. they arranged a deferent seminar also.
2. Extrinsic reward: An extrinsic reward is a tangible and visible reward given to an individual
or an employee for achieving something. They usually have a monetary value such as a
salary hike, bonus, award, or public recognition. there are two types of extrinsic rewards.
 Financial reward: financial rewards are monetary incentives that an employee
earns as a result of good performance. These rewards are aligned with
organizational goals. When an employee helps an organization in the
achievement of its goals. ACI gives 3 types of financial rewards.
 Performance-based: Performance-based rewards are those rewards which are
given on the basis of performance of an employee in an organization ACI gives
piecework ( to the factory worker ), commission ( sales personal ), incentive plan,
performance bonuses ( formula: current basic – previous basic multiply by
performance appraisal and 12 (month ), merit pay plans.
 Implied membership-based: those rewards which are paid based on being
a member of an organization provide profit sharing (mainly get the production,
sales department), labor market adjustment, time-in-rank increase.
 Explicit membership-based: rewards that are given based on the performance
of an employee in an organization. ACI gives protection programs (pension), pay
for time does not work (minimum wages).
 Nonfinancial reward: non-financial incentives are the types of rewards that are
not a part of an employee's pay. this reward is not increased or change the
employee's financial condition. but this reward is tangible in nature. ACI provides
preferred lunch hours, business cards, preferred work assignments, own secretary
(top management).

Other compensation of ACI: some other benefits of ACI is present below:

Salary: Salary Structure is the structure or details of the salary being offered in terms of the breakup
of the various components that constitute the compensation. Salary Structure is the set of parameters
that define the salary. ACL also break up the various component for salary. ACL provided 33% of

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gross salary as an employee, s basic salary. this basic salary employee will get for their employment.
there many components for monthly pays of an employee. employee also get 100% (house rent) ,
50% ( medical cost ) , 50% ( transport ) of basic salary in every month .

Employee Designation

Salary & Benefits

Office Management staff Field Staff

Basic Salary 5500-57000 3000-8500

House Rent allowance 100% of basic 100% of basic

Medical allowances 50% of basic 100% of basic

Transport allowances 50% of basic 50% of basic

Lunch allowance Tk.1100 to Tk.1500 ——-

Utility allowance 50% of basic 50% of basic

Salary structure at management level: we know there are 3 levels in management level (low\junior
level. middle level and top-level). ACL also breaks down these 3 levels. and each has a different
salary range. the salary range is present below:

 Junior level: There is 3 categories manager (OM 1, OM 2 and OM 3). The salary
range at this level 16000 to 30000 tk.
 Middle level: there is 4 categories manager (OM 4, OM 5, OM 6 and OM 7). The
salary range at this level 30000 to 55000 tk.
 Top-level: there is 3 categories manager (OM 8, OM 9 and OM 10 ) the salary range
is above 55000 tk .

And provide 5000 tk for an internship. the salary can vary for different conditions, but they're
no overlap between the salary.

Noncash fringe benefits: they provide personal use of company cars, vacation, discount card etc.

Sick pay medical benefits: ACI gives an amount to the employee for illness with the holiday. All
employees of ACI will receive a monthly medical allowance as per the respective grade of the
employee. The allowance will be paid together with the employee’s monthly salary and for this, no
receipt needs to be submitted. For the special cases of treatment, the following are the additional
support extended to the employees.

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 Level of employees Types of medical benefits Amount

Hospitalization 50%

Office Management staff

Surgery 75%

Hospitalization 50%

Field staff
Surgery 75%

Leave:

All management staff will have the following leave entitlement in a calendar year:

Level of Employees Types of leave Days of leave

Privilege Leave 24

Office Management staff

Sick Leave 14

Privilege Leave 24

Field staff
Sick Leave 14

Gratuity:

An employee shall be eligible for gratuity on leaving the company after continuous and confirmed
service of at least 8 years to the following terms and conditions:

I. Separation on account of superannuation, ill-health, physical or mental incapacity, redundancy or

termination:

Year Amount
On completion of 8 years of service & have not Half month’s basic salary for each completed
completed 12 years’ service year of service

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 On completion of 12 years of service 1 month’s basic salary for each completed year
of service
On completion of 16 years of service 2 month’s basic salary for each completed year
of service

II. Voluntary Resignation:

Year Amount
Before completion of 8 years of service No gratuity is payable
On completion of 8 years of service & have not Half month’s basic salary for each completed
completed 12 years’ service year of service
On completion of 12 years of service 1 month’s basic salary for each completed year
of service
On completion of 16 years of service 2 month’s basic salary for each completed year
of service

1. In the event of death or total disablement; gratuity will be paid at the rate of two month’s
basic salary for each completed year of service. In case of death, the gratuity shall be paid to
the legal heir/ heirs.
2. The term basis salary, as used, means basic salary last drawn by the employee at the time of
separation from the company’s employment.

Insurance:

The company has instituted a fund for management staff which provides payment of death during
service by any cause, except in the first twelve months of insurance.

1. Group life insurance is payable under any kind of death during service except in case of
suicide.
2. Staff should advise the HR Department of the particulars of their nominees including name
and relationship.
3. If the nominee is a minor, the name of the minor’s guardian should also be advised.
4. The payable insurance amount according to the management grades are given below:

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 Management Grade Amount

JB- MIII Tk.100,000/-

MIV- MVII Tk.200,000/-

MVIII & above Tk.400,000/-

Provident fund:

The company has instituted a provident fund for management staff.

1. All Management employees will join the provident fund scheme after confirmation.
2. Along with the confirmation letter, the Human Resource Department will send a provident
fund joining and nomination form to the employee.
3. The provident fund will run on a contributory basis, i.e. 10% of basic salary from the
employee and an equal amount from the company.
4. If any employee leaves the company, he/she will be entitled to the company’s contribution
only after 5 years from the date of confirmation, else, the employee will only be entitled to
his/her own contribution.
5. The company has formed a trusty committee to maintain the provident fund.
6. Conditions with regard to the provident fund shall be regulated as per the rules of the fund.

Sales Incentive:

1. Instead of performance bonuses, field sales staff will be rewarded with quarterly sales
incentives for their contribution to the company.
2. Incentive schemes for each business will be proposed by the respective business head during
budget preparation for the coming year. This scheme will require approval from the
managing director and should be communicated to field force before the beginning of the
year.
3. Based on the requirement of the business, the head of business may propose and implement
any change of the scheme subject to the approval of the managing director.

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Loan against salary:

Generally, such a loan is discouraged. Only en extreme cases, depending on the merit, the loan
may be considered and approved for a loan will require managing director’s approval. ACI
provides a car loan against the salary.

Mode of payment:

Payment shall only be made in Bangladeshi take. Every employee should have a salary account in the
company nominated commercial bank. The salary will be transferred to the respective salary
accounts from the confidential department within the last day of each month.

Other yearly benefits:

 Yearly Leave Fare Assistance. (50% of basic)

 Yearly two festival bonuses. (100% of basic)
 Yearly workers participation Fund. (50% of basic)
 Quarterly sales incentive. (Not fixed)

Hospitalization: If any permanent employee admitted to hospital for illness (no surgery) then the
company will bear 50% of the total cost. and for surgery ACI will bear 75% of total hospital costs
and if the employee is death ACI will bear total hospitalization cost.

Transport: ACI company provides 50% of the total basic salary and provides pick up and drop
facilities to the employee.

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12.Conclusion:
ACI Limited is one of the leading conglomerates in Bangladesh, with a multinational heritage. In BD
ACI Limited has been doing corporate business and soundly maintaining social responsibilities. The
agenda of this company earning profit, creating job opportunity, though trade and commerce.
Achievement of ACI Limited is beyond description. Maintaining Government rules and regulations
ACI Limited always try to contribute on national G.D.P and G.N.P. not only local business but also
internationally. ACI follows most of the compensation practices and policy. They always try to
contribute to employee satisfaction and given to employees all types of compensation benefits.

13. Recommendations:

 The organization should ensure standard incentive policy to their employees for their
high level of satisfaction.

 The organization should increase its compensation related benefits which are provided to
the employees.

 The organization should provide effective/acceptable insurance coverage to their

employees.

 ACI Limited should also provide individual insurance benefit along with group
insurance.

 The organization’s pension/ retirement plan should be modified in favor of their

employees.

 The organization may increase current salary structure of their employees.

14.References:

 ACI Limited annual report 2009, 2010, 2011.

 Web site: www.aci-bd.com.
 HR Executive ( Jubair Uddin Arman , Phnoe : 01824910575 )
 https://en.wikipedia.org/wiki/Compensation_and_benefits
 https://en.wikipedia.org/wiki/Compensation_and_benefits

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