North South University Summer 2011 BUS 601(1) Human Resource Management

Human Resource Management Practices in Bangladesh: A Comparative Case Study based on Bangladeshi and Foreign Electronics industries

Submitted to: M. Khasro MIAH Ph. D Date: 7th August,2011 Submitted by: Group: I Md. Mizanur Rahman Redwan Noor Ullah 1110197060 0911095560

Mohammad Rashedul karim 1031006060

Acknowledgement

In the preparation and completion of this project, we acknowledge the encouragement and assistance given by a number of people and institutions. First of all we would like to thanks to honorable faculty Dr. M. Khasro MIAH Ph. D for giving me this opportunity to conduct this study. Without his assistance and guideline this study could not be completed. We would like to thanks those persons who patiently give us time and help us to collect data from the questionnaire. These questionnaires were the base of this study. Without their valuable time this study would not be possible. And, finally we also thank to the electronics company those were Walton Bangladesh, Myone Bangladesh, Singer Bangladesh and Samsung Bangladesh.

Index

Chapter1 Abstract Chapter 2 Introduction Chapter 3 HR practices in Bangladeshi & Foreign Electronics Company Chapter 4 Comparative Background information of selected company Chapter 5 Characteristics of Bangladeshi & Foreign Company Chapter6 Research question Chapter 7 Literature method Chapter 8 Research Method Chapter 9 Results: -Recruitment and selection -Training and development -Compensation and Benefits -Performance Appraisal -promotion

Chapter 10 Practical implications Chapter 11-Conclusions and future implication

References

Chapter1 Abstract

This paper focuses on the ability of Bangladeshi and Foreign Electronics companies to transfer their domestic HRM practices to their overseas manufacturing operations located in Bangladesh. The information based on interviews conducted with HR manager of two Bangladeshi and two foreign electronics company respectively. The main objective of this article is to acquiring detailed information as to how Bangladeshi and foreign electronics company adopted unique HRM strategy that enhanced the sense of participation among the employees of the firms. This qualitative study endeavors to exhibit of the impact of national and foreign culture

Findings from the field interview surveys for the Bangladeshi and foreign electronics company revealed that the HRM strategy and styles of the Bangladeshi electronics company were more strongly influenced by foreign electronics companys culture. This research also found that foreign electronics company have managed to transfer their parent country HRM model across-the-boarder; they have managed to create close hybrid systems which serve to promote continuous improvement in productivity and product quality in Bangladesh. Based on the results of qualitative evidence of in-depth interview study, a hypothesized model of building a participative HRM strategy in Bangladeshi and foreign electronics company was proposed.

Chapter 2

Introduction

Human resource management is more important in a changing environment than before. There are some challenges and changes, which have great impacts on organizations respective to human resource (HR) function behaviors. These impacts know as globalization, increasing customers expectations, transparent market, and human resource management (HRM) provides possibilities to make organizations more healthy and competitive. Where the firm may focus on cost for employee compensation and make conclusions on share services or outsourcings. We can say that, the function of HR units offers and increases some potential of organizations structure and some of human capital, globalizations, increasing information technology, enhanced customer expectations and the transparency of global markets that know as a main shift in a developing world.

Chapter 3
HR practices in Bangladeshi & Foreign Electronics Company
Criterion Hiring criteria for management people Walton Technical skill requirements Myone Having right attitudes Singer Fit with company values Lectures and seminars inside the company Samsung Fit with company values Job rotation

Management training technique

Coaching by supervisors

Coaching by supervisors

Promotion practices

Knowledge and skills Merit system based on performance evaluation 7%- 10%

Knowledge and skills Merit system based on performance evaluation 10% - 15%

Knowledge and skills Merit system based on performance evaluation 6% - 9%

Knowledge and skills Merit system based on performance evaluation 7%- 10%

Pay practices for managers

Employee Turnover rate

Performance Appraisal practices

Determine the pay level, bonus and promotion Moderate

Determine the pay level, bonus and promotion Moderate

Determine the pay level, bonus and promotion Moderate

Determine the pay level, bonus and promotion High

Industrial relations: (Management &Labor)

Company performance

Rather High

Low

Average

Average

(Documents: From HR Manager)

Chapter 4
Comparative Background Information of selected company :About
Walton

Walton:
Walton Hi-Tech Industries Ltd. (Walton HIL) is the pioneer of Refrigerator, Freezer, Air Conditioner and Motorcycle Manufacturing Technology in Bangladesh. R. B. Group (Mother Company) is the country's top business Group in electrical and electronics, Motorcycle, Electricity generating equipments and other household electrical & electronics appliances using the brand name WALTON. The company has been running its business with a great reputation since 1977. Establishment of Walton HIL to manufacture Refrigerator & Freezer, Air Conditioner, and Motorcycle etc. in Bangladesh is a milestone in the path of success and reputation of the brand WALTON. Walton HIL has introduced first advanced research and manufacturing technologies and equipments for household & commercial Refrigerator & Freezer, Motorcycle and Air Conditioner etc. in Bangladesh.

Singer:
Singer was established by Fringe singer. Mother company is in USA. Established in 1850 .Singer Electronics is the worlds oldest telemarketing system manufacturer. With 30 years in continuous operation we have the experience and time tested knowledge to help you with all of your telemarketing needs.

Samsung:
Over 70 years, Samsung has been dedicated to making a better world through diverse business that today span advance technology, semiconductor, skyscraper and plant

contraction, petrochemicals, medicine and more. Samsung Electronics leads the global market in high tech electronics manufacturing and digital media.

Comparison of four Electronics Company:

Name Walton Share of BD 100% Industry Electronics Age Employee Educational qualification 35 Years 2000 High school to Masters and above 8 Years 450 High school to Masters and above High school to Masters and above High school to Masters and above

Myone

100%

Electronics

Singer

More than 50%

Electronics

160 Years

10000

Samsung Operating through Overseas Agents.

Electronics

70 Years 2000

(Documents: From Manager of Admin)

Chapter 5
Characteristics of Bangladeshi & Foreign Company
Benefits and Services in HR management: discussion in between Bangladeshi & Foreign Electronics Company Benefits:
Indirect financial and nonfinancial payments employees receive for continuing for continuing their employment with the company. It includes things like health and life insurance, pension, time off with pay, child care assistance and many more. There are many benefits and different way to classify them. Dessler, Gary in his Human Resource management book classifies them as: Pay for time not worked Insurance benefit Retirement benefits Services We will discuss the benefits and services packages offer by Bangladeshi & Foreign Electronics Company. Pay for the time not worked Pay for the time not worked also called supplemental pay benefits- is the most costly benefit, because of the large amount of time off that most employees receive. Common time-off-with-pay periods include holidays , vacations, jury duty, funeral leave, military duty, personal days, sick leave, sabbatical leave, maternity leave, unemployment insurance payments for laid off or terminated employees. Unemployment insurance This Insurance is paid for to the designated employees when employees are laid off or terminated for downsizing. In federal laws, any employer in USA must have unemployment insurance coverage. But in Bangladesh this laws is not applicable. As per this benefits firms are not just required to everyone they dismiss. Only they will receive who have no fault in dismissed. So if an employee is terminated based on chronic lateness cannot legitimately claim this benefits. So to control this insurance claim firm could maintain a checklist. In our country does not pay any unemployment benefits to the employee.

Pay for vacation and holidays policy In, Bangladesh a holiday list for the company is prepared in conformity with the Holiday list published by the Metropolitan Chamber of Commerce and Industries. These holidays is remarked as general holidays. There are other type of holidays which are called festival holidays. Payment policy for holidays is different from the general holidays. If an employee works during general holidays he will be paid 4 times of basic hour rate overtime. In Bangladesh, HR services also prepare the list of general holidays and circulate it. Payment is made for these holidays. If an employee works during this holiday they are paid 2 time of basic pay per hour. Annual Leave In Bangladeshi & Foreign Electronics Company all permanent employees will be allowed to avail 25 days of annual leave per annum. Maximum 15 days annual leave will be carried forward to the succeeding year, if any, and excess of 15 days annual leave as the December 31st will be forfeited. A temporary employee will be entitled to 15 days of annual leave per annum for 1 year contract period. For contract less than 1 year; proportionate leave shall apply. If the service tenure is less than 1 year on December 31 in a calendar year, proportionate annual leave shall apply. Sick Leave policy For a regular employee, there will be no standard entitlement of yearly sick leave. Sick leave at actual will be availed based on advice of registered medical practitioner. A temporary employee shall be entitled to sick leave of 14 days for 1 year contract period. Proportionate leave shall apply for contract less than 1 year. Certification from registered Doctor or representative of HSSE is required for sick leave of 3 days or more. An assessment will be carried out by HSSE/ medical board if an employee is frequently availing sick leave. If more than 3 months leave is necessary due to occupational injury or on duty accident, the same shall be allowed. However, accidental dismemberment/ prolonged sicknesses of more than 3 months will be reviewed by HSSE/ medical board. Leave of absence from duty necessitated by orders not to attend office in consequence of the presence of infectious diseases in the person, family or household of an employee is known as quarantine leave, which will be considered as sick leave. Maternity leave

A female employee is granted maternity leave for a period of 26 weeks. Such entitlement applies for two times during her service with the company. An employee shall not be separated by the company during her maternity leave without sufficient cause.

Paternity Leave A male employee may avail paternity leave for a period of 10 working days. Employees availing this leave shall use the leave period to look after his family and home during the time of his childs birth. Such entitlement applies for all employees (regular & temporary who have service tenure of minimum six months in the company. Employees may avail this leave within the two weeks timeframe before or after his childs birth. If he does not live with the mother of the child he has no right to such leave even if he is the father of the child. Transit Leave Upon Transfer from one position to another resulting physical relocation, an employee can avail such leave. An employee may avail a period of 5 working days as transit leave before joining the new place of position. No transit leave is allowed if the transfer is made within the same district even physical relocation is resulted. Leave Without Pay An employee may avail leave without pay as required with consent of respective supervisor. Leave without pay for a period of one week can be approved by immediate supervisor. Leave without pay for more than one week shall be approved by Department Head. Any leave request more than a month shall be approved by Divisional Head. Leave without pay shall be limited to a maximum of 3 months only. Up to 1 month leave without pay, deduction will be made on the basis of basic salary while for more than 1 month leave without pay; deduction will be made on the basis of gross salary. Casual leave A temporary employee shall be entitled to 10day casual leave for a contract period of 1 year. Proportionate casual leave shall be applicable for employment agreement less than 1 year. Casual leave will not be carry forwarded to next calendar year. Festival Holiday Leave Employees are entitled to enjoy 11 festival holidays in a calendar year. Employee Services will announce such holidays at the beginning of each year. An employee may be asked to work on a festival holiday provided he/she shall be entitled to 2 days leave with pay and another alternative holiday.

.Severance pay Many employers provide severance pay in our country. During contract of employment the amount of severance pay is mentioned. Foreign Electronics Company also follows these rules. As per policy if company wants to terminate an employee, the employee will get 1 month gross salary. But Bangladeshi electronics company dont pay severance payment during termination due to employee reason.. LFA (Leave Fair Assistance) To facilitate worklife balance, Leave Fare Assistance is provided to employees at the rate of 6% of their monthly basic salary. However, employees are responsible to preserve all necessary documentation of their vacation availed to be compliant with the Local Tax regulations which is given by Foreign Electronics Company. But in, Bangladeshi Electronics Company there is no leave fair assistance.

Benefit for time not worked In BD& Foreign Electronics Company:

Benefit Type Unemployment insurance Pay for vacation and holidays policy Foreign Electronics company No 4 times Overtime payment than regular hourly payment 25 days At actual 26 weeks 15 working days 5 working days Max 3 months 15 days for part time employee 3 days leave for 1 holiday 1 month gross salary or 3 month early acknowledgement 6 % of monthly Basic Bangladeshi Electronics company No 2 times Overtime payment than regular hourly payment 20 10 26 weeks 0 days 7 working days 0 days 0 days 0 days 0%

Annual Leave Sick Leave Maternity Leave Paternity Leave Transit Leave without pay Casual Leave Festival Holiday Leave Severance pay

Leave Fare Assistance

0%

Discussion: Foreign Electronics Company provides a lot of benefits regarding time not worked. Pay for vacation and holidays, maternity leave, annual leave, sick leave, transit leave all are given somewhat equally importance with employee performance. And Foreign Electronics company gives more emphasis on payment for time not worked. Like in Foreign Electronics company pay for paternity leave, provide leave fair assistance, leave without pay, more over time rate in festival holiday, severance pay. Where as in Bangladeshi Electronics Company this benefits are not provided. These inequities create dissatisfaction among the employee of BD& Foreign Electronics Company. Figure: 5.1 Comparative Benefits percentage we can say that Foreign Electronics company provide 92 % benefits for time not worked and Bangladeshi Electronics company provide only 42 %. Bangladeshi Electronics company have a lot of opportunities to improve their benefit policy regarding time not worked. There are external in-equities in annual leave, paternity leave, and festival holiday Total benefits for time not worked

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Total Foreign Bangladeshi

Persentage(%) of benefits for time not worked

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Total Foreign Bangladeshi

leave, leave fair assistance which would be very little costly in comparison to other cost. The major cost in time for not worked is payment due to annual leave which would cover 80 % of cost due to benefits for time not worked, where Foreign Electronics Company and Bangladeshi are in comparative position. But in remaining 20%, there are huge numbers which resemble a huge different between Foreign and Bangladeshi Electronics company. So with increasing only these little cost Bangladeshi electronics company can improve their benefits policy for time not worked a lot.

Service Facilities:

Total (43%) Foreign(43%) Bangladeshi(15%)

Services comparison between Foreign& Bangladeshi Electronics Company

By these Pie diagram shows Foreign Electronics company services save a lot of man hour and save a lot of insurance cost, health services cost by reducing premium, remain in good position regarding ethical aspect. Bangladeshi Electronics Company also must introduce these services in context to their competitive advantage. Foreign Electronics Company as an employer can show these as their competitive advantage over Bangladeshi Electronics Company.

Chapter 6
Research question:
Q: 1: What are the hiring criteria for management people?

Q: 2: what is the management Training technique?

Q: 3: How does promotion is practices?

Q: 4: For what basis pay practices for Managers?

Q: 5: What is the employee turnover rate?

Q: 6: How does the performance appraisal practices?

Q: 7: How does the industrial relation between Management and Labor?

Q: 8: What is the company performance?

Chapter7
Literature Method:
Human resource management (HRM) refers to the policies and practices involved in carrying out the human resource(HR) aspects of a management position including human resource planning, job analysis, recruitment, selection, orientation, compensation, performance appraisal, training and development, and labour relations (Dessler, 2007). HRM is composed of the policies, practices, and systems that influence employees behaviour, attitude, and performance (Noe, Hollenbeck, Gerhart, and Wright, 2007). There are four top models of HRM such as the Fibrin, Tichy, and Devana Model of HRM, the Harvard Model of HRM, the Guest Model of HRM, and the Warwick Model of HRM (Bratton and Gold, 1999). Out of these models, Guest Model of HRM is considered to be much better than other models (Aswathappa, 2008). The present study selected the HR practices such as HR planning, recruitment and selection, training and development, performance appraisal, compensation, and industrial relations which were incorporated by Foreign& Bangladeshi Electronics Company Human Resource Management.

Chapter8
Research Method:
This study is basically an exploratory study. Exploratory studies are a valuable means of finding out what is happening; to seek new insights; to ask questions and to assess phenomena in a new light . It can be linked to the activities of the Foreign& Bangladeshi Electronics Company

Data Sources and Instrumentation

The study was compiled with the help of primary data and secondary data. Primary data was collected through direct personal interview by means of the questionnaire. A total of 4 employees (i,e., HR manger were selected from every company) responded through the questionnaire. Moreover, the desk study covered various published and unpublished materials on the subject . A five points rating scales of questionnaire from strongly disagree (1) to strongly agree (5) were adopted to measure the variables of HR Practices.

Chapter 9
Results
Summary Results of Case Study Based on Interview Survey among Bangladesh and Foreign Electronics Company
Criteria Recruiting & Selection Training& Development Promotion Job rotation Walton Fresh graduate OJT & shortterm based on performance No plan or policy for job rotation Myone Fresh graduate OJT & shortterm based on performance No plan or policy for job rotation long term, team based reward Improve total quality Local traditional based Negative Positive Positive Singer Fresh graduate OJT & shortterm based on performance Planned job rotation Individual and seniority considered Improve total quality Strong parent corporate culture Samsung Fresh graduate OJT & shortterm based on performance Planned job rotation Individual and seniority considered Improve total quality Strong parent corporate culture

Performance appraisal

long term, team based reward Control strategy Improve total quality Cultural context Local traditional based Managers beliefs Negative

 Recruiting and selection: Foreign Electronics Company provides equal recruitment and selecting quality employee but in Bangladeshi Electronics Company dont provide equal recruitment and selecting quality employee. Training & Development: Foreign Electronics Company provides adequate training and development facilities to employees to effectively perform current and future jobs but in Bangladeshi Electronics Company dont provide adequate training and development facilities to employees to effectively perform current and future jobs.

Compensation & Benefits: Foreign Electronics company ensure competitive salary & benefits packages for the employee but Bangladeshi Electronics Company dont ensure Competitive salary & benefits. Performance appraisal: In foreign electronics company performance appraisal based on individual and seniority based but in Bangladeshi electronics company performance appraisal based on long term and team based reward.

Chapter 10
Practical implications
In foreign electronics company we have seen that in context to benefits and services, they are giving almost all kind of standard benefits and services packages to its employee. But in Bangladeshi electronics company these benefits and services are little bit discouraged. These services and benefits is very much integrated with the performance of employee. In the same industry where both are providing the same services should not have different benefits and services packages. These difference is creating external in-equity in the Bangladeshi electronics company employee. It must be removed and necessary steps should be taken to create the equity in the Bangladeshi electronics employee. In the foreign electronics company job safety is a major concern. So analysis of job and proper job design must be considered. Job design based on skill and knowledge should be given more emphasis in the foreign electronics company

Chapter 11
Conclusions and Future implication

Employee will spend their important time of life serving in this industry. foreign electronics company are trying to maintain a standard level in benefits and services area. But Bangladeshi Electronics are far behind in this area. These people are providing electronics services to the country. Both Bangladeshi and Foreign Electronics company must emphasis that these employees remain in good health both in physically and mentally. Bangladeshi Electronics should consider improving their benefits and services packages. They should also consider the distributive and procedural justice in the all level of business specially managing its human resources.

Some recommendation for future implications would be: 1. Performing a survey regarding the cost of benefits and services incurred by performing a qualitative survey regarding the satisfaction level of these two sectors regarding the benefits and services Bangladeshi and Foreign Electronics Company. 2. Comparing the cost, taking necessary measures to remove the in-equity among the Bangladeshi and Foreign Electronics company. 3. Perform a detail survey into the organizational structure of Bangladeshi Electronics company sectors. 4. Find the awareness level of 5. Bangladeshi Electronics employee in the level of importance of HR in the organization performance 6. A detailed study into the Bangladeshi Electronics employee regarding the ethical, justice and fair treatment awareness would be helpful to shape the organizational shape in this aspect. 7. Perform a total HR scorecard in Bangladeshi Electronics and find the problems in the HR management and also recommending key aspect for better performance.

References 1. Dessler, Gary, and Biju VarkkeyHuman Resource Mangement (Eleventh Edition) 2. www.waltonbd.com 3 .www.singerbd.com 3. www.transcombd.com