4.0 Project Paper

Strategic Recruitment Procedure in Banking Sector: A Case Study based on South East Bank Limited

1.0 Introduction

South East Bank Limited has a long and relished heritage. It is second generation banking

which was established in 1995 with the vision to stand out as pioneer banking institution in

Bangladesh and contribute significantly to the national economy. It was incorporated on March

12, 1995 as a Public Limited Company. Certificate of commencement of business of the bank

issued by the Registrar of Joint Stock Companies and Firms was also dated March 12, 1995.

The Banking license for the bank was issued by Bangladesh Bank on March 23, 1995. The

bank and its first branch at the busiest commercial hub of the country at 1, Dilkusha C/A,

Dhaka was opened on May 25, 1995 by Mr. Saifur Rahman. The authorized capital of the bank

is BDT 2500 million. It’s paid up capital and reserve reached BDT 2236.84 million as on

December 31, 2005.

1.1 Purpose of the Report

The manpower is the lifeblood of any service oriented organization. As a private commercial

bank, South East Bank Ltd. is playing a very significant role in development of various sectors

in Bangladesh economy. In the field of deposit mobilization, Loans and advances, Import and

export business, foreign remittance South East Bank is showing best growth performance year

after year through its highly skilled human resource. At present a large number of banking and

non banking financial institutions are doing their business i.e. the banking business is more

competitive for the existence and smooth running of the banking business. It should be handled

efficiently and for this reason more effective and efficient human resource is very much

necessary. In the way of building skilled human resource recruitment and selecting system

should be organization’s target oriented.

In this study, an effort is made to find out the present policies and practices for recruitment and

selection in South East Bank Ltd.

1.2 Methodology

The study will be conducted through both primary & secondary data considering the field of

South East Bank Ltd.

Data Collection:

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Both the primary and secondary sources would be used to collect the necessary data

Primary data: Face to face meeting with the concerned top executives of South East

Bank Ltd. will be arranged to collect necessary data.

Secondary Data: The following sources will be used for secondary data:

1. Website of South East Bank Ltd.

2. Annual Report and Service Rule of South East Bank Ltd.,

3. Report published from Bankers Association Bangladesh,

4. Report published from Ministry of Labor and Manpower.

1.3 Limitation

This report may have some incompleteness due to some limitations .In fact; the report is

prepared in a brief period of time besides we have our own limitations too. Moreover-Some

essential data could not be gathered because of confidentiality concern. The raw data available

in the organization's database management system was complex and was not properly

organized. Bank's officials are not reluctant to disclose their internal information related to

strategic management of foreign exchange due to their competitors in the market. Data and

other related source of information is not sufficient for conclusion of the study.

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2.0 Overview of South East Bank Ltd.

South East Bank Limited a second generation private bank emerged in 1995 amid

liberalization of global economies. Currently its authorized capital is 2500 million BDT and

its capital and reserve reached 2236.84 million BDT. Its vision is to stand out as a pioneer

banking institution in Bangladesh and contribute significantly in the economy of Bangladesh.

Operational excellence coupled with qualitative improvements continued to be of paramount

importance to the bank. At present the bank has 41 branches across the country. Plans have

been drawn to raise the number of branches further. Their journey towards greater

operational success continues with increased energy and enthusiasm. As they face the

challenges on the way to further improving the profitability of SEBL, they rely on their

skilled and experienced workforce, the advantages of their close and cordial partnership with

customers, their family anchored presence in the country’s strategic places of commercial

and business importance, global reach through their correspondent banks for expansion of

foreign trade and use of their product-basket which encompass Real Time Online any branch

banking, Islamic Banking, Merchant Banking, Dual Currency credit Card, ATMs, loan

products etc.

2.1 Vision Statement

To stand out as a pioneer banking institution in Bangladesh and contribute significantly to the

national economy.

2.2 Mission Statement

High quality financial services with the help the latest technology.

Fast and accurate customer services

Balanced growth strategy

High standard business ethics

Steady return on shareholders’ equity.

Innovative banking at a competitive price.

Quality human resource.

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Firm commitment to the society and the growth of national economy.

2.3 Organizational Structures of South East Bank Ltd

Truly organizational form follows function, for Banks usually are organized to carry out the

roles assigned to them as efficiently as possible. Bank size is also a significant factor in

determining how Banks are organized. However, a Bank's role and size are not the only

determinants of how it is organized or how well it performs. Government regulation too has

played a major role in shaping the performance and diversity of banking organizations that

operate around the globe. The organizational structure of South East Bank Ltd. is as under: -

Management Executives:

Managing Director

Deputy Managing Director

Senior Executive Vice President

Executive Vice President

Senior Vice President

Vice President

First Vice President

Senior Assistant Vice President

Assistant Vice President

Banking Staff:

Senior Principal Officer

Principal Officer

Executive Officer

Management Trainee

Senior Officer

Probationary Officer

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Officer

Trainee Officer

Junior Officer

Trainee Junior Officer

Computer Staff:

Senior Officer (Computer)

Officer (Computer)

Junior Officer (Computer)

Trainee Computer Officer

Cash Staff:

Head Cashier

Senior Officer (Cash)

Officer (Cash)

Junior Officer (Cash)

Trainee Cash Officer

Sub-ordinate Staff:

Messenger

Bank Guard

Driver (Permanent/Casual)

Tea Boy/Electrician/Cleaner/Sweeper and Others (Permanent/Casual)

2.3 Operational Success of South East Bank Ltd.

South East Bank Limited is a premier banking institution of the country. It integrates the

latest technology into every facet of its operations. Their relentless effort to maximize

shareholders wealth continued in 2005 amid a state of stiff competition, more comprehensive

regulatory environment and ever increasing customer expectations. From the year of 2005

they have been focusing on increase of fee based income, diversification of revenue earnings

through a wide range of financial products and services. They made an operating profit of

BDT 1473.44 million and thus posted a growth of 82.21% over the last year. They made

significant progress in enhancing profitability of the bank compared to that of last year. The

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quality and timely availability of management information have improved significantly.

These combined with sharp monitoring practices, enabled the bank to manage the business

better and identify any problem area sooner than later.

3.0 Definition of Human Resource Planning

Human Resource Planning is the personnel process that attempts to provide adequate human

resources to achieve future organizational objectives. It includes forecasting future needs for

employees of various types, comparing these needs with the present workforce and

determining the numbers and types of employees to be recruited or phase out of the

organizations employment group.

In South East Bank the top management examines the environment, analyzes the strategic

advantages of the organization, and sets its objectives for the coming period. Then it makes

strategic and operating decisions to achieve its objectives. The personnel capabilities of the

bank are among the factors analyzed in the strategic management process. Once the strategy is

set, personnel do its part to ensure the success of the strategy and achieve the organization’s

objectives. It does this by comparing the present supply of human resources with projected

demand for them. This comparison leads to action decisions: add employees, cut employees, or

reallocate employees internally.

The importance of HR or staffing planning lies with the contribution it could make to

reducing uncertainties within the employment patterns of large organizations .Staffing planning

is a critical managerial function because it provides management with information on resource

flows that is used to calculate ,amongst other things, recruitment needs and succession and

development plans. South East Bank performs HR or employment planning formally.

3.1 Functions of HRM in South East Bank Limited

Human resources are critical for effective organizational functioning. HRM (or personnel, as it

is sometimes called) was once relegated to second class status in many organizations but its

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importance has grown dramatically in the last ten decades. Its new importance stems from

increased legal complexities the recognition that human resources are a valuable means for

improving productivity. And the awareness today of the costs associated with poor human

resource management.

South East Bank Limited realized that the effectiveness of their HR function has a substantial

impact on the bottom line performance of the organization. Poor human resource planning can

result in spurts of hiring followed but layoffs- costly in terms of unemployment compensation

payments, training expenses and morale. Therefore, this organization is developing strategic

HR plans and integrating those plans with other strategic planning activities.

The HR department of SEBL is headed by an Executive Vice President. There are many other

officials and staffs for the smooth functioning of HRD of SEBL.

3.2 Training and Human Resources

Skilled human resource is life blood for development of any service industry. With this end

in view the Training Institute of the Bank situated at 4 th Floor of Head Office, Dhaka nicely

decorated and equipped with the sophisticated instruments has been striving to bring about a

qualitative change in human resources of the bank by imparting continuous different training

throughout the year. Besides these, a number of executives and officers were sent to various

Training Institutions including Bangladesh Institute of Bank Management (BIBM) and

abroad for higher training.

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4.0 Definition of Recruitment

‘Recruitment is that set of activities an organization uses to attract job candidates who have the

abilities and attitudes needed to help the organization achieve its objectives.’ Another useful

definitions is ‘searching for and obtaining potential job candidates in sufficient numbers and

quality so that the organizations can select the most appropriate people to fill its job needs ‘

The recruitment process has two key aims: the attraction and retention of the interest of

suitable applicants, and the projection of a positive image of the organization to those who

come in contact with it.

Recruiting is related directly to a number of other personnel activities. Employment planning

determines the number of employees needed, and all subsequent personnel activities (such as

selection, orientation, development, compensation) cannot be effective unless good employees

have been recruited.

The recruiting process begins with an attempt to find employees with the abilities and attitudes

desired by the organization and to match them with the tasks to be performed. Whether

potential employees will respond to the recruiting effort depends on the attitudes they have

developed toward those tasks and the organization, on the basis of their past social and

working experiences. Their perception of the task will also be affected by the work

environment in the organization.

As far as we come to know South East Bank has a Human Resource Division charged with

overseeing these activities. Responsibility for HR activities, however, is shared between the

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HR division and other divisions including the Zonal and Branch offices. The HR division

shoulders the responsibility to recruit and initially screen candidates and also select the place

where the new employee will work. The HR division establishes performance appraisal

policies and procedures whereas their immediate superiors do the actual evaluating and

coaching of employees

4.1 Recruitment Process in South East Bank

After completion of planning phase the bank frames a recruitment strategy to look for suitable

applicants which are shown below:

Prepare a message incorporating the required competence of the prospective applicants,

proposed emoluments, and other terms and conditions of recruitment.

In fact, they use traditional type of messages.

Subsequently they publish the message through the print media.

They use telecommunication as well as personal interaction in case of recruitment in

the top level executives only.

They use open recruitment method.

They do not take assistance of any external recruitment agency for this purpose.

Their recruitment process is exclusively individual and they do not participate in

cooperative recruitment alliances.

SEBL adopts centralized recruitment procedure.

The recruitment is made through written test and viva-voce to be decided by the

Managing Director/ Executive Committee.

4.2 Developing recruiting Policy

The power of all appointments/ recruitment up to the rank of Executive Vice President lies

with the Managing Director who exercises the power as per policy and guidelines approved by

board (in line with Bangladesh Bank BRPD circular No.16 dated 24.07.2003). Such proposal is

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initiated by the head of the Human resources Division with his comments and placed to the

Managing Director for final approval.

For appointments/ recruitment of manpower in SEBL, the concerned head of Human

Resources Division takes interview/viva voce up to the rank of Probationary Officer and above

and if the candidate is found suitable, the proposal is placed to the Managing Director with his

observation for final order. The Managing Director approves the proposal with or without any

change. Verdict of the Managing Director is final in the matter of recruitment /appointment.

Number of Applicants:

As far as we understood SEBL receives a huge number of applications in response to their each

advertisement. For their last advertisement they received total 2545 applications for the

position of probationary officer.

Initial Screening:

They use for automation method for initial screening for smooth functioning of their strategy.

Last year they found 1990 valid applications out of total 2545.

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5.0 Criterion of External Recruitment

A sample of message published in print media for recruitment of probationary officer in the

year 2006 by South East Bank Limited is appended below, which will also reflect source and

type of message used by this organization. This message was published in a number of leading

dailies of the country.

1. Educational Qualification

Master degree in any discipline from any recognized University/ Educational Institution with at

least 03 (three) First Divisions/ Classes or GPA 3.75 out of 5 or GPA 3 out of 4 & 1 (one)

Second Division/ Class or GPA 2.75 out of 5 or CGPA 2.50 out of 4 in any of the examinations

from S.S.C. to Masters or equivalent thereof.

Or

“Four-years Integrated Honours” Graduate in any discipline from any recognized University/

Educational Institution with at least 02 (two) First Divisions/ Classes or GPA 3.75 out of 5 or

GPA 3 out of 4-one invariably in Honours Examination and the other either in S.S.C. or in

H.S.C. examination or equivalent thereof & 1(one) Second Division/ Class or GPA 2.75 out of

5 or CGPA 2.50 out of 4 in S.S.C.or H.S.C. examination or equivalent thereof.

The component authority may change the above criteria as it deems fit.

2. Upper age limit

Upper age limit will be decided as per Bank’s Employees Service Regulations. Upper age limit

may be relaxed up to 32 years for the employees of this bank only having requisite

qualifications.

3. Period of Probation

The probation period is 1(One) year.

4. Remuneration

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To be fixed by the component authority/ management at the time of recruitment.

5. Confirmation

May be confirmed for the particular position applied, after completion of the probationary

period successfully.

6.0 Internal Recruitment

Every organization has to undergo both internal and external recruitment process to make

better human resources management. South East Bank also takes the same strategy and also go

through a traditional mobility path to give incentive to the suitable internal candidates. Usually

recruitments in this organization is done on upward mobility.

6.1 Recruitment System in South East Bank Limited

Considering the policy and procedure of internal recruitment system in SEBL, it is assumed

that the organization follows the closed internal recruitment system in terms of their own

perspective. This organization has prepared a framework for internal recruitment which is

shown below:

HRD identifies the vacancy

Searches files of the prospective candidates

Prepares list of eligible candidates by evaluating the criteria

Places the list to the authority for final consideration

Authority which consists of a committee takes final decision

HRD conveys the decision of authority to the selected candidates

6.2 Authority for promotion

All promotion up to the rank of Assistant Managing Director of the Bank is made by a

committee constituting under:

Managing Director As Chairman

Deputy Managing Director-1 As Member

Deputy Managing Director-2 As Member

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Concerned Head of the Department As Member

The above Committee evaluates the performance of each eligible candidate and gives marks as

per criteria mentioned on the basis of which promotion is given. But in case of any difference

of opinion among the committee members while making assessment about any eligible

candidate, the verdict of the Managing Director is final in that case and as per his decisions the

promotion is made.

6.3 Development of internal recruitment guide

The power of promotion of all employees up to the rank of Executive Vice President lies with

the Managing Director who exercises the power as per policy and guideline approved by

Board. The Managing Director may form one or more promotion Committee with the

executives as per his own discretion from time to time to deal with any promotion cases of any

particular time.

The Promotion Committee after proper evaluation and assessment of individual employee as

per approved criteria furnish the names of the probable candidates with their recommendation

for promotion to the Managing Director who approves promotion of required number of

employees which he may deem it necessary from that list. The Managing Director has the

option to approve of any employee beyond the list if the managing Director thinks it fit.

6.4 Policy of the Bank for Internal Recruitment

Since the organization possesses a large number of human resources they have their own

internal policy for internal recruitment which they adhere for execution.

Eligibility criteria:

Probationary Officer and Senior Officer:

3 years service in the same grade as on the date to be decided by the

management.

Evaluation as per marketing system.

Management Trainee and Executive Officer,:

3 years service in the same grade as on the date to be decided by the

management

Evaluation as per marking system.

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Potentiality and suitability for higher assessment

Principal Officer:

Educational Qualification: Graduation

5 (five) years experience in a bank with & 3 (Three) years as Executive

Officer or in an equivalent position.

Senior Principal Officer:


8 (Eight) years total service & 3 (Three) years experience as Principal

Officer or in an equivalent position.

Assistant Vice President:


10 (Ten) years total service & 3 (Three) years experience as Senior

Principal Officer or in an equivalent position.

Senior Assistant Vice President :


15 (Fifteen) years total service & 3 (Three) years experience as Assistant

Vice President or in an equivalent position.

First Vice President:


18 (Eighteen) years total service & 3 (Three) years experience as Senior

Asst. Vice President or in an equivalent position.

Vice President:


20 (Twenty) years total service & 3 (Three) years experience as First Vice

President or in an equivalent position.

Senior Vice President:


20 (Twenty) years total service & 3 (Three) years experience as Vice


Executive Vice President:


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22 (Twenty) years total service & 3 (Three) years experience as Senior Vice


Senior Executive Vice President:


25 (Twenty) years total service & 3 (Three) years experience as Executive

Vice President or in an equivalent position.

Deputy Managing Director:


25 (Twenty) years total service & 3 (Three) years experience as Senior

Executive Vice President or in an equivalent position.

Managing Director:


27 (Twenty) years total service & 3 (Three) years experience as Deputy

Managing Director or in an equivalent position.

6.5 Basis of assessment

a) Length of service

b) Service records

c) Past performance

d) Annual Confidential Report (ACR)

e) Educational and professional qualification

f) Knowledge, training, experiences in different branches/ offices of banking including

Foreign Exchange

g) Promotion committee’s assessment on the basis of results on the above points and on

the potentiality, fitness for higher assignment and efficiency of individual employees.

Personal knowledge of the Committee Members will also work in determining the

efficiency, ability, salesmanship, usefulness and suitability for higher assignment of the

concerned officials.

Thus it reveals that the organization takes the method of skill inventories as the source of their

internal recruitment.

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6.6 Marking System

a) For Seniority in the grade- 15 Marks

1 (one) marks for each 6(six) months completed service in the grade.

b) Educational qualification- 05 Marks

S.S.C. Nil

H.S.C. Nil

Graduation 03 Marks

Graduation with (Hons) 04 Marks

Master degree 05 Marks

c) Banking Diploma- 05 Marks

Part-1 03 Marks

Part-2 05 Marks

d) Average of last 3 years ACRs 35 Marks

A 1 (very Good) 1.6 Marks

A (Good) 1.0 Marks

B ( Average) 0.5 Marks

C & D (below average & poor ) Nil

e) Promotion Committees Assessment 40 Marks

Total 100 Marks

6.7 Recruitment Budget

Expenditure for internal recruitment of the organization is too nominal to mention. As such the

organization does not make any internal recruitment budget.

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7.0 Selection process of SEBL

The Recruitment and Selection process promotes successful hiring decisions that can truly

impact the success of a department or faculty.

Selection is a process of assessing and evaluating people for purposes of determining the likely

fit between the person and the job. The selection of a candidate with the right combination of

education, work experience, attitude, and creativity will not only increase the quality and

stability of the workforce, it will also play a large role in bringing management strategies and

planning to fruition.

Transition from Recruitment to Selection:

Recruitment Process:

Advertisement

Data processing in computer

Scrutiny of Applications received

Selection Process:

Issuance of letter to the eligible candidates advising to

appear in a written test

Arrangement of written test

Preparation of Merit list of written test.

Issuance of Viva-Card to the eligible candidates who have

qualified in the written test.

Arrangement of Viva-Voce to be taken by the Bank

Management headed by Managing Director as

Chairman.

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Preparation of final merit list on the basis of the written

test & Viva.

Issuance of Appointment letters to the selected candidates

7.1 Selection Forms

South East Bank Ltd. always prefers Paper and pencil and oral as forms of selection from they

have started their journey since 1995.

Sources: Examination is taken by the bank management or by any trusted & experienced

Organization like BIBM & IBA or Commerce Faculty of University of Dhaka.

Method: Question is not meant for specialized field. It covers general knowledge,

mathematical term English aptitude.

Screening Applicants

The following steps are being accomplished by the bank while screening the applications,

Screened out applications or resumes through computer by using the key words

Specify the short-list criteria

Record all short-listed applicants

7.2 Short-List Criteria

Short-listing criteria is developed in consultation with the Top level manager of HRD. The

criteria are reasonably discernable from the written application, as that is the only information

available from all candidates. We can consider the following points:

Minimum educational requirements

Related work/volunteer experience ( if any)

Age of candidate

Written communication skills

Knowledge of current affairs.

7.3 Final Selection Criterion

Interview

Medical fitness

Intention to accept service rule of the organization.

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7.4 Interview Panels

Interview panel constitutes the following members:

Managing Director -As Chairman

Deputy Managing Director-1 -As Member

Deputy Managing Director-2 -As Member

Executive Vice President (Head, HRD) -As Member

7.5 Substantive Assessment Methods

South East Bank Ltd. has used different assessment methods to select employees for hire from

the finalists

Background Checks: Background Checks defines checking criminal records, falsified

educational credentials, and other serious liabilities, background checks only reveal

information when an individual has been caught.

Personality Tests: Here South East Bank Ltd. considers traditional assessment tools used in

the hiring process. These assessments measure personality characteristics.

Abilities Assessments: When applicants are tested for both abilities and personality,

employers find they are hiring the right people.

Offer receivers

After going through the interview section, the finalists who get the job finally are called offer

receivers. When all discussion is complete, and the Selection Panel has made its decision, a

formal offer is being made to the successful candidates. Appointment letter makes this offer.

It is not necessary that all the offer receivers will join. In case of South East Bank Ltd. the offer

receivers have to go through a medical test, which assures that the final new employees are fit

enough for the required positions and will be able to handle pressure.

New hires

Finally who ever pass the medical test and ready to join are become the new hires. At this stage

they are supposed to fill in agreement form and some other documents. Subsequently they have

to undergo the following processes:

Orientation

Informal and formal training

Final posting

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7.6 Budget

South East Bank hires a good number of employees every year at a time. This involves a

considerable amount of money. Thus they need a flexible budget to go through the process. We

learnt that they receive tk250/= only along with each application. They need to spend a big

amount of money to conduct the written examination which is almost covered from the

application fee they receive.

8.0 Findings and Recommendation

Required Academic qualification is standard in terms of our country. Because, only

high C.G.P.A. does not mean well qualification.

Candidates studied in any discipline are eligible to apply. Therefore they are

contributing greatly to reduce unemployment problem in our country.

Candidates need no previous experience to offer them for the job in South East Bank

Ltd.

Selected candidates need not go for a long term contract to remain in the organization.

As such high rate of turnover is observed.

To accomplish entire procedure of recruitment and selection the bank takes too much

time. Consequently the candidates have to wait for a long time.

Receiving application fee is not reasonable in context of socio economic position of

country.

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9.0 Conclusion:

Human Resource Management system is gradually developing all over the world. In

Bangladesh, the HRM concept is also developing and the organizations are re-shuffling the

exiting HRM system.

South East Bank Limited has its high acceptance in the market among the first generation

banks. It can grab this opportunity easily by introducing new highly demanded services. In this

perspective South East Bank Ltd is also trying to follow and regulate the best human

resource planning to incorporate in this operation. South East Bank Ltd believes like

the other financial institutions of Bangladesh and World by following their HRM

system to develop the best practice of Banking Human Resource Management.

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4.0 Project Paper

Documents

Transcript of 4.0 Project Paper