51313598-Standard-Chartered-HR-Intern-Report-Bangladesh

Internship Report: HRMP in Standard Chartered Bank

Abstract

According to the universalistic perspective, organizations from different sectors, across

industries, and through different time periods should use a series of select human resource

management practices (HRMP). The main principle of this paper is to investigate whether

there is any relationship between HRMPs and organizational performance, regarding

Standard Chartered Bank in Bangladesh. This study aims to investigate the relationship of

training, employee participation, and selection with perceived organizational performance in

the context of Standard Chartered Bank in Bangladesh. This study is co-relational in nature

and it will examine the correlation among these variables. A single set of sample will be

considered for this study and that will be the employees of Standard Chartered Bank. A set of

structured questionnaire will be distributed among 200 respondents. Regression analysis will

be conducted for the purpose of data analysis.

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Origin of the Report

The BBA internship program is a mandatory requirement for the students who are graduating

from the BBA program under the School of Business of North South University, Bangladesh.

In the internship program, I was attached to a host organization named ‘Standard Chartered

Bank’ for 12 weeks. During this period I learned how the host organization works with the

help of the internal supervisor. As a result I have decided to write a report on “A

universalistic perspective for explaining the relationship between HRM practices and

organizational performance – in context of Standard Chartered Bank in Bangladesh”.

During the three months of work experience with Standard Chartered Bank on this internship

program, I was placed in the Human Resource division of the bank. I joined on September 1st

2007. This department manages recruitment, training, and career progression plan. Standard

Chartered Bank highlights the importance of developing its people to create a culture of

customer service, innovation, teamwork, and professional excellence.

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INTRODUCTION


The Standard Chartered Group is an unusual banking business. Although its roots are clearly

British, its area of operations, its network, and indeed its profit stream are overwhelmingly

international. The name Standard Chartered comes from two original banks from which it

was founded. One of the banks is the Chartered Bank of India, Australia and China and the

other bank is the Standard Bank of British South Africa.

In Bangladesh, Standard Chartered Bank is one of the leading multinational banks. To

maintain its leading position in the Bangladesh, SCB has always been keen to develop long-

term beneficial relationship with trustworthy clients. To achieve this end, they have always

upgraded their approaches to achieve top-level performance. This up gradation is especially

apparent in its HR activities. There are numerous human resource management principles (or

HRMP) that seek to rectify and streamline the HR activities of an organization. Standard

Chartered Bank’s HR processes, quality-wise, are one of the top-grades in the country.

Among these HRM practices, training, employee participation and employee selection

processes are instrumental in aiding a business thrive in its area. This research paper seeks to

establish whether these three HRM practices have managed to augment the perceived

organizational performance of Standard Chartered Bank (Bangladesh).

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BANKING INDUSTRY-OVERVIEW

ORGANIZATIONAL OVERVIEW


The Banking Industry in Bangladesh is one characterized by strict regulations and monitoring

from the central governing body, the Bangladesh Bank. The chief concern is that currently

there are far too many banks for the market to sustain. As a result, the market will only

accommodate only those banks that can transpire as the most competitive and profitable ones

in the future.

Currently, the major financial institutions under the banking system include:

Bangladesh Bank

Commercial Banks

Islamic Banks

Leasing Companies

Finance Companies

Of these, there are four nationalized commercial banks (NCB), 5 specialized banks, 11

foreign banks, 26 domestic private banks and 4 Islamic Banks currently operating in

Bangladesh.

Generally, the commercial banks and finance companies provide a myriad of banking

products/services to cater to the needs of their customers. However, the Bangladeshi banking

industry is characterized by the tight banking rules and regulation s set by the Bangladesh

Bank. All banks and financial institutions are highly governed and controlled under the

Banking Companies Act-1993.

The range of banking products and financial services is also limited in scope. All local banks

must maintain a 4% Cash Reserve Requirement (CRR), which is non-interest bearing and a

16% Secondary Liquidity Requirement (SLR). With the liberalization of markets,

competition among the banking products and financial services seems to be growing more

intense each day. In addition, the banking products offered in Bangladesh are fairly

homogeneous in nature due to the tight regulations imposed by the central bank.

Competing through differentiation is increasingly difficult and other banks quickly duplicate

any innovative banking service.

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BACKGROUND OF STANDARD CHARTERED BANK


The Standard Chartered Bank PLC is an international banking group that is incorporated in

the UK, with its headquarters in London. The group focuses its activities in Asia, Africa and

the Middle East and its operation is segmented under six regions: LTK & Europe, Middle

East and South Asia (MESA), South East Asia, and the Americas.

Globally, the key resources of SCB include:

A network of over 600 offices in 48 countries

A staff of about 25,000 people managing assets of around 47 billion pounds

Standard Chartered Bank's international businesses in Personal Banking, Corporate

Banking and Standard Chartered Markets are its special strengths

The global strategies of Standard Chartered Bank are:

To build and grow strong businesses in East and South East Asia - the Asia Pacific

Region

To enhance historical position in the MESA region

To concentrate operations in the OECD in those activities that support Standard

Chartered Bank's remarkable franchise in newly industrialized and emerging markets.

Board of Directors

There is a nineteen-member board, headed by Sir Patrick Gillam as Chairman. Half of the

directors are non-executives. Most of the board members are very eminent persons drawn

from the boards of world-renowned multinationals such as Rolls Royce, British Gas PLC, etc.

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The Standard Chartered Group is an unusual banking business. Although its roots are clearly

British, its area of operations, its network and indeed its profit stream are overwhelmingly

international. The name Standard Chartered comes from two original banks from which it

was founded. One of the banks is the Chartered Bank of India, Australia and China and the

other bank is the Standard Bank of British South Africa.

The Chartered Bank was founded by James Wilson following the grant of a Royal Charter by

Queen Victoria in 1853, while the Standard Bank was founded in the Cape Province of South

Africa in 1862 by John Paterson. Both companies were keen to capitalize on the huge

expansion of trade and to earn the handsome amount of profits from financing the movement

of goods from Europe to the East and to Africa.

Both banks were prosperous in those early years. The Chartered Bank opened its first

branches in Bombay (Mumbai), Calcutta (Kolkata) and Shanghai in 1858, followed by Hong

Kong and Singapore in 1859. With the opening of the Suez Canal in 1869 and the extension

of the telegraph to China in 1871, the Chartered Bank was determined to expand and develop

its business. Traditional business was in cotton in Bombay, indigo and tea in Kolkata, rice in

Burma, sugar in Java, tobacco in Sumatra, hemp in Manila and silk in Yokohama.

In South Africa, the Standard Bank established a considerable number of branches. The bank

was prominent in financing the development of the diamond fields of Kimberly from 1867

and later extended its network further north to the new town of Johannesburg when gold was

discovered there in 1885. Half of the output of the second largest gold field in the world

passed through the Standard Bank on its way to London.

Both the banks, although they were separate entities, survived the First World War and the

Depression, but were directly affected by the wider conflict of the Second World War in

terms of loss of business and closure of branches. There were also long-term effects for both

banks as countries in Asia and Africa gained their independence in the 50s and 60s.

Each bank acquired other small banks along the way and spread their networks further. In

1969, the decision was made by both the banks to undergo a friendly merger. They decided to

counterbalance their network with expansion in Europe and US. Further expansion also took

place in Standard Chartered bank’s traditional markets in Asia and Africa. All appeared to be

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going well, but a hostile takeover bid was made for the Group by Lloyds Bank of UK in

1986.

When the bid was defeated, Standard Chartered Bank entered into a period of change. Like

many British banks, provisions had to be made against third world debt exposure and loans to

corporations and entrepreneurs who could not meet their commitments. Standard Chartered

Bank begun a series of divestments notably in the US and South Africa and entered into a

number of asset sales. In mid 1993, Sir Patrick Gillam became Chairman and he made two

points clear. Firstly, Standard Chartered Bank would grow and develop its strong franchises

in Asia, the Middle East and Africa using its operations in the UK and North America to

provide customers with a bridge between these markets. Secondly, it would focus on

customer, corporate and institutional banking, and on the provision of treasury services- areas

in which the Group had particular strength and expertise.

History of Grindlays Bank

Captain Grindlays established Grindlays and Company with partner in 1928. The name was

changed to Grindlays Christian and Mathew’s in 1839, which again changed to Grindlays and

company in 1853. The first branch was opened in India at Church Lane, Kolkata in 1854 and

the other Indian branches autonomous from London were opened by Grindlays and Company

in 1864. They were acquired by National Provincial bank Limited in 1924. National bank of

India acquired Grindlays and Company in 1858 and begun to operate as National and

Grindlays Limited.

Acquisition of ANZ Grindlays Bank by Standard Chartered Bank

In August 2000, the US$1.34 billion acquisition of Grindlays Bank was completed. This

made the Standard Chartered Bank the leading international bank in India and the other

countries of South Asia. The acquisition strengthened the Group’s competitive position in

Middle East and brought to the group a respected private banking business.

Standard chartered Bank has taken the advantage of the expansion opportunities. Buying

Grindlays from ANZ now propels it from number five to number one among international

banks in India, with some choice extra footholds in the Middle East. At 1.34 billion US

dollars, it is hard to complain that Standard Chartered Bank has overpaid. The financial ease

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BUSINESS ACTIVITIES OF THE GLOBAL SCB


is less compelling for ANZ shareholders, as there are advantages of getting out of a

strategically peripheral business.

This acquisition of Grindlays Bank has added 6000 employees and 4 countries to Standard

Chartered Bank’s existing network of 7000 employees and 570 offices in 50 countries. The

end result is that Standard Chartered Bank, which went into the 1997 Asian crisis with strong

business in Hong Kong, Singapore and Malaysia, emerges with additional core markets in

India and Thailand.

The deal has made Standard Chartered Bank the largest foreign bank by assets in India,

Pakistan and Bangladesh and the second largest in Sri Lanka and the United Arab Emirates.

The bank has been seeking to expand in the region since the end of the Asian economic crisis,

and has finally become successful in its expansion. The primary goal of the integration is to

combine the best of both the banks, and put right people in right jobs on the basis of fairness

and equitability. In September 2000, the group agreed to acquire Chase’s Hong Kong

consumer banking business for US$1.32 billion, which makes Standard Chartered Bank the

leader in Hong Kong cards. At that time it was also announced that the chartered Trust had

been sold to Lloyds TSB for 627 million pounds. Until September 2002, both Standard

Chartered and Standard Chartered Grindlays operated under the same management but as

separate entities. With effect from September 2002, there was not any Grindlays - only

Standard Chartered Bank.

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Standard Chartered Bank operates in every Asia pacific Market with exception of North

Korea and 60% of the group profit comes from Asia Pacific region.

Hong Kong continues to be the happy hunting ground for SCB as it contributes around 30%

of the group profit. With over 80 branches in Hong Kong and strong representation in China

especially in Shanghai the group is poised to dominate the banking industry there in years to

come. There exists a Resident group Executive Director to manage the operations there and

also in Singapore.

In other East Asian countries, the group has been gaining prominence in Malaysia, Taiwan

and Thailand, the group acquired 75% stake in Nakornthon.

SCB is the leading multinational bank in the Sub-Saharan Africa with prominent presence in

Kenya, Zambia, Zimbabwe, Botswana and Ghana. The group operations of the South Asia

and Middle East region are managed from Dubai.

Bank provides a full range of products and services to its all around the world, some of which

are mentioned below with a brief overview of the major business activities:

1. Global Consumer Finance

There are seventy-six branches and finance centers under this division in about ten countries

with a workforce of 1615 employees. Some of the services provided by this division are

unsecured personal loans, credit cards and retail store cards; vehicle related leases, etc.

Global Personal Banking

There are 410 offices/branches with a workforce of 12,000 employees working under this

division in 28 countries. Some of the services provided by this division are various kinds of

insurance and loans, various types of accounts, travelers' cheques, card money, etc.

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2. Global Corporate Banking and Institutional Banking

There are 350 branches/offices under this division. This division provides services in 42

countries. The services provided by this division are International Trade Management,

Institutional Banking, Treasury, Custody and Cash Management. This division operates on a

worldwide basis.

3. Global Custodial Service

There are 17 offices under this division and about 900 staff members in this division, operates

in fourteen countries and is headquartered in Singapore. Standard Chartered Equitor fulfils

Standard Chartered Bank's strategic commitment to providing custody and clearing services

in greater Asia. Standard Chartered Bank has one Asia's leading custodians for over 40

years. Equitor's main focus is on the following:

Commitment to quality

Dedication to customer needs

Sustained investment in people and systems

4. International Trade Management

This division is operational throughout the group and Standard Chartered Bank's core

strength is trade finance and services. With an experience of over 150 years, Standard

Chartered Bank has developed knowledge of trade finance, which is world class. Principle

services to importers are Import Letters of Credit; import Bills for Collection and Back-to-

Back Letters of Credit facilities.

Principle services to exporters include Export Letters of Credit, Direct Export Bills for

Collection, Bulk Letter of Credit Collection, Bonds and Guarantees.

5. Global Cash Management

This division is operational in all branches where the Group has a Corporate Banking and

Institutional Banking division. There are 100 employees working in this division. Standard

Chartered Bank recognizes the importance of Cash Management to Corporate and Financial

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Institutional customers, and offers a comprehensive range of services and liquidity

management. Services by this division are provided worldwide with stress on Asian delivery.

6. Global Institutional Banking

Through Standard Chartered Bank’s network of more than 600 offices in over 40 countries, it

is very well positioned to provide a wide range of services to institutional clients:

commercial, merchant and central banks; brokers and dealers; insurance companies; funds

and fund managers, and others. Offices in emerging markets of Asia, sub-Saharan Africa, the

Middle East, and Latin America are complemented by branches in the developed countries

such as USA, UK and Japan and the bank’s membership of the clearing systems in those

countries. The institutional banking group has network of offices in 25 countries throughout

Asia, North America, Europe, Africa and the Middle East. It provides Relationship managers

who are close to their customers and speak the local language. This wide network of

Institutional Banking facilitates transactions, introductions, problem solving and renders

advice and guidance on local trading conditions.

7. Global Electronic Banking

Electronic Banking provides various types of support through a wide range of operating

systems, sweeping transaction accessories with the provision of reporting features or other

special functions. There are 10 offices and 50 employees under this division, which operates

in 26 countries.

8. Problem Country Debt Unit

There is one office in this division with four employees working in it. Problem Countries

Debt Unit is the Group's provisional exposure to countries experiencing temporary external

liquidity problems, when such exposures are not externally secured or advanced on a

voluntary short-term basis.

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STANDARD CHARTERED BANK IN BANGLADESH


The Standard Chartered group is operating in 48 countries in various extents. These countries

are grouped in 5 regions based on their location business core focuses.

1. Africa: (Includes 11 countries) Botswana, Cameroon, Gambia, Kenya, Sierra Leone,

South Africa, Tanzania, Uganda, Zambia and Zimbabwe.

2. Asia Pacific: (Includes 17 countries) Australia, Brunei, Darussalam, Cambodia, China,

Hong Kong, Indonesia, Japan, Laos, Macao, Malaysia, Myanmar, Philippines, Singapore,

South Korea, Taiwan, Thailand, Vietnam.

3. Latin America: (Includes 6 countries) Argentina, Brazil, Colombia, Mexico, Peru and

Venezuela.

4. Middle East and South Asia: (Includes 10 countries) Bahrain, Bangladesh, India, Iran,

Nepal, Oman, Pakistan, Qatar, Sri lanka, and United Arab Emirates.

5. UK and USA: (Includes 4 Countries) Falkland Islads, Jersey, United Kingdom and USA,

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The Chartered Bank started operating in Bangladesh in 1948, opening a branch in

Chittagong. The branch was opened mainly to facilitate the post-war reestablishment and

expansion of South and Southeast Asia. The Chartered Bank opened another branch in Dhaka

in 1966, where it is still headquartered. After the merger of the Chartered Bank with the

Standard Bank in 1969, the Standard Chartered Bank took up a program of expansion. It

increasingly invested in people; technology and premises as its business grew in relation to

the country's economy. In 1993, there was an organizational re-structuring, which led to a

substantial expansion of the Bank's business. Today the bank has in total four branches in

Dhaka apart from the Chittagong branch, including an offshore branch at the Savar Export

Processing Zone.

Bangladesh is under the MESA region, with the controlling office in Dubai. Its

correspondent relationship with Sonali Bank, the largest bank in Bangladesh, gives its

customers access to all major centers in the country. Standard Chartered Bank's worldwide

network facilitates convenient connections with foreign trade and remittance business.

Standard Chartered Bank's branch banking license in Bangladesh allows it to offer a full

range of banking services.

Since the organizational restructuring in 1993, the amount of deposits and loans in 1997 has

increased by more than five times. There is an overall increasing trend of Standard Chartered

Bank's market share in terms of deposits and advances. In 1995, the market share in terms of

advances was 20%, which peaked to 29% in 1996 and fell by 3% in 1997. In the case of

deposits, the market share of Standard Chartered Bank increase 16% in 1995 to 18% in 1996,

and increased by another 2% in1997. In terms of profit before taxes, there is a rise from eight

million BDT in 1990 to its highest amount of 750 million BDT in 1998. The largest increase

of 438% took place in 1991. Although the growth rate began to decline gradually from 1993

(from a 170% to 5% in 1998) the overall increase reflects a substantial positive trend.

Standard Chartered Bank's growth in terms of profit and market share depicts an overall

positive trend.

After the Acquisition

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This acquisition has made Standard Chartered/Standard Chartered Grindlays bank the largest

foreign bank in this country.

An integration team from Standard Chartered Bank in London is to come time to time in

Dhaka to settle the process of the acquisition of the ANZ Grindlays Bank. The team

comprising of officials from both Standard Chartered and Grindlays are working on staff and

branch rationalization.

But the whole process will take about one and a half years and meanwhile both the banks will

continue to work as legal entities. Though there may not be many changes at the lower and

mid-levels of the banks, there may be some changes and redundancies in the higher level. But

those who will have to leave will get a handsome compensation package.

The integration was comprehensive and is being managed as a distinct process. Meanwhile,

the business is kept going to provide uninterrupted customer service and to deliver the desired

results. Standard Chartered Bank after acquiring Grindlays expects to relocate its own and

acquired branches upon regulatory consent. There are places where both SCB and SCGB

have branches and there are other places with perceived demand for branches, but the

Bangladesh Bank does not want to give permission for opening any new ones. SCB, known

for its technological edge is the forerunner in automated teller machines, telebanking,

treasury and lately corporate banking solutions. Grindlays is the market leader in credit cards,

corporate advisory services and personal banking.

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MISSIONInternship Report: HRMP in Standard Chartered Bank

SCB Bangladesh operates with the same mission as the group SCB subscribes to worldwide.

The bank in Bangladesh has the best and dedicated human resources in the privet sector

banking. With an experience of 150 years, the bank has a formidable efficiency in the

operational areas in which it operates. The bank has a mission to build and grow on its 150

years of experience and the positive image that it has earned over the years. The underlying

factor on its business mission is manifested by its five values: “ Responsive, International,

Trust Worthy, Responsive and Courageous.” Since SCB as a bank caters to the higher

echelon of the society, its operational strategies relies on trust and confidence building with

the customers and offer them the highest sense of security and confidentiality. It has the

dedicated attitude toward the community in which it operates and it wants to grow and

flourish along with its customers and community. This credo of the bank is categorically

expressed by the Group Executive Director. Mr. Chris Keljik during his Dhaka entourage in

August 2003. Quoting him in verbatim- “We want to make money in ethical way but we also

want to address the very fact that there are people who are less fortunate than us and needs

help. So we have a mission to ensure good corporate governance with sound development of

human resources to build a solid workforce to attain our objectives and give back to society

by involving ourselves with them”.

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CUSTOMERS

IndividualOrganization

Consumer Banking Corporate & Institutional Banking

Treasury


Two of the business target specific customer groups:

Consumer banking meets the needs of individual customers.

Corporate and institutional banking meets the needs of companies, banks and other

financial institutions.

Figure 2.1: The Relationship between Respective Customers to Different Departments of

SCB

Companies Banks and other

Financial Institutions

This focus allows the business to develop an in-depth understanding of the banks customer’s

evolving requirements. This in turn enables us to develop the products and services that help

SCB stand out from the competition. Treasury provides support to the customers of both

these business and develops customers (both individual and organizational) of its own.

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ORGANIZATIONAL STRUCTUREInternship Report: HRMP in Standard Chartered Bank

The Standard Chartered Bank in Bangladesh has its headquarters and three branches in

Dhaka and one branch in Chittagong, while they are going to open one in Sylhet very soon.

While the full range of services is available at the headquarters, other branches offer specific

services appropriate for the location. At the headquarters, the bank mainly consists of two

divisions:

Business

Support

The business division has the following departments:

Corporate Banking Group (CBG) : Standard Chartered Bank offers its local

customers a wide variety of financial services. All the accounts of corporate clients,

which mainly comprise the top local and multinational companies operating in

Bangladesh, are assigned a Relationship Manager (RM) who maintains regular and

close contact to cater to their needs. The objective of this department is to maintain a

thorough knowledge of the client's business and to develop positive relationships

with them. This is maintained through interactions to offer timely advice in an

increasingly competitive business environment. The expertise of the Institutional

Banking and Treasury groups is also available whenever required. The unique Off-

shore Banking Unit (OBU) in Savar offers a full range of facilities to overseas

investors. The Corporate Banking Group in Bangladesh has displayed a spirit of

community involvement by working with NGOs to underwrite soft loans. Standard

Chartered Bank offers its corporate customers:

The wide varieties of lending needs are catered to with skilled and responsive

attention.

The trade finance of Standard Chartered Bank takes care of the commercial activity

related issues, particularly those related to import and export finance services. Some

of the services are:

Project finance and investment consultancy.

Syndicated loans.

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Bonds and Guarantees.

Local and International Treasury products.

Trade finance facilities including counseling, confirming export L/Cs and issuing of

import L/Cs, backed by its international branch and correspondent loan network Bond

and Guarantees Project finance opportunities for import substitution and export

oriented project.

Treasury (TSY) : The foreign exchange and money market operation of the Standard

Chartered Bank in the world is extensive. Exotic currencies happen to be one of its

specials areas of strength. A 24 hour-service is provided to customers in Bangladesh

through the Bank's network of dealing centers placed in the principal of the world.

The Bank's treasury specializes in offering solutions to those who wish to manage

interest rate and currency exposures that result from trade, investment and financing

activities of other dynamic economies of the region. Treasury operations are

developed in line with changing market conditions to provide the best services to its

customers. According to BAFEDA (Bangladesh Foreign Exchange Dealers

Association), Standard Chartered Bank presently controls 42% of the local foreign

exchange market's traded volume.

Institutional Banking Group (IBG) : The IBG of Standard Chartered Bank offers a

wide variety of products and services to banks and financial institutions. It has global

links with leading banking institutions and agency arrangements through its network

of offices in 40 countries. The Bank offers a full range of clearing, payment collection

and import-export handling services. The bank offers foreign missions, voluntary

organizations, consultants, airlines, shipping lines, and their personnel the following

financial services:

(a) Current accounts in both Taka and other major foreign currencies

(b) Convertible Taka accounts (these funds are freely convertible to major

international currencies)

Consumer Banking (CB) : Superior retail banking services comprising a wide range

of deposit and loan products are offered by the Standard Chartered Bank to its

individual customers. The Consumer Banking division constantly faces challenges

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and meets them by developing new products and services to fulfill the specific

requirements of local and foreign customers. Bank offers a 24-hour service in

Bangladesh through its Moneylink ATM network and Phone-link Phone Banking

services.

Custodial Services (CUS) : Headquartered in Singapore, Standard Chartered Equitor

fulfils the group's strategic commitment to the provision of custodial service in Asia.

Equitor's customers are primarily foreign global custodians and broker/dealers

requiring cross border information as well as sub-custodian services. Standard

Chartered Bank, Bangladesh is responsible for the planning in Bangladesh, but the

overall management of the custody business is based on Equitor's international

business strategy.

Standard Chartered Bank is primarily corporate driven. Corporate banking generates

more than 40% of its revenue group while Treasury contributes more than 20% to the

overall revenue. The rest is generated from Personal Banking, Custodial services and

Institutional Banking.

The Support division provides assistance to the above business activities and consists

following departments:

Operations : Operations is part of the support division that helps to run the businesses

of the bank in a smooth and controlled manner. Since it helps mainly in processing the

works of the business units, any mistakes made can be easily detected and on time.

Following are the main functions of the operations department:

(a) Central operations deals with the closing and opening of accounts and other

payment and account related processing of the Personal Banking division

(b) Treasury operations help to deal with the processing works of the treasury

division. Loan Administration Unit (LAU) deals with the processing of the

Corporate Banking division.

(c) Operations also have a department that deals with internal projects that arises

from the need to deal with certain problems or to make certain changes.

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Finance, Administration and Risk Management : Although it is a financial

organization itself, Standard Chartered Bank needs financing to run its operation.

Finance, Administration and Risk Management departments are the ones that are

primarily concerned with maintaining a level of cost incurred that do not cross the

threshold leading the company to bankruptcy.

Information Technology Center : This department is instrumental in the running of

all the computerized operations of the bank. They help in the implementation and

generation of computerized reports. Another major duty of the department is to

maintain communication with the rest of the world.

Human Resource Department : This department manages recruitment, training and

career progression plan. Standard Chartered Bank highlights the importance of

developing its people to create a culture of customer service, innovation, teamwork

and professional excellence.

Legal and Compliance : In the UK, Standard Chartered Bank is regulated by the

Bank of England, while in Bangladesh local banking laws regulate it and rules set by

the Ministry of Finance and Bangladesh Bank. It also encourages its staff to conform

to an internal culture of ethical behavior and sensitivities to the culture and religion of

the country. Some of the key areas that the Legal & Compliance department has to

take care of are: any kind of legal issues, to advise the CEO regarding all matters and

the management on legal and regulatory issues, correspond regulatory compliance

issues to MESA Regional Head of Compliance, and supervise internal control (e.g.

internal audit).

External Affairs : This department deals with advertising, public relations,

promotions, partial marketing etc. that involve disseminating new products and

services to customers and above all ensuring service quality.

Chain of Command

Chartered Bank in Bangladesh follows a hierarchical pattern of command. The Chief

Executive Officer (CEO), Mr. Osman Murad reports to the Regional General Manager,

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Chief Executive Officer

Support Manager to CEO

Head of Client

Relationships

Head of Finance &

Admin.

Head of GSAM

Head of Consumer Banking

Head of Human

Resource Dept.

Chief Operating

Officer

Head of Treasury

Senior Credit Officer

Head of Information Technology

Head of Institutional

Banking

Head of Legal & Compliance


MESA in Dubai. All the department heads at the headquarters report to the CEO. A manager

or senior manager who reports to the head of the division heads the major business activities.

In Chittagong, however, since there are two major business activities, a manager or senior

manager, who reports directly to the head of the respective division in Dhaka, heads each.

The Custodial Service division at the headquarters reports to the Head of Corporate Banking.

The respective branch managers are responsible for the performance of their unit. Each

branch is organized functionally along line divisions with some support facilities and the

manager assigns tasks to his/her subordinate personnel and supervises their performance,

instructions are often given without necessary details and clarifications.

Figure 1: Organizational Organogram

All the staff members of Standard Chartered Bank belong to an internal trade union known as

"Standard Chartered Bank Employees Union" the clauses of which are reviewed and agreed

upon every two years. The last agreement was made on January 1, 1998.

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MANAGEMENTInternship Report: HRMP in Standard Chartered Bank

The goal of Standard Chartered Bank is to be the "Bankers of First Choice." Towards that

goal, the overall planning in the Organization is done at the headquarters level in Dhaka by a

Management Committee (MANCO), headed by the CEO and consisting of the business heads

of Corporate Banking, Consumer Banking, Treasury, and from the support divisions the

heads of Human Resource, Operations and Finance Departments. They meet once a month, or

when a special situation arises, to plan the strategic decisions. The decision making, although

apparently based on a top-down approach, leaves room for participation down to the level of

department heads, which are responsible for carrying out the planning of their department

within the broad guidelines set by MANCO.

Among the broad strategic objectives are:

Creating a congenial work environment

Modernization of the Management Information System (MIS) to achieve full automation

by drastically cutting down on the paper work in the long-run

Focusing on service quality and consumer needs

Recruiting and maintaining top-grade, efficient employees

To invest in those technological systems which will upgrade and enhance financial

services.

Creating an excellent brand image of the Bank

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PEST ANALYSISInternship Report: HRMP in Standard Chartered Bank

A PEST analysis is an analysis of the external macro-environment that affects all firms

including banking industry. P.E.S.T. is an acronym for the Political, Economic, Social, and

Technological factors of the external macro-environment. Such external factors usually are

beyond the firm's control and sometimes present themselves as threats. For this reason, some

say that "pest" is an appropriate term for these factors. However, changes in the external

environment also create new opportunities and the letters sometimes are rearranged to

construct the more optimistic term of STEP analysis.

Many macro-environmental factors are country-specific and a PEST analysis will need to be

performed for all countries of interest. A scan of the external macro-environment in which

the firm operates can be expressed in terms of the following factors:

Political

Economic

Social

Technological

The acronym PEST (or sometimes rearranged as "STEP") is used to describe a framework

for the analysis of these macro environmental factors.

Political Factors

In case of Bangladesh, political instability like hartal makes difficulties in both domestic and

international trade. As a result banking transactions are also stuck. Beside this corruption is

another factors which hampers business environment. Growing US influence though

ambiguous, relations with the US remain all important, strategically and economically. The

US remains a guarantor of the balance of power in several parts of the region.

Limited EU Influence: The EU shows increased interest and involvement in trade

aid and good governance issues in Asia, but it is not a threat to the autonomy of the

states.

Political factors include government regulations and legal issues and define both formal and

informal rules under which the firm must operate. Some examples include; Political stability,

- 23 -


Legal framework for contract enforcement, Trade regulations & tariffs, Pricing regulations,

Taxation - tax rates and incentives, Wage legislation - minimum wage and overtime,

Mandatory employee benefits and Industrial safety regulations all these affects banking

industry.

Economic Factors

Economic factors affect the purchasing power of potential customers and the firm's cost of

capital. Banking industry is not an exception too. The examples of factors in the macro

economy are Type of economic system in countries of operation, Government intervention in

the free market, Comparative advantages of host country, Exchange rates & stability of host

country currency, Efficiency of financial markets, Infrastructure quality, Skill level of

workforce, Economic growth rate, Unemployment rate, Inflation rate, Interest rates.

Globalization and the increase in free trade zones will impact on the autonomy of

the state. International cooperation and others financial economic actors will play an

increasingly important role.

Increasing impact of globalization on a wide range of social and economic rights

of millions of poor peoples across the region including their right to water, health and

housing.

Economic restructuring and the transition to a market economy is likely to

continue to impact on rule of law issues with a growth in corruption, organized-crime

and social unrest (e.g. China, India). There is growing economic rivalry and

increasing fears of Chinese domination.

Feminization of labor: growing presence of free trade zones and export processing

zones employing women in often extremely poor working conditions.

- 24 -


Social Factors

Social factors include the demographic and cultural aspects of the external macro

environment. These factors affect customer needs and the size of potential markets. Some

social factors include health consciousness, population growth rate, age distribution, career

attitudes, emphasis on safety, class structure, Education, Culture, Attitudes and Leisure

interests.

Poverty affects hundred of millions of people across the region, and there is a

growing anti-globalization movement (partly linked to anti-American sentiments)

especially in Bangladesh (South-Asia).

Access to medical care food, housing and social welfare will remain restricted in

Bangladesh with the state failing to provide basic provisions. This is especially true in

the situation of armed conflict.

Technological Factors

Technological factors can lower barriers to entry, reduce minimum efficient production

levels, and influence outsourcing decisions. Some technological factors include R&D

activity, automation, technology incentives, rate of technological change, Recent

technological developments, Technology's impact on product offering and Impact on cost

structure.

New technologies including the internet, email and mobile phones will continue to open

possibilities for communication, information sharing and cooperation but this resource

remains inaccessible to the many people in the region who are poor or illiterate or in other

states due to state attempts to control freedom of expression.

- 25 -

SWOT ANALYSIS – SCB vs. MARKET

StrengthWeakness

OpportunityThreat


The acronym for SWOT stands for –

The SWOT analysis comprises of the Organization’s internal strength and weakness and

external opportunities and threats. SWOT analysis gives an organization an insight of what

they can do in future and how they can compete with their existing competitors. This tool is

very important to identify the current position of the organization relative to others, who are

playing in the same field and also used in the strategic analysis of the organization.

Strengths

– Dominant market position in chosen markets

– Customer franchise

– Strong regional focus

– Product diversity

– Experienced and efficient management team.

– Better infrastructure facilities.

– Company reputation and goodwill.

– Sound profitability and growth with good internal capital generation.

– Larger corporate client base.

Weaknesses

– Limited headroom for growth in top names

– SQ: not at par with customer expectation

– Lack of up-country reach

– Perceived lack of flexibility vis-a-vis local banks

– Turnover and long term people issues

– Small market share.

– High concentration of fixed deposit and large scale of loans.

– Lack of full-scale automation.

Opportunities

– Untapped Middle Market

- 26 -

SWOT ANALYSIS – SCB vs. TOP 4 COMPETITORS


– Acquisition of PCB clients

– State-owned Enterprises (SOE) Sector

– Acquisition of Banks/NBFI

– Islamic Banking

– Structured Products

– Scope of market penetration through diversified products.

– Automation of transaction processes and online branch banking.

– Government’s policy of encouraging heavy inflow of foreign investment.

– Regulatory environment favouring privet sector development.

– Increasing purchasing power of people.

– Increasing trend in international business.

Threats

– Aggressive competition from Int. & local banks

– Political volatility & regulatory impediments

– Loss of people to competition

– Privatised/re-structured NCBs

– Increasing competition for market share in the industry.

– Frequent changes of banking rules by central bank.

– Market pressure of lowering of lending rate.

– National and global political unrest.

– Default culture of credit.

- 27 -


- 28 -

SCB Eastern Prime HSBC Citibank

STRENGTHS

-Market

dominance

-Product

diversity

-People

-Flexibility

-Appetite for

term lending

-Flexibility

-Appetite

for project

finance

-Service

quality

-Quick

Turnaround

-Global Cash

Mgt.

-Strong

network

WEAKNESSES

-Service

quality

-Perceived

inflexibility

-Limited

product suit

-Limited

product

suit

-

Technolog

y platform

-Product &

market

knowledge

-Lack of

focus -Lack

of credit &

country risk

appetite

OPPORTUNITI

ES

- Middle

Market

- PCB

Clients

-Islamic

Banking

-Structured

products

- MNCs

- Fx products

- Syndication

-Cash Mgt.

-Fx

products

-Increase

wallet share

-Govt. Sector

-CM/CF

product

-Increase

wallet share

in Cash &

Trade

-CM/CF

products

THREATS

-Competition

-Regulatory

restrictions

-Privatized

NCBs

-Competition

both local

and Int.

banks

-

Competitio

n both

local and

Int. banks

-

Competition

-Regulatory

restrictions

-Privatized

NCBs

-Competition

-Extreme

sensitivity to

political

unrest

SCB’S PERFORMANCE IN BANGLADESHInternship Report: HRMP in Standard Chartered Bank

- 29 -

Revenue Growth

0

20

40

60

80

100

120

SC

B

Isla

mi

HS

BC

Prim

e

EB

L

DB

BL

Dhaka

Citi

bank

Bank

Asia

CB

CL

US

D M

io

2002 2003

2004 2005

SCB leads in

Profit After Tax

0

10

20

30

40

50

60

SCB

Isla

mi

HSB

C

Citib

ank

Prim

e

EBL

Dha

ka

Bank

Asia

DBB

L

CBC

L

USD

Mio

2002 2003

2004 2005

SCB dominates in Profits

0.1%

2.1%

0.1%

SCB Citibank N.A.HSBC

Trading Profit contribution by Bangladesh Operations (Percentage over Group TP)

TP contribution of Bangladesh SCB to the group is 21 times that of the other two banking giants More than twice as large as Citibank N.A. or HSBC in Bangladesh


Revenue Trend Analysis (2004-2007F)

RevenueUSD M 2004 2005 2006 2007 (F)Consumer 31.20 38.20 45.22 52.55 Commercial 25.22 29.21 31.61 36.03 Global Market 23.99 22.61 20.61 24.10 Other Banking - - (0.22) (0.51)Country 80.41 90.02 97.44 112.17

Exchange Rate 59

The revenue of three sectors of Standard Chartered Bank is shown in graph below-

- 30 -

Trend in Revenue: Country

80.4190.02

97.44112.17

-

20.00

40.00

60.00

80.00

100.00

120.00

140.00

2003 2004 2005 2006 (F)

US

D M


Trading Profit Analysis (2004-2007F)

Trading ProfitUSD M 2004 2005 2006 2007 (F)Consumer 12.62 16.55 19.37 22.50 Commercial 15.35 19.36 20.13 20.33 Global Market 21.14 19.63 17.16 19.15 Other Banking (1.20) (0.94) (0.77) (0.05)Country 47.92 54.60 55.89 61.93 Exchange Rate 59

- 31 -

Trend in Revenue: Consumer

31.20

38.20

45.22

52.55

-

10.00

20.00

30.00

40.00

50.00

60.00

2003 2004 2005 2006 (F)

US

D M

Trend in Revenue: Global Markets

23.9922.61

24.1020.61

-

5.00

10.00

15.00

20.00

25.00

30.00

2003 2004 2005 2006 (F)

USD

M


- 32 -

Trend in TP : Consumer

12.62

16.55

19.37

22.50

-

5.00

10.00

15.00

20.00

25.00

2003 2004 2005 2006 (F)

US

D M

Trend in TP: Global Markets

21.1419.63 19.1517.16

-

5.00

10.00

15.00

20.00

25.00

2003 2004 2005 2006 (F)

USD

MTrend in TP: Country

47.9254.60 55.89

61.93

-

10.00

20.00

30.00

40.00

50.00

60.00

70.00

2003 2004 2005 2006 (F)

US

D M

Osman MoradCEO

Ahmed A Shah Head of Client Relationships

Head Client Relationships India & South Asia

Humaira Azam Head of Financial Institutions

Faisal Rahman Head of Global Corp

Rahel AhmedHead of Local Corp

Mirza Aminur Rahman Head of Transaction Banking

Nadia Mahbub Support Manager Khandakar Kayes Hasan Business Planning Manager

Mahfuzur Rahman Head of Commodity Corp

Arunangshu Dutta Head of Sec Services

Tahia Khalil HO WB Operational RiskNasreen Sattar Regional Acct Manager


Organogram

- 33 -

RECENT CHANGES IN SCBInternship Report: HRMP in Standard Chartered Bank

Recently SCB has reformed its Values and launched the Logo.

The previous values were -

Helpful

Responsive

Efficient

The present values are –

Trustworthy

Courageous

Responsive

International

Creative

The Logo has changed

From -

To -

SCB has launched the new Logo in its web site and in the Middle East countries. In

Bangladesh it will be officially launched in the third quarter of this year. From April 2002 it

has been displaying the new screen saver in all computers.

- 34 -

RECOMMENDATIONSInternship Report: HRMP in Standard Chartered Bank

SCB has some threats and weaknesses, which will turn down the operation of this bank to a

great extent. It is been seen that customer complaint has increased recently than before for

this reason it is high time that the employees are trained up more to avoid future mishaps.

Some recommendations are proposed below.

In the deposit accounts the new emerges in the market are providing a higher rate

of interest compared to SCB and for this reason the MANCO might give a second

thought about re-fixing the rate.

The latest entrant BRAC Bank is planning to launch a similar product like

Personal Loan for Consumers with a lower rate and charge. SCB should take

precautionary measures to keep their products viable to customers both new and

old.

SCB should lower its charges immediately to prevent the loss of customers. The

prime dissatisfaction with SCB is with the high interest rate and various fees it

charges from its customers, and competitors have grabbed a big portion of its

customer-base by charging lower rates and charges/offering higher saving rates.

SCB senior officials should be more cooperative to their subordinates and

arrange for workshops/ training programs to keep them motivated in their work.

- 35 -

ORGANIZATION STRUCTURE – HR DEPARTMENTInternship Report: HRMP in Standard Chartered Bank

In this department, the (HOHR) holds the topmost position in the hierarchy. Under the Head

of Human Resources, there are 1 Senior Relationship Manager (SRM), 2 Relationship

Managers (RM), 1 Resourcing Manager, 1 Operations Manager and 1 Officer directly

reporting to him.

Fig. 1: Organogram of Human Resource Dept, SCB

- 36 -

INTRODUCTIONInternship Report: HRMP in Standard Chartered Bank

The concept of human resource management (HRM) has received focused attention for

around 20 years, with the method being that “many US companies found they were being

rivaled and in some instances overtaken, in markets they had dominated” (Ehrlich, 1994, p.

492).

Human resource development (HRD) is presented in this paper as the delivery system used

by organizations to develop individuals through training and development, career

development and organizational development. Moreover, (Mankin, 2001, p. 74) stated that

“HRD is a concept that comprises a variety of activities and processes” (Mankin, 2001, p.

74).

There are attempts taken by the different academics, researchers, and practitioners to define

the concept of Human Resource Development (HRD) and providing frustrating, elusive, and

confusing thoughts (McGoldrick et al., 2002, p. 18). Although a universally accepted

definition of HRD is absent, several scholars have tried to identify its essential elements. For

instance, McLagan and Suhadolink (1989) grouped organization development, training and

development, and career development as the primary factors of HRD. Furthermore Swanson

and Holton (2001, p. 4) define HRD as,

“A process for developing and unleashing human expertise through organization

development and personnel training and development for the purpose of improving

performance.”

This definition is more inclined towards individuals, organizations and work groups or teams.

McLean and McLean (2001) have tried to define HRD from an international perspective as

follows:

“Human resource development is any process or activity that, either initially or over the long

term, has the potential to develop adult's work-based knowledge, expertise, productivity and

satisfaction, whether for personal or group, team gain, or for the benefit of an organization,

community, nation, or ultimately, the whole of humanity (p. 10)”.

Regarding defining the concept one cannot discuss HRD without acknowledging the various

disciplines from which it has taken. Human resource development has borrowed from other

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disciplines such as systems theory, psychological theory, and most recently economic theory

(Aliaga, 2001; Swanson, 1999).Thus the difficulty with defining HRD reflects the evolving

nature of the field.

In a more comprehensive definition, Gilley and Maycunich (2000) define HRD as:

“…The process of facilitating organizational learning, performance, and change

through organized interventions and initiatives and management actions for the

enhancing an organization's performance capacity, capability, competitive readiness,

and renewal (p. 6)”.

In a study Garavan T.N., Gunnigle, P., Morley, M. (2000) shows that HRD is mainly

concerned with capabilities, psychological contracts, and learning organization or

organizational learning. In contrast, Holton (2000) argues that the debates on the meaning of

HRD focus on the learning versus performance perspectives. Thus we can say that learning,

performance, and change are three important elements that define HRD.

Statement of the Problem

Recent facts have shown human resource management practices (HRMP) have a positive

influence on organizational performance. Ramsay, H., Scholarios, D., Harley, B. (2000)

demonstrated that the notion of HRMP impacting on organizational performance through a

“high road” approach has become a key element in HR. This “high road” approach asserts

that some HRMP are universalistic, appropriate, and advantageous for all firms.

Accordingly, organizations from different sectors, across industries, and through different

time periods should use these HRMP. Nevertheless, researchers have yet to examine in depth

the provable influence of HRMP under these different conditions. Unfortunately, researchers

who assert the universality of certain HRMP are fail to agree what constitutes those practices

(Delaney and Huselid, 1996; Harel and Tzafrir, 1999; Huang, 2001a, b; Huselid, 1995;

Pfeffer, 1994). For example, Harel and Tzafrir used eight strategic HRMP: grievance

procedure, incentive compensation, participation, promotion from within, recruitment,

selection, and training. Others used innovative work practices such as total quality

management and quality circle. Some saw employment security and employee ownership as

best practices (Pfeffer, 1994), while others did not mention them (MacDuffie, 1995).

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The multiplicity of what constitutes universalistic HRMP represents a challenge to

organizational scholars. Little empirical research has focused on the effect of different points

in time on the relationship between so-called universalistic HR practices and organizational

performance (Youndt et al., 1996). Standard Chartered Bank wants to identify whether there

is any positive correlation between HRMP and organizations performance. A study by

Boselie and Dietz (2003) discovered that training, participation, information sharing, as well

as compensation are frequently used as a part of HRMP.

Similarly, Den Hartog and Verburg (2004) focused on selection, incentive pay, participation,

training, etc. as HRMP. Moreover, Wright et al. (2005) based their analysis on selection,

training, pay for performance, and participation. Using these studies, several practices have

been identified (i.e. selection, training, participation, compensation, and internal labor

market) that are generally used as a starting point and appear to affect firm performance

under all circumstances. This list is not complete but encompasses many of the relevant

HRMP in earlier empirical and theoretical studies.

Therefore, the current study proposes compensation, participation, training, and selective

hiring as strategic HRMP, the determinants of organizations performance for Standard

Chartered Bank.

Objective of the Study

A decrease in the magnitude of traditional sources of competitive success has led to the

increased significance of human resources as part of an organization's tangible and intangible

resources having the potential for continuous organizational success (Barney, 1986, 1991,

1995; Von Glinow, 1993; Lado and Wilson, 1994). The new model of human relations views

management as the primary performer in the employment relationship and relates to HRMP

as “good things”. The universalistic perspective has been proposed as a key approach in

human resource management literature, and as other perspectives, it plays a fundamental role

in explaining different levels of organizational performance.

The universalistic perspective asserts that there is a simple direct relationship between several

HRMP and organizational performance (Delery and Doty, 1996). As a result, a universal

human resource management practice would directly influence organizational performance,

remaining all other things constant.

- 39 -












According to the universalistic perspective, organizations from different sectors, across

industries, and through different time periods should use a series of select human resource

management practices (HRMP).

The main purpose of this paper is to investigate whether there is any difference in the

relationship between compensation, participation, training, and selective hiring with the

organizational performance across time.

Significance of the Study

First, it will help researcher to understand the relationship between training,

participation, and employee selection with perceived organizational performance.

Second, Human Resource is an emerging concept in Bangladesh and organizations such

as Standard Chartered Bank put much more emphasis on this department so this study

will help the organization as well. In this regard, this research will help to increase

organization’s performance in a way the employee of the organization will think.

Third, it will encourage further study in this area and will provide useful guidelines for

this type of research.

Research Timeline

Table 2: The Research Time line

2007 November Research Proposal Writing

2007 December Company Overview and Literature Review

2008 January Pilot Testing Data Collection Procedure

2008 March Data Analysis and Interpretation of Findings

2008 April Final Redraft of Complete Manuscript

2008 April Submission of Research Paper

- 40 -

REVIEW OF THE LITERATUREInternship Report: HRMP in Standard Chartered Bank

Literature review distills the existing literature in a subject field; the objective of the literature

review is to summarize the state of the art in that subject field. From this review of earlier and

recent work, it becomes possible to identify areas in which further research would be

beneficial. Indeed, the concluding paragraphs of the literature review should lead impeccably

to research propositions and methodologies. It is therefore important that the literature review

is focused, and avoids the more comprehensive textbook-approach.

Training

It is reasonable to suggest that training has been seen as a very functional part of HRM,

dominated by technical questions which have restricted the capacity for wider alternative and

critical perspectives (Huselid, 1996).

Training has always been recognition of the value it has to the national economy, however,

this tended to be primarily as a response to skill shortages until the 1970s Barraud-Didier's

(2004). Recent accounts have challenged assumptions about training: firstly, it was simply

functional in nature. Secondly, the assumption that training was almost exclusively about

skill development has been challenged. Thirdly, the implication that employees generally

benefited have been questioned, particularly in respect to their opportunity to transport skills

and knowledge throughout external labor markets (Hodson, 2002).

Increasingly, training was linked to internal factors such as culture and commitment, and

external factors such as suppliers and customers (e.g. in the finance industry, studies by Kato

and Morishima (2002) where employees sell a range of financial products as part of a

marketing strategy, and Wilson’s (1994) study of the strategy of introducing a new

management information system and a TQM programmed to “…refocus staff perspective on

the accomplishment of the organization’s goals” (Wilson, 1994, p.122).

In a study MacDuffie (1995) said that, though training is a labor cost issue it is probably the

most visible HRM function and the one most easily targeted by management. MacDuffie

(1995) suggest that contrary to the conventional market view of training, a complex

combination of institutional and market factors did not lead to a deep cutback in training.

Some employers engage in cost reduction during recession, some appear to regard the

- 41 -








continuation or expansion of training as crucial to their performance in their product market

Kato and Morishima (2002).

Relationship between Training and Perceived Organizational Performance

One of the most common practices that appear in the different journal as a best HRMP

practice is training. Pfeffer (1998) and Pfeffer and Veiga (1999) mentioned in their article

that, training as one of seven practices of successful organizations. Harel and Tzafrir (1999)

found that the single HR practice that most influences perceived organizational performance

is training. Other studies have also viewed training activities as a potential universal best

practice (Arthur, 1992; Delaney and Huselid, 1996; Huselid, 1995; MacDuffie, 1995;

Youndt et al., 1996).

In a study of 25 semiconductors manufacturing Hatch and Dyer's (2004) revealed that

statistical process control training for equipment operators resulted in significantly fewer

defects in the produced products. In a study Delaney and Huselid (1996) found a positive and

significant relationship between training and perceived organizational performance. Guerrero

and Barraud-Didier's (2004) study of “High-involvement” they found a significant link

between training and organizational performance.

Employee Participation

One of the key variable in this study is employee participation is managerial style. This is

because the greatest opportunity for employees to get involved in issues that affect them is by

developing a constructive relationship with their immediate boss W. David Rees, Christine

Porter (1998 pp. 165-170). They also suggest that, formal schemes of employee participation,

whether direct or indirect critically depend on the enthusiasm and ability of line management.

In assessing the effectiveness of formal schemes of employee participation it is necessary to

find out how they really operate in practice. In a study of Hodson (2002) said that, if

organizations really want employee participation, they need to review the effectiveness and

attitudes to involvement of their managers at all levels.

- 42 -
















Relationship between Employee Participation and Perceived

Organizational performance

Another HRM practice that many researchers believe increases organizational performance

and decreases employees' negative behavior is employee participation (Arthur, 1992; Batt et

al., 2002; Hodson, 2002; Kato and Morishima, 2002; Pfeffer, 1994). Batt's (2002) study of

customer call centers found that employee participation in decision-making decreased the

quitting rate. Hodson (2002) suggested in a study that employee involvement reduces

workplace conflict and improves work life experiences. Kato and Morishima (2002) found

that employee involvement practices, after a long developmental period, led to a significant

8-9 percent increase in productivity. Li (2004) found that participatory management has a

positive effect on productivity of state-owned enterprises in China. Karami, A., Analoui, F.,

Cusworth, J. (2004) revealed the high positive relationship between HR managers'

involvement in formulation of business strategy and its implementation in the electronic

manufacturing industry. Concentrating on middle management involvement, Wooldridge and

Floyd (1990) found that generating options is closely associated with qualitative

organizational performance. In a similar vein, MacDuffie (1995) found a positive correlation

between the number of suggestions made by employees and employee involvement.

Employee Selection

The selection process determines the decisions as to which candidates will get employment

offers. Throughout the history of Industrial, Work and Organizational (IWO) Psychology,

issues employee selection, and assessment have featured prominently in the scientific and

pragmatic agendas that fuse our discipline (Neil Anderson, Filip Lievens, Karen van Dam,

and Ann Marie Ryan, 2004). Indeed employee selection has been one of the central pillars of

the scientific foundations of IWO psychology in North America, Europe, and the rest of the

world (Neil Anderson et. el).

- 43 -















Relationship between Employee Selection and Perceived Organizational

Performance

The aim of these practices is to improve the fit between employees and the organization,

teams, and work requirements, and thus, to create a better work environment. In doing so,

selection may be seen as an essential tool for organizational performance (Terpstra and

Rozell, 1993; MacDuffie, 1995). For example, Delaney and Huselid (1996) observed that

staffing selectivity has a positive impact on perceived organizational performance. Shipton,

H., Fay, D., West, M., Patterson, M., Birdi, K. (2005), noted the role sophisticated HR

practices such as selection have in predicting product innovation and in production

technology innovation. Rowden (2002) conducted in-depth interviews with key managerial

and non-managerial personnel and found that selective staffing is one of several HRMP that

exist in successful small manufacturing companies. Hunter and Schmidt (1982), referring to a

minority issue, concluded that an employment balance can be achieved through a selection

procedure based on ability.

Operational Definitions

Summaries of the operational definitions of measured variables (Training, Employee

Participation, Compensation, Employee selection, and Perceived Organizational

Performance) going to be used in this study are given below in Table 3.

Table 3: Operational definitions of measured variables

Measured Variables Developed by Reliabilities

TRAINING Harel and Tzafrir (1999) 0.72

EMPLOYEE

PARTICIPATION

Arthur, 1992; Batt et al., 2002; Hodson, 2002;

Kato and Morishima, 2002; Pfeffer, 1994.0.82

EMPLOYEE

SELECTIONTerpstra and Rozell, 1993; MacDuffie, (1995) 0.79

PERCEIVED

ORGANIZATIONAL

PERFORMANCE

Delaney and Huselid (1996) 0.76

- 44 -















HYPOTHESES


Research Questions

1. Is there a significant relationship between Training and Perceived Organizational

Performance in context of Standard Chartered Bank in Bangladesh?

2. Is there a significant relationship between Employee Participation and Perceived

Organizational Performance in context of Standard Chartered Bank in Bangladesh?

3. Is there a significant relationship between Employee Selection and Perceived

Organizations Performance in context of Standard Chartered Bank in Bangladesh?

Hypotheses

1. There is a significant relationship between Training and Perceived Organizational

Performance in context of Standard Chartered Bank in Bangladesh.

2. There is a significant relationship between Employee Participation and Perceived

Organizational Performance in context of Standard Chartered Bank in Bangladesh.

3. There is a significant relationship between Employee selection and Perceived

Organizational Performance in context of Standard Chartered Bank in Bangladesh.

Development of Conceptual Framework

Figure 1: Conceptual Framework of Proposed Variables and their Relationships

- 45 -

Employee Participation

Perceived Organizational Performance

Training

Employee Selection

METHODOLOGYInternship Report: HRMP in Standard Chartered Bank

Research Design

This paper examines HRMP and their relationships with organizational level performance. In

order to identify the research questions and to test hypotheses, the researcher has selected a

co-relational study as appropriate for this research. The earlier graphical representation

(figure 1) of the conceptualized framework reveals the pattern and structure of co-relational

study among the set of measured variables. When a researcher investigates the effects of the

measured variables and analyzes the relationships among the variables, the design is known

as co relational study (Graziano & Raulin 1997; Zikmund, 2000). A correlation exists when

an increase in one variable either increases or decreases another variable (and vice versa) in a

somewhat predictable fashion.

The present study will investigate the relationship between Training, Participation, and

Employee Selection and Perceived Organizational Performance within context of Standard

Chartered Bank in Bangladesh. Training, Participation, and Employee Selection are

considered as independent variables and Perceived Organizational Performance is considered

as dependent variable.

Research Approach

To examine this research problem, information were collected from the employees of

Standard Chartered Bank. The questionnaires were filled up by employees who had at least

two months’ experience with the organization. Participation of the respondents was at their

full discretion. Every participant could withdraw from responding at any time without

showing any reason.

Sampling Method

The study was conducted in different branches of Standard Chartered Bank in Dhaka city

only, due to budget and time constraints. The questionnaires were given to the head of HRM

or the human resource manager of the organization. The questionnaire was provided as well.

For the purpose of research, a single set of population was taken that consisted of entry-level

employees (Grade-9) of the bank.

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In this research, Human Resource Managers were chosen as the main subject for three

primary reasons. First and foremost, they had the greatest access to the data related to HRM

activities. Second, the researcher followed caution that perceptual error is smaller, partly, if a

manager's functional area relates to the perceived variable (Huselid and Becker, 2000). Third,

HR managers have the largest storehouse of knowledge about the overall activities of the

organization at wider level, as opposed to the narrow departmental level knowledge base.

The sample size is 150 for this study intended to investigate the relationship of training,

participation, and employee selection with perceived organizational performance in context

of Standard Chartered Bank in Bangladesh. The researcher used both cluster and stratified

sampling method and then a simple random sampling method to choose the appropriate

sample.

Survey Instruments

For lack of secondary data (articles, journals, magazine), the researcher gathered data from

the primary source by using questionnaire. To obtain data for this study the researcher used

questionnaire because of the following reasons:

The researcher found that most of the previous research with large number of sample

size used questionnaire method.

It was not possible to make personal interviews for the large number sample size of

150.

Internet survey was not possible for this study, as the research was conducted in the

context of Bangladesh.

A set of structured questionnaire was used in this research for collecting data from the

employees of the Standard Chartered Bank to measure the four variables that is used in this

research.

Training has been measured in this study, as instructed by Lawler, E.E. III, Mohrman, A.S.,

Ledford, E.G. (1992), using a four item instrument and with the alpha value α=0.72.

Respondents were asked in order to find out the percentage of employees in the organization

who received systematic and formal training in the past year in a variety of skills: leadership,

business areas, quality, and technical aspects of the job.

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Employee Participation has been measured in this study, as developed by Lawler et al. (1992)

and recently used by Harel and Tzafrir (1999), adapting the five-item scale and with the alpha

value α=0.82. The items were used to find out the degree of influence that employee rank and

file have on issues such as investment in new equipment, workflow, salary determination, and

so forth. Responses ranged from 1 (not influential) to 5 (very influential).

Employee selection has been measured in this study by an instrument composed of 4 items

with the alpha value α=0.79, in which respondents were asked to evaluate the importance

attributed by the company to selection tools and tests used in the hiring process (such as

“How important is the manager's interview?”), on a scale of 1 (not important) to 5 (very

important).

Finally, perceived organization’s performance in relation to its competitors’ has been

measured through four items questions in which the respondent was asked to evaluate the

quality of her/his organization’s performance as compared to that of competing organizations

performing the same work in the past year. The alpha value used in this regard was α=0.76

This variable covered several aspects, such as the quality of the product/service, new product

development, the ability to attract and retain essential employees, and customer satisfaction.

Pilot Testing

The purpose of pilot test is to evaluate clarity, bias, ambiguous questions of the selected

questionnaire. According to Cooper and Schindler (2003), pilot testing detects weaknesses in

design and instrumentation and provides proxy data for selection of probability sample.

Malhotra (2003) stated that, pre-test refers to the testing of the questionnaire on small group

of respondents in order to identify and eliminate potential problem. Burns and bush (1998)

recommended that a pre-test of 5-10 representative respondents is usually sufficient to

identify problems with questionnaire. The researcher distributed 15-20 questionnaires among

15-20 employees due to time limitation.

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Data Collection Procedure

It was not possible to obtain information from secondary sources like magazine, article, or

journal for the reason that very few published study has been conducted within the context of

Standard Chartered Bank in Bangladesh. So, the researchers necessitated primary data in the

exploration of research problem. The researchers conducted questionnaire to collect primary

data.

Data Analysis Procedure

For this study, the researcher used statistical technique Stepwise Regression Analysis. The

researcher used Stepwise regression to test the strength of association between the study

variables. Stepwise regression also gave individual R2 for each independent variable with

dependent variable. For this research, SPSS version 11 has been used as the Statistical Data

Analysis tool as it offers greater flexibility in data analysis and visualization.

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RESULTS AND IMPLICATIONSInternship Report: HRMP in Standard Chartered Bank

Reliability Coefficient and Descriptive Statistics

The reliability coefficients, means, and standard deviations of all the constructs in the current

study are displayed in Table 2. The coefficient alphas for the different constructs were

computed using the reliability procedure in SPSS (version 10.0). Nunnally (1978) suggested

that for early stages of any research the reliability of 0.50-0.60 is sufficient. The reliabilities

of all the constructs in this study found to be above the standard set by Nunnally (1978).

Table 4: Reliability Coefficient and Descriptive Statistics of Training, Employee

Participation, Employee Selection and Perceived organizational performance.

Scales Number of items Alpha M SD

Training 5 0.69 3.84 0.39

Employee Participation 5 0.71 3.76 0.45

Employee Selection 6 0.66 3.71 0.48

Organizational Performance 4 0.59 3.72 0.45

Note: n =150

The survey was done with a formatted questionnaire having a 5-point likert scale.

In this study alpha value for all the variables are present. Alpha value indicates the reliability

of a given set of questioners. Reliability denotes the consistency level of a question. The

standard value of alpha is 0.5 means any value over 0.5 is acceptable.

In this study the alpha value is well over the standard value, which is a good thing for

research. By seeing this value there is no doubt that the selection of questions is proper. The

values are a little different from the original study done by Shay S. Tzafrir (2006) due to

some adjustment made in this research.

The means have been calculated by taking the average of all the answers of the questions in

each variable. The calculated mean for Training is 3.84 with a standard deviation of 0.39. It

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signifies that the training program of Standard Chartered has high influence on the employee

and the perceived organizational performance as the value is above 3.

The mean for Employee Participation is 3.76 and has a standard deviation of 0.45. So it can

be said that employees’ perception about their participation in different aspect is high and

they believe they are getting sufficient importance in their organization.

The mean value for Employee Selection is 3.71 with a standard deviation of 0.48. This

shows that the employee selection process in Standard Chartered Bank influences the

perceived organizational performance highly.

Correlation Analysis

A correlation analysis was conducted on all variables to discover the relationship between

variables. The correlation procedure was subject to a two-tailed statistical significance at two

different levels: highly significant (p < 0.01) and significant (p < 0.05).

Table 5: Correlation Matrix for Training, Employee participation, Compensation, and

Employee selection and Perceived Organizational performance

Variable Training Employee Employee Organizational

Participation Selection Performance

Training - .529** .557** .579**

Employee - .499** .583**

Participation

Employees - .522**

Selection

Organizational Performance -

**p< 0.01 (2 tailed)

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In explaining the relationship between the studied variables first we should know the range

by which we can understand how significantly or strongly each variable related to each other.

The ranges are given below:

0.0 to 0.2 Very weak, negligible

0.2 to 0.4 Weak, low

0.4 to 0.7 Moderate

0.7 to 0.9 Strong, high marked

0.9 to 1.0 Very strong, very high

The table above is a result of a correlation analysis that has been done on all the data that has

been collected through the questionnaire survey. This analysis is done to show the existing

relation among the study variables (training, employee participation, and employee

participation and perceived organizational performance). A bivariate two-tailed co-relation

analysis was done by running the data on SPSS 11.

In the given table it is seen that, each of the figures has the symbol ‘**’ which signifies that

each of the variables are significantly correlated with each other at a significance level of p <

0.01.

In the table it is visible that training is positively and significantly correlated with employee

participation by .529 or 52.9 % (r = 0.529, p < 0.01), with employee selection (r = 0.614, p <

0.01) and with perceived organizational performance (r = .579, p < 0.01).

In case of employee participation it is positively and significantly correlated with employee

selection (r = 0.544, p< 0.01), and with perceived organizational performance, (r = .583, p <

0.01).

Finally, employee selection is positively and significantly correlated with perceived

organizational performance by .522 or 52.2 % (r = 0.522, p < 0.01).

If we summarize the whole result we will see that there are correlations among training,

employee participation, and employee selection with perceived organizational performance

by training (r= .579, p<.01), employee participation (r=.583, p<.01), and employee selection

(r=.522, p<.01).

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This indicates that training, employee participation, compensation and employee selection are

moderately and positively correlated with perceived organizational performance.

Table 6: Stepwise regression on Perceived organizational performance

Variable B SEB β R2 ∆R

Step 1 0.391

Employee 0.551 0.036 0.622*** -

Participation

Step 2 0.473 0.089

Employee 0.603 0.046 0.549***

Participation

Training 0.388 0.055 0.474***

Step 3 0.562 0.082

Employee 0.662 0.015 0.602***

Selection

Training 0.498 0.025 0.687***

*p <.05, **p <.01, ***p <.001.

Stepwise regression will work as a useful tool in testing hypothesis. In this part of the

analysis we will see that which independent variables individually and collectively provide a

meaningful contribution towards the explanations of the dependent variable. Stepwise

regression analysis helps to determine the most significantly related variable that explains the

dependent variable.

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In table 6, shows that employee participation (p <.001), and training (p <.001) were found to

be statistically most significantly related with perceived organizational performance.

Employee selection failed to enter into the regression equation, which indicates it was not

that significantly related with perceived organizational performance like the other variables.

These results provided a partial support for hypothesis. These three variables (training,

compensation, and employee participation) together explained 56.2% of the variance in

perceived organizational performance. Employee participation, training, and compensation

individually explained about 39.1%, 8.9%, and 8.2% of the variance in perceived

organizational performance respectively.

Assessment of Research Hypotheses

Research Hypothesis 1

From Table 5, it has been found that training (r = .579, p<.01) had a statistically significant

relationship with perceived organizational performance and they are positively correlated in

context of standard Chartered Bank. Thereby, it proves the first hypothesis.

The regression analysis that we have in table 6 also supports this hypothesis. It shows that

training and perceived organizational performance are correlated at p < 0.01. The predictor

variable, in this case training explains 8.9% of the variance in perceived organizational

performance. So this analysis also supports hypothesis 1.


There is a significant relationship between employee participation and perceived

organizational performance in context of Standard Chartered Bank Bangladesh.

The calculated correlation analysis suggests that there is a significant and positive association

among employee participation and perceived organizational performance

(r = 0.583, p <0.01). So from this result it proves that the correlation analysis completely

supports hypothesis 2.

The regression analysis also supports this hypothesis. It portrays that employee participation

and perceived organizational performance are significantly correlated at (p< 0.01). The

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predictor variable (in this case: employee participation) alone explains 39.1% of the variance

in perceived organizational performance. So this analysis also supports hypothesis 2.


From Table 5, employee selection (r= .522) with perceived organizational performance is

positively correlated and also statistically significant. It is also positively correlated with the

others. Thereby, it is providing support to the Hypothesis 4.

From regression analysis (Table 6), employee selection has been excluded, because its

significance level is greater then 0.05. It also provides partially support to its relationship

with perceived organizational performance.

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RECOMMENDATIONSInternship Report: HRMP in Standard Chartered Bank

After completing the analysis of the studied variables in the context of Standard Chartered

Bank Bangladesh, the following issues were found for recommendation:

From the analysis, training proved to be a significant factor for organizational

performance. Therefore, Standard Chartered Bank should emphasize on their training

program to a great degree. Standard Chartered Bank should give proper formal

training in different areas to their employees so that they can increase the

organization’s performance through increase their individual performance by getting

good training.

According to the findings, employee participation turned out to be a very important

factor for Standard Chartered Bank. Majority of the employees believed that positive

participation of employees in different organizational aspects played a strong role in

improving the organizations performance. So Standard Chartered Bank should put

more focus on it and needs to create such organizational environment so that to each

level employee can participate in their respective areas.

Although compensation has not been analyzed in this research to find out whether it

had any significant relation with perceived organizational performance, it seemed to

be another important factor for Standard Chartered Bank, as per personal interviews.

Overall not a single respondent of the interviews had a negative view on questions

regarding compensation. This could be because they believed that compensation

played a strong role in improving the organizational performance. Therefore, Standard

Chartered Bank should put focus on it and try to give precise remuneration to each

level employee.

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LIMITATIONS OF THE STUDYInternship Report: HRMP in Standard Chartered Bank

Although this study makes several important contributions to the literature and has valuable

implications for practice, it is not without limitations. The researcher possessed a marketing

concentration background; therefore it required a substantial time and effort to study a non-

concentration field (i.e. Human Resource Management). This, consequently, shortened the

time required to actually prepare the report. There are be some other factors which can affect

perceived organizational performance like industry sector, organizational size, organizational

age, and union membership or personal relationship with staff which the researcher has not

considered because of the simplicity of the research and to narrow down the research focus.

Moreover, the sample will be taken from the employees of the Standard Chartered Bank who

has six months or more experience in the job and only from the branches in Dhaka city.

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CONCLUSIONInternship Report: HRMP in Standard Chartered Bank

To improve the organizational performance it is very important to provide formal training,

compensation by which the employees can satisfy themselves, and create opportunities where

every employee can participate. To an extent it is important to select the right kind of

employee for increase organizational performance, but the magnitude of transparency and

quality Standard Chartered Bank exerts in its employee selection process renders it sufficient

to merely continue the current practice. Therefore, from this study Standard Chartered Bank

Bangladesh can get the indications on which of the issues they have to focus more to increase

or improving their performance. Finally, this research will encourage further study and useful

guidelines for these types of researches.

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