Compensation Management Practices

1.
Introduction
During the late nineties the banking sector of Bangladesh saw a sudden shift of
expansion as the government approved operation of a good number of new Private and
Foreign Commercial Banks. This expansion irresistibly brought in greater benefits to the
consumers because of the highly competitive market condition. The period has seen
emergence of some dynamic and high-tech banking services of which our consumers
were deprived of. This new era of banking services include:
 One Stop Utility Service

 Automated Teller Machine
 Phone Banking
 Credit Card
 On-line Banking
 Syndicated loan
But these advancements in banking technology didn’t solely benefit the customers. It
brought greater challenge in parts of the employees or bankers who were designated
with high profile jobs with tougher goals to meet, a dynamic career with attractive
remuneration, greater benefits and stunning status. This report will take an attempt to
study the career private commercial banks of our country through the evaluation of the
employee maintenance functions as practiced in this sector.
In contrast to theories, many business firms of Bangladesh have the least or even no
exposure to one of the crucial areas of business - Human Resource Management.
But since every organization is made up of people, compensating them, acquiring their
services, developing their skills, motivating them to high levels of performance, and
ensuring that they continue to maintain their commitment to the organization are
essential to achieving organizational objectives. We will find out how management in
the selected organizations is dealing with compensation system mainly.
Real life business is far more different from our classroom studies. Sometimes the books
we read are the oversimplification of facts and most of the time actual practices don’t
match with the theories written in books. So our objective is to relate our classroom
studies with real life scenario and get a clear view of what actually is happening in the
area of Human Resource Management of the selected banks.
Compensation Management Practices in Banking Sector of Bangladesh: A Case Study on Dhaka Bank Ltd.
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2. A Brief Discussion about Compensation
Compensation is a systematic approach to provide monetary value to employees in
exchange of work performed. Compensation may achieve several purposes assisting in
recruitment, job performance, and job satisfaction.
According to Handerson “a step by step approach for designing a remuneration system

that recognizes job requirements, employee related knowledge and skills and
performance related incentives that link individual, work unit and organizational
performance”.
Total remuneration also includes a host of benefits that protect and expand the life style
and health of workers and their families.
Compensation is the remuneration received by an employee in return for his/her

contribution to the organization. It is an organized practice that involves balancing the
work-employee relation by providing monetary and non-monetary benefits to
employees. Compensation is an integral part of human resource management which
helps in motivating the employees and improving organizational effectiveness.
Compensation may be used to:
 Recruit and retain qualified employees.

 Increase or maintain morale/satisfaction.
 Reward and encourage peak performance.
 Achieve internal and external equity.
 Reduce turnover and encourage company loyalty.
 Modify (through negotiations) practices of unions.
Compensation will be perceived by employees as fair if the approach is based on

systematic components. Various compensation systems have developed to determine
the value of positions. These systems utilize many similar components including
job descriptions, salary ranges/structures, and written procedures.
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2.1 Types of Compensation
Compensation can be of two types. They are Direct or Indirect Compensation.
Compensation
Direct Indirect
Pay Incentives Benefits Services
Base Pay Merit Pay
Direct compensation is remuneration provided to employees in exchange for their

labor and services. What makes it direct is that it is given to the employee without an
intermediary. Under direct compensation there are two sub types of compensation.
 Pay: It consists of wages and salaries received for performing work. It can be base
pay and merit pay based on job performance.
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 Incentives: They are provided for higher performance. They can be piece wage,
commission, bonus, profit sharing, stock option etc.
Direct compensation refers to monetary benefits offered and provided to employees in

return of the services they provide to the organization. The monetary benefits include
basic salary, house rent allowance, conveyance, leave travel allowance, medical
reimbursements, special allowances, bonus, Pf/Gratuity, etc. They are given at a regular
interval at a definite time.
Medical
Reimburse-
ments
Special
Basic Salary
Allowances
Direct
Compensation
House Rent
Bonus
Allowance
Leave Travel
Conveyance
Allowance
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Indirect compensations are provided for the employees benefit, but are not given
directly to the employee. Under indirect compensation there are two types of
compensation
 Benefits are the payments addition to pay. They can be

 Pay for time not worked: Paid vacation, holidays, leaves etc.
 Protection Programs: Pension, gratuity, insurance etc.
 Executive Benefits: Free Newspapers, telephone rental etc.
 Services and Perquisites: They increase employees wellbeing at no cost or

significantly reduced cost to employees. They can be
 Housing, transport, food
 Loans, children’s education expenses
 Discount on purchases, credit cards
 Social-cultural recreational activities; club subscriptions.
Indirect compensation include Leave Policy, Overtime Policy, Car policy,

Hospitalization, Insurance, Leave travel Assistance Limits, Retirement Benefits, Holiday
homes.
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Overtime
Policy
Leave Policy Hospitalization
Flexible Indirect
Insurance
Timings compensation
Holiday
Leave travel
homes
Retirement
Benefits
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2.2 Components of Compensation System
Compensation systems are designed keeping in minds the strategic goals and business
objectives. Compensation system is designed on the basis of certain factors after
analyzing the job work and responsibilities. Components of compensation system are as
follows:
Job Salary
Analysis Structures
Salary
Surveys
2.3Theory behind Compensation

 Reinforcement and Expectancy
Theories Reinforcement theory states that a response followed by a reward is more

likely to recur in the future (Thorndikes Law of Effect). The implication for
compensation management is that high employee performance followed by a monetary
reward will make future high performance more likely. By the same token, high
performance not followed by a reward will make it less likely in the future. The theory
emphasizes the importance of a person actually experiencing the reward.
Like reinforcement theory, expectancy theory (Vroom, 1964) focuses on the link
between rewards and behaviors (instrumentality perceptions), although it emphasizes
expected (rather than experienced) rewards (i.e., incentives). Motivation is also a
function of two other factors: expectancy, the perceived link between effort and
performance, and valence, the expected value of outcomes (e.g., rewards).
Compensation systems differ according to their impact on these motivational
components. Generally speaking, pay systems differ most in their impact on
instrumentality: the perceived link between behaviors and pay also referred to in the
pay literature as "line of sight." Valence of pay outcomes should remain the same under
different pay systems. Expectancy perceptions often have more to do with job design
and training than pay systems.
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 Equity Theory
Equity theory suggests that employee perceptions of what they contribute to the
Organization, what they get in return, and how their return-contribution ratio compares
to others inside and outside the organization, determine how fair they perceive their
employment Relationship to be (Adams, 1963). Perceptions of inequity are expected to
cause employees to take actions to restore equity. Unfortunately, some such actions
(e.g., quitting or lack of cooperation) may not be helpful to the organization. Two recent
empirical studies provide good examples of the types of counterproductive behaviors
that can occur as a result of perceived inequity. In the first study, Greenberg (1990)
examined how an organization2 communicated pay cuts to its employees and the
effects on theft rates and perceived equity. Two organization units received 15% across-
the-board pay cuts. A third unit received no pay cut and served as a control group. The
reasons for the pay cuts were communicated in different ways to the two pay-cut
groups. In the "adequate explanation" pay-cut group, management provided a
significant degree of information to explainits reasons for the pay cut, and also
expressed significant remorse. In contrast, the "inadequate explanation" group received
much less information and no indication of remorse. The control group received no pay
cut (and thus no explanation).The control group and the two pay-cut groups began with
the same theft rates and equity perceptions. After the pay cut, the theft rate was 54%
higher in the adequate explanation group than in the control group. However, in the
"inadequate explanation" condition, the theft rate was141% than in the control group. In
this case, communication had a large, independent effect on employees’ attitudes and
behaviors.
Cowherd and Levine (1992) used a sample 102 business units in 41 corporations to
examine whether the size of the pay differential between lower-level employees and top
management had any impact on product quality. Cowherd and Levine suggest that
individuals often compare their pay to that of people higher in the organization
structure. If lower-level employees feel inequitably treated, they may seek to reduce
their effort to achieve equity. Quality, in their study, was defined as customer
perceptions of the quality of goods and services. They hypothesized that extra role, or
citizenship behaviors, such as freely offering to help others, following the spirit rather
than letter of rules, and correcting errors that would ordinarily escape notice, would be
less likely when pay differentials between hourly and top managerial employees were
large. Their results supported this hypothesis, suggesting that Employees may use other
comparisons standards also, such as their previous or expected future jobs or cost of
living. Organizations need to take care that they not forget the potential adverse
motivational consequences of executive pay for the motivation of other employees.
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 Agency Theory
Agency theory, until recently best known in the economics, finance, and law literatures,
focuses on the divergent interests and goals of the organizations stakeholders, and the
ways that employee compensation can be used to align these interests and goals
(Eisenhardt, 1989; Fama &Jensen, 1983). Ownership and management (or controls) are
typically separate in the modern corporation, unlike the days when the owner and
manager was often the same person. With most stockholders far removed from day-to-
day operations, so-called agency costs (i.e., costs that arise from the interests of the
principals/owners and their agents/managers not converging are created. What is best
for the agent/manager may not be best for the owner. Examples of agency costs include
management spending money on perquisites (e.g., "superfluous" corporate jets) or
"empire building" (acquisitions that do not add value to the company but may enhance
the manager’s prestige or pay) rather than seeking to maximize shareholder wealth
(Lambert & Larcker, 1989). In addition, the fact that managers and shareholders may
differ in their attitudes toward risk gives rise to agency costs. Shareholders can diversify
their investments (and thus their risks) more easily than managers can diversify risk in
their pay. As a consequence, managers may prefer relatively little risk in their pay (e.g.,
high emphasis on base salary,-low emphasis on uncertain bonuses or incentives).
Indeed, research shows that managerial compensation in manager-controlled firths is
more often designed in this manner (Tosi & Gomez-Mejia, 1989).Agency costs also stem
from differences in decision-making horizons. Especially where managers expect to
spend little time in the job or with the organization, they may be more inclined to
maximize short-run performance (and pay), perhaps at the expense of long-term
success.
Agency theory is also of value in the analysis and design of non-managers

compensation. In this case, the divergence of interests may exist between managers
(now in the role of principals) and their employees (who take on the role of agents). In
designing either managerial or non-managerial compensation, the key question is,
"How can such agency costs are minimized?" Agency theory says that the principal
must choose a contracting scheme that helps align the interests of the agent with the
principals own interests (i.e., reduces agency costs). These contracts can be classified as
either behavior oriented (e.g., merit pay) or outcome oriented (e.g., stock options, profit
sharing, commissions). At first blush, outcome-oriented contracts seem to be the
obvious solution. If profits are high, compensation goes up. If profits go down,
compensation goes down. The interests of "the firm" and employees are aligned. An
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important drawback, however, is that such contracts increase the amount of risk borne
by the agent. Furthermore, because agents are averse to risk, they may require higher
pay (a compensating wage differential) to make up for it. Behavior-based contracts, on
the other hand, do not transfer risk to the agent, and thus do not require a
compensating wage differential. However, the principal must be able to monitor with
little cost what the agent has done. Otherwise, the principal must either invest in
monitoring/information or structure the contract so that pay is linked at least partly to
outcomes.
Which type of contract should an organization use? It depends partly on the following
factors (Eisenhardt, 1989):
 Risk aversion. Risk aversion among agents makes outcome-oriented contracts

more costly.
 Outcome uncertainty. Profit is an example of an outcome. Linking pay to profits
(outcome-based contract) is more costly to the extent that profits vary and so
there is a risk of low profits.
 Job programmability. As jobs become less programmable (i.e., less routine and
less structured), and more difficult to monitor, outcome-oriented contracts
become more likely. The increasing complexity of organizations and technology
makes monitoring more difficult, and may help explain the growing use of
variable pay programs (discussed below), which are examples of outcome-based
contracts. Consistent with this idea, outcome-oriented contracts (e.g., profit
sharing and stock plans) are more prevalent in research and development
organizations, where monitoring is especially difficult (Milkovich, Gerhart, &
Hannon, 1991). Pay levels are also higher, consistent with the idea that
employees must be compensated for sharing more risk.
 Measurable lob outcomes. When outcomes are more measurable, outcome-
oriented contracts are more likely.
 Ability to pay. Outcome-oriented contracts contribute to higher compensation
costs because of the risk premium.
 Tradition. A tradition or custom of using (or not using) outcome-oriented
contracts will make such contracts more (or less) likely.
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3. An Overview of Banking Sector in Bangladesh
The Banking Industry in Bangladesh is a complex and competitive one. The sector can
be diagramed as follows:
The sector can be diagramed as follows:
Bangladesh Bank
Specialized Commercial Non-Banking

Banks Banks Financial Institutions
Nationalized Private Commercial Foreign Banks

Banks Banks
A brief description of each of the groups is noted here:
Bangladesh Bank
Bangladesh Bank is the Central Bank of Bangladesh and the chief regulatory authority
in the sector. The banking system consists of four nationalized commercial Banks,
around forty private commercial banks, nine foreign multinational banks and some
specialized banks. The ministry of Finance in association with Bangladesh bank
regulates the banking sector through monetary and fiscal policies whereas banks are
operating under guidelines set by Bangladesh Bank.
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Specialized Banks
These banks basically are specialized micro-finance institution, which

revolutionized the concept of micro-credit and contributed greatly towards poverty
reduction and the empowerment of women in Bangladesh.
The Nobel-prize winning Grameen Bank is a specialized micro-finance institution,

which revolutionized the concept of micro-credit and contributed greatly towards
poverty reduction and the empowerment of women in Bangladesh. Out of the
specialized banks, two (Bangladesh Krishi Bank and Rajshahi Krishi Unnayan Bank)
were created to meet the credit needs of the agricultural sector while the other two (
Bangladesh Shilpa Bank (BSB) & Bang ladesh Shilpa Rin Sangtha (BSRS) are for
extending term loans to the industrial sector. The Specialized banks are:
 Grameen Bank
 Bangladesh Krishi Bank
 Bangladesh Shilpa Bank
 Rajshahi Krishi Unnayan Bank
 Bangladesh Shilpa Rin Sangstha
 Basic Bank Ltd (Bank of Small Industries and Commerce)
 Bangladesh Somobay Bank Limited (Cooperative Bank)
 The Dhaka Mercantile Co-operative Bank Limited (DMCBL)
Nationalized Banks
The banking system of Bangladesh is dominated by the 4 Nationalized Commercial

Banks, which together controlled more than 50%-55% of deposits. The nationalized
commercial banks are:
 Sonali Bank
 Janata Bank
 Agrani Bank
 Rupali Bank
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Private Commercial Banks
Private Banks are the highest growth sector due to the dismal performances of
government banks (above). They tend to offer better service and products.
 AB Bank Limited
 BRAC Bank Limited
 Dutch Bangla Bank Limited
 Dhaka Bank Limited
 Islami Bank Bangladesh Ltd
 IFIC Bank Limited
 United Commercial Bank Limited
 NCC Bank Limited
 Prime Bank Limited
 Exim Bank Limited
 Bank Asia Limited
 Trust Bank Limited and many more
Foreign Commercial Banks
 Citigroup
 HSBC
 Standard Chartered Bank
 Commercial Bank of Ceylon
 State Bank of India
 National Bank of Pakistan and many more
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4. The Segments of Pay Components in Banking Sector of Bangladesh
To evaluate the various components of the total compensation package, the values of
non-cash perquisites and benefits have been monetized at current market rates.
While computing Annual Guaranteed Cash, items like Performance Bonus, which is
variable, and Terminal Payments have not been taken into account though these have
been considered for the purpose of Annual Cost to the Company.
The compensation package has been divided into five segments:
a) Monthly Guaranteed Cash

b) Annual Guaranteed Cash
c) Annual Variable Cash
d) Terminal Payments
e) Monthly Cost of Benefits
a. Monthly Guaranteed Cash
 Basic Salary
Actual average basic salary of the benchmarks has been taken.
No employer agrees to provide actual individual salary for the benchmark jobs as
this is confidential between the employer and the employee. Where a job is held by one
person, the individual’s actual salary has been shown. Where 2/3 benchmark jobs fall
under one grade, actual average of that grade has been taken. Where actual average has
not been available, the meaningful point of the salary range, applicable to the job grades
of the benchmark has been taken.
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 House Rent Allowance
Specific amounts or percentage of basic salary paid in cash for each matched job have
been taken.
 Domestic Aid’s Wage
Specific amounts paid in cash for each matched job have been taken.
 Utilities / Maintenance
Specific amounts paid as cash allowance have been taken.
 Transport Allowance
Specific amounts paid in cash for each matched job have been taken.
 Medical Allowance
A specific amount paid in cash has been used.
 Personal / Special / Other Allowance
Specific amounts paid in cash as allowances have been utilized.
Quite a few costs are lumped into this and paid in cash. With reduction of personal tax
slabs, employers are opting for a more transparent pay system conforming to the tax
regulations.
 Meal Allowance
Specific amounts paid in cash as allowance have been used.
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 Children Education Allowance
Specific amount paid in cash has been used.
b. Annual Guaranteed Cash
 Annual Bonus
This is a deferred wage not linked to profitability. Actual amount paid under this head
has been used.
 Festival Bonus
Actual amount paid under this head has been used.
 Leave Fare Assistance
Actual amounts paid to the employees have been taken.
c) Annual Variable Cash
 Performance Bonus
Actual amounts paid have been taken. This is paid by the employers in different forms
based on:
 Employee’s performance only

 Combined performance of the group, business unit and the employee
 Company performance
 Profit Bonus
Actual amounts paid, based on company profitability, have been taken.
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 Incentive Bonus
SMC pays an incentive bonus to its all its employees. The incentive amount is a fixed
sum for each grade.
d) Terminal Payments
 Provident Fund
Actual payments made by the employers to the Fund have been used.
 Gratuity
Actual amounts provided by the employers in the Books of Accounts have been used.
 Pension Fund
Actual payments made by the employers to the Fund have been used.
e) Monthly Cost of Benefits
 Company Leased Accommodation
Actual cost has been taken.
 Household Effects (Depreciation)
This reflects the cost of depreciation on account of hard and soft furnishing and
electrical appliances provided by the comparators.
 Utilities / Maintenance
Costs under this head have been taken at actual.

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 Telephone
Actual cost has been taken.
 Company Car (Depreciation)
Where company cars are provided for both functional and personal purposes, the
figures mentioned represent the cost of depreciation.
 Running and Maintenance Cost
Actual amounts spent for fuel and car maintenance have been used.
 Driver’s Wages
Where drivers are Company employees, their actual cost has been taken. Where Private
Driver's wages are paid for, actual amounts paid to the employees have been taken.
 Registration / Insurance / Tax
Costs of registration, insurance, tax, etc. have been taken, at actual.
 Pickup-Drop / Transportation Cost
Actual cost to the company for pickup-drop facility has been taken.
 Entertainment Allowance
Specific costs reimbursed have been utilized.
 Canteen Subsidy
Specific costs on account of company provided subsidized meals have been taken.
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 Company Products
Specific costs on account of company products have been taken.
 Club Membership
The actual amounts paid for by the employers have been utilized.
 Group Life Insurance
Actual premium paid by the employers has been used.
 Medical Expense
The average cost to the employer on account of medical reimbursement has been used,
at actual.
 Hospitalization Scheme
Premium paid by the comparators under the Hospitalization Insurance Policies has
been taken at actual.
 Loan
Amount of interests absorbed by the comparator for utilization of various loan policies
has been taken.
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 Fringe Benefits
Employee benefits, sometimes called fringe benefits, are those rewards that employees
receive for being members of the organization and for their position in the organization
unlike wage, salaries and incentives, benefits are usually not related to employee
performance.
The term fringe benefits was coined over 40 years ago by the war labor Board,
Reasoning that employer provided benefits such as paid vacation, holidays and
pensions were on the fringe of wages , are agency exempted them from pay controls. It
has been argued that this action, more that any single event, led to the dramatic
expansion of employee benefits that has since occurred. However, because of the
significance of benefits to total compensation, many employers have dropped the word
fringe for fear that it has a minimizing effect.
Following is the list showing the types of benefits that employees can receive
from the company:
PAYMENT
RETIREMENT INSURANCE
FOR TIME NOT OTHERS
RELATED RELATED
WORKED
Pension fund Medical insurance Vacation Company discounts
Annuity plan Accident insurance Holidays Meals furnished by company
Early retirement Life insurance Sick leave Moving expenses
Disability
Disability insurance Military leave Severance pay
retirement
Retirement gratuity Dental insurance Paid rest periods Tuition refunds
Survivor benefits Lunch periods Credit union
Travel time Company car
Legal service
Financial counseling
Recreation facilities
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5. Dhaka Bank Limited
5.1 Background of Dhaka Bank Limited (DBL)
Dhaka Bank Limited (DBL) was incorporated as a Public Limited Company on April 06,
1995 under the Company Act 1994 and started its Commercial Operation on June 05,
1995 as Private Commercial Bank. The Bank started its journey with an Authorized
Capital of Tk.1000.00 Million and Paid up Capital of Tk.100.00 Million. Today it is one of
the most renowned Private Commercial Banks having multiple branches in the major
cities of the Country.
Dhaka Bank Limited (DBL) has started its Business with all the features of a Corporate
Bank and the Products of both Corporate and Retail Banking System; to facilitate the
daily clientele requirements. DBL is always trying to improve their Customer Services
in every sector, but in today’s Competitive Business World, Banks need to offer
additional concentration to the Clients‟ requirements in order to stay at the top.
Therefore, besides dealing with the general attributes of Different Products, they have
been trying to put more emphasis on the Customer Benefits and other Customer related
Facilities.
Mission & Vision
The Mission of the Dhaka Bank Limited (DBL) is to be the Premier Financial Institution
in the country providing High Quality Products and Services backed by Latest
Technology and a Team of Highly Motivated Personnel to deliver Excellence in
Banking.
“The stars in the seven skies sparkle in brilliance and twinkle in blissful beauty. We
wonder at them in profound admiration and speculation.
At Dhaka Bank we draw our inspiration from the distant stars. Our team is committed
to assure a standard that makes every banking transaction a pleasurable experience.
Our people, products and processes are aligned to meet the demand of our discerning
customer. Our goal is to achieve a distinction like the luminaries in the skies. Our prime
objective is to deliver a quality that demonstrates a true reflection of our vision -
Excellence in Banking.”
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Goals of the Bank
 Long-term Goal:
To be the Market Leader both in terms of Deposits and good advances among Private
Commercial Banks in Bangladesh by the year 2009.
 Short-term Goal:
To increase Current Market Shares.
 Financial Goal:
To reduce the existing Cost of Fund
Values
 Customer Focus
 Integrity
 Team Work
 Respect for Individual
 Quality
 Responsible Citizenship
Management Committee
Mr. Khondker Fazle Rashid
Managing Director
Mr. Tanweer Rahim
Deputy Managing Director
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Mr. Kaiser Tamiz Amin
Mr. Neaz Mohammad Khan
Mr. M.M. Haikal Hashmi
Senior Executive Vice President
Head of Credit Compliance & Administration
Mr. Arham Masudul Huq
Senior Executive Vice President Company Secretary
Mrs Shamshad Begum
Principal, Dhaka Bank Training Institute & Head of Human Resources Division
Mr. S.A.F.A. Musabbir
Executive Vice President Legal & Recovery
Mr. Fakhrul Islam
Senior Vice President Head of Operations
Mr. Shah Azizul Islam
Senior Vice President
In-charge, Retail Banking
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Mr. Md Shahadat Hossain
Senior Vice President
In-charge- Credit Operations
Mr. Darashiko Khasru
Vice President
Head of Finance & Accounts Division
Mr. J.Q.M. Habibullah
Vice President
Board Secretariat & Share Division
Mr. Imran Ahmed
Vice President
In-charge-RMU & Head BASEL-II Imp Cell
Mr. Syed Faisal Omar
Vice President
In-charge, Global Transaction Services
Mr. Md. Shaukat Ali Khan
Vice President
In-charge, SME Unit
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Mr. Faruk Ahmed
Senior Assistant Vice President
In-charge, CPC-Trade Operations
Mr. A K M Ahsan Kabir
In-charge Internal Control & Compliance
Mr. Saiful Momin
In-charge, Information Technology Division
Mr. Mesbah Uddin Ahmed
In-charge, Syndication & Structured Finance
Mr. Shaikh Altaf Mahmud
In-charge, Monitoring
Mr. Kamrul Aziz Nippon
First Assistant Vice President
In-charge, Capital Market Services
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Mr. K. M. Faisal Faruqui
Assistant Vice President
In-charge Treasury Division
Mr. Ibrahim Khalil
Senior Principal Officer
Head of Public Relations & Brand Communication
5.2 Total Compensation and Benefits Package of DBL
 Objectives
This chapter outlines the rules relating to compensation structure and the benefit
package of the Bank and gives detailed procedures for exercising them in order to
promote fair treatment and consistency within the organization.
 Salary Structure
Refer to the Salary & Remuneration Package Structure for Supervisors and Executive
Staff of DBL for details regarding the structure of salary and allowances for different
units under DBL.
 Revision of Pay Elements
The compensation structure may be revised, if necessary, with the approval of the
Director, Admin/HR, Head of the Dept., Finance and the Chief Executive.
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 Employee Compensation Records
Employee Pay Records are maintained by the Personnel & Admin Department for
Workers and Supervisors and by the Human Resource Department for the Executives.
These departments maintain personal file of all employees where all records in
regards to the employee are kept in addition to any soft copy (in computer database)
maintained by the departments. These records are confidential and should not be
accessible to any unauthorized persons (authorization defined by HR or Personnel &
Admin dept. head).
5.3 Basic Employee Benefits for Permanent Employees
 Provident Fund
The Bank's Provident Fund is a funded scheme. All confirmed and permanent
employees are entitled to be members of the Provident Fund. The employee
contribution, equal to 10% of the basic salary, is deducted each month through the
payroll. The Bank contributes an equal amount and both the employees' and the
organization's contributions are paid to the Fund each month. In the Provident Fund
Ledger, both the employee's and the Bank's contributions are credited to the
individual employee's account.
The membership of the Trustees of the Provident Fund must include at a minimum:
a) Representation from the HR Department
b) Representation from Finance & Accounts Department
c) Two representatives from the Workers
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 Group Term Life Insurance
The Bank provides coverage of life insurance to all Permanent employees after their
joining with the organization effective on the date of joining. To participate in the
Group Term Life Insurance policy, all employees are required to fill up "Group Term
Life Insurance Registration Form", and submit to HR/Personnel & Admin dept for
processing. To change the beneficiary at any time, the employee must complete the
“Beneficiary Change Form”, and submit to the Human Resource Department or to the
Personnel & Admin dept. for making the changes.
In the event of the death of an employee while in the bank’s service, other than: 1) death
by suicide, 2) death by criminal prosecution, or 3) death by taking part in any activities
subversive of the state, the bank depending on the classification of employees
shall pay benefits on normal death and accidental death from insurance bank as
follows:
Employee classification Normal death benefit Accidental death
benefit
Executives 36 month last basic 72 month last basic
salary salary
Detail of compensation other than death (partial disability) will be determined as per
calculation within the purview of insurance coverage policy. No recovery or
adjustments of loans or salary advances etc. shall be made from the insurance claim
benefits. In addition to this coverage of insurance benefits compensation will also be
made as per "Workman's Compensation Act 1923" in the case of death/disability of
employees.
5.4 Bonuses
All confirmed Permanent employees of Dhaka Bank Limited are entitled to one Annual
Bonus each equivalent to “Basic Salary” under the following conditions:
Attendance in the Calendar Year Bonus Entitlement
213 days + 100% of the Bonus

107 days + 50% of the Bonus
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5.5 Meal Facilities
The following facilities are provided in each of the organization under Dhaka Bank
Limited:
 Branches
Executives:
 Meals are provided at a subsidized rate.
 Head Office:
Executives:
 No meals are provided.
5.6 Accommodation
The Bank on the basis of requirements and availability provides accommodation to
DBL’s Top Executives at their own established facilities in Dhaka city. Outside the
Dhaka city, the Bank provides expenses of the accommodation.
5.7 Utilities Allowances

Executives between grades J to M4:
No utility allowance is paid.
Executives of grades M5 and above:
Designation Electricity Gas Water Telephone

(Limit/Month) (Limit/Month) (Limit/Month) (Local & NWD)
Taka Taka Taka (Limit/Month) Taka
Manager /
Sr. Manager 2,500 At Actual At Actual At Actual
EVP and
above At Actual At Actual At Actual At Actual
Page 29
To get reimbursed for utilities bills, complete “Expense Reimbursement Form”, and
submit to the Accounts Department. The Accounts Department will make
reimbursement payment to the employee within 45 days from the date of submission.
Telephone bill has to be forwarded to the IT department, so payments can be made by
the company, if it is in the name of the Bank.
5.8 Medical Benefits
 Medical Benefits for the Executive Staff
The bank will reimburse the cost of authorized medical treatments in Bangladesh
including hospitalization, surgical and childbirth subject to the conditions mentioned
hereunder. In case of any overseas treatment prior approval from the Chief Executive is
required. The following are the basic guidelines in regards to medical benefits provided
to the Executives:
i. Treatment to be carried out by a registered Medical Practitioner. The Bank

reserves the right to approve the Medical Practitioner consulted.
ii. Dental treatment included as preventative measures, the Bank will reimburse
for „Upper and Lower‟ dental cleaning twice a year.
iii. Reimbursement of the cost will be restricted to the treatment of the executive,
spouse and children.
iv. Relevant details including names and dates of birth of spouse and the eligible
children should be sent to HRD for record.
v. Children attaining 21 years of age or getting married, whichever is earlier,
will not be entitled to reimbursement of the cost of medical treatment.
vi. Expenditure on medical treatment of Executives is reimbursed by the
company as per following entitlements:
vii. Expenses Cannot not be claimed: The Bank will not reimburse the following
expenses:
 The supply of dentures and false caps.
 Any cosmetic dental work.
 The supply of spectacle frames.
 Special diets except in hospitals under medical advice
 Treatments not covered under paragraphs (i) and (ii)
Page 30
5.9 Transportation Facilities and Car Purchase Scheme
 Transportation Facilities for the Executives
Executives
DBL Branches:
There are no transportation facilities provided for the Executives between grade J to M4
Head Office:
There are no transportation facilities provided for the Executives between grades J to
M4. For business purpose travel, Pool Car can be provided based on availability.
 Car Purchase Scheme:
Senior Executives:
Employees in this grade, which is Managers, Senior Managers, and Vice President, are
eligible to apply for a Car Purchase Scheme upon the expiry of one month after the date
of joining in the Bank. To initiate the request for participating in this Car Purchase
Scheme, the employee is required to write a note to the HR Department. The Human
Resource Department then gets necessary approvals and then forwards the request to
the Head Office Admin department.
The objective of the scheme is to provide financial assistance to bank executives for the
purchase of cars and thus to provide executives with transport necessary for carrying
out their duties.
An employee who has acquired a car under this scheme will not be eligible to apply
again for a period of five (5) years. The following are the approved specification of the
transport and benefit given to the employee:
Page 31
Description of the 1300/1500 cc new or reconditioned. Four door Sedan.
car :
Car Price : Tk 900,000/= (maximum Tk 1,000,000)
Purchase Employee – 50%; Bank – 50%
Contributions :
Fuel Allowance Allowance of 350 liters per month to be paid by the
Bank f o r w o r ke r b a s e d a t H e a d O f f i ce a n d a l s o
worker who are working at the branches.
Maintenance: Based on manufacturer‟s year model, for up to 6 year
old car, the Bank will pay a maintenance allowance of Tk
3,000/= per month.
For 8 years or older cars, the Bank will pay a maintenance
allowance of Tk 4,000/= per month.
For 10 years or older cars, the Bank will pay a maintenance
allowance of Tk 5,000/= per month.
The money will be accumulated in the employee’s account
in the accounts department and will be utilized for repairs
and maintenance when they arise. The accounts
department will be responsible to pay the money
immediately upon submission of paid in receipt from the
Driver : Workshops.
To be employed by the employee concerned. An
allowance of Tk 4,100 per month will be paid by the
Bank to cover the driver’s salary.
st
Major Accidental Any vehicle under this scheme will maintain a 1 Party
Repairs insurance. The Admin. Department will ensure filing of all
insurance claims considering the amount of money required
to repair and the amount of deductible. The amount of
deductible and/or the amount of repairs will be split
50:50 between the employer and the employee if the
balance of the maintenance fund is not adequate to cover
the expenses. The employer initially will make the full
payment to the insurance company and/or to the repair
shop, then the portion of the employee will be deducted
from the salary in equivalent 12 installments, if not
covered by the insurance. The Admin. Department (and the
employee if willing to) will supervise all repair work and
do the administrative tasks, then forward a bill of the
employees portion, signed by the employee, to the
Accounts Department for repayment.
Page 32
Purchase of re-conditioned cars will be subject to inspection on behalf of the Bank, by
the Transport department or by a workshop designated for this purpose by them. The
car will be checked for engine and body condition, suspension and safety features. The
“Automobile Inspection Report” will be completed and signed by the Administration
Department for processing the request of car purchase.
The company, bank or a leasing company may finance the purchase of the car. The car
will be initially registered as follows:
By the company - in the name of the company

Through a bank loan - as stipulated by the bank
Through a leasing contract - in the name of the leasing
company
The employee’s 50% contribution towards the cost of the car will be paid by him to the
Bank in equal monthly installments over a period of three years if the car is financed by
the Bank, or over a period equal to the currency of the loan or leasing contract, as the
case may be.
If the car is acquired through a leasing contract or a bank loan, the employee will be
required to contribute 50% of the lease payments or loan installments every month until
the expiry of the lease period.
If the price of the car exceeds Tk 1,000,000 the employee will pay the amount in excess
of Tk 1,000,000 to the company in cash.
The Bank’s 50% contribution to the cost of the car will be amortized over a period of
five years. After the expiry of this period, or the expiry of the leasing contract if the car
has been leased, or the repayment of the bank loan if the car has been acquired through
a bank loan, and subject to prior receipt of the final installment of his
contribution, the ownership of the car will be transferred to the employee. Costs
incurred in connection with the transfer will be payable by the employees.
Page 33
In the event that the employee leaves the Bank before the expiry of five years, he shall
have the option to purchase the car from the Bank at the written down value in the
books of the Bank, plus the total of the unpaid installments towards, his own
contribution. This option to purchase will only be available to an employee who has
been with the company for a minimum period of two years. In case he does not choose
to exercise the purchase option, the Bank will reimburse the employee 75% of the
amount contributed by him/her towards the cost of the car, and the car will then remain
in or be transferred to the ownership of the Bank.
The employee will be expected to use the car for the Bank’s business as well as for
fulfilling his private transport needs, including the transport of children to school, etc.
Employees who have availed for this scheme are expected to meet all their
transportation needs with the vehicle provided under scheme. No other transport will
be provided to an employee who has availed of this scheme. However, if the
employee is asked to travel outside Dhaka on Bank’s business, he will be reimbursed at
Tk. 6/- per km, subject to prior permission from his department head, plus an allowance
of Tk. 100/- per day for the driver. Tolls and other expenses will be paid at actual.
Repairs and maintenance of the vehicle will be the responsibility of the employee. A
maintenance allowance will be paid as explained earlier in this section.
All taxes, fees, duties, registration costs, and insurance will be paid by the Bank. The
employee must inform the Admin Department one month prior to the due date for
Fitness/Insurance and the Admin Department will take full responsibilities to complete
the said tasks.
The Bank’s approval to participate into this scheme will be based on the nature of the
employee’s job and on the availability of funds with the Bank, at the time when the
application to join the scheme is made.
Page 34
The employee may choose to select a car that is presently in the name of the Bank and if
made available to the employee for purchase. The administrative department will be
responsible to identify the market value of the car, get approval from the HR
Department, and make an offer to the employee. For the purchase of the company car,
the employee shall be liable to pay 50% of the market value of the vehicle, in equal
monthly installments to the Bank over a period of three (3) years. All other terms and
conditions shall remain the same.
The Management reserves the right to change, modify, amend, cancel or waive any or
all of the provisions of this scheme at its absolute discretion and without any prior
notice and also to withhold or reject any application to join the scheme, without
assigning any reason whatsoever.
Top Executives
Top Executives of grade M6 and above, i.e. Sr. Vice President and above are entitled to
24 hours company paid transportation. The company also pays for the fuel at cost,
Driver’s salary, and for all necessary maintenance/repair and administrative cost of the
vehicle.
5.10 Leave Entitlements

 Basic Leave Types
All Permanent Executives of the Bank are entitled to various types of Leaves that are
calculated based on calendar year and prorated from the date of joining the Bank's
service for the first year. Leave entitlements of expatriate (Contract) employees shall be
governed by their respective terms of employment with the company specified in the
Appointment Letter.
For Employees the leave entitlements are calculated in accordance with "The Shops and
Establishment Act 1965", Factories Act 1965 and the Factory Rules 1979.
Page 35
These entitlements are as follows:
Types of Leave Days Per Year

Casual Leave (with full wages) 10
Sick Leave (on ½ average wages) 14
Earned Leave (1 for every 22 days 12
actual work with wages)
Public Holidays 10 (minimum)
The following are the Basic Leave entitlements for the Executives at Head Office:

Weekends (with full wages) As per Section 5.5
Sick Leave (with full wages) 10
Earned Leave 15
As per list of holidays
Public Holidays
declared by the Govt.
The following are the Basic Leave entitlements for the Executives at Branches:

Weekends (with full wages) As per Section 5.5
Sick Leave (with full wages) 10
Earned Leave 15
Public Holidays 10 (minimum)
Public Holidays for Head Office worker are governed by the policy of the Board of
Directors of the Bank and is based on the list of holidays declared by Govt. For Branch
employees, the Management determines the Public Holidays (minimum 10 days) and it
is announced at the beginning of the year.
Page 36
5.11 Definitions of Basic Leave Entitlements
The following are some definitions of Basic Leaves entitlements:
 Casual Leave
Entitlement to casual leave for the Executive at Head-Office and Branch Site, it is 15
days based on each calendar year. The employee is entitled to exercise Casual Leave
from the very next day of joining; though the Casual Leave is pro-rated for the balance
period of the year counting from the joining date. Casual leave cannot be availed for
more than three days at a time. Also, it cannot be carried forward to the following year
or cashed. Casual Leave can be taken with Weekends, Public Holidays, Earned Leaves,
etc. but be limited to only 3 days.
 Sick Leave
Entitlement to Sick Leave for the Executives at Head-Office and Branch Site it is 15 days
on the basis of each calendar year. The employee is eligible to exercise the Sick Leave
benefit from the date of his/her joining. The above entitlements represent the maximum
number of days Sick Leave that an employee can avail in a year. Normally, medical
certificates are not required but if the sick leave exceeds three days at a time or if it is
being taken as an extension of Earned Leave, then a Medical Certificate is required.
Where this is not the case an application for Sick Leave is considered enough. Sick leave
cannot be carried forward to the succeeding year and cannot be cashed. If an employee
is sick on Weekend or on a Public Holiday, that day will not be counted as a sick day
and the number of Sick Leave taken out of his/her allocated days will be excluding
those days.
 Earned Leave
Entitlement to Earned Leave for the Executives at Head-Office and Branch Site is 15
days on the basis of each completed year of service. A maximum of thirty (30) days can
be accumulated. Any accumulation beyond this will automatically lapse on the
following 1st of January each year. The entitlement to Earned Leave is exclusive of
Weekends and Public Holidays i.e., Weekends and Public Holidays falling during the
annual leave taken will be considered additional to the entitlement. Though Earned
Leave is counted from the date of joining but it cannot be taken until the employee
passes the probationary period receiving confirmation.
Page 37
 Other Leave Options
The following sections explain some additional leave options that an employee may
exercise depending on the need.
 Maternity Leave
Married woman employees are entitled to Maternity Leave benefit as per "The
Maternity Benefit Act, 1939". The period of Maternity Leave shall be 84 actual days of
absence which shall include the Public Holidays and Weekends (non-working days)
and including the day of delivery. The entitlement to maternity leave is to be availed as
follows:
 Six weeks or 42 days immediately preceding and including the day of delivery.
 Six weeks or 42 days immediately following the day of delivery.
 A woman shall not be entitled to maternity leave unless she has been employed by
the Bank for a period of not less than nine months immediately preceding the date
of delivery.
 Study Leave
An Executive may be granted Study Leave, with or without pay, entirely at the bank’s
discretion, once s/he has been in the bank for at least one year. Study leave is
normally granted if the course of study which the employee intends to pursue is likely
to benefit the Bank’s operations. Study Leave can be given for up to a maximum period
of two years.
 Hajj Leave
A Permanent Executives who intends to perform Hajj at his own expenses, upon
completion of one year of service, may be allowed for a 45 days Hajj Leave with pay at
the sole discretion of the management. This leave can only be availed once in the entire
period of service.
Similar leave may be granted for employees other than Muslims, if the occasion is a
once in a life time holy event significant to the believers.
Page 38
 Special Leave
Special leave may be granted to the Permanent or Contract employees with or without
pay and allowances at the sole discretion of the management. Application for special
leave should be forwarded to HR/Personnel department, through the relevant
departmental head, along with appropriate reasons and recommendations for necessary
action. Some examples of such leave request may be for marriage, death in the family,
etc.
 Leave Encashment
Executives before leaving the Bank due to resignation, retirement or termination are
allowed to cash the Earned and Compensatory Leave due to them up to a maximum of
30 days, while for workers it is 20 days plus the prorated entitlement for the current
year. The amount paid on encashment includes only the employee's last drawn basic
salary for the period. Allowances are not included in this amount.
 Maintenance of Leave Records
Approved leave applications received from departments are entered in a Leave Register
and the lower portion of the leave application showing the balance of leave is sent to the
employee. Leave records for all Executives and Head Office Staffs are maintained by HR
Department.
5.12 Financial Assistance Schemes
 Objectives
To meet various emergency and incidental expenses, the Bank provides financial
assistance in the form of advance payment of salary and loan against provident fund to
its employees. The following sections give detailed procedures for salary advances and
loan sanctions under Financial Assistance Schemes.
Page 39
 Priorities for Loan against Provident Fund (PF) or Salary Advance
The following priorities will be maintained for PF loan or salary advance request
processing:
1) Medical emergencies for spouse or children

2) Death of Spouse or children
3) Medical emergencies for other dependent
4) Death of other dependent
5) Rental advance
6) Own marriage
7) Other emergencies
8) Marriage of siblings
9) Education
10) Other requirements
 Loan against Provident Fund (PF) or Salary Advance Eligibility and Limits
 Loan against Provident Fund
1. All Permanent employees who have contributed to atleast18 installments in the
Contributory Provident Fund of Dhaka Bank Limited and have been in the Bank
for less than 3 years, are eligible to take loan against the provident fund equal
and up to 75% of the employee’s own contribution.
2. All Permanent employees who are members of the Contributory Provident Fund
and have been in the Bank for more than 3 years but less than 4 years, are eligible
to take loan against the provident fund equal and up to 100% of the employee’s
own contribution.
and have been in the Bank for more than 4 years but less than 5 years, are eligible
to take loan against the provident fund equal and up to 70% of the total
contribution (employee’s own contribution + Bank’s contribution).
and have been in the Bank for more than 5 years are eligible to take loan against
the provident fund equal and up to 75% of the total contribution (employee’s
own contribution + Bank’s contribution).
Page 40
 Salary Advance
Salary Advance is given only in those situations where the Permanent employee does
not have enough contribution to the Provident Fund but the urgency is very high.
Usually one month’s average gross salary is given as advance but based on the
emergency; a maximum of two months‟ salary can be given as advance.
 Repayment of Loan or Salary Advance
One month’s grace period is given to the employee before the repayment starts. The
employee, through automatic deductions by the Accounts Dept. from his/her Pay-
check, makes the payment. The following are some guidelines for repayment s:
1. If financial situation permits, the employee is asked to pay the money back with
6 equal monthly payments.
2. If the financial situation does not permit, the employee is given the opportunity
to pay back with 12 equal monthly installments.
3. If the amount of loan is large and the repayment imposes hardship on the
employee, it may be considered to extend the repayment schedule to a maximum
of 24 equal installments. In such cases, the Department Head of the employee
must recommend the accounts department to do so.
4. If the loan or advance is related to medical payments and the employee is eligible
for medical benefit, the advance/loan will be applied towards the eligible benefit
once the treatment is received. Upon receipt of all medical vouchers, the
employee is required to submit “Medical Bills Reimbursement Form”, as per
guidelines provided in Section 6.12.2 and apply the advance/loan towards the
refund. Any excess amount taken as advance/loan must be paid back
immediately after the treatment is over.
 Procedures to Apply and Processing of a Loan or Salary Advance Request
The employee completes a “Loan Application Form”, and upon receiving an approval
from the Department Head, submits to the Accounts Department. The Accounts Dept.
personnel review the application, discuss with the employee if necessary, and let the
employee know about the outcome. At the time of processing the loan/advance request,
the Accounts Dept. identifies the repayment agreement discussing with the employee.
Page 41
The following are guidelines for loan/advance approving:
Loan Amount (Tk.) Approval Authority

< or = 5,000.00 Section Head responsible for Loan/Advance
>5,000.00 < or = 20,000.00 Second level authorization by Manager or above.
> 20,000.00 Department Head
6. SOWT Analysis:
Strength Weakness
The main strength of DBL HR Division is Still Bangladesh has lack of enough
the authority to work. DBL HR Division compensation systems to satisfy &
has authority to maintain the employee motivate employee. DBL does not have
properly. They provide enough salary to proper person to provide enough
employee. The employees from different compensation to their employees. It is
division have proper respect for HR important to satisfy & motivate
division. This respect was gained by the employees to increase productivity &
HR division. performance.
Opportunity Thread
In DBL there are four types of employee; It is also very difficult for DBL to handle
Regular, Contractual, Part time and with such a gigantic number of
Internee. DBL HR Division has to look employees. It is very normal that any
after all types of employee. HR division process can be bewildered when there
can work in several sectors along with are not enough internal resources.
those employees. Very few Bangladeshi Sometimes the total process can be
organizations have this kind of injudicious. Employee switch to other
opportunity. An additional thing is DBL organization lack of compensation’s &
also enough financial resources for benefits. They lose lots of talented
successful implementation of HR worker just because of lack of
policies. compensation & benefits.
Page 42
7. Recommendations
The Human Resources Management system of DBL is up to mark. But the management
authority needs to look some major issues like compensation policies, allowances and
transfer policies. DBL needs more man power for handling its huge volume of
employee.
Temporary employees at DBL do not have the security and stability that permanent
employees have. They should be provided with little health care, pensions or other
similar benefits. DBL should also set a production; distribution and sales target and any
employee belonging to the particular area reaching a desired target in the first quarter
should be selected as a permanent employee. At DBL teamwork is given immense
importance as the management realizes the fact that the only way to attain and conform
a high standard is by working like a well -knit unit. Thus it is imperative that Tapas
should have an effective performance appraisal system, which fosters teamwork.
DBL has devised a very comprehensive performance appraisal program in which each
employee is given objectives against which his/her performance will be evaluated. For
the setting up of these objectives with its work force, the company utilized Management
by Objectives. The way these objectives are set is through mutual agreement, where the
employees are told exactly what is required of them, how they will be evaluated against
each of their objectives and what will be the reward in case if the objectives are met or
exceeded. The mutual setting up of these objectives in a participative manner motivates
the employee to achieve these objectives as they have a hand in setting them up as well.
DBL should have a time limit, evaluation criteria and clearly defined rewards that will
contribute towards motivating the employees to contribute the best towards fulfilling
their goals.
8. Conclusion
This study has been focused on the compensation system, practiced by a private bank of
Bangladesh. There are some components that are taken into consideration during pay in
our country, but it varies significantly among banks regarding pay. It could have been
better, if we might have worked with all types of banks. Here in our study we have
worked with only one type of bank. In our study we have tried to focus on the pay
differences, possible reasons of using different pay components used by the banks in
our country. Finally, we came up with some recommendations, which can be used for
both of the banks so that they can perform better.
Page 43
9. References
1. Richard I. Henderson. (2012) Pearson Education, Inc. Panchsheel Park, New
Delhi, India.
2. DeCenzo, D. A., & Robbins, S. P. (2008). Human Resource Management (Eighth
Edition ed.).New Delhi: Prentice - Hall of India.
3. www.essaytown.com/paper/art-hallen-corporation-compensation-management-
program-compensation-management-understand.
4. http://www.managementstudyguide.com/compensation-management.htm
5. http://en.wikipedia.org/wiki/Compensation_and_benefits.
6. http://digitalcommons.ilr.cornell.edu/cgi/viewcontent.cgi
7. http://www. http://dhakabankltd.com
8. www.scribd.com
9. www.slideshare.com
10. www.Academia.com
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1.

 One Stop Utility Service

According to Handerson “a step by step approach for designing a remuneration system

Compensation is the remuneration received by an employee in return for his/her

Compensation may be used to:

 Recruit and retain qualified employees.

Compensation will be perceived by employees as fair if the approach is based on

Pay Incentives Benefits Services

Base Pay Merit Pay

Direct compensation is remuneration provided to employees in exchange for their

Direct compensation refers to monetary benefits offered and provided to employees in

 Benefits are the payments addition to pay. They can be

 Protection Programs: Pension, gratuity, insurance etc.

 Executive Benefits: Free Newspapers, telephone rental etc.

 Services and Perquisites: They increase employees wellbeing at no cost or

 Loans, children’s education expenses

 Discount on purchases, credit cards

 Social-cultural recreational activities; club subscriptions.

Indirect compensation include Leave Policy, Overtime Policy, Car policy,

Leave Policy Hospitalization

2.3Theory behind Compensation

Theories Reinforcement theory states that a response followed by a reward is more

Agency theory is also of value in the analysis and design of non-managers

 Risk aversion. Risk aversion among agents makes outcome-oriented contracts

The sector can be diagramed as follows:

Specialized Commercial Non-Banking

Nationalized Private Commercial Foreign Banks

A brief description of each of the groups is noted here:

These banks basically are specialized micro-finance institution, which

The Nobel-prize winning Grameen Bank is a specialized micro-finance institution,

The banking system of Bangladesh is dominated by the 4 Nationalized Commercial

Foreign Commercial Banks

The compensation package has been divided into five segments:

a) Monthly Guaranteed Cash

a. Monthly Guaranteed Cash

Actual average basic salary of the benchmarks has been taken.

 Domestic Aid’s Wage

Specific amounts paid as cash allowance have been taken.

A specific amount paid in cash has been used.

 Personal / Special / Other Allowance

Specific amounts paid in cash as allowances have been utilized.

Specific amounts paid in cash as allowance have been used.

Specific amount paid in cash has been used.

b. Annual Guaranteed Cash

Actual amount paid under this head has been used.

 Leave Fare Assistance

Actual amounts paid to the employees have been taken.

c) Annual Variable Cash

 Employee’s performance only

Actual amounts paid, based on company profitability, have been taken.

e) Monthly Cost of Benefits

 Company Leased Accommodation

Actual cost has been taken.

 Household Effects (Depreciation)

Costs under this head have been taken at actual.

Actual cost has been taken.

 Company Car (Depreciation)

 Running and Maintenance Cost

 Registration / Insurance / Tax

Costs of registration, insurance, tax, etc. have been taken, at actual.