INDEPENDENT UNIVERSITY,

BANGLADESH
TERM PAPER

TOPIC : A CASE ON COMPENSATION AND BENEFIT

COURSE CODE : HRM390

SEMESTER : AUTUMN 2023

SECTION 01

DATE OF SUBMISSION : 1ST DECEMBER 2023

SUBMITTED TO : DR. IKRAMUL HASAN

(SENIOR FACULTY)

GROUP MEMBERS OF PHOENIX FIVE :

STUDENT NAME STUDENT ID
DEWAN MD ALIF 2130187
RAINA JAHAN 2220039
SPONDON 1910333
SADIA SULTANA 1910401
RABEYA BOSHRI RIYA 2020572

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 LETTER OF TRANSMITTAL

December 01, 2023

DR. Ikramul Hasan
School of Business
Management Information System
Independent University, Bangladesh (IUB)

Subject: Submission of a case on employee training process at IBBL

Dear Sir,
We, the student of HRM390 section 01 pleased to submit our term paper of a case on
compensation and benefits to the instructions given by you. we tried to narrow down our
objective of this Project and Assignment in the best possible manner. We, would, also like
to draw your attention that we have tried our level best to complete this assignment
correctly, and gather appropriate information as much as possible.

May we, therefore wish and hope that you would be cordial enough to our hard work and
oblige us thereby. Thank you very much for your support and patience.
Sincerely yours,
Team Phoenix Five

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 ACKNOWLEDGEMENT

Apart from the efforts made by us, the success of any project depends largely on the
encouragement and guidelines of many others. We take this opportunity to express our
gratitude to the people who have been instrumental in the successful completion of this
paper. Our first acknowledge goes to The Almighty Allah for bestowing us the patience
and courage to finish this task within its deadline. Then we would like to show our greatest
appreciation to our honorable faculty Dr. Ikramul Hasan. We can’t thank him enough for
his tremendous support and help. We feel motivated and encouraged every time we attend
his classes. Without his encouragement and guidance this project would not have
materialized. Acknowledgments must go to the team members, whose unflagging patience
and outstanding capacity for creative work, and long hours made the project both possible
and successful under the pressure of knocking deadline. The guidance and support received
from all the persons who contributed and to this project was vital for the success of the
project. We are grateful for their constant support and help.

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 TABLE OF CONTENT

SL NO. CONTENT NAME PAGE NO.

1. INTRODUCTION 05

2. BACKGROUND 06

3. METHODOLOGY 07

4. CASE STUDY 08

5. FINDINGS 10

6. CONCLUSION 11

7. CASE QUESTIONS 12

8. REFERENCES 13

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 INTRODUCTION
The banking sector in Bangladesh has undergone significant growth, technological
advancements, and intense competition, leading to the adoption of telecommunication and
information technology to enhance services such as automated teller machines, internet
banking, mobile banking, and various card services. This evolution has prompted changes
in management styles within banks, attracting more qualified professionals. Despite the
competitive environment, maintaining high performance standards among bank employees
is crucial for career satisfaction.

Employee performance in the banking industry is closely linked to compensation and

benefits practices. These practices are integral to aligning individual and organizational
goals, aiming to improve performance ethically and responsibly. While various
organizational practices contribute to enhancing employee performance, this study focuses
on compensation and benefits as innovative factors influencing performance.

The research aims to investigate the compensation and benefits practices at IBBL Jatrabari
branch, with a focus on fostering job satisfaction and sustaining careers for banking
professionals. Given the coexistence of public and private sector banking institutions, the
role of bank employees is pivotal in shaping the future of both the institution and the
country's service industry. The study extends to include bank employees from both public
and private sector banking companies, acknowledging the significance of creating an
environment conducive to job satisfaction for the betterment of the banking industry and,
consequently, the country's economy.

BACKGROUND
Employee compensation occupies a central and indispensable position in the intricate
dynamics of the employment relationship, holding paramount significance for both
employees and employers in shaping organizational success and individual well-being
(Milkovich & Newman, 2021). Wages, salaries, and benefits constitute a significant share
of personal income, providing financial stability and serving as a cornerstone for health
security. From the employer's perspective, compensation decisions wield substantial
influence over the organizational cost structure, affecting competitiveness in the broader
product market and influencing pricing strategies (Gerhart & Milkovich, 1990).

The multifaceted landscape of employee compensation practices across diverse

employment units has been a subject of extensive exploration within organizational studies
(Gerhart & Milkovich, 1992). The scholarly discourse has delved into defining these
variations, discerning the determinants that underlie differences, and assessing the
repercussions on a spectrum ranging from employee attitudes and behaviors to overall
organizational effectiveness (Gerhart, Milkovich, & Murray, 1992).

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In the context of human resource management, the compensation and benefits processes
emerge as linchpin components, wielding considerable influence within modern HR
organizations (Milkovich & Newman, 2021). These encompass judiciously managing the
personnel expenses budget, establishing rigorous performance standards, formulating
transparent compensation policies, and offering a suite of competitive benefits. The adept
handling of compensation and benefits not only allows organizations to exert control over
personnel costs but also serves as a catalyst for steering employee performance and
appropriately recognizing exceptional contributions. In this expansive purview, effective
compensation and benefits practices align with and contribute to the overarching goals of
strategic human resource management (Milkovich & Newman, 2021).

METHODOLOGY
Primary data sources:
For our study, we used different ways to learn about the company. We had a friendly talk
with Mr. Azizul Hoq Molla to get information because he knows a lot. We also checked
the company's official website for numbers and details about what they do. By watching
people work at different desks, we saw how things happen in real-time at the company.
We looked at all this information carefully, trying to find patterns and themes in how the
company operates. If there were any numbers on the website, we also studied those. We
promised to be respectful and keep everything private, following the rules about ethics like
getting permission and keeping things confidential. We knew that sometimes things can
be a bit subjective or we might run out of time, but our goal was to really understand how
the company worked on the inside, making sure our study was clear and trustworthy.

Secondary data sources: Secondary data refers to information that is collected for a
purpose other than the primary focus of a study. It serves as a swift source of background
information, aiding in contextualizing and supplementing primary data. In this study, We
also gathered information from various secondary data sources to enrich the research. The
sources include:

ü Internet

ü Financial statements

ü Interview with the HR personnel

ü Previous reports on HR of IBBL

CASE STUDY

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This comprehensive study delves into the intricate dynamics of compensation and benefits
and their profound influence on the job performance of employees within the banking
industry, specifically honing in on the context of IBBL in Jatrabari, Dhaka. By
meticulously examining a spectrum of factors associated with compensation and benefits,
the research conducts a comparative analysis across private and public banks, aiming to
unravel the nuanced effects on employee performance. The overarching objective is to
elucidate the pivotal role played by these factors in shaping the professional efficacy of
individuals and, consequently, to formulate pragmatic guidelines geared towards the
enhancement of compensation structures. The anticipated outcomes of this study hold the
promise of furnishing invaluable insights, offering a strategic roadmap for refining
compensation practices within the banking sector, particularly tailored to the unique
landscape of IBBL. Ultimately, this research aspires to contribute not only to the empirical
understanding of compensation dynamics but also to serve as a blueprint for cultivating a
more productive and contented workforce within the confines of Jatrabari, Dhaka,
potentially setting a benchmark for optimization in other banking institutions.

Compensation : In managing a commercial bank, it's crucial to have a systematic

approach to give employees both external and internal benefits. This means not only
providing money but also other non-money things, showing how well employees are
treated. Each company decides how it will reward its employees, what facilities they get,
how they get them, and the categories for these benefits.

To better understand how this works in the real world, we're looking at Islami Bank
Bangladesh Limited (IBBL) as a case study. We're focusing on IBBL's compensation
system and how it affects employee satisfaction. IBBL's Human Resources Policy and
Procedure Manual is our guide. It's a document that tells us how to manage and develop
staff. It doesn't just list rules but also gives detailed steps to follow, making sure everyone
is treated fairly.

In IBBL, compensation isn't just about pay. It includes all the money and rewards
employees get during their time there. There are two main parts: direct payments, like
wages, salaries, bonuses, and indirect payments, like insurance and vacations paid for by
the employer. Direct payments are the immediate money employees receive, while indirect
payments are about their overall well-being and balance between work and life.

By looking at how IBBL handles compensation, we learn a lot about what makes
employees happy and well. This study helps us understand the theory behind compensation
and how it works in practice, especially in a unique organization like IBBL.

Pattern of Compensation

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 ü Financial ü Non Financial

ü Basic salary ü Housing facilities

ü Incentives ü Transportation

ü Bonus ü Vacation

ü Wages ü Insurance

Benefits : Employers who care about their employees often provide many benefits to
support them. These include mandatory protection programs to keep them safe from
unexpected problems, making workers feel secure and dedicated. Giving pay for time off
shows a commitment to a good work-life balance, understanding that breaks and personal
time are essential for employee happiness. Optional protection programs let individuals
choose benefits that fit their needs, creating a flexible and inclusive workplace. Private
retirement plans give financial security, ensuring employees feel confident about their
future. These are the main benefits, but employers also offer various services for different
parts of employees' lives, like health programs and chances to grow professionally. This
overall approach not only attracts great employees but also builds a positive workplace,
helping the team to thrive and overcome challenges.

Pattern of Benefits

ü Reward ü Benefit

ü Increment ü Provident firm

ü Promotion ü Profit bonus

FINDINGS
The Bank promises to have a fair, competitive, and flexible payment plan for its
employees. The Board has the ultimate say in approving this plan and will update it as
needed, based on suggestions from the Managing Director or Management Committee.
The payment plan applies to all people working permanently for the bank.

Employee Benefits and Policies at IBBL: A Comprehensive Overview

• Basic Pay : The basic salary ranges are in line with the job grades and are set by
the Board following the Managing Director's suggestions. The Board re-evaluates
these ranges at least once every two to three years.

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 • Festival Bonus : Every regular and confirmed employee receives two bonuses
annually. One is given during Eid-Ul-Fitr, and the other is granted during Eid-Ul-
Azha, exclusively for Muslim employees. Employees of different religions
receive their bonuses during their respective religious festivals.

• Sick Leave: Every year, the staff members of IBBL are entitled to 14 days of sick
leave with pay.
• Maternity Leave: IBBL offers a maternity leave of six months with full pay to
its female staff members.

• Paternity Leave: All confirmed staff members at IBBL are granted a paternity
leave of seven days.
• Termination Benefit: If a confirmed employee is instructed by the relevant
authority to resign without specifying a reason, the employee is entitled to either
one month's written notice or one month's gross salary as compensation.
However, if the employee is duly notified with one month's notice, no additional
compensation for the termination of services will be provided.
• Suspension Benefit: When an allegation of misconduct or fraud is reported
against an employee, a series of disciplinary proceedings are initiated. The
employee is provided with a charge sheet and given a four-day period to provide
an explanation. Subsequently, a preliminary enquiry committee is established,
and an enquiry notice is issued, marking the commencement of a formal domestic
inquiry.

Survey Questionnaires for Employee Compensation and Benefits

Strongly

Disagree

Disagree
Strongly
Neutral
Agree
Agree

S.NO Compensation & Benefits Attributes

1 I believe my current compensation reflects - ✔ - - -

the value of the work I contribute to the
organization.

2 The health plan options provided by the - - ✔ - -

organization meet my satisfaction.
3 I am content with the life insurance benefits - - ✔ - -
offered as part of my compensation package.
4 The retirement plan benefits provided by the - ✔ - - -
organization are satisfactory to me.
I am pleased with the number of days - - - ✔ -
5 allocated for vacations, sick leave, and
personal leaves in my compensation package.
6 Overall, I am satisfied with the paid time off - - ✔ - -
policy included in my compensation
package.

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 The options available for expenses - - ✔ - -
7 reimbursement align with my expectations
and needs.
I believe the organization effectively links - ✔ - - -
8 rewards to job performance through its
compensation structure.
I am well-informed about the various ✔ - - - -
9 components of my compensation and
benefits package.
I am well-informed about the various ✔ - - - -
10 components of my compensation and
benefits package.
The organization's communication about - ✔ - - -
11 changes in compensation and benefits is clear
and timely.
I believe my compensation is competitive - ✔ - - -
12 compared to industry standards for similar
roles.
I am satisfied with the overall benefits - - - - -
13
package provided by the organization.
The organization's efforts to support - ✔ - - -
14 employee well-being through compensation
and benefits are evident and appreciated.
The compensation policies contribute - ✔ - - -
15 positively to the overall work culture within
the organization.
I am satisfied with the process of - - ✔ -
performance reviews and its impact on
16
rewards and recognition within the
compensation structure.
The organization effectively aligns rewards - - - ✔ -
17 with individual job performance in the
compensation and benefits framework.
I feel that my compensation reflects a fair - - - - ✔
18 balance for my responsibilities and tasks
within the organization.
I am satisfied with the organization's overall - - - - ✔
19
approach to compensation and benefits.
The organization demonstrates transparency - - ✔ - -
20 in linking rewards to job performance
through its compensation practices.

The Compensation & Benefits Attributes survey provides valuable insights into the
perceptions and sentiments of employees regarding their remuneration packages. A
prevailing theme in the responses is the belief among employees that their compensation
accurately reflects the value of their contributions to the organization. This sense of

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fairness extends to various benefits, with satisfaction expressed for health plans, life
insurance, and retirement benefits. The positive reception of paid time off policies further
underscores the organization's commitment to providing a holistic and employee-friendly
work environment.

A notable aspect of the survey is the commendable level of communication and

transparency observed within the organization. Employees not only feel well-informed
about the components of their compensation and benefits but also appreciate the clarity
and timeliness in communication about changes in these structures. This reflects positively
on the organization's commitment to keeping its workforce engaged and informed.
Additionally, the recognition of the organization's effective linkage of rewards to
individual job performance suggests a robust performance management system that aligns
with employee expectations, contributing to a positive work culture.

While the overall findings are affirmative, the survey signals a potential area for
enhancement in expenses reimbursement options. This specific feedback provides a
targeted opportunity for the organization to address employee needs and further elevate
the employee experience. By focusing on refining expenses reimbursement policies, the
organization can demonstrate responsiveness to employee concerns and reinforce its
commitment to ensuring a comprehensive and employee-centric compensation and
benefits framework. This strategic approach aligns with the organization's broader
objective of maintaining a satisfied and motivated workforce.

CONCLUSION

This study aims to look into how salaries and benefits are made the same for employees in
the banking sector. Job performance in banks is influenced by various factors like heavy
workload, benefits, unclear expectations, pressure, and conflicts. Compensation and
benefits have become crucial in modern life, affecting how employees behave both at work
and in their personal lives. Many studies on organizations focus on understanding
compensation and benefits among employees. The lack of suitable compensation and
benefits is often linked to problems such as low employee satisfaction and declining
performance. In the future, it's crucial for companies to focus on maximizing job
performance as a key strategy for improving employee satisfaction. In some bank units,
there's a problem with linking rewards to job performance, and employees are not happy
with retirement plans, leading to dissatisfaction and issues with time management.

CASE QUESTIONS
1. Q: How has the evolution of the banking sector in Bangladesh influenced the
management styles within banks, and what role do compensation and benefits play
in maintaining high performance standards among bank employees?

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Answer: The evolution of the banking sector in Bangladesh has seen significant growth,
technological advancements, and increased competition. This has prompted changes in
management styles within banks, attracting more qualified professionals. Compensation
and benefits play a crucial role in maintaining high performance standards among bank
employees by aligning individual and organizational goals, aiming to improve
performance ethically and responsibly.

2. Q: How does the study address the significance of compensation and benefits in the
context of the intricate dynamics of the employment relationship, considering both
the employee's and employer's perspectives?

Anwer: The study acknowledges the central and indispensable role of employee
compensation in shaping organizational success and individual well-being. It explores the
multifaceted landscape of compensation practices from both the employee's perspective,
where it provides financial stability and health security, and the employer's perspective,
where it influences the cost structure and competitiveness in the broader market.

3. Q: In what ways do compensation and benefits practices align with the overarching
goals of strategic human resource management, as mentioned in the study?

Answer: The study highlights that effective compensation and benefits practices align with
and contribute to the overarching goals of strategic human resource management. This
alignment involves judiciously managing personnel expenses, establishing performance
standards, formulating transparent compensation policies, and offering competitive
benefits. Such practices not only control personnel costs but also act as catalysts for
steering employee performance and recognizing exceptional contributions.

REFERENCES
• Collins, N., Ngo, A., Stanton, P., Ren, S., & Rowley, C. (2023). Employee
perceptions of pay equity and compensation factors: a study of Vietnamese state-
owned enterprises. Asia Pacific Business Review, 29(3), 778-796.

• Gerhart, B. A., Milkovich, G. T., & Murray, B. (1992). Pay, performance, and
participation.

• Jeet, V., & Sayeeduzzafar, D. (2014). A study of HRM practices and its impact on
employees job satisfaction in private sector banks: A case study of HDFC Bank.
International Journal of Advance Research in Computer Science and Management
Studies, 2(1).

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• AIi, M. M. (2005). Overall Banking System of IBBL (Doctoral dissertation, East
West University).

• Alam, M. N. (2008). A Study on over All Activities & Performance of Islam Bank
Bangladesh Limited (IBBL) (Doctoral dissertation, East West University).

• Ahmad, F. (2022). ADVANCEMENT OF ISLAMIC BANKING AND FINANCE

IN THE SOCIO-ECONOMIC CONTEXT OF BANGLADESH BASED ON
IBBL. International Journal of Islamic Banking and Finance Research, 10(1), 1-
10.

• Manzur, T. R. (2021). Recruitment and selection procedure of Islami Bank

Bangladesh Limited.

• REFERA, B. (2015). COMPENSATION AND BENEFITS PRACTICE OF ABAY

BANK SHARE COMPANY AND ITS IMPLICATION FOR EMPLOYEES
PERFORMANCE (Doctoral dissertation, St. Mary's University).

• Shimelis, A. (2017). EMPLOYEES’PERCEPTION TOWARDS COMPENSATION

AND BENEFIT SCHEMES: THE CASE OF DASHEN BANK SC (Doctoral
dissertation, St. Mary's University).

• Fariba, N. (2015). Compensation and Benefit of Jamuna Bank Limited.

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