Challenges of Human Resource Management in Bangladesh

Faculty of
Business Administration
Jatiya Kabi Kazi Nazrul Islam University
Assignment on : Contemporary Issues & Challenges of Human
Resource Management Practices in Bangladesh
Course Title : Human Resource Management
Course Code : FB 305
Presented to Kazi Saifur Rahman
Lecturer
Department of Finance & Banking
J.K.K.N.I.U
Presented by
Date of Submission 25 June 2019
Sl.
No.
Name ID.
No.
1 Shirin Akter 17132638
2 Mutasin Billa 17132639
3 Abdullah Al Noman 17132640
4 S M Muhaiminul Sagor 17132641
5 Md.Saiful Islam 17132642
6 Taslima Akter 17132643

Letter of Transmittal
25 June, 2019
Kazi Saifur Rahman
Lecturer
Finance & Banking Department
Jatiya Kabi Kazi Nazrul Islam University,Trishal,Mymensingh.
Subject: Submission of Assignment on Contemporary Issues & Challenges of Human
Resource Management Practices in Bangladesh.
Dear Sir,
This is our great pleasure to submit the assignment.
We have worked hard and put our best effort to make this assignment successful. It has been
an enlightening experience for us while preparing this task.
We would like to express our gratitude to you. We will be glad if you find this assignment
useful to have an apparent perspective on the issue. If you have any query, please do not hesitate
to call us about the task.
Sincerely Yours,
Abdullah Al Noman
ID:17132640
Finance & Banking Department
Group Leader
(On behalf of Group 7)

TABLE OF CONTENT
Letter of Transmittal……………………………………………………………………...…2
Introduction……………………………………………………………………………..… 4-5
Contemporary Issues of Human Resource Management Practices in
Worldwide…….……………………………………………………………………………6-9
Challenges of Human Resource Management Practices in Worldwide………..…….10-12
Bangladesh Perspective…………………………………………………………,,,….…….13
Present Scenario of HRM in Bangladesh………………………………………………….14
Rising Trends of HRM Practices in Bangladesh…………………………………...……..15
Challenges of Human Resource Management Practices in Bangladesh………………...16
Future Challenges of HRM Practices in Bangladesh………………..………………..17-18
Recommendations…………………………………………………………………………..19
Conclusion……………………………...……………………………………………………20

INTRODUCTION
What is Human Resource Management?
Human resource management (HRM) is the practice of recruiting, hiring, deploying and
managing an organization's employees.
It is true that without human being all the resources are valueless. So, in an organization the
most important resource is employees, popularly known as human resource. Even if all of the
required factors of an organization are available without appropriate human resource, the
organizational goal cannot be achieved. In every country, there are so many people but all of
them are not used as resources. They will be treated as resources when their skills, abilities,
knowledge, qualifications, etc. will be increased and used in the productive sector and which
will have economic values. So, managing human resource properly is one of the most important
functions of an organization.
HRM is often referred to simply as human resources (HR). A company or organization's HR
department is usually responsible for creating, putting into effect and overseeing policies
governing workers and the relationship of the organization with its employees. The term human
resources was first used in the early 1900s, and then more widely in the 1960s, to describe the
people who work for the organization, in aggregate.
The modern HR technology term, human capital management (HCM), has come into more
frequent use than the term, HRM, with the widespread adoption by large and midsize
companies and other organizations of software to manage many HR functions.
Human Resource Management Process
4

Objectives of human resource management
The objectives of HRM can be broken down into four categories:
1. Societal objectives: Measures put into place that respond to the ethical and social needs
or challenges of the company and its employees. This includes legal issues such as
equal opportunity and equal pay for equal work.
2. Organizational objectives: Actions taken that help to ensure the efficiency of the
organization. This includes providing training, hiring the right amount of employees for
a given task or maintaining high employee retention rates.
3. Functional objectives: Guidelines used to keep the HR functioning properly within the
organization as a whole. This includes making sure that all of HR’s resources are being
allocated to its full potential.
4. Personal objectives: Resources used to support the personal goals of each employee.
This includes offering the opportunity for education or career development as well as
maintaining employee satisfaction.
Human resource management functions
HRM can be broken down into subsections, typically by pre-employment and employment
phases, with an HR manager assigned to each. Different areas of HRM oversight can include
the following:
• Employee recruitment, onboarding and retention.
• Talent management and workforce management.
• Job role assignment and career development.
• Compensation and benefits.
• Labor law compliance
• Performance management.
• Training and development.
• Succession planning.
• Employee engagement and recognition.
• Team building.
5

Contemporary Issues of Human Resource
Management Practices in Worldwide
Human resource managers face a lots of challenges with todays workforce. There are issues
concerning the diverse workforce, legislation affecting the workplace and technology matters.
Major contemporary issues in HRM-
Green HRM
Green HR is one which involves two essential elements: environmentally friendly HR practices
and the preservation of knowledge capital.Green HR involves reducing your carbon footprint
via less printing of paper, video conferencing and interviews, etc.
The kinds of action taken within green HRM initiatives include educating employees about
climate change and other environmental issues, training in working methods that reduce the
use of energy and other resources, promoting and incentivizing more sustainable means of
travel to work and auditing employee benefits to eliminate those that are environmentally
damaging.
6

Green HRM Activities:
Impact of Green HRM:
• Gaining perception, reputation and good will.
• Economically useful, hence direct impact on profit and enhances the return
on investments.
• Better Power Utility.
• Better Utilization of Resources.
• Cost Effective.
• Smarter Performance translated into Cheaper Products.
7

International Human Resource Management (IHRM)
International Human Resource Management is the process of procuring, allocatingand
effectivelyutilising human resources in an international business.
Need for IHRM: Managing expatriates, globalization has forced HRM to have international
orientation, effectively utilise services of people at both the corporate office and at the foreign
plants.
Model of International Human Resource Management
Reasons for Using IHRM:
8

Strategic Human Resource Management (SHRM)
Strategic human resource management is formulating and executing HR systems producing the
employee competencies and behaviors the company needs to achieve its strategic aims.
SHRM Strategy Level
Impact of SHRM:
Strategic HRM planning leads to:
Growth.
Profits.
Survival.
Planning also:
Expands awareness of possibilities
Identifies strengths and weaknesses
Reveals opportunities
Points to the need to evaluate the impact of internal and external forces.
9

Challenges of Human Resource Management
Practices in Worldwide
Challenges facing in practices of HRM –
Environmental Challenges: Environment is the sum total of conditions that surrounds us at a
given point of time and space. It is comprised of the interacting systems of physical, biological
and cultural elements which are interlinked both individually and collectively. It influences the
growth and development of this specific organization. Managers or HR professionals of any
organization cannot meet the objectives without understanding and being aware of
environmental challenges. Pervasive environmental challenges faced by the manager and HR
departments are governmental challenges, organizational challenges, international human
resource management, etc.
Management System: A management system is the framework of processes and procedures
used to ensure that an organization can fulfill all tasks required to achieve its objectives. The
benefits of an effective management system include more efficient use of resources, run the
organization in a cost effective way, improved risk management, and increased customer
satisfaction as services and products consistently deliver what they promise.
Changing Market: Changes in the purchasing pattern of consumers may affect the demand
for labor. Changes in the economy can also affect human resource planning. In a recession, a
business is likely to reduce its workforce as demand for its products falls.
Social Issues: In some companies, employees are represented by a labor union. Managing
human resources in a union management requires knowledge of specific laws, contract
administration, and the collective bargaining process. Human resource management practices
must contribute to organizational effectiveness. Thus, it is important to understand the types of
approaches used to determine the effectiveness of HRM. Effective HRM are based on external
standards (benchmarked) and include only the necessary procedures, steps, processes, and
people.
The Quality of Work Life: Now employees and managers are more concerned about the
quality of work life where they are performing every day. Actually it means the total
organizational life of the human resource. These are adequate and fair compensation, safe and
healthy working conditions, opportunities to use and develop human capacities, opportunity
for continued growth and security, social integration in the work organization,
constitutionalism etc.
10

Organizational Culture: Organizational culture is the behavior of humans within an
organization and the meaning that people attach to those behaviors. It is the collection of values,
beliefs, assumptions, myths, norms, goals, mission, vision etc. Basically the unique personality
of an organization is referred to as its culture. When groups of people work together,
organizational culture is an invisible but powerful force that influences the behavior of the
members of that group. Organizational culture is composed of seven characteristics that range
in priority from high to low. These characteristics are innovation (risk orientation), attention to
detail (precision orientation), emphasis on outcome (achievement orientation), emphasis on
people (fairness orientation), teamwork (collaboration orientation), aggressiveness
(competitive orientation), and stability (rule orientation).
Leadership Development: As one of the biggest challenges for human resource management,
leadership development needs to be a critical strategic initiative. HR professionals are faced
with being expected to provide the essential structures, processes, tools, and points of view to
make the best selection and develop the future leaders of the organization.
Work force Diversity: Basically now-a-days the workforce is changed in comparison to last
ten to fifteen years. Some of the changes have been occurred in the recent past years and some
are still in process. Today the lifestyles and the requirements are changing day by day. Now
the employees want a balance between work life and family life. The traditional employees
wanted to earn more money by working hard even by overtime. But now employees are less
willing to work for a long period of time, or on overtime or on weekend days.
Managing Change: In the past decade, there have been rapid, turbulent, and often strained
developments in the relationship between employers and employees. New trends and changes
have occurred in telecommunicating, outsourcing HRM practices, family medical leave, child
care, QWL programs, spouse-relocation assistance, pay for skills, benefit cost-sharing, union
management negotiations, testing, and many other HRM areas of interest. Nearly all of these
trends and changes can be traced to the emergence of new lifestyles and an aging population.
Change management represents a particular challenge for HRM. An intensified focus on
training may be needed to develop added competencies to deal with change management.
Successful organizations are becoming more adaptable, resilient, quick to change directions,
and customer-centered. Within this environment, the HR professional must learn how to
manage effectively through planning, organizing, leading and controlling the human resource
and be knowledgeable of emerging trends in training and employee development.
Decentralized Work-sites: Organizations use decentralized work sites because
telecommunicating arrangements enable organizations to find and use qualified employees
without having to relocate business facilities. Decentralized work sites also provide cash
savings to the organization, as well as fulfilling some special needs of a diversified work force.
For HRM decentralized work sites will require training for managers in managing and
controlling work, and establishing pay systems to reflect this work arrangement.
11

Innovations in Technology: The world has never before seen technological changes appear
as rapidly as they are presently occurring in the computer and telecommunications industries.
One estimate is that technological changes are coming so fast that a person may have to change
his entire skill repertoire three or four times in a career. Technological innovations that can
either benefit or hurt the business. Some technological innovations can increase the
productivity and profit margins. On the other hand, if the organization cannot cope with the
technological changes, then the performance will be decreased. In this case the more concerned
factors are nature of products, production methods, cost of adopting new technology, quality
control, organizational ability, etc.
Ethics: Ethics is the branch of philosophy that involves systematizing, defending, and
recommending concepts of right and wrong conduct. In practice, ethics seeks to resolve
questions of human morality, by defining concepts such as good and evil, right and wrong,
virtue and vice, justice and crime. Professionalization of human resource management created
the need for a uniform code of ethics. Today more and more companies are concerned with
values and ethics. Basically an ethical workplace is important not only for the owner’s
satisfaction but for employee satisfaction as well. Many decisions related to the management
of human resources are characterized by uncertainty. Ethics can be considered the fundamental
principles by which employees and companies interact. HRM is dealing with the value of
implementing ethical codes within the business. Generally it includes obey the applicable laws
and regulations, be honest, fair, and trustworthy in all activities and relationships.
Economic and Political Conditions: The economic and political condition, both at home and
abroad has a major impact on human resource management. In a strong, highly productive
economy, organizations have greater financial resources for attracting workers with higher pay,
for implementing training and development programs, and for funding other personnel
programs. In contrast, a struggling economy plagued by high inflation and lower productivity
intensifies the need for more cost effective management of human resources.There are some of
the factors which can be predicted and some are unpredicted. But in reality, these factors are
more or less uncontrollable in nature.
Different Laws of the Country: Actually all of the business organizations conduct their
business activities by following some rules and regulations which are formulated by the
Government. If the organization fails to follow these then the Government may give
punishment to that organization and may impose a fine over the organization. As new
employment legislation created the potential for discrimination related lawsuits and penalties,
personnel’s advice and oversights became even more indispensable. Here the concerned factors
are labor laws, women’s rights, rights of the disable persons, laws for tax administration, labor
relations, etc.
Changing demographics of the workforce
Information and communication system
Increased use of social networking to distribute information to employees
12

Bangladesh Perspective
Bangladesh has been progressing gradually towards its dream of a hunger and poverty free
society. Initially, the government of Bangladesh followed a socialist economic model. As a
result, the government and policymakers did not prioritize issues such as private sector
development, industrialization, competitiveness and human resource management (HRM).
However, after shifting its economic policies from socialism to a free-market economy in the
early 1990s, Bangladesh achieved commendable economic growth and now has an industry
contribution to GDP of about 28.5 per cent (ILO, 2013; PwC, 2015). Bangladesh is predicted
to become the world’s 23rd largest economy in terms of PPT by 2050, and has been included
by Goldman Sachs in the N-11 countries. To become a middle-income country by 2021, given
the country’s limited natural resources and abundance of human resources, the efficiency and
efficacy of HRM practices could be pivotal and driving forces for Bangladesh’s economic
development.
However, the current state of HRM practices is far below the level Bangladesh needs to
achieve. Most organizations are family owned and controlled by family members, and human
resource management activities tend to be viewed as just a company owner’s wish. But in
recent years, labour-intensive and export-oriented industries have begun experiencing pressure
from the EU and North American countries to maintain their labour-rights standards and to
improve their factories’ working conditions (Bowen, 2014; ILO, 2013). This pressure from
outside the country is compelling organizations to change their corporate culture and HRM
practices. Researchers have indicated that improved working conditions and better wage rates
could improve the productivity and the profitability of organizations in Bangladesh. Therefore,
these organizations need to develop systematic and efficient HRM practices to be competitive
globally and to cope with the changing needs of the economy.
However, in a “family or crony-capitalism” situation, employers have yet to realize, or be
convinced, that it would be in their best interest to adopt systematic and effective HRM
practices. Empirical research on HRM in Bangladesh is still rare, and only a few studies have
been published, usually on specific issues of HRM practices, in recognized and credible
journals. Thus, the current study could pioneer an understanding of the past, present and future
of HRM in Bangladesh, which would be immensely beneficial to students, researchers,
academics, business executives and policymakers. In addition, this study should encourage
first-generation Bangladesh entrepreneurs and corporate managers to develop systematic HRM
practices and, thus, gain a competitive advantage from the country’s available human
resources.
13

Present Scenario of HRM in Bangladesh
▪ Around 40 per cent of the organizations use formal background or reference check in
the selection process.
▪ About one-third of the organizations indicated outsourcing recruitment process
sometimes in the past to recruitment managerial employees.
▪ More than 25 per cent of the organizations do not conduct training need analysis and do
not provide training to employees on regular basis.
▪ Performance appraisals indicators include mostly functional achievements rather than
behavioural aspects of the jobs. However, IT and telecommunications sectors are leading
to introduce structured performance appraisal system and employee training need
identification process.
▪ More than 55 per cent of the organizations do not have any defined employee reward
and recognition programme. However, 66 per cent organizations of first moving
consumer goods, pharmaceuticals sectors and telecommunications sectors reported to
have short-term incentive programmes.
▪ About 95 per cent of the organizations do not provide long-term incentives to retain
employees.
▪ About 75 per cent of the organizations have structured mechanisms to deal with
employee grievances.
▪ About 30 per cent of the organizations reported to have preventive mechanisms to avoid
employee conflicts.
14

Rising Trends of HRM Practices in Bangladesh
Researchers have identified changes that indicate progress in terms of strategic HRM practices.
First, the role and importance of HRM is increasing in organizations in Bangladesh. Many
large organizations have already established separate HRM departments and hired professional
HRM personnel with relevant education, knowledge and experience. A few organizations have
even upgraded the status of HRM managers and incorporated the head of the HRM department
on the corporate board. The government, with help from the World Bank, established the
Bangladesh Institute of Management, which offers specialized degrees and diplomas in HRM
and related areas. Most public and private universities in Bangladesh now also offer Bachelor
of Business Administration (BBA) and Master of Business Administration (MBA) degrees,
with specialization in HRM.
Second, shifts in recruitment and selection practices are also visible in Bangladesh. Private
sector organizations are beginning to emphasize competency-based approaches in their
recruitment and selection practices. Organizations are moving away from the traditional view
of educational qualifications and experience to one focused more on individual achievements
and work-related competencies. Employers are changing their focus from “what” to “how” to
use qualifications and knowledge criteria. In the context of huge levels of unemployment,
where sometimes more than 1000 applicants vie for a single position, educational achievement
is still used to reduce the number of applications to a manageable figure.
Globalization has changed the landscape of modern workplaces, and organizations are facing
continuous automation and technological challenges in the changing nature of their business.
These technological changes have placed increased pressure on organizations to update
employees’ knowledge and skills in order to compete in the global arena. The pace of
industrialization in Bangladesh also has intensified the competition for talented employees
among organizations. To cope with the competition, organizations are now realizing the
importance of investing in employee training and development activities, and are establishing
separate human resource development (HRD) departments, including specialized professionals
and experts.
The introduction of performance-related pay (PRP) is explicit in private sector organizations,
mainly in multinationals and leading local organizations in Bangladesh. However, public sector
organizations are still lagging behind in implementing such practices because of legal
complexities. Most public sector organizations still consider seniority as the main criteria for
pay and promotion.
As we mentioned earlier, lack of comprehensive studies on HRM practices in Bangladesh make
it difficult to discern overall scenarios, and therefore, we collected information from many
different sources.
15

Challenges of Human Resource Management
Practices in Bangladesh
The challenges are facing; following:
• People with lack of managerial and technical skills.
• Lack of friendly business environment.
• Aging workforce and retirements
• Less experienced and smaller younger generations.
• Competition with other MNC to get talents.
• Layoffs and downsizing
• Changing demographics of the workforce
• Political Conditions
• Ethics
• Leadership
• Public Relations
• Innovations in Technology
• Changing Market
• IHRM Practices
• Staffing
• Organizational Challenges: Work Force Diversity, Organizational Objectives,
Downsizing, Business Process Re-engineering.
• Environmental Challenges: Globalization Movement, Change in Economic Outlook,
Change in Political Environment, Change in Socio-cultural Environment, Change in
Technological Environment
• Globalization
16

Future Challenges of HRM Practices in
Bangladesh
Bangladesh is now considered a supplier of products to MNCs in the garment, electronics,
pharmaceutical and other labour-intensive industries, and employers are blamed for labour
exploitation and unethical HRM practices. Bangladesh is far behind in terms of implementing
equal employment opportunities and inclusive employment practices. HR managers are facing
a big challenge in adjusting to diversity management and inclusion issues, as these require
changes in employment policies, such as those dealing with working hours, health and safety
measures, statutory maternity leave, a work–life balance, childcare facilities and so on .
Though Bangladesh is a country with abundant labour, employers still complain about a
shortage of highly skilled employees in many professions, as well as a lack of competent senior
level employees. In the absence of an integrated national education and HRD policy,
educational institutes are producing housands of non-technical and non-vocational graduates
every year. This creates a huge imbalance in the labour market. Many highly educated
graduates remain unemployed, on the one hand, while knowledge-intensive industries face skill
shortages on the other.
In addition, in recent years, the free-market economy has intensified competition in different
industries, and companies now face stiff competition in acquiring and retaining talented
employees. HR managers are struggling to attract and retain the talent required by
organizations. The legal context of Bangladesh is viewed by some as a barrier to introducing
the latest HRM practices. Labour laws in Bangladesh turn it very complicated for the
organizations to hire part-time employees or to change employment contracts from a full-time
permanent position to a temporary or adjunct position. Such a rigid regulatory environment
handicaps HRM managers who need to implement appropriate and effective HRM practices in
their organizations.
As Bangladesh is moving from being a developing economy to an emerging economy, people’s
expectations and values are also changing. In the last 2 decades, because of globalization and
the IT revolution, people are better informed about the world, work and civic facilities of
modern life. While previous generations worried about savings and job security, the new
generation of employees are more concerned about relationships, a work–life balance and
meaning in their work. Women are joining the labour market in increasing numbers, and the
number of working couples is increasing too.
17

In Bangladesh, politics determines or influences most business decisions. It is difficult to
differentiate between a businessperson and a politician. Business people need to maintain
contact with political leaders to obtain loans from banks or to get necessary support from the
government or supporting agencies. Recruitment, promotion, trainee selection, salary
adjustment, management–union relationships and so on, are all influenced by politics and
politicians. Political ideology became prominent in employee recruitment and selection,
training and promotion activities in public sector organizations. Private sector business owners
also consider political links or the background of employees to achieve their long-cherished
political motives. For HRM managers, moving beyond this tradition of political links, without
the consent of owners, could be a big challenge when implementing the latest HRM practices.
The HRM managers in multinational corporations also face a dilemma in maintaining the
balance between global HRM prescriptions and the requirements of local subsidiaries in
Bangladesh. As globalization bring the world closer, HRM practices in Bangladesh are also
influenced by multinationals and other dominant ideologies. Many multinationals have been
operating in Bangladesh for a long time, and their financial performance is better than that of
the local competitors. MNCs are role models in developing systematic HRM practices and
leading local companies are trying to imitate their practices. However, owing to cultural and
institutional differences, the efficacy of these practices for local companies remains in doubt.
18

Recommendations
Most important challenges of HRM are technology, e-commerce, and workforce diversity,
and globalization, ethical consideration of the organization which may directly or indirectly
affect the organizations’ competitive advantages, especially with technological advancement
the affect on recruitment, training and development and job performance with great extent can
be study in organization. The challenges of the HRM are evolving with the change in
competitive market environment.
With the increase in competition, locally or globally, organizations must become more
adaptable, flexible, and customer-focused to succeed. At present HR professionals are facing
different types of challenges. As a result, it is very difficult for them to retain, attract and take
care of valued employee. If the organization wants to get better output from the employees,
firstly it should overcome the challenges. The study suggests the following recommendations
to face the HRM challenges effectively and efficiently:
Proper performance evaluation system should be used in the organization to reduce
professional mobility.
Encourage open communication among employees and respecting everybody’s opinions.
Involve as many employees as possible in the formulation and execution of organizational
plans. Because if the employees involved in making plans, they will be motivated and
determined to implement those plans.
Take different kinds of plan for increasing quality and productivity of the product and
service.
The HR manager must take different steps to increase job satisfaction among employees.
Arrange effective training and development program for the employees. In the case of
foreign assignment, cross cultural training should be given so that they can understand the
culture of other countries.
Design a handsome compensation package for the employees.
Identify appropriate source of recruiting and selecting employees.
Develop financial management and budgetary skills so that organization can reduce extra
cost of managing the organization.
The HR managers must be updated with the new technologies. Hence they must be adopted
as and when required and employees should be motivated to adopt these.
19

Conclusion
Now the members of today’s workforce have more education, higher aspirations about
participation, and more expectations about due process in the work situation. Some segments
of the work force are more likely to find collective action such as unionization acceptable than
in the past.
Influences on human resources management from the external environment are many. Some
of the more salient external influences, which tend to be interrelated, are the high cost of
energy, inflation, differential industry growth, intense national and international competition,
successful management practices in other countries, government deregulation of several
industries, technological innovations, and widespread concerns about productivity and product
quality.
HR professional can’t ignore these challenges rather they ought to be line to design and execute
innovative mechanisms of developing skills and competencies of human resources to prepare
them to accept the emerging challenges. All-time HR manager should be prepared for facing
the challenges when these will be arisen and all of the required mechanisms should be adopted
for reducing the effects of these challenges. After all, it’s always best to hope for the best, but
to be prepared for the worst.
20

Challenges of Human Resource Management in Bangladesh

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