Compensation and Benefits of

Bashundhara Paper Mills Ltd.

 North South University

Human Resource Management

MGT 351, Section 5

BEXIMCO Pharmaceuticals Ltd.

Prepared For

Mohammad Monzurul Islam Chowdhury

School of Business
North South University

Prepared By

MD. ABU BAKR SIDDIQUE ID# 1310758030

Faria Nazin Mahbub ID# 1411093630

Humaira Hossain ID# 1310679030

Kamrul Hasan ID# 1310781630

Md. Imran Hossain Himel ID# 1310111630

Kazi Md. Shamsul Alam ID# 1230561630

 Date of Submission: December 12th, 2015

Letter of Transmittal

12th of December, 2015

Dr. Md. Khasro Miah

Professor
School of Business
North South University

Subject: Letter of Transmittal

Dear Sir,

With great pleasure, we are submitting the project on Compensation and benefits of
Bashundhara Paper Mills. We expect this report would fulfill all the requirements of our
course Bus-601 of MBA program.

We have put in our best effort to make this report successful. We have followed all the
criteria and guidelines you provided us to prepare this report. However, we are sure that this
report could have been a more superior one, if we had enough time for preparation. However,
this has obviously been a great source of learning for us to conduct similar types of studies in
future.

We would like to express our sincere gratitude to you for your guidance and suggestions in
preparing the report. We will be happy to provide any further explanation regarding this
report if necessary.

Thank you for the guidance throughout the preparation.

Sincerely,

Md. Homayun Kabir

Salman Daud
Abdullah Al Masud

A. F. M. Khairul Bashar

Table of Content

Topic Page Number

Background of Paper Industry 1-4

Company Analysis: Bashundhara Paper 5-7

Mills

Table : Company information 8-9

Company Mission Statements (central 10

issues) of Bashundhara Paper Mills

Success story of Bashundhara Paper 11-12

Mills

Interview information 13

Conclusion and Future direction 14

Scenarios development 15-19

Discussion questions 20

Bibliography 21

Appendix 22-23
Background of Paper Industry in Bangladesh

Introduction

The paper industry in Bangladesh went into operation during late 1950s when Daud Group
had established the Karnaphuli Paper Mill (KPM) at Chandragona in Chittagong using local
bamboo as raw materials. Following that, Bangladeshs private sector paper mills started
with the setting up of Khan Md Iqbal Board Mill in early 1980s in Narayanganj (Paper
mills Industry in Bangladesh 2014).

Production
Currently, 55 local private paper mills account for a market share worth Tk 25 billion by
producing more than 990000 tons of paper a year. If we see back in 2004 the annual paper
production was 250000 tons followed by a gradual growth and in 2008 it reached to 355000
tons since then a steady growth observed in paper industry and by 2014 it increased to
990000 ton. That is almost fourth times compared to 2004 year paper production (Paper
mills Industry in Bangladesh 2014).

Paper Production Trend

Production Year Production(thous)Ton

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

940 990
740
640
560
460
320 335 355
250 280

1 2 3 4 5 6 7 8 9 10 11

Source: Bangladesh Bureau of Statistics

1
De-inking technology in paper industry

The introduction of new Chinese technology called De-inking has brought a tremendous
boost in the production of off-set paper for writings and printings which is enormously
contributing for an increase of paper production (Financial express March 16, 2013).

Consumption
Bangladeshs consumption of paper and paperboard has been slightly more volatile than
consumption at the global level, but still shows a clearly increasing trend. In Bangladesh,
the paper industry uses mostly bamboo and mixed hardwood. Both of these raw materials
come from Bangladeshs forests, which is however not sufficient to satisfy the demand for
paper in Bangladesh. Hence, beginning in the mid-1980s, Bangladesh has imported
increasing amounts of pulp and paper. Today, Bangladesh imports about 250 thousand tons
of paper and paperboard a year, which amounts to about US$300 million (Export
Promotion Bureau, Bangladesh, n.d.).

Paper Consumption Trend

Consumption Year Consumption(thous)Ton

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

860
715 750
625 660
535 550 590
490
310 360

1 2 3 4 5 6 7 8 9 10 11

Source: Export Promotion Bureau

2
With increasing imports, the domestic production of paper and paperboard has decreased
drastically in Bangladesh. Today, Bangladesh produces less than 20 percent of its paper and
paperboard consumption. Over the Last decade there is an upward trend in paper
consumption, in 2004 it was 310000 tons and by 2014 it increased to 860000 tons which is
almost three times.

As the world is becoming more aware of Mother Natures declining resources, the need for
green and sustainable alternatives to preserve the natural resources are also increasing.
Many industries today offer green products, and one such industry that is on the rise is the
tree-free paper industry. The paper industry is the largest industrial wood consumer in the
world. Although recycling has helped, it has not been able to make an appreciable
difference. Using agricultural residues as a fiber source for paper offers clear environmental
benefits, making use of an existing waste product while displacing the need for virgin fiber.
Farmers also avoid generating the air pollution that results from the widespread alternative
practice.

SWOT Analysis of Compensation and Benefits of Paper Industry

Strength Weakness
Irregular payment
Fair Working Environment
Unadjusted Payment System
Increment
Lack of Branding
Contingent Rewards
Profit Sharing

Opportunity Threats
Government Supports Others Attractive Compensation
Market Demand Strong Vertical Competitors Branding
To Attract Fresh Graduates Less Employees Retention Rate
To Increase Profit Sharing Portion Lack of HR Department
Intensive Training Program Less job satisfaction
More Fruitful Benefits

3
Description: If we consider, the industry SWOT from the initial to the new area of paper
industry in terms of compensation and benefits, we will observe a plenty of changes. The
major strengths for paper industry are being fair working environment, increment,
contingent rewards, profit sharing plan, and proper training and development programs for
future career progress and all of those strengths are facilitating the achievement of
respective organizational goals. Few internal factors are hampering to achieve corporate
goals including irregular payment system, unadjusted payment system, lack of brand image
compared to other vertical competitors such as banking industry, service industry and others
MNCs.

However, if we look external factors first of all lets start with opportunity. It indicates a lot
of scopes by implementing those, paper industry could progress much more than what they
are today mentioning by arranging more intensive training program, attractive compensation
and benefit package with the given government support and expanded market demands for
papers. On the other hand, few threats that paper industry firms are facing from competitors
especially vertical competitors like banking institutions, financial corporations and service
firms of attractive compensation and benefits.

4
Company Analysis

The Bashundhara Group has started operation as a real estate venture known as
"Bashundhara" under the support of the Group's first concern - the East West Property
Development (Private) Ltd in 1987. Bashundhara Paper Mills Limited (BPML) is a pioneer
among the private sector paper producers in the country. The enterprise, since its inception in
1993, is helping the nation save huge amount of hard-earned foreign exchange by cutting
dependence on imported paper products. Bashundhara paper mills ltd. has 70% of the total
market share. Since it is a private sector company its HRM practices are better than
government owned paper mills (company history, n.d.).

HRM Department of Bashundhara (see appendix 1.1 for HR orgonogram)

In the beginning, the Bashundhara paper mills did not have any HR department, it had
personnel division. Later in 2005 it opened it Administration & HR department. In the
beginning Bashundhara paper mills did not followed constructive & progressive HR
strategies. But now they follow traditional HR practices and carry out the following HR
strategies & practices.

Bashundhara paper mills believe that Manpower is the main aspects of a company and
they are giving top priority in its Manpower. The plan/program on the aspect will attempt
to improve the current and future performance of the employees by increasing their
ability to perform better services. The company bears all expenses related to such
trainings. The company to motivate its employees providing performance based rewards
or benefits.

Bashundhara paper mills provide employees with opportunities to grow. Promotion is

based both on seniority and performance. The performance of each employee is reviewed
every 6 months and the employees merit in the company depends on that. However, the
employees at the same level can be paid more or less depending on his performance.
After the initial two years, the growth of the employee in the company is mostly
dependant on his performance.

5
Compensation & benefit unit carry out the following HR Planning Process to develop
HR strategies-

HR department first sets compensation & benefits related objectives

Analyze internal weaknesses of HR capabilities related to compensation & benefits
Scan external environment for changes affecting employee motivation regarding
compensation
Developing Organizational market standard pay plan, compensation structure, benefit
plans for employees
Finally implement those HR strategies and plans throughout the organization & control.
Source: (Jubaier Ahmed, personal communication October, 2015)

Compensation & Benefit unit provides following HR services-

Compensation and benefits, Loan & advance, In-house welfare scheme, Final payments of
outgoing employees, Payroll preparation, Calculation of Bonus, deduction & incentives &
leave encashment, Attendance and leave record, Annual appraisal, Maintain leave records
etc.

Some features of Compensation & Benefits of Bashudhara Paper Mills ltd.

Salary Above standard in the market, Regular increments, Festival Bonus: yearly one
month salary (5 festival Bonus).

Holiday Weekly Holidays.

Leave 24 days leave at Head Office and 24 days leave in factory, 15 days
government holiday list followed.

Food Cafeteria system in H/O, factories : subsidized foods during lunch, Free food
for labors in factory

Development Promotions open for deserving candidates and also based on seniority.
Transport AC Bus provided for transportation for employees (inside and outside Dhaka).

Source: (Jubaier Ahmed, personal communication October, 2015)

6
SWOT of Bashundhara Paper Mills Ltd. (Compensation)
(Managerial Employees Level)
Strength Weakness

Regular Increments Late disbursement of salary

Performance Based Rewarding Improper adjustment in giving salary
Multiple Festival Bonuses No insurance scheme

Opportunity Threats

Profit Sharing to Motivate Employees Decreasing Employee Retention

Group Insurance/ Life Insurance Psychological Stress of Employees

(Non-Managerial Employees Level)

Strength Weakness

Standard Level Compensation Late disbursement of salary

Multiple Festival Bonuses Discrimination in providing benefits
No insurance scheme

Opportunity Threats

Fair Rewarding System Declining Employee Satisfaction

Fair career development Programs Declining Employee Motivation

Description: If we consider our focusing organization Bashundhara Paper Mills, we can see
some of its strengths that accelerate its way of achieving goals including standard level
compensation regular increments, flexible payment mode (Bank, cash etc.), performance
based rewards, and festival bonuses. It also has internally some weak points including, late
disbursement of salary, discrimination in providing benefits, improper adjustment in giving
salary and no progressive insurance scheme. These factors reduce the job retention at
Bashundhara paper mills and also contribute to lower job satisfaction. When employees and
workers are dissatisfied with salary it increases their psychological stress and leads to
reduced performance. This is why the retention rate in this company is relatively low.

7
On the other hand, external factors come with opportunities where Bashundhara Paper Mills
can promote their business by engaging with proper initiatives including implementing
following: profit sharing, group insurance and life insurance, fair reward practicing system
and training and development programs. Bashundhara paper mills ltd. must be aware of their
threats regarding compensation & benefits. It must develop and implement right strategies to
implement them.

Bashundhara Paper Mills Ltd. (BPML) at a Glance:

Features
Year of Establishment
Total Capital
Total Workforce
Total managerial and non-
managerial employees
Core export items (last 5 years)
Core import items (last 5 years)
% of employee retention rate
Total production capacity
Business Type
Main Markets
Product/Service
Figure
1993
BDT 15000 Million
BPML Unit-1 898, BPML Unit-2 1377, BPML Unit-3
1791 respectively
1224 and 2842 respectively
A4 Paper, Facial Tissue, Pocket Tissue, Toilet Tissue,
Napkin Paper, Kitchen Towel, Clinical Bed Sheet
Production Machineries, Raw Materials
75% - 80%
20000 25000 MT
Manufacturer
North America South America Eastern Europe
Southeast Asia Africa Oceania mid-East Eastern Asia
Western Europe
Facial tissue, pocket tissue, toilet tissue, napkin paper,
kitchen towel, clinical bed sheet, white paper liner &
media paper, NCR paper, Sanitary Napkin, offset
paper, Newsprint paper, Biri Paper, A4 Paper

Business Owner Ahmed Akbar Sobhan

Region Bangladesh
Source: Jubaier Ahmed, personal communication October, 2015.

8
Bashundhara Paper Mills Limited (BPML) one of the largest concerns of Bashundhara
Group is also a pioneer among the private sector paper producers in the country. The
enterprise was established in 1993. Currently the company has a capital of BDT 15000
million. It has basically three units such as BPML Unit 1, BPML Unit 2 and BPML Unit 3.
The Unit 1 has a total workforce about 898 people, Unit 2 has a total of 1377 people and Unit
3 has a total of 1791 people working. The company has a total of 1224 managerial and 2842
non managerial employees and since its inception it is continuously growing along with its
employees as well business and become the leading paper manufacturer in Bangladesh. Its
core exports items are A4 Paper, Facial Tissue, Pocket Tissue, Toilet Tissue, Napkin Paper,
and Kitchen Towel etc. and core import items are basically production machineries and raw
materials. The companys employee retention rate is at about 75% to 80%, which is a good
sign for its growth and development. The production capacity of BPML is around 20000
25000 MT per year. Bashundhara Paper Mills which controls countrys around 350000 tones
paper market is continuously taking a move to expand its capacity.

By meeting the local paper demand the company also exports its products to the abroad.
Companys major markets are North America, South America, Eastern Europe, Southeast
Asia, Africa, Oceania, Mid-East, Eastern Asia and Western Europe. BPML is helping the
nation save huge amount of hard-earned foreign exchange by cutting dependence on imported
paper products (Bashundhara paper mills at glance, 2013).

Financial Condition Analysis of BPML

For a better understanding of BPML economic condition we must go through its financial
statement analysis part.

Sales Volume (see appendix 1.2): If we see last five years sales volume of BPML, we can
see there is a steady increase in sales volume. That clearly indicates BPML is doing well
operationally in the market.

9
 Year 2010 2011 2012 2013 2014

Sales 196956321 239098497 195550335 157092044 265727042

Profits Analysis (see appendix 1.3): Simultaneously with the increase of sales gross and net
profit portions also significantly increased. It clearly indicates that BPML operational
efficiency.

Year
2010 2011 2012 2013 2014
Gross Profit
29551065 30522188 26504560 22563612 35415642
Net Profit
15770854 16448475 14605540 9939553 18310780

(Source: Annual Report of BPML 2010, 2012 and 2014)

10
Company Mission Statements (Central Issues)
Vision: For the People, for the Country
Mission: Strives to Work Making Partnership with the Government for Promoting
Sustainable Development, Economic Protection, Employment Generations and Poverty
Reductions.

Goals of the Organization:

Create affordable housing (developed land & houses) for people
Foster better living environment and pleasant surroundings
Ensure environmental balance and sustainability
Use re-cycled raw material in industrial production
Establish recreational and shopping facilities for people.
Develop a meaningful partnership with others for development
Provide better working conditions for its staff members

Business and Marketing Strategy

Brand Elements:
Brand name: Bashundhara Group.
Slogan: For the country, for the people
Brand Association:
Brand associations are such a vital task for any kind of organization The BG brand
associations are formed on the following basis:
Customers contact
Advertisements
Word of mouth publicity
Price at which the brand is sold
Quality of the product

Thats all are the major business and productions strategies followed by the Bashundhara
Group. Thats how it is generating revenue by maintaining its core philosophies and going
to achieve its long term vision with effective workforce (Company overview, n.d.).

11
Success stories of Bashundhara Paper Mills

In a country of dense unemployment like Bangladesh, revolution of provision of about one

hundred thousand people has been accomplished in which vast business empire, that one is
named Bashundhara Group. Bashundhara, possessor of vast unique characteristic features in
housing industry, raised by private initiative in countrys private sector.

Year Description
1994 Bashundhara Paper Mills Limited (Unit-2) formally known as Bashundhara
Newsprint & Duplex Board Industries Limited, was set up at Meghnaghat,
Sonargaon, Narayangonj. The first plant produces duplex boards and other
industrial packing papers used in packaging industry. The second plant produces
environment friendly newsprint from recycled pulp (DIP) for national dailies,
weeklies, fortnightlies. It also produces writing and printing paper for local
consumption and also for printing text book for NCTB. The third plant makes art
paper for printing industries.
1995 Bashundhara Paper Mills Limited, formerly known as Bashundhara Tissue
Industries Limited, was set up as the countrys first basic tissue manufacturing
factory at the face of growing popularity of tissue with fast changing urban lifestyle
and elevation of living standards as a whole. The import-substitute industry has
attained ISO 9002:1994 certification for its quality management system and ISO
14001:2004 certification for its environment management system.

1997 On the bank of river Meghna, Bashundhara Paper Mills (Unit-1) is located on the
eastern side of Dhaka-Chittagong highway, about 29 KM off from zero point
Dhaka. By providing substantial volume of quality paper, BPML (Unit-1) has
succeeded to reduce the gap between demand and supply of paper in the country.
This has resulted to curtail the volume of import of paper and to save the hard
earned foreign currency. A team of professionals has been engaged in running mill
since it had stepped in. This management team is of high commercial and
technological caliber and assumes a real international status with profound degree
of specialization in the field of paper production.

12
Bashundhara Paper Mills Ltd. is the Market leader in paper market by having more than 70%
market share and also exporting paper products to different countries. To develop its
product it has a very efficient R&D team and world class Lab facility in all the three paper
producing units. Technical resources of all the paper mills are very strong as we have the best
quality people working with the best machines of this country including some foreign
experts. Because of Sustainable Production, Superior Quality, and Smart Marketing with a
premium quality paper Bashundhara Paper is continuously expanding its business and
making a huge contribution on the national economy (success story of Bashundhara paper
mills, 2013).

13
Interview Information

We took interview of HR executives named Jubaier Ahmed and Mr. Mahabub Hasan
currently working in Bashundhara Paper Mills. He gave us some useful information about the
company. The company follows the basic HR practices (traditional) like hiring, training and
development, recruiting, selection and so on. Besides, the administration and HR department
is jointly working. The administration is on the charge of salary and benefit and HR
department is on the charge of promotion, training, performance appraisal. Bashundhara
paper mills recently complied FSC system (Forest stewardship council) is an international
multi stakeholder organization establish to promote responsible management of the worlds
forest. Its main tools for achieving this are standard setting, certification and labeling of forest
product. The company complies all terms and condition of FSC system so it can use the sill
on its paper; as a result it is now easier for them to export outside of the country.

Some unique compensation & benefits of BPML Mr. Jubaier Ahmed discussed with us
which are banks provide special loan facility to the employees with no interest (company
pays the interest) in case of emergency, free income tax consultancy to employees, group
deposit pension scheme for employees, incentive & commission for employees based on
performance, position and department and scholarship program for employees children.

The company recently introduced ERP software which is integration software combining all
information among different departments. The company use SAP software (bought from
German Company) to integrate the whole operation. So every department is aware of new
order.

The current value of the Bashundhara Group's total assets is about Tk. 15000 million,
equivalent to approximately US $300 million. The major strength of this company is the low
cost of production due to economies of scale and the weakness is that it is still private ltd
company. The company is striving to be public ltd company.

14
Future Direction of Bashudhara Paper Mills

Human Resource (HR) management is not a new concept in Bangladesh. From the very
Beginning of a company of large investments, HR has turned out to be one of the vital
ingredients of a companys existence and make a mark in the market. With the passage of
time HR practices has revolutionized with the modern world and incorporated it with new
technologies and modern sciences. Nowadays even the small and medium companies venture
to have a different HR department in order to utilize their human resources most effectively
and efficiently in order to maximize their productivity.

Future direction for Bashudhara Paper Mills is the company should improve from the root
level starting from the recruiting process to selection, training, development, performance
appraisal, ethics, and fairness treatment up to employee safety. They should give the salary
and bonus on time. In order to give salary and other benefit on time, they need to solve
liquidity problem of their current bank account. Moreover, their HR department should be
taking the charge of distributing salary and other benefit. Now finance and administration
department is on the charge of salary and benefit. In order to maximize benefit of employees
and employer, salary and other benefits should be in the charge of HR department. The
training and development of their current employees need to enhance more to improve their
performance in their job. Performance appraisal process needs to improve more, so that
employees work efficiency and effectiveness can increase, thus they can drive the company
towards more profitable so that Bashundhara can invest at the right time to compete with
their competitors market.

15
Scenario Development
Real Life Case-One:
Theme of case

Late Disbursement of Compensation Can Cost a Lot

Background of the case

Md. Sazzad Hossain working at Bashundhara paper mills ltd. as an executive since 2013.
After joining the company he was unhappy and disappointed with the companys salary
payment schedule.

Central issue
The problem is late disbursement of salary and sometime bonuses are not given on time. Mr.
Sazzad saw that late disbursement of compensation happening several times a year. Mr.
Sazzad received his payment on time rarely but in most of the case the payment was made
one or two weeks later than the due date (14th or 15th date of the month or later).

HR practices & policies

But the company policy states salary should disbursed by the 7th of the month.

Problem Identification
Mr. Sazzad waited several months hoping this problem will solve but nothing happened.
When Mr. Sazzad complained to his supervisor about it he told him to discuss this matter
with senior executive of compensation & benefit unit of Administration & HR department.
When he went to the HR department and complained about this problem, the executive in
charge told him that the bank account which distributes the salary every month faces liquidity
problem. The bank account faces the shortage of money. The company accounts department
has to call the bank to give short term loan to company bank account to pay the salary which
takes time. This type of problem occurs several times a year which causes the late
disbursement of salary. Although Mr. Sazzad came to know from financial reports of the
company that it has enough cash in bank and it is also making good profit each year but still
for some unknown reason the salary is not paid on time.

Mr. Sazzad has a big family; many people are depended on his income. The late payment has
made his life more difficult. Not only Mr. Sazzad has faced this kind of problem but also his

16
colleagues, subordinates have faced this kind of problem. The HR department has no good
solution to Mr. Sazzads problem. The problem still continues and it is continuing for years.
The HR department is not successfully perusing accounting & finance department to solve
this problem. They also failed to pursue management to solve this issue.

Destructive Information
A yearly report prepared by the companys HR department indicates that late disbursement of
compensation and bonuses created employee dissatisfaction and financial stress on
employees. It has minimized productivity, resulted poor performance and negligence at work
place.

Analytical information
It also lowered employee retention by 20%-24%. These negative outcomes have cost the
company a lot regarding recruitment, selection, training and leading experienced loyal
employees to resign. The HR department is developing many planes to solve this issue but no
one knows when it will be solved. Now Mr. Sazzad is looking for other companies to get a
new job.

Discussion Questions with this Case:

1. What is the main problem in this case? How the HR department can go in-depth of it?

2. What plans & strategies the HR department can make to solve this problem?

3. How the HR can motivate dissatisfied employees in this situation?

4. Do you think the HR & management are reluctant about this problem? How their attention
can be gained in this case?

5. How the issue will affect the company & its manpower in the long run? Discuss.

17
Real Life Case-Two:

Theme of case
Unadjusted Salary Accumulates a Sense of Dissatisfaction

Background of the case

Bashundhara Group (BG) is one of the leading organizations in Bangladesh. It is usual to
practice a leading compensation structure being a catalyst company but after talking to Mr.
Haris Al Asad who at present is working as senior accountant at Bashundhara Paper Mills we
came to know that the compensation policy maintained by BG is not remarkable in terms of
adjustment implies lacking of its up to date.

Central issue
Mr. Haris Al Asad also mentioned when he joined here in 2013 up to this year 2015 his
salary has not been adjusted properly with the changes of overall economic conditions of the
country and salary structure of other similar type and positional companys jobs.

HR practices & policies

Although it is clearly mentioned in salary and compensation program of Bashundhara Paper
Mills:
If a supervisor believes that the current salary of a staff member needs to be reviewed due to
pay compression, market factors, or increase of duties, the supervisor can submit a request to
review the salary. The request should include the reasons for the review and a current resume
for the staff member. A staff member must have at least six months of continuous service in
his current position to be eligible for a salary adjustment. An employee, who currently is on a
performance improvement plan, will not be eligible for a salary adjustment. Individual salary
changes will be recommended on the basis of performance, qualifications, internal and
external market factors, and position in the salary range.

Problem Identification
However, Mr. Haris Al Asad already has reported to concern Department HR for his salary
adjustment according to companys salary and compensation policy considering his
performance and overall economic conditions. But he replied something like we are
considering your salary adjustment soon But Mr. Asad it was still nine months earlier and
company yet to implement their saying.

18
Destructive information
He also mentioned, not only him but also other employees of the organizations whom salary
and benefits are not adjusted for a long time even their performance overstated settled goals
by the organization. He said with sad voice, doesnt it create a sense of dissatisfaction in
employees minds?

Analytical information
BPML has a standard compensation and benefit package but it is lacking proper adjustment
and implementation.

Discussion Questions with this Case:

1. What is the main issue of the case?

2. Isnt it a violation of companys promise giving in recruitment?
3. The probable consequences of unadjusted salary among employees?
4. What initiatives DHR should take minimize diverse effect of unadjusted salary?
5. Doesnt it diversely impact long term growth of the organization?

Real Life Case-Three:

Theme of the case

Fair Compensation System Creates Employees Satisfaction

Back ground of case

After having a direct conversation with HR executive Mr. Mahabub Hasan of BPML we
come to about the compensation structure of Bashundhara Paper Mills Ltd. is designed in
such a manner that attracts retains and motivates qualified and skilled employees at all levels.

HR Policies and practices

The Compensation Principles of the company is to provide a level of compensation that will
attract, retain and reward competent employees at all levels considering Internal and external
Equity.

19
Central issue
Meanwhile Bashundhara Paper Mills Ltd. is deeply concerned about the relative weight of
jobs; be competitive and internally consistent and fair; recognize individual performance and
contribution and uphold the excellent understanding and relationship with the employees.

Problem statement
In order to attract and retain employees, BPML considered to reward and set a competitive
compensation structure in accordance with the companys financial performance and internal
salary analysis and market dynamics. The Company offers a Compensation package of
salary, a wide range of cash and non-cash benefits and services including monthly guaranteed
cash and admissible variable components and yearly cash and non-cash benefits (dependent
on eligibility) and long term/deferred benefits. But the problem is that it is unable to provide
100% of this. In view of Company's strategic objectives and unique characteristics and
environment prevailing in the Paper industry of Bangladesh, Bashundhara Paper Mills
considers cash and non-cash benefits, internal and external equity, competitiveness,
consistency, performance based pay etc to determine an attractive compensation system.

Constructive and analytical information

Pay and benefits are extremely important to both new applicants and existing employees. The
compensation received from work is a major reason that most people seek employment.
Compensation not only provides a means of nourishment and allows people to satisfy their
materialistic and recreational needs, it also serves their ego or self-esteem needs.
Consequently, if a firm's compensation system is viewed as inadequate, top applicants may
reject that company's employment offers, and current employees may choose to leave the
organization considering so many factors which needs to be cared off.

Discussion Questions with this Case:

1. How does expected performance relate to the current business outlook?
2. What are the results that need to be achieved in the short and long term?
3. How is compensation perceived by employees (fairness, reasonableness)?
4. To what extent is the legal department involved in compensation planning, design,
administration and disclosure?
5. What will be the shareholder expectations about the compensation programs, and how do
they affect plan design?

20
Discussion Questions

1. Discuss briefly about production, consumption & market growth of paper industry.

2. Discuss the SWOT analysis of paper industry (salary & benefit perspective) with
examples.

3. Write brief history of Bashundhara paper mills (BPML) and discuss its mission, objectives
and marketing tactics.

4. What are the HR practices Bashundhara paper mills have and what types of HR services it
provides?

5. Discuss the strength & opportunity of Bashundhara paper mills (compensation view point)
& how can it overcome it weaknesses (compensation view point)?

6. What are the unique features of compensation and benefits of Bashundhara paper mills?

7. What are the unique technology and software are used by BPML for providing better
products & services?

8. What are major successes BPML achieved in its 20 years of doing business?

9. What are the main HR issues of BPML and how the HR & management will tackle it?

10. Discuss the future direction of Bashundhara paper mills

21
Bibliography

Bashundhara Paper mills credit rating analysis. (n.d.). Retrieved October 29th 2015, from
crabrating.com/index.php/Organizations/download/
Company history. (n.d.). Retrieved 27th October 2015 from
http://www.bashundharapapermill.com/
Consumption trend of paper industry. (n.d.). About paper industry consumption. Retrieved
31th October 2015, from http://www.epb.gov.bd/index.php
Paper production trend. (2014). Retrieved 28th October 2015, from
http://www.bbs.gov.bd/home.aspx
Company mission statements. (n.d.). Retrieved from http://www.bashundharagroup.com/
De-inking technology in paper industry. (March 16, 2013). Retrieved 1st November 2015
from http://www.thefinancialexpress-bd.com/de-inking technology in paper industry
Financial Condition Analysis of BPML. (n.d.). Retrieved November 2nd 2015, from annual
report of BPML 2010, 2012 and 2014.
Success story of Bashudhara paper mills ltd. (2013). Retrieved October 28th 2015, from
http://www.goldenbusinessbd.com/content/index/86.html?Content_page=6

22
 Appendix

1.1 HRM Department of Bashundhara

Management

Head of Division (AHR)

Analysis, Training & Organizational & Personal Recruitment

Planning, Policy Quality Leadership Administration & Selection
Service Rules & Management Development, &
Regulation Compensation
System Performance & Benefit
Appraisal

Source: Jubaier Ahmed, personal communication October, 2015

1.2 Sales Analysis

300000000 Sales
250000000

200000000

150000000
Sales
100000000

50000000

0
2010 2011 2012 2013 2014

23
1.3 Profits Analysis

Year
2010 2011 2012 2013 2014
Gross Profit
29551065 30522188 26504560 22563612 35415642
Net Profit
15770854 16448475 14605540 9939553 18310780

40000000

35000000

30000000
Gross
25000000 Profit

20000000 Net Profit

15000000

10000000

5000000

0
2010 2011 2012 2013 2014

Interviewing at Bashundhara group office

24