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Monowar Mahmood1
Mir Mohammed Nurul Absar2
Abstract
The aim of this study is to assess current HRM practices in Bangladesh, as
well as the future challenges the country faces. Based on secondary sources,
we explain the institutional contexts of the four main generic HRM functions:
recruitment and selection, training and development, pay and performance
appraisal and industrial relations practices. Here, we also highlight recent devel-
opments and future challenges with regard to HRM practices. While credible
research on HRM practices in Bangladesh is still rare, this study will be beneficial
to researchers and HRM practitioners interested in Bangladesh and other devel-
oping countries and, we hope, will encourage future research.
Keywords
HRM practices, developing country, Bangladesh
Introduction
Since gaining independence in 1971, 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,
1
Bang College of Business, KIMEP University, Almaty, Kazakhstan.
2
School of Business, Chittagong Independent University, Chittagong, Bangladesh.
Corresponding author:
Monowar Mahmood, Bang College of Business, KIMEP University, Almaty, 050010, Kazakhstan.
E-mail: monowar@kimep.kz
Methodology
The purpose of this article is to provide an overview of current status and future
prospects of developing systematic and high-performing HRM practices in
Bangladesh. Therefore, various secondary sources and materials were used to
review the situations. The sources comprised of articles in academic journals,
professional magazines and newspapers on HRM practices in Bangladesh. We
also used documents published by national and international organizations to
assess the current situation and future challenges with regard to HRM in
relationship with the top officials or their links with the political leadership of the
relevant ministry who ultimately decide on the senior officials. In government
departments, employees obtain promotion solely based on seniority, irrespective of
merit, performance or additional qualifications (Jacobs, 2009).
In public sector manufacturing organizations, employees have very few oppor-
tunities to undergo any training programmes, despite the fact that some organiza-
tions do have formal training departments. Most training is conducted on an
informal and on-the-job basis, and only a few organizations have well-structured
internal training programmes. A few public sector organizations (e.g., in the
chemical and textile industries) organize training programmes for different levels
of workers and supervisors through their own training centres. However, trainees
are rarely selected using a training needs analysis or performance appraisal proce-
dure. Managerial judgement on who receives training is subjective, being the
prerogative of the chief executive of the organization, and as elsewhere, employees
are chosen according to their personal relationship with top officials and their
political affiliations. Furthermore, whenever any training opportunity arises,
employees try to manipulate the selection process using the political leaders who
hold the most power at the ministry level (Haque, 2011; Siddique, 2003). Similarly
to the situation in government departments, training or further qualifications do
not bring any benefit or career progression opportunity for the employees. Instead,
promotion depends on the seniority determined by the entry-level selection tests,
and on political links with higher-level positions. In most cases, employees see
training as a reward from the higher management, which may result in extra
money or a short break from routine work (Ehsan, 2008; Siddique, 2003).
The main limitation of government training programmes is that training or
qualifications do not benefit employees, as these activities seem not to have any
impact on their career path or promotion opportunities. In public sector organiza-
tions, promotion or career advancement is not linked with further skill develop-
ment and qualification acquisition, but rather depends on seniority and
interventions from canvassers and peers. Employees have no scope to avoid the
entry-level seniority list to obtain promotions and career progression.
about the need for training programmes for workers hinder the initiation and imple-
mentation of training programmes. Industry and the educational institutes are not
linked and, consequently, industry has no influence on the development of courses,
curricula, or other instructional processes within the educational and training insti-
tutions (Mahmood & Akhter, 2011). Most trade unions are busy in bargaining and
the settlement of industrial disputes, and have little or no time or energy to organize
workers’ training programmes (Mahmood, 2008). As a result, the training
programmes that do exist have not proved relevant or useful to industry. Another
important issue is determining priorities in terms of skill development. This issue
remains unresolved since policymakers and civil society representatives are divided
on whether technical or general education should be emphasized (ILO, 2013).
complained about its bias towards upper-level employees and have asked for a
reduction in the pay differentials between the highest and lowest grades (PSC,
2013). However, the opinion of lower-level employees has counted very little, or
even not at all, in subsequent Pay Commission recommendations.
The job grades in public sector organizations are based mainly on government-
specified educational qualifications rather than on any job evaluation or job speci-
fications designed by the respective departments (Chowdhury & Mahmood,
2012). The present job grading system is rooted in that of the British colonial
administration, in which employees were not recruited to specific jobs, but instead
were given ranks. Then, an employee’s pay was related directly to the job posi-
tion/rank rather than to responsibilities or duties (Obaidullah, 1995). Job grades in
different public sector organizations are developed in accordance with the hierar-
chical ladder specified in the National Pay Scales, and the pay for each grade is
determined by “pay for rank” rather than “pay for person” or “pay for job”.
Managerial employees’ job grades in public sector enterprises are categorized
within the top10 grades of the national pay structure. Job grading in public sector
manufacturing enterprises depends mainly on the perceived educational require-
ments of the job positions and relevant managerial experience of the upper-level
jobs. In this context, jobs graded 1 to 9 are considered as Class I jobs, whereas
jobs in grade 10 are considered Class II jobs, which mainly cover entry-level
educational requirements and the quality of previous educational background
(Obaiduallah, 1995).
Non-managerial employees’ pay grading also has its origins in the historical
job classification introduced during the British period. Jobs in pay grades 11 to
16 are classified as Class III jobs, while those in 17 to 20 are Class IV jobs.
Employees within pay grades 11 to 16 must have, as a minimum, the Higher
Secondary Certificate (12 years full-time education) or equivalent educational
qualifications. Employees within pay grades 17 to 20 do not need to have any
recognized educational qualifications, other than some literacy or numerical
ability. In fact, pay grading in public sector organizations is based on hierar-
chical ranking and is linked to perceived educational requirements for each rank
or position. In Bangladeshi society, these classifications are so distinctive that
employees in different categories use different transport, canteens and other
civic facilities in the workplace. The centralized structure of pay bargaining in
public sector organizations makes it difficult to link pay with performance,
which in turn brings inefficiencies. As a result, organizations are losing compet-
itiveness in the long run.
The latest pay commission, that is, the Eighth National Pay and Service
Commission (NPSC) was formed in June 2014 and the commission has submitted
its recommendations to the finance ministry in December 2014 (The Dhaka
Tribune, 2014). This commission suggested pay raise up to 112.5 per cent for
different categories of public sector employees, compared to 94 per cent of 2005
NSPC and 96 per cent of 2009 NSPC. The suggestions for comparatively higher
salary increase aim to recruit better qualified talents into public services and to
minimize the pay-gap between public and private sector employees. According
to the proposal, the present 20 pay grades would be reduced to 16 grades. It is
educational qualifications are honoured in the job grading process, and jobs with
higher educational qualifications are placed in higher grades. Until 1992, the
literacy rate in Bangladesh was about 26 per cent, and most workers in the tradi-
tional manufacturing sector were illiterate. Although, officially, unions and
management are supposed to determine job grades jointly, in the absence of
proper union bargaining capability, management unilaterally controls the process
in most local private sector organizations.
strengthened the Ministry of Labour and Manpower and its affiliated agencies to
resolve labour disputes in a proactive manner (Absar, 2014).
occur. As the HRM profession gains momentum and HRM managers become better
equipped, the use of competency models appears to be more widespread. The
dissemination of competency-based practices from multinational corporations
(MNC) and international organizations is quite evident in different sectors (Absar,
2014; Chowdhury & Mahmood, 2012; Mahmood, 2014).
Globalization has changed the landscape of modern workplaces, and organiza-
tions 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. In some cases, the appointment of a Human Capital
Manager or Talent Development Manager indicates the increased presence of
HRD activities in Bangladesh (Absar et al., 2014). Attitudes towards employees
are changing. Rather than considering employees as a cost or negligible resources,
employers are realizing the potential value of highly skilled employees and are
investing in employee training and development activities. Certainly, this shows a
bright future for HRD.
The introduction of performance-related pay (PRP) is explicit in private sector
organizations, mainly in multinationals and leading local organizations in
Bangladesh (Absar, Nimalathasan & Mahmood, 2013). 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. According to civil service employment regula-
tions, entry-level seniority needs to be maintained throughout the service period.
Employees who receive a minimum pass mark in the annual performance evalua-
tion automatically qualify for a pre-specified annual salary increment, as determined
in the National Pay Scale. However, there is no scope to reward any employee by
more than this pre-specified increment, irrespective of their level of performance.
In contrast, private sector organizations, concerned about productivity and growth,
are gradually moving to PRP to improve productivity and employee motivation
(Khan, 2013; Mia & Hossain, 2014). However, the operation of PRP and the
selection of criteria to assess performance seem to be contentious issues. For
example, the PRP system could have a negative effect on employees, who might
not receive a pay raise because of apparent inefficiency or incompetence.
In recent years, private sector organizations have shifted their attitude towards
workers and trade unions. In several instances, employers have taken the initiative
to resolve industrial disputes, enabling unions and management to cooperate at the
plant or sector level and avoid government intervention. Employers and employees
both view this as a welcome step, because the earlier tripartite nature of the
conflict resolution process seems to have been ineffective owing to government
involvement and ulterior political motives. The bipartite dispute resolution mech-
anism in the garment and leather sector seems to be a good example of an effective
• About 33 per cent of organizations used internal referral and word of mouth in
the employee recruitment process. Use of social media and mobile applications
are very limited (i.e., less than 10 per cent) in the recruitment process.
• 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.
Source: Daily Star, 2 February 2014.
Conclusions
HRM practices in Bangladesh used to resemble those of personnel management
practices in which the role of HRM managers was confined to administrative and
legal issues, as happened in many other developing and emerging economies
(Budhwar & Debrah, 2001; Mahmood & Baimukhamedova, 2013). In public
sector organizations, HRM practices are still highly centralized and all practices
HRM practices for specific industries and sectors of the country. Also, the socio-
cultural differences in Bangladesh may require careful adoption of universal best
HRM practices. Future researchers could examine the effectiveness of so-called
best practices and find different set of modified HRM practices effective in the
socio-cultural context of Bangladesh.
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