Kathmandu University School of

Management

Report on Ethics in Recruitment and Selection at Prabhu Bank Limited

Submitted to: Submitted by:

Prabina Rajbhandari Shailesh Gyawali

Assistant Professor Roll: 157038

Business Ethics Group: A

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Executive summary

Laws are the base on which organizations are built. Laws must be compulsorily followed.
However, above laws organizations have to be ethical. As a part of report on Ethics, I had
selected the topic Ethics in recruitment and selection in Prabhu Bank Ltd. In a short interview
with HR head of Prabhu bank Mrs. Rashmi Pant, I could know that they were ethical in terms
of recruiting and selecting employees in the organization, whether that is internal or external.
They have set of predefined criteria for selecting employees written in banks rulebook and they
do not deviate from this. Bank does not prefer favouritism and nepotism or practice any
discrimination on basis of race, age, sex, gender. We hear many instances were recruiters select
candidates in the greed of money or gifts, but such practice is strictly prohibited in Prabhu Bank
and has a strict punishment if anyone practiced this.

In addition to the laws that are put forward by regulating agencies and the government,
organizations are required to act ethically. An organization can sustain for a longer period and
remain profitable if they act ethically. Unlike Enron, who collapsed on acting unethical and the
top executives are still facing its consequences. Prabhu Bank refers themselves as an ethical
organization having a good corporate culture. As the recruitment and selection is also an
important aspect of organization, being ethical in recruiting helps the organization increase its
reputation and Prabhu Bank believes in this.

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Contents
Executive summary ................................................................................................................................. 2
Introduction ............................................................................................................................................ 4
Body ........................................................................................................................................................ 6
Conclusion ............................................................................................................................................. 10
References ............................................................................................................................................ 11
Appendices:........................................................................................................................................... 12

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Introduction
Prabhu bank is an ‘A’ class commercial bank Licensed by Nepal Rastra Bank. The bank has
branches all across the Country and they provide entire commercial banking services. Their
head office situated at Anamnagar, Kathmandu. Mr Ashok Sherchan is the present CEO of the
organization. Prabhu bank was given this name when it merged with Kist bank, Grand Bank
and Gaurishankar Development Bank Ltd in 2016.

Prabhu Bank is a public company. It is listed in Nepal Stock Exchange (NEPSE) and is treated
as an ‘A’ category company. At present is has market value Nrs 251 (as on 30th Dec 2018) per
share.

The bank has been maintaining harmonious correspondent relationships with various
international banks from various countries to facilitate trade, remittance and other cross border
services. Through these correspondents bank is able to provide services to most of the countries
in the world. The bank keeps its customer at the centre of all it does. Prabhu Bank believes that
a bank is only successful when its customers are successful.

The mission and Vision of the bank are:

Mission

To become the leading commercial bank in Nepal by providing the finest quality financial
products and services to our customer; enhance our shareholders’ value, contribute to the
economic prosperity of the country and to create continuous learning and growth opportunities
for our People.

Vision

“To support individuals, families and businesses to attain financial independence and improve
their financial wellbeing”

Ethics refers to the system of moral principles. They affect how people make decisions and
lead their lives. It is concerned with what is good for individuals and society. Simply we can
say that ethics covers the following dilemmas:

 How to live a good life

 Our rights and duties
 The language of right and wrong

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  Moral decisions-what is good and bad?

Since the mid-1980s, employment tests have been used and hundreds of tests are known till
date. Among them intelligence test, spatial ability, perception skills, motor ability, personality
traits, achievement test are some which are often used by companies.

Similarly, the test used for selection of employees in Prabhu Bank is Achievement Test. This
test helps one to know the level of understanding, past learnings, experience and know whether
the candidate is the best for any particular position.

When any organization operates in the society and benefit from it, they are supposed to pay
back to the society to some extent so that the status of both gets uplifted. Corporate Social
Responsibility (CSR) deals with this view. Nepal Rastra Bank, central bank of Nepal has
formed a rule that every BFIs are required to separate 1% amount out of their profit for CSR.
As Prabhu Bank is a commercial bank of Nepal, they are also required to follow the
requirements forwarded by central bank.

Similar to this they are even required to follow ethical values while recruiting and selecting the
employees. As employees are the backbone of any organization, they must be ethical so that
the organization sustains for a longer period.

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Body
Prabhu Bank is Nepal’s one of the rapidly growing banks. They have 164 branches and 9
Extended counters across the country. As they grow, they’re required to recruit large number
of employees. In interview with . Rashmi Pant, Head of Human Resource who is working in
Prabhu bank for four years shared their ethical values regarding how they were recruiting and
selecting their employees. First, she joined the organization as deputy head and was promoted
to Head two years ago. After the interview with HR Head, it was clear that they recruit large
number of employees yearly.

Stages of recruitment followed is.

1. Defining Requirements

 Preparing job descriptions and specifications

 deciding terms & conditions of employment

2. Attracting candidates

 Reviewing & evaluating alternative sources of applicants,

 inside & outside the company,

 advertising, using agencies & consultants

3. Selecting candidates

 Selecting applications, interviewing, testing, assessing candidates, assessment centres,

offering employment, obtaining references

 preparing contracts of employment

As per the requirement, need they advertise their vacancy in daily newspapers, pamphlets,
Facebook advertisement, LinkedIn and even have to head hunt in case they require top-level
executives. They look upon few characteristics like skills, practical knowledge, past experience
while selecting the right candidates. They treat all job seekers equally and do not prefer
favouritism and nepotism or neither practice discrimination on basis of race, origin, religion,
policies, gender, age and sex. They have around 40% female employees out of total employees
which somewhat represents they do not practice any discrimination while selecting employees.
Even they make equal payment to the employees working in same department despite of their
gender.

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They practice two types of recruitment while selecting employees i.e. Internal and External.
Internal recruitment is done when any post is to be filled by any employee who is well known
with how things work in the department e.g. junior manager promoted to senior manager.
Similarly, when any employee leaves the organization, they fill the vacant position by hiring
employees externally. Organization do not practice receiving of any gifts or commission for
hiring any employee and they have strict rule to look over this concern.

They outsource employees who are indirectly related to the operations in the organization like
security guards. They usually have contracts with companies that provides guards facilities and
have contract tenure of a year.

Bank has clearly defined rules regarding the selection process written in Banks rulebook as per
NRB directives. They first announce vacancy, accept the application form, shortlist the
candidates, written examination takes place, candidates are called for job interview and they
have reference checks if they get selected in the preliminary round. However in case of Top
level executives, rather than following above steps of recruitment, they are interviewed with
scenario-based questions, some stress interview is taken and proper analysis of their past work
is evaluated.

They even bind employees while recruiting them so that they do not perform unethical acts by
filling a form on ethics and make contract. Even they clearly predefine position’s objectives,
requirements and candidate specification in the recruitment process. Even they show true

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picture of the company if they inquire and even reflect the true position of organization, make
JD and JS clear beforehand.

They mainly focus on CV of candidates, their knowledge based on written exams result to
gauge the capabilities and attitude of candidates. Similarly, when the specified criteria is met,
these people are shortlisted and the best one is selected after the interview.

There are times when organizations face problems while recruiting. They may select a poor
candidate, they may face issues regarding absentees, or turnover, even employee may timely
wish to negotiate for their salary. In such cases organization must have predefined written
policies and even have contract with employees stating minimum years of stay in organization
so that it prevents turnover.

Employees and jobseekers sometimes provide feedback to management regarding recruitment

and selection issues and show some areas of improvement and if found logical and is
implemented by organization after discussion with management.

Selection criteria for all positions shall include the following requirements:

 Demonstrate awareness of the Prabhu Bank’s ethics and demonstrate an understanding

of how their role serves the Mission;
 Demonstrate commitment to customer service and ethical practice principles, and
demonstrate knowledge of equal employment opportunity.

These days a lot of innovative techniques like stress level test and psychometrics test are being
used so that the selection process becomes much more effective. However, not all the
organization follow this because it is somewhat regarded to be violating ones privacy and is
even not so popular in context of Nepal.

Even sometimes, there arises ethical dilemmas when any person who is related to
organization’s supplier or partner agency or any one close to the organization applies for any
position. Meanwhile, Banks do no suffer much in this case as they do not have any bigger
supplier and management does not perform any acts that creates any negative news in the
media.

One of the major test that organization believes in selecting employees is Achievement Tests.
This test measures what someone has learned, past achievement & performance. This measures

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job knowledge in areas like economics, finance, marketing or human resources and is used to
predict what an individual can perform based on his/her current knowledge or experience

There are even other techniques that can be used for recruiting other than the techniques used
by the bank. On-demand Recruiting services is the one which provides short term specialized
recruiting to support specific projects without the expense of retaining like in traditional search
firms. Even companies perform College Recruiting to select fresh graduates. Similarly, hiring
the good interns, focus on hiring a more diverse workforce can help the organization solve any
arising problem in an easier way.

The major problem that organization face in terms of employee is turnover. In order to manage
this a lot of information of employees is to be found out which can be done with the help of
application forms, Tests, interviews, medical examination and background investigation.

Thus, recruiters can foster an ethical relationship by predefining the selection procedure and
criteria in Mission Statement, Code of Conduct, MOA and AOA and have written agreements
with the selected candidates. So that they do not think of performing any activities for their
personal benefit rather be focused towards organizational goals on one hand similarly,
organization should not even create situations where the employee has to face ethical dilemmas
while taking decisions on the other.

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Conclusion

As one of the leading banking and financial services group in Nepal, the Bank has promised to
be there where growth is, connecting customers to the opportunities, enabling business to thrive
and economies to prosper and ultimately helping people to fulfill their hopes and realize their
ambitions. The Bank offers the full range of banking and investment services for personal and
corporate customers, backed by the team of highly motivated, young and dynamic
professionals.

One of the bank’s primary objectives is to reach out to the common people with a host of
helpful products and services that will assure their future prosperity. Over a very short period
of time, the bank has achieved a significant degree of success in executing this objective
thereby creating a substantial base of loyal customers.

This has all been possible as the organization followed all the rules as specified by regulators
and in addition gave importance to the ethical values. Ethics though may seem not much
important but it helps organization to sustain for a longer period. Such organizations create
trust among the customers and help organization remain profitable in the long run.

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References

https://www.prabhubank.com/

https://www.cleverism.com/handling-employee-grievance/

http://www.educatenepal.com/notice_announcements/vacancy/vacancy-announcement-from-
prabhu-bank-limited

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Appendices:
Questionnaire
 Since how many years have you been working with this organization?
a. 0-5 Years
b. 5-10 Years
c. 10 to 15 Years
d. More than 15 Years
 Does the organization clearly define the position objectives, requirements and
candidate specifications in the recruitment process?
a. Yes
b. No
 Does the organization timely perform recruitment and Selection process?
a. Yes
b. No
 Which medium do you prefer communicating the vacancy?
TV Newspaper Radio Other(specify)……..
 Do you reflect true state of the organization while advertising?

 What selection process do you favour? Do you have set of predefined selection
procedure? (So that it does not lead to future issues.)
Accepting application form¬ Written Examination¬ Job Interview¬ Selection Tests¬
Reference checks
If other (mention)…
 Do you prefer favouritism/ nepotism? Are all job seekers treated equally?
 Are JD (Job Description) and JS (Job Specification) made clear beforehand?
 Do you practice any discrimination on basis of race, origin, religion, politics, gender,
age, sex?
 Do you have special consideration to particular group? If yes, is it notified
beforehand?
 What factor do you look upon while selecting employees?

 What techniques are used to gauge the capabilities & attitude of candidates?
 What do you think how can recruiters foster an ethical relationship while recruiting?

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  Mission Statement
 Code of conduct
 Written Agreements
 MOA and AOA
 How does Hiring of Top level Executives take place?
 How do you handle grievances during recruitment process?
 Do employees or the job seekers give you feedbacks?
 Have you worked on the given feedbacks? How?
 In selection process, do you think innovative techniques like stress level test and
psychometrics test should be adopted?
 How do you deal when you recruit employees form organizations that have material
dealing with you? Like supplier, customer or competitors?

References:

https://www.rightmatch.co.in/single-post/2017/08/23/Ethics-In-Recruiting

https://www.ere.net/the-ethics-of-recruiting/

https://study.com/academy/lesson/ethics-in-hr-recruitment.html

http://www.educatenepal.com/notice_announcements/vacancy/vacancy-announcement-from-
prabhu-bank-limited

Corporate Building: Anamnagar

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Prabhu Bank and ATMs around the valley.

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