AB Bank

Internship Report
On
Performance Appraisal System
Of
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INTERNSHIP REPORT On
Performance Appraisal System of AB Bank Limited, ABBL
Of logo-ab-bank.gif HR Division, Head Office.
(This report on internship in AB Bank Limited is submitted as a requirment of the partial fulfilment of BBA Program)
Report prepared for Probal Dutta (1st), Shantu Kumar Ghosh(2nd) Senior Lecturer, Senior Lecturer BBS, BRAC University BBS, BRAC University.
Report prepared by MD. ULLAH AL MAMUN Student ID: 06104007. BBS Department, BRAC University.
Date Of Submission 13th May, 2010.
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Students Assertion
I hereby announced that the extensive study entitled
(Conducted on behalf of AB Bank Limited, Head Office, HR Division)
Prepared in partial accomplishment of the requirements for the award of the degree in Bachelor of Businesss Administration (BBA)
From
BRAC University BBS Department.
Is my original work and not put forward For the award of the any other degree/fellowship Or other similar designation or accolade.
MD. ULLAH AL MAMUN Student ID: 06104007. logo.jpg
Certificate of Approval
The internship report of
MD. ULLAH AL MAMUN Student id: 06104007. BBS Department,
BRAC University
Titled
Is approved and is suitable in eminence and figure
Academic supervisor
. (Signature) Probal Dutta. Senior Lecturer.BBS Department, BRAC University.
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BRAC University
Titled
. (supervisor Signature) Mr. Mehedi Hasan Assistant Vice President,HR Division, Head Office, AB Bank Limited.
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BRAC University
Titled
Academic supervisor
. (Signature) Shantu Kumar Ghosh. Senior Lecturer.BBS Department, BRAC University.
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Certificate of the project Guide
This is to certify that the extensive study entitled
Prepared in partial accomplishment of the requirements for the award of the degree in Bachelor of Businesss Administration (BBA) From
BRAC University
Is a record of extensive researrch work carried out By
MD. ULLAH AL MAMUN Student ID: 06104007. BBS Department,
Under my supervision and guidance, no part of this report has been submitted for the award of any other degree fellowship Or other similar designation or accolade
..
(Signature) Probal Dutta
Lecturer.BBS Department, BRAC University.
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Preface
Internship program is one of the most significant topics of our BBA program. Now the world is competitive. So we have to earn the knowledge about the critical environment of business. This type of program helps the student to acquire practical knowledge about the contemporary business organization. It will also help the student to be an effective executive in future. Different organizations take different kind of policies to operate their business. A reputed private bank like AB Bank Limited, takes different kind of modern banking system to satisfy their customers.
As a student of BBA, BRAC University, I have been assigned to prepare the internship report on Performance Appraisal System of AB Bank Limited, ABBL from the practical exposure I have undergone at AB Bank Limited, Head Office, HR Division. As a model I have tried my best with all my aptitude to complete this report with aptness.
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LETTER OF TRANSMITTAL
April 21, 2010 Mr. Probal Dutta Lecturer, BRAC Business School (BBS), BRAC University.
Subject: Submission of the internship working report.
Dear Sir, With due respect, I would like to inform you that, I am MD. ULLAH AL MAMUN bearing student ID: 06104007, a student of BRAC Business School department. My major was on Human Resource Management and Finance. It is my great pleasure to inform you that I have the opportunity to submit an internship working report on Performance Appraisal System of AB Bank Limited, ABBL , as a requirment for BBA program. While conducting the working report, I have gathered extensive knowledge on overall banking activities from all the relevant departments and brunches of AB Bank Limited.
I believe this genuine and honest analysis will help you to have a possitive viewpoint upon me. I will be pleased to deliver you with added explanations or clarifications that you may feel necessary in this regard. I shall be thankful if you kindly approve this effort.
Sincerely yours
.. MD. ULLAH AL MAMUN Student ID: 06104007. BBS Department, BRAC University.
ACKNOWLEDGEMENT
First of all, I would like to thank almoghty Allah for his grace in accomplishing my internship report timely.
I would like to express my gratitude to my academic supervisor Mr. Probal Dutta from the core of my heart for her kind support, guidance, constructive, supervision, insstructions and advice and for motivating me to do this report.
I am also thankful to Head of HR Division of AB Bank Limited for giving me the opportunity to conduct the internship in AB Bank Limited. I would like to thank Mr. Mehedi Hasan, AVP of HR Division for supervising me, Mr. M. Hasan Mottalib Chowdhury, principle officer and M. Mahmudur Rahman, Officer also help me by providing various key informatiion and giving me the path to write a fruitful report.
I am also greatful to the employees of HR Division for their cordial acceptance. Mr. Sazzad Hossain was too helpful. He helped me a lot to collect the information correctly. Ms. Jesmin Sultana and Mr. Anup Kumar Roy also extended their helpful hand to me. They have been very helpful in showingme the work process and provided relevant information for my report whenever I aproached. It was a great opportunity to do internship in such an organization. The experience I have gathered will be a privilege for my future career planning.
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Table of Contents
Chapter 1 Introduction 1.0 Introduction 1.1 Origin of the report 1.2 Purpose of the study 1.3 Objective of the study 1.3.1 Broad Objective 1.3.2 Specific Objective 1.4 Methodology of data collection 1.4.1 Primary Sources 1.4.2 Secondary Sources 1.5 Limitations of the study
Page No 2 3 3 4 4 4 4 5 5 5-6
Chapter
2 The Organization 2.1 Background of AB Bank Limited 2.2 Mission Statement 2.3 Vision Statement 2.4 Change of Name 2.5 Corporate Information 2.6 Values 2.7 Objectives of AB Bank 2.8 Historical Review of AB Bank 2.9 Current Profile 2.10 Board of Directors 2.11 Management Aspects 2.11.1 Executive Committee 2.11.2 Audit Committee 2.11.3 Management Committee 2.12 management Hierarchy 2.13 Branch Locations 2.14 Financial Performance Indicator 2.15 Operating Performance 2.16 Portfolio Management Service 2.17 Departments & Divisions of AB Bank 2.18 Products & Services of AB Bank 2.19 CSR of AB Bank
7-43 8 9 9
9 9 10 10 11 14 16 17-19 17 18 18 20 21 21 23 28 30-35 36-42 43 Chapter 3 Job Description 3.0 Job Description 3.1 General Responsibilities 3.2 Essential Duties 3.3 Ancillary Duties 3.4 Critical Observations
45-48
45 45 45 47 47
Chapter 4 Literature Review 4.0 Performance Appraisal 4.1 Criticism 4.2 Basic Purposes 4.3 Appraisal Methods 4.4 Benefits of Performance Appraisal 4.5 Reward Issues 4.6 Conflict & Confrontation 4.7 Common Mistakes 4.8 Bias Effects
49-80 50 52 54 56 64 67 71 73 77
Chapter 5 Project 5.0 PAS of AB Bank 5.1 Performance Appraisal Policy 5.2 Objectives & Modus Operandi
5.3 Defination of Different Performance Grades 5.4 Annual Performance Appraisal & SPD 5.5 Types of Performance Appraisal Form 5.6 The Complition Process of Appraisal Form 5.7 The Input Process of PAF in Database
81-103 82 84 84 86 86 87 88 99 Chapter 6 Conclusions & Recommendation 6.0 Conclusions. 6.1 Ending Remarks.
104-108 105 106
Annexure
109-117
References
118-123
AB Bank Limited HR Division, Head Office, Dhaka. logo-ab-bank.gif
logo-ab-bank.gif Executive Summary
As a student of business administration analyzing today's business world is very crucial to observe in this complex situation. It is necessary to go through all fields of knowledge, both theoretical and practical. After passing four years BBA program, I was sent out to have practical knowledge in business life as a part of my academic program. An internship program is organized to give me an opportunity for enhancing my capabilities. [n this report I had tried to focus my both theoretical and practical knowledge regarding HRM practices. My internship topic is 'HRM practice in ABBL . I have tried to flash out about HRM practices of this bank and how it is working in progress of the bank.
In the report HRM practice of AB Bank Limited. has been highlighted providing the basic concept of Human Resource Management side by side. The intention is to understand the activities of human resource management by practical survey. The fact revealed from this survey is that all most all the banking organizations are involved in the same type of HR practice.
For example, organ gram of the company, recruitment procedures, training institute, increment and bonus n the banks which are operated in the private sector. approaches the more they can resolve their problems employees in the organizations.
and selection facilities etc are typical i The more modern is their regarding handling
I have tried to follow the right methodology for preparing this report, which is very important to find out the truth, which is hidden behind the curtain. In the case study of AB Bank Limited. Effort has been given to disclose about organizations system and procedure step by step. Finally, conclusion and findings are also included in the report.
Chapter
Introduction
Performance Appraisal System of AB Bank Limited, HR Division, Head Office. P Performance_appraisal_process3.jpg
Performance Appraisal System of AB Bank Limited, HR Division, Head Office. P 1.0 Introduction
Internship is a partial requirement of graduation. It offers a great opportunity for any student to get some tremendous and brilliant ideas about the practical field. It is also a challenging experience to prepare Internship Repor t which increases intellectual abilities as an efficient graduate. As Banking sector have emerged as the most important player of our economy and they also offer a passionate environment for career development so it was my premier objective since the very beginning of BBA program to accomplish internship in this type of financial institution.
A develop banking sector plays a vital role for financial stability of a country . AB Bank Limited (ABBL) is a Commercial bank and financial institution. This is the first commercial bank in Bangladesh. It is now providing their banking service with 77 branches. I am very glad for getting the opportunity to accomplish my practical training in the HR Division of AB Bank Limited (ABBL) in Head Office. The internship program was carried on the Human Resource Division. The internship report has been based on the performance appraisal system of AB Bank Limited. During the three month long internship period spanning form January 03 to April 03 in AB Bank Limited the writer of this report gained practical knowledge about the performance appraisal system of the employees of ABBL and worked on a project titled Performance Appraisal System of AB Bank Limited, HR Division, Head Office . Here the analysis has been made on the whole performance appraisal system of ABBL, As well as a case study of an employee of AB Bank has been conducted to understand the whole process more effectively.
Performance Appraisal System of AB Bank Limited, HR Division, Head Office. P 1.1 Origin of the report
The report has been prepared as a fulfillment of the partial requirement of the internship program as authorized by BRAC Business School (BBS), BRAC University. The primary goal of the internship prospectus is to provide on the job coverage to the student and an opportunity for translation of theoretical conceptions in real life situation. Students are placed in enterprises, organizations, research institutions as well as development projects. The program covers an overall period of approximate 12 weeks of organizational attachment, with report finalization work.
1.2 Purpose of the study
As an institution, bank has been contributing towards the development of any economy for a long time and at the moment it is treated as an important service industry in modern world. Nowadays, the function of a bank is not limited within the same geographical limit of any country. Due to globalization and free market economy, this industry is facing severe competition. Most of the banks fail due to lack of proper strategic planning and goals. One of the major reasons of their poor performance is adaptation of traditional banking system. They are very much slow in adopting new product line, less concerned about attracting and satisfying customers and being reluctant to implement information technology. That s why it is very necessary for each and every bank to evaluate its performance over the periods. But the most important thing is that nearly all of the banks are more focusing on sale rather than the service, even they do not know how to evaluate their performance. Basically, this study is conducted to expose the way to find out the employee s satisfaction level and know how to provide them better service. Different evaluating procedures and techniques have been followed to measure the employee s satisfaction.
Performance Appraisal System of AB Bank Limited, HR Division, Head Office. P 1.3 Objective of the Study
1.3.1 Broad Objective: To complete my BBA degree it is a mu To match my academic knowledge with the real corporate busine set up.
To enlarge my experienced from a real corporate exposur To enhance my adaptive quality with the real life situatio
1.3.2 Specific Objective: Introduce myself to the ABBL Grou To know the inner side of the ABBL banking cultur Provide information on AB Bank Limite To find out the corporate social responsibility of AB Bank Limite To describe the HR function, structure and its procedures, rules and regulation. To analyze the performance of ABB To understand the internal and external environment of the organization.
1 For achieving the specific objectives o b
Performance Appraisal System of AB Bank Limited, HR Division, Head Office. P 1.4.1 Primary Sources
Direct conversation with the respective officers of the Departments. Face to face conversation with the employees. Employee s opinion collected through Questions.
1.4.2 Secondary Sources: Various records of the bank. Different Types of brochures. Website of AB Bank Limited. Different newsletters of ABBL. Personal files of the employe 1.5 Limitations of the study Banking is, in fact, a huge operation and it is quite impossible to cope up all the activities w ort were: The ban obvious reasons, which would have been very much useful for the report.
Performance Appraisal System of AB Bank Limited, HR Division, Head Office. P .. As the bank is continuously changing its system is also changing time to time, it will be difficult to ascertain the true performance of t employees each time. Few officers sometime felt disturbed, as Sometime they didn t want to supervise us out of their official work. Sometimes it was difficult to collect data important files are kept in volt for safety. Performa are not been disclosed as sack of secrecy. It is d period.
Performance Appraisal System of AB Bank Limited, HR Division, Head Office. P
The Organ
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Performance Appraisal System of AB Bank Limited, HR Division, Head Office. P 2.1 Background of AB Bank Limited: AB Bank Limited, the first private sector bank unde B started its operation with effect from April 12, 1982. Dubai Bank Limited (name subsequently changed to Union Bank of the Middleast Limited) decided to off-load their investment in AB Bank Limited with a view to concentrate their activities in the UAE in early part of 1987 and in terms of Articles 23A and 23B of the Articles of Association of the Company and with the necessary approval of the releva b Bangladeshi Sponsor Shareholders (ABBL 2010). As of December 31, 2007; the Authorized Capital and the Equity (Paid up Capital and Reserve) of the Bank are BDT 2000 million and BDT 4511 re million in the Extra Ordinary General Meeting held on July 16, 2008. Since beginning, the bank acquired confidence and trust of the public and business houses b b of art technology. During the last 28 years, AB Bank Limited has opened 77 Branches in different Business Centers of the country, one foreign Branch in Mumbai, India and also established a wholly owned Subsidiary Finance Company in Hong Kong in the name of AB International Finance Limited (ABBL 2010). To facilitate cross border trad relationship with over 220 international banks of repute across 58 countries of the World.
Performance Appraisal System of AB Bank Limited, HR Division, Head Office. P AB Bank Limited, the premier sector bank of the country is making headway with a mark of sustainable growth. The overall performance indicates mark of improvement with Deposit reaching BDT 53375.35 million, which is precisely 26.85% higher than the preceding year. On the Advance side, the Bank has been able to achieve 30.76% incre 40915.35 million, which places the Bank in the top tier of private sector commercial banks of the country. On acco re abroad.
2 "To be the best performing
2 "To be the trendsetter for inn 2.4 Change of Name: Arab Bangladesh Bank Limited changed its name to AB Bank Limited (ABBL) with effect from 14 November 2007 Vide Bangladesh Bank MRPD Circular Letter No- 10 dated 22 November 2007 B held on 04 Septemb
N Effective 01 January 2008, ABBL changed its Logo as we
2.5 Corpo Name of the Company AB Bank Ltd
Performance Appraisal System of AB Bank Limited, HR Division, Head Office. Legal Form: A public limited c under the Compan and Chittagong St Commencement of Business 27th February 1982 Registered Office BCIC Bhaban, 30-31, Dilk Dhaka 1000, Bang Tel: +88-02-9560312 Fax: +88-02-9564122, 23 S E-mail: info@ab b: .. .. .. www.abbank.com.b Service Excelle Opennes Trust
.. Integrity .. Responsible corporate citizen AB Bank Limited se c people as their strength to multiply and service excellence. 2 ximization of profit along with the benefits of employees is the main tive of the bank. In addition, the order objectives are:
Performance Appraisal System of AB Bank Limited, HR Division, Head Office. .. Bringing modern Banking facility to the doorstep of general public through diversification of banking services, thereby propensity among the people. Foreign a cordial, deep-rooted and firm banker-customer relationship by dispensing prompt and .. Taking part in the development if the national economy through productive deployment of the Bank s resources as well as patronizing different social activities. .. Connecting clients to modern banking practice by the best application of improved information technology encouraged to continue and feel proud of banking with ABBL. Ensuring highest use of the professional workforce through enhancement of their aptitude and competenc ..Responding to the need of the time by participating in syndicated large loan financing with expanding the area of investment of the Bank. Elevating the image of the Bank at home and abroad by sustained expansion of its activities. E
asset quality and highest through succe management core risk program (ABBL 2010). 2.8 Historical Review of AB Bank Limited: AB Bank Limited (ABBL) a joint collaboration bank with Dubai Bank Limited. It was formed in Dhaka on 31 December 1981. It started banking operations on 12 April 1982 as a scheduled private sector commercial bank. Initially the authorized capital of the bank was Tk 200 million divided into 2 million shares of Tk 100 each. The issued and paid up capital was Tk 80 million. The authorized capital of the bank has later been enhanced to Tk 800 million. The paid up capital was also enhanced at different times of its operation and stood at Tk 409.94 million in December 2000. ABBL is the first Ara
Performance Appraisal System of AB Bank Limited, HR Division, Head Office. B formed with the assistance and support of the Dubai-based Galadari family, a group active in international trade, finance and industry (ABBL 2010). Nine numbers of boards of directors including the chairman governs the overall affairs of the bank. The chief executive of the bank is its managing d the bank in various capacities. The bank has 62 branches (urban-46, rural-15 and overseas-1). The Head Office of the bank is located at Dilkusha, Dhaka. ABBL was set up to conduct all types of traditional commercial banking functions including foreign exchange business and other financial serv has been able to achieve satisfactory progress in all areas of its planned activities including deposit mobilization, credit expansion, servicing imports and exports, remittance services, investment, and product innovation. At the end of 1982, the first year of the banking business, the total deposits o f ABBL amounted to Tk 136.71 million. This stood at Tk 16,217.5 million on 31 December 2000. The deposit-mix of the bank in 2000 was c d (21.56%). The amount of total reserve funds of ABBL was Tk 354.81 million in 2000 as against Tk 202.48 million in 1995. Total loans and advances of ABBL increased from Tk 116.96 million in 1982 to Tk 12,548.4 million in 2000. Responding to the needs of the market, ABBL introduced three new schemes: Student Loan, Personal Computer Loan for Educational Institutions (for their laboratories), and Monthly Interest Payment Facility to term deposit holders. The broad economic areas in which the bank lends (and the total outstanding amount of advances to those areas in million Taka) up to 31 March 2000 were: agriculture and fisheries (278), industry (2,811), retail/wholesale trade and hotels and restaurants (3,769), transport/communication and storage (180), insurance, real estate and trade
Performance Appraisal System of AB Bank Limited, HR Division, Head Office. service (1,384), special credit programmers, including poverty alleviation and income generating activity (520), and others (1,874). Up to 31 March 2000, ABBL provided financial support in the form of loans and advances to 88 large and medium scale and 145 small and cottage industrial p a syndication with other banks. The ratio of advances and deposits during the year 1999 and 2000 were 80.66% and 77.38% respectively (ABBL 2010). In 2000, the bank's total classified loans were 23.45% of its total loans and advances. It maintained a provision of Tk 1,435.4 million for them, which affected the bank's performance and degraded the quality of its lending assets. The quantum of investment of the bank rose to Tk 2,429.66 million in 2000 from Tk 23 million in 1982. Of the total investment in 2000, 93% was g debentures of ICB, ordinary shares of companies and prize bonds. In that year, the bank earned an income of Tk 170.21 million from its investments. In the financial year ending on 30 June 2000, total foreign exchange business of the bank was Tk 11,600 million, which included imports (34.48%), exports (58.19%) and remittances (7.33%). ABBL has foreign correspondent relationships with 221 banks/bank offices and other financial institutions at different international financial centers. The overseas operations of the ban a company, the AB International Finance Limited in Hong Kong. The bank has two foreign representative offices - one in London and the other in Yangon. As of December 31, 2006; the Authorized Capital and the Equity (Paid up Capital and Reserve) of the Bank are BDT 2000 million and BDT 2582.76 million respectively. The Sponsor-Shareholders hold 50% of the Share Capital; the General Public Shareholder b
Performance Appraisal System of AB Bank Limited, HR Division, Head Office. 2008). However, no individual sponsor share holder of AB Bank holds more than 10% of its total shares. During the last 27 years, AB Bank Limited has opened 74 Branches in different Business Centers of the country, one foreign Branch in Mumbai, India, two Representative Offices in London and Yangon, Myanmar respectively and also established a wholly owned Subsidiary Finance Company in Hong Kon in tr with over 220 international banks of repute ac
2.9 Current Profile of AB Bank Limited: Since beginning, the bank acquired co business houses by rendering high quality services in different areas of banking operations, professional competence and employment of the state of art technology (Annual report 2008). At present, the bank has 74 branches throughout the country with about 18000 employees. The existing Board of director is 14. M. Wah c ector. The bank has be posible for earning the .. Corporate Ba .. Consum .. Treasury and .. Cards
Performance Appraisal System of AB Bank Limited, HR Division, Head Office. All other department of the bank acts as support for these units and helps them in every possible way. Under this arrangement, the responsibilities and functions of those branches have been reduced dramatically. Many of the activities like credit evaluation and appro se of the bank are now termed as the sales and service Centers which are solely concentrated on delivering services to the corporate and consumer clients and maintain relationship with them. AB Bank Limited, the premier sector bank of the country is making headway with a mark of sustainable growth. The overall performance indicates mark of improvement with Deposit reaching BDT 42076.99 million, 5 been able to achieve 46.32% increase, thereby raising a total portfolio to BDT 31289.25 million, which places the Bank in the top tier of private sector commerc
O re a
Performance Appraisal System of AB Bank Limited, HR Division, Head Office.
Director Director Director
Dr. M. Imtiaz Hossain Runa Zakia Shahrood Khan Director Director Kaiser A. Chowdhury Director feroz-ahmed shishir-ranjan-bose ma-awal faheemul-huq afzal M. A. Awal mishaal Shishir Ranjan Bose salah-uddin Faheemul Huq mesbahul-hoque Afzal Hasan anawar-jamil-siddqui Mishaal Kabir imtiaz-hossain runa-zakia-shahrood-khan d Mesbahul kaiser-a-chowdhury ar Jamil Siddi
Performance Appraisal System of AB Bank Limited, HR Division, Head Office. 2.11 Management Aspects: The AB Bank Limited Management Team comprises of a group of people and each them comes with an international working background and is committed in leveraging their experience to take ABBL to greater heights by ensuring top line revenues with dynamic capabilities. This Management Team is unique in being able to env a organizational make-up for maximum profitability. Other than the President and Managing Director, the remaining Management Team Members each lead a functional Department. This mix of people is persistent to provide unparallel services to its customers , come up with timely and innovative products and services and to enhance the capabilities of its people of its people while emphasizing on the latest technology. This they believe will take the bank to a foremost position in the country m talent, developing systems, processes and people and through blending of these to let customers revel in with fulfillment and permanency (Annual report 2008). L by the top management committee. objectives and policies of the ban for different purpose: 2.11.1 Executive Committee: This committee is comprised of Chairman, four members of the bank and one member secretary. e
Performance Appraisal System of AB Bank Limited, HR Division, Head Office. policies and procedures, development and implement uniform and minimum acceptable credit standards for the bank, new credit proposal assessment and approval etc. 2 The main objective of this committee is t to the audit of financial reports, management reports by the external auditors, internal controls and internal audits. ABBL have four members in audit committee. 2 T l T a
Management Committee
Kaiser A. Chowy Niaz President & Managing Director Deputy Mangctor, Corporate
q M Ahmed audhury Fazlur Faru Shamim Ahmed Ch Rahm DMD, Credit DMD, Operations DMD
Badrul H. Khan Abu Hena Mustafa Kama nior Executive Vice Presidt, Executive Vice Presi Chief Finance Officer Head of Financial Institution and Treasu
Akhtar Hamid Khan Md. Azad Hossain Executive Vice Presen utive Vice Presid id Execent, d of Risk Asset Managem Head of Regional Relationship Ma Heaent nagem
Senior Vice President, faruq badrul akhtar azad reaz amzad Islam Amza
Performance Appraisal System of AB Bank Limited, HR Division, Head Office. Chairman
Board of Directors
Management Director
y Managing Director
Senior Executive Vice President
Senior Vice President
Vice President
Senior Assistant Vice President
Principal Officer
Contractual Officer (Entry Level
2.13 Branch Locatio
Branch: Dhaka Division B Assistant Vice President
Performance Appraisal System of AB Bank Limited, HR Division, Head Office. Branch: Khulna Division Branch: Rajshahi Division Branch: Sylhet Division
2.14 Financial Perf ABBL at a Gl
Million T Decem 008 007 nges Gross I 6.85 9.90 Net Interest Income Operating Profit (PBP & T) 98.39 25.29 Net Operating Profit 00.62 17.99 Profit after Tax (PAT) 00.62 03.49
Deposits
60.47 75.35 Loans & Advances 08.775 15.35 4 Total assets 3.61 9.86 Shareholders' Equity ,722.51 11.59
N N( % C Return on ER AC N E
operating-profit ) 66.98 asset-utilization npl eps Page 21 bvps
Sector W ember 8
re in '000 Limit % tstanding % /C
T A M ServiC EO
1 Speci
abbl-sectorwise-ldos-outstanding-position abbl-sector-wise-limit-of-ldo-position
* Sector wise LDO's Position as on December 30, C 2.15 Operating Performance
Board of Directors of AB Bank Limited (ABBL) takes immense pleasure in presenting the 25th Annual Report of the Bank to you. It is also the privilege o f the Board to present the audited accounts of the Bank for the year ended 31st December, 2006 and the Auditors' Report thereon. Your Bank reached a milestone on 12th of April, 2007 when AB reached 27 years of its journey which started with a single Branch operation at Karwan Bazar, Dhaka way back in 1982. AB being the pioneer in private sector banking in Bangladesh will be the first to achieve this milestone. Over the years, your Bank has contributed in many ways towards development of the private sector banking in the country. Many of th fi proud development partner of these industrial houses over the years. AB thrived on customer service and relationship banking which brought new dimensions to this particular service sector and many more new entrants to banking sector followed AB (Annual report 2008).
Performance Appraisal System of AB Bank Limited, HR Division, Head Office. AB's Sponsors set a vision for the Bank which reads: "To be the Trendsetter for innovative banking with excellence and perfection". Throughout these 27 years your Bank raised the bar for itself through services, initiatives, product s, customer support and performance towards that visionary path. A year of consolidation and growth". In line with that, year 2006 was identified to be the year of "financial re-structuring and growth". Sponsors of the Bank remain committed to take AB into next higher level of banking on a strong financial footing and with a
Being a financial in economic developments and activities both within and outside the country. Hence to start with, we will throw some brief insights in to the economic scenario of the year 2006. Global Economy: World economic growth strengthened in the year 2006 as the global gross domestic product (GDP) registered a growth of 3.9 percent compared to 3.5 percent in 2005. Despite rising oil prices (that topped $75 a barrel during the course of the year), rising short-term interest rates, and a bout of volatility of financial market, the global growth acce global performance w economies, which grew by 7 percent - more than twice as fast as high income countries (3.1 percent). In the overall, 38 percent of the increase in global output originated in developing countries which far exceeded these economies 22 percent share in world GDP. South Asian Economy: South Asian region experienced 8.2 percent growth dur m the region. Private se
Performance Appraisal System of AB Bank Limited, HR Division, Head Office. management and greater integration in the economy were the contributing factors. Loose monetary and fiscal policies and strong remittance inflows also played a role, providing a boost to domestic demand. Bangladesh Economy: Bangladesh economy continued on the growth path in 2006 and achieved a higher growth compared to the year 2005 mainly driven by a strong postflood agricultur t of exports and remittanc the face of rising oil price, rise in import costs and also the phase out of the Multi -Fiber Arrangement (MFA). GDP growth was registered at 6.7 percent in the year 2006. Overall Banking Sector: Financial sector reforms to strengthen the regulatory and supervisory framework for banks made headway in 2006 although at a slower than expected pace. Overall health of the banking system showed improvement since 2002 as the gross Non-performing Loans (NPL) declined from 28 percent to 14 percent while net NPL (less Provision) reduced to 8 percent from 21 percent. This led significant improvement in the profitability ratios. Although the Private Commercial B p and showed very high NPL at 25 percent. The NCBs have large capital shortfalls with a risk-weighted capital asset ratio of just 0.5 percent (June 20 06) as against the required 9 percent. For the PCBs risk-weighted capital asset ratio stood at 10 percent. Bangladesh Bank issued a good number of prude y rationalization of prudential norms for loan classification and provisioning, (i i) policy for rescheduling of loans, (iii) designing and enforcing an "integrated
Performance Appraisal System of AB Bank Limited, HR Division, Head Office. credit risk grading manual", (iv) credit rating of the banks, and (v) revisions to the make-up of Tier-2 capital (Annual report 2008). Besides, recent decision of the Government to corporatize the remaining three NCBs along with the initiative to in has also taken up the task of implementing the Basel II capital accord. Further, the recent enactment of the Micro-credit Regulatory Authority Act (MRAA) for the regulation of the Micro Finance I m
Since 1998 CAMEL rating of banks gradually improved and in 2006 Bangladesh Bank updated this rating model by incorporating the market risk and the new model is known as CAMELS. Capital Market: Bangladesh capital market is still quite small in terms of size compared to countries like India or Pakistan. Present market capitalization accounts for roughly 6 percent of the GDP. During the first half of the year 2006, liquidity crises had its affect in the market and towards the end of the year, the market had to weather unstable and volatile political situation. Besides, relatively higher rates on G challenging factors towards expansion of investment in the capital market. Yet, the market showed remarkable stability in the face of the above. Market capitalization registered a rapid growth of over 38 perce b among others (ABBL 2010). At the end of the year DSE general price index stood at 1609.51 and the all shares price index closed at 1321.39 while CSE general price index stood at 2432.51 and the all shares price index closed at 3724.39.
Performance Appraisal System of AB Bank Limited, HR Division, Head Office. Future for the capital market looks bright as government is planning to offload profitable state owned enterprises. Moreover, enlistment of telecommunication and inclusion of various companies under oil and gas sector will contribute towards increasing the size of the market. Economic outlook: The 6 percent plus growth of GDP over the past four years has been underpinned by more market-oriented economic policies, a dynamic garment sector, and substantial inflow of overseas workers' remittances. The lead-up to the parliamentary election was generally expected to be rough ride for the country as a whole and the economy in particular. However, deepening e established economic policies and expedited structure and sector reforms. It has taken a broad agenda of activity, including an extensive anti-corruption drive that it sees necessary to establish better foundations for the future besides establishing the atmosphere for a truly democratic system to unfurl in the future.
Economic forecasts for the fiscal year 2007-8 are based on several policy assumptions towards preserving the macroeconomic stability and ensuring GDP growth of around 7 percent. However, some of the significant challenges include increased competition, high in ri
The economy has started to come back on track after months of political instability which at times had the risk of irretrievable consequences. With the economic course outlined in the budget for 2007-8, Bangladesh should be able to drive full steam towards the desired growth. 2.16 Portfolio Management Service:
Performance Appraisal System of AB Bank Limited, HR Division, Head Office. Since inception, it has achieved an unparalleled reputation as a leading Merchant Banker through prov m relationships. Keepin has designed Investors Discretionary Account (IDA) and Bank's Discretionary Account (BDA). In these accounts the customers may enjoy loan facilities at a ratio 1:1 for investments in private o Types of Accounts: Investors Discretionary Account (IDA): This leveraged account is managed by the account holder through us. B investment and also its ga Banks Discretionary Account (BDA): With this account the Bank, on behalf of the account holder, uses its discretion in managing the acco la aligning the investors' risk-return profile. Operational Procedure: O mind having a minimum age of 18 years may open three IDA/BDA s-one each in their single name and the other in their joint names.
Building o Placement and Secondary Market. A account holder of MBW as an operator of his/her Account. Services:
Performance Appraisal System of AB Bank Limited, HR Division, Head Office. A by AB Bank on behalf of the clients. Safe Custody of Securities: Securities are kept in the AB Bank vault. IPO and Private Placement: AB Bank furnishes the account holders, information abo m
Statement of Acc a obtain informatio ir portfolios a on request. access their portfolio a time from any part country through S Phone Service.
Fees and Charges:
IDA BDA Minimum dep BDT 10,00,000 Loan Facility (opti Max BDT 5.00 crore Max BDT 5.00 c
Documentation charge BDT 500.00 B value value Portfolio Management Fee* 1.50% p.a., on Portfolio value, charged quarterly
2.00% p.a., on Portfolio value, charged quarterly Portfolio Certificate* R SMS Charge Tk. 3.00 per SMS Phone Service Tk. 10.00 for printed portfolio (on request) *Bank reserves the right to change the rate at any time A 6.5% on client s credit balance, if minimum Tk. 25,000 is kept with the account from the beginning to the end of a month.
Performance Appraisal System of AB Bank Limited, HR Division, Head Office. Portfolio Reporting Through SMS and Phone Service: SMS Service: The portfolio clients of the MBW may obtain their portf p Send a message to 01713045777 mentioning the IDA Accou P accounts (i) Purchase Power (PP), (ii) Current Balance (CB) and (iii) last buy & sell detailing the Company Code, Quantity and Total Cost of each trade. Phone Service: The Portfolio Clients may dial directly to 9560312 Ext 258 / 9566688 to get the portfolio positions through Phone Service. P Instant Portfolio Service enter 13 digit Account Number and (to be obtained from MBW) to get the information of (i) Purchase Power (ii) Current Balance (iii) Portfolio Position (iv T Position through mail (Intranet). 2.17 Departments and Divisions of AB Bank Limited: These are the main divisions the structures and functions of each of these divisions are described below (Intranet):
7.1 Internal Control and Compliance ain function of this division is to provide legal assistance to the branches mplement recovery strategy for stuc herence of rules and policies by all connected of the bank through routine rprise inspection and audit. The functions of this division are as follows:
Performance Appraisal System of AB Bank Limited, HR Division, Head Office. .. Implement rescheduling process of stuck-up loan to the branches for obtaining notice etc. as the condition required. securities and finally review of possibilit classified loan. .. Investigate suspicious or irregular matters being directed by higher management. .. Time to time follow-up of advance to keep the branch under constant pressure. .. Carryout instant audit as felt necessary. 2 Treasury unit is a core banking unit w steadily growing volume of activity in the markets, ABBL s treasury unit and currency dealing desks have consolidated its position as a well-known and well establish counterpart in the newly transformed Free Floating rate, dealing daily with a wide circle of both bank and non-bank customers all over Bangladesh. Their everyday business evolves around participation in Money Market and Foreign Exchange Market in a substantial volume (Intranet). 2.17.3 Human Resources Division The employees of AB Bank Limited are the most valuable asset for the bank. Having competent and professional employees is becoming increasingly important in today s competitive world, and ABBL has a significant competitive advantage in this respect. Many of its employees have worked here from the be t academic background up for their responsibilities. At present around 18000 people are employed with ABBL. All aspects of th
Performance Appraisal System of AB Bank Limited, HR Division, Head Office. D Rewarding and Benefits of the staffs. we will ensure the skilled employments where we will work with fun and pride (Intranet). 2.17.4 Board Division In Board Division works the company secretary. They take decision and run the organization properly. 2.17.5 Sha T in its Affiliates / banks / agencies/participation in any telecommunication or electronic clearing network as may be requi stat imited liable for use or disclosure of this information ). 7.6 Finance Division e division ance Division are: .. Maintain daily liquidity positions, treasury bills, call money, debentures, placement of fund e inter-branch as .. Preparation of statement of accounts and profit and loss account for the Bank. .. Cost of fund analysis
Performance Appraisal System of AB Bank Limited, HR Division, Head Office. .. Maintenan Provident Fund etc. 2.17.7 Operations The Operations Division consists of Service Delivery, Trade services and Treasury support unit and IT Division. These subunits provide support to the front office functionalities. 2 The Credit Risk Managem which is mainly concern with the post-approval functions of ties and responsib cumentation, sittin c under expired limits or line oateral have not 7. Retail Banking de retail banking ABBL provide tw .. Unsecured Loan .. Secured Lo T .. Personal Loan .. Auto Loan .. Easy Loan (For Exec .. House/Office Furnishing/Renovat
Performance Appraisal System of AB Bank Limited, HR Division, Head Office. The Secured Loans are: .. Personal Loan
2.17.10 Business Banking Division Alongside providing the best service to the client, patronizing and taking part in social development activities as well as making due contribution to growth of the national economy. 2 At AB Bank provides comp Customers requirement. ABBL Corporate Banking solutions include a board spectrum of products and services backed by proven, modern technologies. ABBL specialist terms offer a comprehensive service providing finance to large and medium-sized businesses based in Bangladesh (Intranet). 2.17.12 MISYS Core Team The strategy at Misys is to provide innovative, integrated solutions and services that set us apart as the leadin p se banks. In healthcare, all scripts Misys, th controlling interest, serves more than 150,000 physicians, 700 hospitals an arly 7,000 post-acute and ho nking application softw 2 AB Bank generally does four type
Performance Appraisal System of AB Bank Limited, HR Division, Head Office. .. Merchant Banking Wing .. Custodial Service .. Brokerage Service .. Future Products. 2.17.14 AB Bank Foundation AB Bank Foundation (ABBF) is a subsidiary company of AB Bank Limited having holding 99.60% shares of the ABBF. The company was first established under the trust deed constituted and registered on the 14th Subsequently the trust by a resolut held on 29.12.2002 resolved to cancel the Trust Deed and utilize the trust fund for the foundation of a company limited by guarantee primarily for charitable purpose. Then the company was incorporated on 3rd day of November 2003 under section 28 of Companies Act 1994, a company limited by guarantee. The certificate of incorporation is C-558(10)/2003. (Intranet) 2.17.15 Merchant Ba AB Bank launched its Merc 2003. Financial stateme a separately ap expenditures of that Wing are incorporat Bank's financial stateme the following services: .. .. Issue Management Underwriting Corporate Advisory Bankers to the Iss Private Placement .. Retail Banking
Performance Appraisal System of AB Bank Limited, HR Division, Head Office. .. .. .. .. .. .. Corporate Bankin SME Banking Project Finance Loan Syndicatio Lending Rates Deposi
.. NRB Banking .. .. .. .. re Money Transfer Islami Banking Investment Bank Cards points a
.. SME Banking .. Project Finance .. Loan Syndication .. Islami Banking
2.18.1 Corporate Banking At AB Bank we provide complete range of solutions to meet Corporate Customers' requirement. Their Corporate Banking solutions include a broad spectrum of products and services backed by
Corporate Lending Its specialist teams offer a comprehensive service providing finance to large and medium-sized businesses based in Bangladesh. For more information as to how they might best meet your corporate debt needs, please contact them at t
Performance Appraisal System of AB Bank Limited, HR Division, Head Office. Structured Financ They have a specialist Structured Fina fi management teams and corporate. Also they provide corporate advisory vices. y aim to provide tailored fina n rapidly respond t ing are some of the products and financial too .. Project Finance .. Working Capital Finance .. Cash Manageme .. Syndicated Finance, both onshore & off-shore .. Equity Finance, both onshore & off-shore .. 2.18.2 SME Banking C ecades AB Bank has been patronizing this sector b d ilities of different types and tenor. As of now 54% serve all io is segmented to the SMEs which de p A uch the bank has em .. To provide the .. To increase the .. To improve the qu E Sctors in which AB Bank .. Agro machinery .. Poultry .. Animal Feed
Performance Appraisal System of AB Bank Limited, HR Division, Head Office. .. .. .. .. .. .. .. .. Dairy Product Fruit Pr Hotel & Restaurants Garments Acc Leather pro Plastic product Furniture : Wooden & Ink
.. Printing & Packaging .. Wire & Cable .. Aluminum .. Cement and Lime Plaster Clinics and Hospitals Engineering & Scientific Instruments In order to cater the demand of client AB Bank has segmented its portfolio in terms of loan size. As per this segmentation any loan over Tk. 10.00 Crore falls under the purview of Large Loan Unit. the business. The unit is entrusted to handle the portfolio in a focused manner. AB Bank is always in fore front to su n
portf is distri tors:
SL Sector sure
Tk.) 1
Agro2,717.56 2 Business Cement Powe 8,691.92 r, Glass 3
Performance Appraisal System of AB Bank Limited, HR Division, Head Office. 3 Consumer P 21,855.00 4 Edible Oil 5 Enginee 8,106.42 6 Financial Institution 1,414.70 7 Food & Bevera 27,044.24 8 Hotel 2,505.26 9 Health Care 3,928.62 10 Printing & 11,867.61 1 Real Estate Micro-finance 10,451.49 1 Export
9,441.63 1 RMG & Backward Linkage Ship Breaking Steel 94,826.13
1 18 Trading Total ( including exposure) Less Syndicated Exposure 51,560.29 Total Large Loan & Project Finance portfolio without syndicated exposure 3930,24.92 Bangladesh. Syndicated finance diversifies the risk of one bank on a single borrower and incre c institutions. AB Bank, the first bank in the private sec
In 1997, AB Bank for the firs and Dhaka bank financed Tk. 1000 Lac
.. In 1999, AB Bank arranged its second syndicated credit facility with IPDC to raise Tk 3563 Lac.
Performance Appraisal System of AB Bank Limited, HR Division, Head Office. Since then AB Bank did not look back. as Lead Arranger. The following banks from time to time have been our partners in these syndications: Dhaka Bank, IPDC, EXIM Bank, Bank Asia, Oriental Bank, NCC Bank, The City Bank, Trust Bank, and Bank Asia.
.. AB Bank has also participated in different syndications arranged by other Banks, out of which till date 6 (six) syndication has successfully been completed. AB Bank exposure in these com
B has p At the articipatio facilities. AB Ba in the on Lac which is dive following
SL Sector ation k.) 1 Textile 533.57 2 Micro-finance 3,000.00 3 Cemen 7,990.00
4 Energy & P 1,997.00 5 Teleph 15,500.00
(PSTN) 6 Glass 78 Steel 9 Paper 1158.00 10 Chemical 1,500.00 2.18.5 Islami Banking
Performance Appraisal System of AB Bank Limited, HR Division, Head Office. To provide the Islamic banking services in accordance with the principles of Islamic Shariah, AB Bank has established Islamic Banking Wing and started it s functioning by opening full-fledged Islamic banking branch on 23.12.2004. The branch is known as AB Bank Islami Banking Branch, Kakrail, and is situated at 82, Kakrail, Ramna, and Dhaka. Prominent Islami Banker Mr. M. Azizul Huq has joined the Bank as its Islamic Banking Consultant. A dedicated team of experienced Islamic bankers is working under his active guidance both at head office and branch level. A competent Shariah Council consisting of Islamic scholars, Ulema, Fukaha and Islamic bankers headed by Mr. Shah Abdul Hannan, a prominent Islamic scholar and f G banking affairs. Board of directors as well as management of v opening more Islamic branches in the near future. AB B tained membership of Islamic Banks Consultative Forum (IBCF) and Central riah Board for Islamic Banks of Bangladesh (ABBL 2010). als and objectives of
.. To facilitate the Islamic banking system in the country .. To play effective .. To give assistance
U .. Deposit services .. Investment services 2
Performance Appraisal System of AB Bank Limited, HR Division, Head Office. In the present context of banking business in the world, Card is the future of any bank. Electronic payment system is now ruling the world and some days from now cash transactions system will turn into a history found only in the tex t book.
AB Bank Limited is one of the leading first gene c issuing VISA Credit Cards from the end of VISA International (Intranet). Brief descriptions of different features are given below: Card Conversion & Balance Transfer Plan 'Card Conversion & Balance Transfer Plan' to AB Bank VISA Credit Card will be extended towards all local Credit Cardholders of the market, provided that their 'other banks' credit card is in 'regular' state, not in 'overdue' state. Cardholders will repay the approved transferred amo C Other ba allowed to apply for this facility along with their new AB Bank Credit Card application form. You can convert your other bank card to AB Bank Card and get interest facility @ 19.95% on your outstanding. Easy Buy 'E towards all AB Bank Visa Credit Cardholders. Cardholders can convert any retail purchase done using AB Bank credit card into an installment scheme where they can pay back the amount at rate of interest of 19.95% per annum over a tenor ranging from 6 months to 48 months. 2.19 Corporate Soc
Performance Appraisal System of AB Bank Limited, HR Division, Head Office. In The societal marketing concept holds that the organization should the needs wants and interest of the target markets. It should then deliver superior to customers in a way that maintains or im so The bank realizes the importance of contributing to the public, community and society as a whole as well as participating in environmental protection and conservation for a sustainable future. In every year ABBL contribute their in various types of social activities. These are; awarding p phe
Performance Appraisal System of AB Bank Limited, HR Division, Head Office. e
3.0 Job Description office 1.jpg
Performance Appraisal System of AB Bank Limited, HR Division, Head Office. 3.1 General Responsibilities
R Division function of Head w immediate supervisor; responding to inquiries or requests for information.
ssntial Duties ms a variety of duties to support the HR Division functions of head office the following a .. Completes the documentation and file works of employees persona .. Complete the salary updates and analyze the papers of the branch salary sheets. Input the salary .. Engaged in distributing the salaries of the casual stuffs of head office. .. Enter the newly recruited employee s information in the d .. Manages and sorts the CV and applications for jobs the HR Division. Maintains the input of the perf database. Update the existing employee .. Assist in arranging training programs for the employees. Performs as a training prepare a budget for training.
Performance Appraisal System of AB Bank Limited, HR Division, Head Office. .. Engaged in collecting maintaining a different training programs. Provides s quantitative service. Maintains the leave app tracks. .. Serves as a member of the HR team. In .. Assists with job training, including mentoring and coaching HR service staff as needed. .. Created the organogram of all the bra .. Coordinates specific work tasks with other personnel within the department as well as with other departments in order to ensure the smooth and e
2) Abides by the current laws and organizational policies and procedures designed and implemented to promote an environment which is free of harassment and other forms of illegal discriminatory behavior in the work place.
Cooperates with, participates in, and supports the adherence to all internal policies, procedures, and practices in support of risk management and overall s c
Performance Appraisal System of AB Bank Limited, HR Division, Head Office. ave to arrange a training program urgently. The allocated vehicles for the 4) Reports pertinent information to the immediate supervisor as requested, or according to an established schedule; compiles information as necessary or a
and within establish 6) Performs duties as Human Resource Representative as needed
Performs tasks which are suppo joc 3.4 Critical Observations During my intern period, I found some problem. Firstly, in HR Division, there ar e few employees so one employee has to do huge volume of works. The working space of HR Division is not enough. Because they have to maintain a huge amount of papers documents and files which needs a huge space. The training academy of AB Bank is in Dhanmondi. But the head of training department and the other employees of training departments have to sit in the head office which is in Motijheel. So it creates a huge pro h
Performance Appraisal System of AB Bank Limited, HR Division, Head Office. d T a th p
Performance Appraisal System of AB Bank Limited, HR Division, Head Office. e
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Performance Appraisal System of AB Bank Limited, HR Division, Head Office. The history of performance appraisal is quite brief. Its roots in the early 20th century can be traced to Taylor's pioneering Time and Motion studies. But this is not very helpful, for the same may be said about almost everything in the field of modern human resources m appraisal really dates from the time of the Second World War - not more than 60 years ago. Yet in a broader sense, the practice of appraisal is a very ancient art. In the scale of things historical, it might well lay claim to being the world's second oldest profession! Appraisal system has bee te about oneself." Appraisal, it seems, is both inevitable and universal. In the absence of a carefully structured system of appraisal, people will tend to judge the work performance of others, including subordinates, naturally, informally and arbitrarily. The eminent management expert, McGregor defined the performance appraisal system as the formal performance appraisal plans are designed primarily to meet the organizational needs and to provide systematic judgments to bac Appraisal also tells the employees as to how they are doing and about the required changes in their behavior, attitudes, skills or job knowledge, in other words, making the employees aware as to where they stand in the eyes of superiors. These form the basis for the coaching and counseling of employees by their bosses. The human inclination to judge can create serious motivational, ethical and legal problems in the workplace. Without a structured appraisal system, there is little chance of ensuring that the judgments made will be lawful, fair, defensible and accurate. Performance appraisal systems began as simple methods of income justification. That is, appraisal was used to decide
Performance Appraisal System of AB Bank Limited, HR Division, Head Office. whether or not the salary or wage of an individual employee was justified. The process was firmly linked to material outcomes. If an employee's performance was found to be less than ideal, a cut in pay would follow. On the other hand, if their performance was better than the supervisor expec a pay rise was in order. Little consideration, if any, was given to the developmental possibilities of appraisal. If was felt that a cut in pay, or a ri se, should provide the only required impetus for an employee to either improve or continue to perform well. Sometimes this basic system succeeded in getting the results that were intended; but more often than not, it failed. For example, early motivational researchers were aware that different people with roughly equal work abilities could be paid the same money and yet have quite different levels of motivation and performance. These observations were confirmed in empirical studies. Pay rates were important, yes; but they were not the only element that had an impact on employee performance. It was found that other issues, such as morale and self-esteem, cou A rejected. In the 1950s in the United States, the potential usefulness of appraisal as tool for motivation and development was gradually recognized. The general model of performance appraisal, as it is known today, began from that time. In modern times Performance appra formal interaction between a subordinate and supervisor, that usually takes the form of a periodic interview (annual or semi-annual), in which the work performance of the subordinate is examined and discussed, with a view to identifying weaknesses and strengths as well as opportunities for improvInor indirectly, to help determine reward outcomes. That is, the appraisal results are used to identify the better performing employees who should get the
Performance Appraisal System of AB Bank Limited, HR Division, Head Office. majority of available merit pay increases, bonuses, and promotions (Goel, 2008). B performers who may require some form of counseling, or in extreme cases, demotion, dismissal or decreases in pay. (Organizations need to be aware of laws in their country d
Whether this is a a contentious matter. 4.1 Crit Performance appraisals are an instrument for social control. They are annual discussions, avoided more often than held, in which one adult identifies for another adult the improvement areas to work on over the next twelve months. There are many reputable sources - researchers, management commentators, psychometricians - who have expressed doubts about the validity and reliability of the performance appraisal process. Some have even suggested that the process is so inherently flawed that it m p performance appraisal. Some view it as potentially the most crucial aspect of organizational life. Between these two extremes lie various schools of belief. While all endorse the use of performance appraisal, there are many different o
Performance Appraisal System of AB Bank Limited, HR Division, Head Office. There are some people who believe that performance appraisal has many important employee development uses, but scorn p This group believes that the linkage to reward outcomes reduces or eliminates the developmental value of appraisals. Rather than an opportunity for constructive review and encouragement, the reward-linked process is p For example, how many people would gladly admit their work problems if, at the same time, they knew that their next pay rise or a much-wanted promotion was riding on an appraisal result? Very likely, in that situation, many people would deny or downplay their weaknesses (Dewakar, 2008). Nor is the desire to distort or deny the truth confined to the person being appraised. Many appraisers feel uncomfortable with the combined role of judge and executioner. Such reluctance is not difficult to understand. Appraisers often know the subordinate-supervisor relationship. They work together on a daily basis and may, at times, mix socially. Suggesting that a subordinate needs to brush u on certain work skills is one thing; giving an appraisal result that has the dir ect effect of negating a promotion is another. The result can be resentment and serious morale damage, leading to workplace disruption, soured relationships and productivity dec On the other hand, there is a strong rival argument which claims that performance appraisal must unequivocally be linked to reward outcomes. The advocates of this approach say that organizations must have a process by which rewards - which are not an unlimited resource - may be openly and fairly distributed to those most deserving on the basis of merit, effort and results (Goel, 2008).
Performance Appraisal System of AB Bank Limited, HR Division, Head Office. (2) Tell me how well I have done it There is a critical need for remunerative justice in organizations. Performance appraisal - whatever its practical flaws - is the o a c results should be linked dd appraise may suspect that they are not being told the whole truth, or that the appraisal process is a sham and waste of time.
4.2 Basic Purposes Effective performance appraisal systems contain two basic systems operating in conjunction: an evaluation system and a feedback system. The main aim of the evaluation system is to identify the performance gap (if any). This gap is the shortfall that occurs when performance does not meet the standard set by the organization as accepta fe p appraisers also receive feedba
4.2.1 Employee Viewpoint F fold:
Performance Appraisal System of AB Bank Limited, HR Division, Head Office. (3) Help me improve my performance (4) Reward me for doing well. 4 From the organization's viewpoint, one of the most important reasons for having a system of performance appraisal is to establish and uphold the principle of accountability. For decades it has been known to researchers that one of the chief causes of organizational failure is "non-alignment of responsibility an N but are not held accountable for the way in which those responsibilities and duties are performed (Cash, 1993). What typically happens is that several individuals or work units appear to have overlapping roles. The overlap allows - indeed activ u system, no one is accountable for anything. In this event, the principle of accountability breaks down completely. Organizational failure is the only possible outcome (Cash, 1993). In cases where the non-alignment is not so severe, the organization may continue to function, albeit inefficiently. Like e a make people accountable accountab 4.3 Appraisal Methods
Performance Appraisal System of AB Bank Limited, HR Division, Head Office. In a landmark study, Per Locher & Teel (1977). He found appraisal methods in general use are: 1. Rating scales (56%) 2. Essay methods (25%) and 3 Certain techniques in performance appraisal have been thoroughly investigated, and some have been found to yield better results than others. Encourage Discussion Research studies show that employees are likely to feel more satisfied with their appraisal result if they have the chance to talk freely and discuss their performancm appraisal process is fair if This especially so when they are permitted to challenge and appeal against their evaluation. Constructive Intention It is very important that employees recognize that negative feedback is provided with a constructive intention to help them overcome present difficulties and to improve their future performance. Employees will be less anxious about criticism, and more likely to find it useful, when the believes that the appraiser's intentions are helpful and constructive. In contrast, ocproblems such as anger as increased resistance to improvement, denial of problems, and poorer performance.
Performance Appraisal System of AB Bank Limited, HR Division, Head Office. Set Performance Goals It has been shown in numerous studies that goal-setting is an important element in employee motivation. Goals can stimulate employee effort, focus attention, increase persistence, and encourage employees to find new and better ways to work. The useful of goals as a stimulus o quite clear that go employees will lead to higher levels of performance than easy, vague goals (such as do your best) or no goals at all (Harris 1994). Appraiser Credibility It is important that the appraiser (usually the employee's supervisor) be wellinformed and credible. Appraisers should feel comfortable with the techniques of appraisal, and should be knowledge emW pa
4.3.1 Rating Scales The rating scale method offers a high degree of structure for appraisals. Each employee trait or characteristic is rated on a bipolar scale that usually has several points ranging from "poor" to "excellent" (or some similar arrangement). The traits assessed on these scales include employee attributes such as cooperation, communications ability, initiative, punctuality and technical
Performance Appraisal System of AB Bank Limited, HR Division, Head Office. (work skills) competence. The nature and scope of the traits selected for inclusion is limited only by the imagination of the sc o they should be in som selected by some organizations have been unwise and have resulted in legal action on the grounds of discrimination (Torre, 1996). 4.3.1.1 Advantages The greatest advantage of rating scales is that they are structured and standardized. This allows ratings to be easily compared and contrasted even for entire workforces. Each employee is subjected to the same basic appraisal process and rating criteria, with the same range of responses. This encourages equality in treatment for all appraise and imposes standard measures of performance across all parts of the organization (David, 1993). Rra in The result is widespread
4.3.1.2 Disadvantages Trait Relevance Are the selected rating-scale trait clearly relevant to the jobs of all appraise s? It is inevitable that with a standardized and fixed system of appraisal that certain traits will have a greater relevance in some jobs than in others. For example, the trait "initiative" might not be very important in a job that is tightly defined and rigidly structured. In such cases, a low appraisal rating fo r initiative may not m
Performance Appraisal System of AB Bank Limited, HR Division, Head Office. re that particular trait (Mck said to be context-sensitive. Job and workplace circumstances must be taken into account. Systemic Disadvantage Rating scales, and the traits they purport to measure, generally attempt to encapsulate all the relevant indicators of employee performance. There is an assumption that all the true and best indicators of performance are included, and all false and irrelevant indicators are excluded (Torre, 1996). This is an assumption very difficult to prove in practice. It is possible tha e included in the se do not truly or fairly reflect their effort or value to the organization. Employ ees in this class are systemically disadvantaged by the rating scale method. Perceptual Errors This includes various well-known problems of selective perception (such as the horns and halos effect) as well as problems of perceived meaning. Selective perception is the human tendency to make private and highly subjective assessments of what a person is "really evidence to support that view (while ignoring or downplaying evidence that might contradict it). This is a common and normal psychological phenomenon (Torre, 1996). All human beings are affected by it. In other words, we see in others what we want to see in them. An example is the supervisor who believes that an employee is inherently good (halo effect) and so ignores evidence that might suggest otherwise. Instead of correcting the slackening employee, the supervisor covers for them and may even o
Performance Appraisal System of AB Bank Limited, HR Division, Head Office. assessment of the employee, and always ready to criticize and undermine them (Sanches, 1996). The horns and halo effect is rarely seen in its extreme a in effectiveness and cre Perceived Meaning Problems of perceived m same opinion about the meaning of the selected traits and the language used on the rating scales. For example, to one appraiser, an employee may demonstrate the trait of initiative by reporting work problems to a supervisor. To another appraiser, thi s might suggest an excessive dependence on supervisory assistance - and thus a lack of initiative. As well, the language and terms used to con mean differen Rating Errors The problem judgment and motive. Unlike perceptual errors, these errors may be (at times) deliberate. The most common rating error is central tendency. Busy appraisers, or those wary of confrontations and repercussions, may be tempted to dole out too many passive, middle-of-the-road ratings (e.g., "satisfactory" or "adequate"), regardless of the actual performance of a subordinate. Thus the spread of ratings tends to clump excessively around the middle of the scale (Sanches, 1996). This problem is worsened in organi d fe
Performance Appraisal System of AB Bank Limited, HR Division, Head Office. 4.3.2 Essay Method In the essay method approach, the appraiser prepares a written statement about the employee being appraised. The statement usually concentrates on dessu2007). T be composed in collab 4.3.2.1 Advantages The essay method is far less structured and confining than the rating scale method. It permits the appraiser to examine al a appraisal criteria are rigidly defined (Harry, 2007). Appraisers may place whatever degree of emphasis on issues or attributes that they feel appropriate. Thus the process is open-ended and ve T assumes that employee tra 4.3.2.2 Disadvantages Essay moscales. The techniques greatest advantage - freedom of expression - is also its greatest handicap. The varying writing skills of appraisers can upset and distort the whole process. The process is subjective and, in consequ
Performance Appraisal System of AB Bank Limited, HR Division, Head Office. d broad conclusions about organizational needs (Christopher, 2006).
4.3.3 Results Method Management By Objectives (MBO) It aims to increase organizational performance by aligning goals and subordinate objectives throughout the organization. Ideally, employees get strong input to identify their objectives, time lines for completion, etc. MBO includes ongoing tracking and feedback in the process to reach objectives. Management by Objectives (MBO) was first outlined by Peter Drucker in 1954 in his book 'The Practice of Management'. In the 90 s, Peter Drucker himself decreased the significance h ineffi 9
4.3.3.1 Core Concepts According to Drucker managers should "avoid the activity trap", getting so involved in their day to day activ objective. Instead of just a few top managers, all managers should: Participate in the strategic plann im Implement a range of pe organization stay on the right track. 4.3.3.2 Managerial Focus MBO managers focus on the result, not the activity. They delegate tasks by "negotiating a contract of goals" with their su
Performance Appraisal System of AB Bank Limited, HR Division, Head Office. d about setting yourself ob specific goals or key results (Nasis D. B, 1992). 4.3.3.3 Main Principle The principle behind Management by Objectives (MBO) is to make sure that everybody within the organization has a clear understanding of the aims, or objectives, of that organization, as well as awareness of their own re managers and empow their plans, which automatically achieve those of the organization. 4.3.3.4 Advantages The MBO approach overcomes some of the problems that arise as a result of assuming that the employee traits needed for job success can be reliably identified and measured. Instead of assuming traits, the MBO method concentrates on actual outcomes. If the employee meets or exceeds the set objective performance. Employees are judged according to real outcomes, and not on their potential for success, or on someone's subjective opinion of their abilities. The guiding principle of the MBO approach is that direct results can be observed, whereas the traits and attributes of employees (which may or ma not contribute to performance) must be guessed at or inferred. The MBO method recognizes the fact that it is difficult to neatly dissect all th e complex and varied elements that go to make up employee performance. MBO advocates claim that the b to study it. But put all th directly observed and measured.
Performance Appraisal System of AB Bank Limited, HR Division, Head Office. 4.3.3.5 Disadvantages MBO methods sense of autonomy and achievement. But on the downside, they can lead to unrealistic expectations about what can and cannot be reasonably accomplished. Supervisors and subordinates must have very good "reality checking" skills to use MBO appraisal methods. They will need these skills during the initial stage of objective setting, and for the purposes of self-auditing and self-monitoring. Unfortunately, research studies have shown repe tend to lack the skills needed to do their own "reality checking". Nor are these skills easily conveyed by training. Reality itself is an intensely personal experience, prone to all forms of perceptual bias. One of the strengths of the MBO method is the clarity of purpose that flows from a s also. It has become very apparent that the modern organization must be flexible to survive. Objectives, by their very nature, tend to impose a certain rigidity. Of course, the obvious answer is to make the ob y c distorted to disguise or justify failures in perform
4.4 Benefits of Performance Appraisal Perhaps the most significant benefit of appraisal is that, in the rush and bustl e of daily working life, it offers a rare chance for a supervisor and subordinate to have "time out" for a one-on-one discussion of important work issues that mappraisal is conducted properly, both supervisors and subordinates have reported the experience as beneficial and positive (Goel, 2008).
Performance Appraisal System of AB Bank Limited, HR Division, Head Office. Appraisal offers a valuable opportunity to focus on work activities and goals, to identify and correct existing problems, and to encourage better future performance. Thus the performance of the whole organization is enhanced. For many employees, an "official" appraisal interview may be the only time they get to have exclusive, uninter employee of a large organization after his first formal performance appraisal, "In twenty years of work, that's the first time anyo d The value of this intense and purposeful i and subordinate should not be underestimated. 4.4.1 Motivation and Satisfaction Performance appraisal can have a profound effect on levels of employee motivation and satisfaction - for better as well as for worse. Performance appraisal provides employees with power of social recognition as an incentive has been long noted. In fact, there is evidence that human beings will even prefer negative recognition in preference to no recognition at all. If nothing else, the existence of an appraisal program indicates to an employee t performance and development (Dewakar, 2008). This alone can have a positive influence on the individual's sense of worth, commitment and belonging. The strength and prevalence of this natural human desire for individual resome organizations might be greatly re it. Regular performance appraisal, at least, is a good start. 4.4.2 Training and Development
Performance Appraisal System of AB Bank Limited, HR Division, Head Office. Performance appraisal offers an excellent opportunity - perhaps the best that will ever occur - for a supervisor and subordinate to recognize and agree upon individual training and development needs. During the discussion of an employee's work performance, the presence or absence of work skills can become very obvious - even to those who habitually re Performance appraisal can make the need for training more pressing and relevant by linking it clearly to performance outcomes and future career aspirations. From the point of view of the organization as a whole, consolidated appraisal data can form a picture of the overall d re needs audit for the entire organization 4.4.3 Recruitment and Induction Appraisal data can be used to monitor the success of the organization's recruitment and induction practices. For example, how well are the employees performing who were hired in the past two years? Appraisal data can also be used to monitor the effectiveness of changes in recruitmengwhether the general quality of declining. 4.4.4 Employee Evaluation Though often understated or even denied, evaluation is a legitimate and major objective of performance appraisal. But the need to evaluate (i.e., to judge) is also an ongoing
Performance Appraisal System of AB Bank Limited, HR Division, Head Office. at its most basic level, performance appraisal is the process of examining and evaluating the performance of an individual (Goel, 2008). Though organizations have a clear right - some would say a duty - to conduct such evaluations of performance, many still r explicit process of judgment can be dehumanizing and demoralizing and a source of anxiety and distress to employees. It is been said by some that appraisal cannot serve the needs of evaluation and development at the same time; it must be one or the other. But there may be an a e th
4.5 Reward Issues Some in re (1986). The Xerox Experience The Reprographic Business Group of the Xerox Corporation operated a very traditional system of performance appraisal based on rating scale methods. The rating outcome direct effects on merit pay rises - everyone at Xerox knew that and expected it (Dewakar, 2008). The Xerox system included all the The appraisal interviews were held annually and conducted by the employee's immediate supervisor. Accomplishments of the preceding year were recorded and performance levels were judged according to various predefined c
Performance Appraisal System of AB Bank Limited, HR Division, Head Office. included some elements of essay appraisal, since appraisers were required to write brief supporting statements for each rated criterion. The Xerox system also called for a summary rating; an ultimate digit, from a low of 1 (for unsatisfactory) to a high of 5 (exceptional). The summary rating attempted to encapsulate the whole year's performance in a single number. The significance of that final number was immense. It literally determined the size of the employee's annual pay rise. The higher the rati rise. For Xerox employees, the thing that really mattered about appraisal was getting the biggest possible final number (Dulewicz, 1989). Analysis of ratings over time showed that more than 95 percent of employees were either 3s, 4s or 5s; that is, the spread o end of the scale. Almost every employee, according to the appraisal system, was performing at or above the average. The lower end of the scale, the ratings of "below average" and "unsatisfactory" were very ra employee who scored less than a 4 ("exceeds expected performance level") began to feel like a failure! The appraisal process became a sort of ratings lottery; the aim was to get the became fixated This situation The appraisers highest possible score and win the jackpot. The process on that all-important final digit (McKellin, 1993). placed tremendous pressure on appraisees and appraisers alike. had the
losers. No wonder most of them preferred to hand out an abundance of overly-generous ratings! Xerox eventually replaced this system with an MBO/essay form of appraisal. They abandoned rating scale methods completely. That may have been an over-reaction, since the fault did not lie with the method itself so much as with its intimate - and ultimately inflexible linkage to the annual pay rise. When reward outcomes are so clo
Performance Appraisal System of AB Bank Limited, HR Division, Head Office. The Xerox rating system might have worked if the direct causal relationship between the summary rating and merit pay outcomes had been eliminated or at least softened.
The Case for Linkage The question of whether appraisal results should be allowed to directly influence decisions about pay increases (and other reward outcomes such as promotion) has been hotly contested. It is still one of the most contentious issues in human resources management. One of the main reasons for separating appraisal results from reward decisions is the belief that a too-close link would create an overly-threatening and potentially punitive system. Employees, apprehensive at the prospect of being judged, would have the added anxiety of knowing that the result will directly impact their pay packet and career outcomes.
Appraisal Pressure This kind of appraisal pressure results in a win/lose mentality of the sort that developed at Xerox. Rather than the appraisee being willing to openly discuss their performance, they become anxious and defensive. Naturally, the typical appraisee is not eager to admit to anything that might impair their chances of a pay rise or other reward. There is a deep irony in the fact that many organizations, while having excellent systems of appraisal, allow their merit pay and promotion decisions to be made by inferior means. Often the matter is left to the discretion of one or two supervisors or managers, with a cursory review being made by the HR department. There is also the work of (Bannister & Balkin, 1990), which has reported that "discussions of pay at the time of performance appraisal" increases employee acceptance of appraisal and their satisfaction with the process. This undermines the arguments for separation.
Performance Appraisal System of AB Bank Limited, HR Division, Head Office. As well, there is evidence that incongruity between appraisal results and later pay and promotion outcomes is a source of employee discontent and demotivation. Pay increases and promotions send powerful messages to employees. If these messages don't match up with the appraisal results, employees are quick to dismiss the whole process as a farce. Efforts have been made to convince employees otherwise, but the "bottom line" for many is who got the extra money or who got the new job.
A Management "Trick" The separation of appraisal results and reward outcomes is, at best, a contrived situation. At worst, it may convey the impression that appraisal is some sort of deception, a trick by management, designed to give an appearance of openness and fairness while "real issues" like pay and promotions are decided in secret. Nor is the practice of putting a six-month buffer between appraisals and pay reviews an effective method of avoiding the issue. Far better to define and clarify the relationship between appraisal, performance and reward outcomes. The view of the separatists, which insists that appraisal results and reward outcomes should be insulated from each other, may be an over- reaction to the potential abuses (Balkin, 1990). There is evidence that appraisees appreciate the existence of a link between appraisal and reward results. To many, the existence of such a link is intuitive ly sensible. From the perspective of the organization, the inclusion of carefully collected appraisal data in pay and promotion matters may contribute to better quality decisions. It should also help ensure a greater degree of congruity between appraisal results and subsequent reward outcomes.
Performance Appraisal System of AB Bank Limited, HR Division, Head Office. Even so, many advocates of separation will be reluctant to concede the possibility of any form of constructive linkage between appraisal and rewards. This is a shame, because the potential of performance appraisal encompasses more than employee development. Admittedly there are risks in linking reward outcomes; but there are also risks, and a potential for harm, in contriving to deny that any linkage exists. At the very least, an organization wishing to form the mildest of reward links might consider a frank discussion of reward criteria during the appraisal interview (Bannister, 1990). Those organizations that are determined to keep their appraisal and reward issues separated might ask themselves whether performance appraisal is really the tool they need. Perhaps what they actually desire is some form of developmental appraisal. 4.6 Conflict and Confrontation Invariably the need arises in performance appraisal to provide an employee with less than flattering feedback. The skill and sensitivity used to handle these often difficult sessions is criti cal. If the appraise accepts the negative feedback and resolves to improve, all is well. But if the result is an angry or hurt employee, then the process of correction has failed. The performance of an employee in such cases is unlikely to improve and may deteriorate even further. 4.6.1 Self-Auditing Appraisers should not confront employees directly with criticism. Rather, they should aim to let the evidence of poor performance emerge "naturally" during the course of the appraisal interview. This is done by way of openended questioning techniques that encourage the employee to identify their own performance problems (Goel, 2008). Instead of blunt statements or accusations, the appraisers should encourage an employee to talk freely about their own impressions of their performance.
Performance Appraisal System of AB Bank Limited, HR Division, Head Office. For example, consider the case of employee who has had too many absent days. The appraiser, in accusatory mode, might say: "Your attendance record is unacceptable. You'll have to improve it." A better way to handle this might be to say: "Your attendance record shows that you had 7 days off work in 6 months. What can you tell me about this?" The technique is to calmly present the evidence (resisting the temptation to label it as good or bad) and then invite the employee to comment. In many cases, with just a gentle nudge from the appraiser here and there, an employee with problems will admit that weaknesses do exist. This is much more likely when an employee does not feel accused of anything, nor forced to make admissions that they do not wish to make. If an appraiser can get an employee to the stage of voluntary admission, half the battle is won (Goel, 2008). The technique described by Krein is a type of self-auditing, since it encourages the employee to confront themselves with their own work and performance issues. The technique is useful because it is more likely to promote discussion and agreement on the need for change. Confrontation techniques that rely on "charge and counter-charge" tend to promote adversarialism - and that leads to denial and resentment.
4.6.2 Ownership of Problems Perhaps the most powerful aspect of the self-auditing process is that employees are more willing generally to accept personal "ownership" of problems that have been self-identified. This sense of ownership provides an effective basis for stimulating change and development. (Some would argue that it provides the only basis.) Nevertheless there are individuals who will not admit to anything that appears to reflect poorly on them. With ego defences on full-alert, they will resist the process of self-auditing very strongly. In such cases, appraisers may
Performance Appraisal System of AB Bank Limited, HR Division, Head Office. have no choice but to confront the poor performer directly and firmly with the evidence they have. Sometimes the shock of direct confrontation will result in the employee admitting that they do need to make improvements. But sometimes it will just make their denial of the problem worse. In providing any feedback - especially negative feedback - appraisers should be willing and able to support their opinions with specific and clear examples. Vague generalizations should be avoided. The focus should be on job-related behaviors and attitudes. If a specific observation cannot be supported by clear evidence, or touches on issues that are not job-related, it may be best to exclude all mention of it. Appraisers must carefully scrutinize their own perceptions, motives and prejudices.
4.7 Common Mistakes Where performance appraisal fails to work as well as it should, lack of support from the top levels of management is often cited as a major contributing reason. Opposition may be based on political motives, or more simply, on ignorance or disbelief in the effectiveness of the appraisal process. It is crucial that top management believe in the value of appraisal and express their visible commitment to it. Top managers are powerful role models for other managers and employees. Those attempting to introduce performance appraisal, or even to reform an existing system, must be acutely aware of the importance of political issues and symbolism in the success of such projects.
Fear of Failure There is a stubborn suspicion among many appraisers that a poor appraisal result tends to reflect badly upon them also, since they are usually the
Performance Appraisal System of AB Bank Limited, HR Division, Head Office. employee's supervisor. Many appraisers have a vested interest in making their subordinates "look good" on paper. When this problem exists (and it can be found in many organizations), it may point to a problem in the organization culture. The cause may be a culture that is intolerant of failure. In other words, appraisers may fear the possibili ty of repercussions - both for themselves and the appraisee. Longenecker, (1989) argues that accuracy in performance appraisal is impossible to achieve, since people play social and political games, and they protect their own interests. "No savvy manager...", says Longenecker, "... is going to use the appraisal process to shoot himself or herself in the foot." No matter what safeguards are in place, "... when you turn managers loose in the real world, they consciously fudge the numbers." What Longenecker is saying is that appraisers will, for all sorts of reasons, deliberately distort t he evaluations that they give to employees. Indeed, surveys have shown that not only do many managers admit to a little fudging, they actually defend it as a tactic necessary for effective management. The fudging motives of appraisers have, at times, certain plausibility. For instance, a supervisor who has given an overly generous appraisal to a marginal performer might claim that their 'legitimate' motive was the hope of encouraging a better performance. On the other hand, fudging motives can be a lot less admirable and sometimes devious: the appraiser who fudges to avoid the possibility of an unpleasant confrontation, the appraiser who fudges to hide employee difficulties from senior managers, the appraiser who fudges in order to punish or reward employees.
Judgment Aversion Many people have a natural reluctance to "play judge" and create a permanent record which may affect an employee's future career. This is the
Performance Appraisal System of AB Bank Limited, HR Division, Head Office. case especially where there may be a need to make negative appraisal remarks. Training in the techniques of constructive evaluation (such as self-auditing) may help. Appraisers need to recognize that problems left unchecked could ultimately cause more harm to an employee's career than early detection and correction. Organizations might consider the confidential archiving of appraisal records more than, say, three years old. Feedback-Seeking Larson, (1989) has described a social game played by poor performers. Many supervisors will recognize the game at once and may have been its victims. The game is called feedback-seeking. It occurs where a poor performing employee regularly seeks informal praise from his or her supervisor at inappropriate moments. Often the feedback-seeker will get the praise they want, since they choose the time and place to ask for it. In effect, they "ambush" the supervisor by seeking feedback at moments when the supervisor is unable or unprepared to give them a full and proper answer, or in settings that are inappropriate for a frank assessment. The supervisor may feel "put on the spot", but will often provide a few encouraging words of support. The game seems innocent enough until appraisal time comes around. Then the supervisor will find that the employee recalls, with perfect clarity, every casual word of praise ever spoken! This places the supervisor in a difficult bind. Either the supervisor lied when giving the praise, or least, misled the employee into thinking that their performance was acceptable (in fact, this is the argument that feedbackseekers will often make). The aim of the game is that the feedback- seeker wants to deflect responsibility for their own poor performance. They also seek to bolster their appraisal rating by bringing in all the "evidence" of casual praise. Very often the feedback seeker will succeed in making the supervisor feel at least partly
Performance Appraisal System of AB Bank Limited, HR Division, Head Office. responsible. As a result, their appraisal result may be upgraded (David B, 1993). Was the supervisor partly responsible? Not really. The truth of the matter is th at they have been "blackmailed" by a subtle social game. But like most social games, the play depends on the unconscious participation of both sides. Making supervisors aware of the game is usually sufficient to stop it. They must learn to say, when asked for casual praise, "I can't talk about it now... but se e me in my office later." This puts the supervisor back in control of the appraisal process. Appraiser Preparation The bane of any performance appraisal system is the appraiser who wants to "play it by ear". Such attitudes should be actively discouraged by stressing the importance and technical challenge of good performance appraisal. Perhaps drawing their attention to the contents of this web site, for example, may help them to see the critical issues that must be considered. Employee Participation Employees should participate with their supervisors in the creation of their own performance goals and development plans. Mutual agreement is a key to success. A plan wherein the employee feels some degree of ownership is more likely to be accepted than one that is imposed. This does not mean that employees do not desire guidance from their supervisor; indeed they very much do.
Performance Management One of the most common mistakes in the practice of performance appraisal is to perceive appraisal as an isolated event rather than an ongoing process. Employees generally require more feedback, and more frequently, than can be provided in an annual appraisal. While it may not be necessary to
Performance Appraisal System of AB Bank Limited, HR Division, Head Office. conduct full appraisal sessions more than once or twice a year, performance management should be viewed as an ongoing process. Frequent mini-appraisals and feedback sessions will help ensure that employees receive the ongoing guidance, support and encouragement they need (Bannister, 1990). Of course many supervisors complain they don't have the time to provide this sort of ongoing feedback. This is hardly likely. What supervisors really mean when they say this is that the supervision and development of subordinates is not as high a priority as certain other tasks. In this case, the organization may need to review the priorities and values that it has instilled in its supervisory ranks. After all, supervisors who haven 't got time to monitor and facilitate the performance of their subordinates are like chefs who haven't got time to cook, or dentists who are too busy to look at teeth. It just doesn't make sense. If appraisal is viewed as an isolated event, it is only natural that supervisors will come to view their responsibilities in the same way. Just as worrying, employees may come to see their own effort and commitment levels as something that needs a bit of a polish up in the month or two preceding appraisals.
4.8 Bias Effects
Gabris & Mitchell have reported a disruptive bias in performance appraisal known as the Matthew Effect. It is named after the Matthew of biblical fame who wrote, "To him who has shall be given, and he shall have abundance: but from him who does not have, even that which he has shall be taken away." In performance appraisal the Matthew Effect is said to occur where employees tend to keep receiving the same appraisal results, year in and year out. That is, their appraisal results tend to become self-fulfilling: if th ey
Performance Appraisal System of AB Bank Limited, HR Division, Head Office. have done well, they will continue to do well; if they have done poorly, they will continue to do poorly. The Matthew Effect suggests that no matter how hard an employee strives, their past appraisal records will prejudice their future attempts to improve. There is other research to support the theory that poor performers might not be given a fair chance to improve. A study of supervisors in nearly 40 different organizations found that subordinates tend to be divided into two groups: ingroupers and out-groupers. This study, by Heneman, Greenberger & Anonyou (1989) reported that ingroupers are subordinates who seem to be favored by their supervisors. In their relationship with the boss, they enjoy "a high degree of trust, interactio n, support and rewards." On the other hand, outgroupers don't do as well. They appear to be permanently out of favor and are likely to bear the brunt of supervisory distrust and criticism. The effect is therefore similar to the horns and halo effect; supervisors tend to judge employees as either good or bad, and then seek evidence that supports that opinion. It was found that when an ingrouper did poorly on a task, supervisors tended to overlook the failure or attribute to causes such as bad luck or bad timing; when they did well, their success was attributed to effort and ability. But when a outgrouper performed well, it was rarely attributed to their effort or ability. And when an outgrouper performed poorly, there was little hesitation it citing the cause as laziness or incompetence (Smith, 1997). It is not clear how supervisors make the distinction between ingroupers and outgroupers. Whatever the criteria, it is clearly not objective, equitable or reliable. This bias must inevitably lead to a distortion of the appraisal process. It must also be a source of frustration for those employees who are discriminated against.
4.8.1 Frustration The extent of this frustration was explored by Gabris & Mitchell. They studied an organization with a quarterly performance appraisal system. The workforce was divided into two groups: those who had been given high appraisal results consistently, and those who had low results consistently. When the groups were asked if the appraisal system was fair and equitable, 63 per cent of the high performers agreed, compared to only 5 per cent of the lower performers. The groups were asked if their supervisors listened to them. Of the high performers, 69 per cent said yes, while among the low performers, 95 per cent said no (Goel, 2008). Finally, when asked if their supervisors were supportive, nearly half of the hig h performers agreed that they were, while none (nil, zilch, zero!) of the low performers agreed. Of course, not everyone who gets a poor appraisal result is a victim of supervisory bias. Nor are all supervisors prone to making the same degree of in group and out group distinction. The effects discussed here are tendencies, not immutable effects. But to some extent, it appears that certain employees may be unfairly advantaged, while others are disadvantaged, by bias effects in the judgements of supervisors.
It is a cardinal principle of performance appraisal that employees should have the chance to improve their appraisal results - especially if their past results have not been so good (Goel, 2008). It is a very serious flaw in the process of appraisal if this principle is denied in practice. There are reasonable steps which can be taken to limit the effects of supervisory bias.
Performance Appraisal System of AB Bank Limited, HR Division, Head Office. 4.8.2 Awareness Training The first line of defence lies in raising awareness of the problem. Supervisors need to be informed of the types of subtle bias that can interfere with their performance as appraisers. They need to understand that the ingroup/outgroup bias, for instance, reduces the morale and motivation of their subordinates.
4.8.3 Developing Poor Performers Incentives, financial or non-financial, may offered to encourage supervisors to make special efforts to help poor performers improve. Supervisory appraisals, for example, might stress the importance of working with poor performers to upgrade their performance. The possibilities are extensive. 4.8.4 Counseling, Transfer, Termination There is always the possibility that an employee who receives poor appraisal results is in fact a chronic poor performer. No employer is obliged to tolerate poor performance forever. Consistently poor appraisal results will indicate a need for counselling, transfer or termination. The exact remedy will depend on t he circumstances.
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5.0 Performance Appraisal System (PAS) of AB Bank Limited
Performance appraisal system (PAS) is the tool for measuring the performance of an individual and identifies the gaps and plan future development in order to enable a better performance between the jobs and the incumbent.
It is an HR process for driving business outcomes. It is defining in advance what the employees must do as an individual to win in the market place and later on assessing the performance based on the extent to which the organization achieve result.
Performance appraisal system is quite structured that it can measure of assess both goal (What) and the management competencies (How).
Goals-Key Result Areas (KRA) is the specific major objectives to be set at the beginning of the year through consultation with the reporting manager or supervisor. These need to be aligned to the objectives of the function and consequently to overall objectives of the bank (ABBL, 2010).
A management competency is a skill, ability or trait that predicts success to perform a job. The Performance Appraisal needs to be implemented as per PAS format which will be circulated by HR at the beginning of the year. The definition of rating in performance appraisal is given below for reference: Performance Standard
. . . .
Excellent (4.5-5.0) Very Good (3.5-4.5) Good (2.5-3.5) Average (1.5-2.5)
Performance Appraisal System of AB Bank Limited, HR Division, Head Office. . Below Average (1.0-1.5)
AB Bank consider the following term for Appraisal. Indication key job responsibilities/ Targets/ Work plan of the employee for the year. . Performance on the job. . Knowledge level. . Behavioral competence level.
Excellent= 91-100, Very Good= 71-90, Good= 51-70, Average= 31-50 and Below Average= 0-30
Consider on the Job Performance and the results delivered by employee (Judge Quantity and Quality) - anyone of the following:
. A Strongest all around performer, Exceptionally Exceeded targets/ given what plan for above expectation. . A Stronger all performer, Reasonably Exceeded or target/ given work plan above expectation. . A Strong performer Met targets/ given work plan satisfactorily within expectation. . A Reasonable performer, Closely Met target/ given work plan, but not fully satisfactory. . Performance standard is Well Below, targets/ given work plan, needs serious tanning and serious efforts to improve.
Those who are rated in Excellent, Very Good, Good, Average and Below Average are eligible for incentive bonus or promotion.
Performance Appraisal System of AB Bank Limited, HR Division, Head Office. 5.1 Performance Appraisal Policy
Performance appraisal process is conducted by the HR Division. So the policy is also made by the (Human Resources Division to conduct this process smoothly and clearly.
5.2 Objectives & Modus Operandi
The Performance Appraisal System (PAS) of AB Bank is limited to measuring performance of employees, the purpose of the PAS is to improve employee performance in terms of skills & knowledge as well as leadership .
The PAS focuses first on the job performance parameters for a given period of time:
and considers the following
.. .. .. .. .. .. ..
What assignment was given by the work plan or in terms of targets? What was expected of? What has been delivered? How has been delivered? What has gone well? What has gone wrong? What could have been done differently to do better?
1st, Getting these answers it will help in finding newer ways and means to improve performance learning from past successes and failures.
2nd, it examines the professional skills & knowledge which are required in a job, the actual skill & knowledge level, a job holder possesses and thus helps in finding skill /knowledge gaps to be addressed for personal development
Performance Appraisal System of AB Bank Limited, HR Division, Head Office. 3rd, it reviews the leadership behaviors i.e. competencies or abilities which ar e required in a job in comparison with real demonstration of behavioral competencies by the job holder and thus helps finding competency gaps to be addressed for personal development.
Therefore, the appraisal system of AB Bank takes care of the following:
.. Business performance ( on the job accomplishment in terms of a work plan/targets/expectation ) .. Skill & knowledge .. Behavioral competencies ( leadership ) .. Individual development plan
AB Bank conducts its performance appraisal annually and in the process review progress quarterly for correction of directions enabling an individual to achieve his / her objectives. On the whole, the objective is to shape outstanding performance in a competitive way to ensure sustainable profitable growth in business.
Performance Appraisal System of AB Bank Limited, HR Division, Head Office. 5.3 Definition of different performance grades
5 (Five) Performance Categories Standard of Performance/Definition Rating .. EXCELLENT (EX) ..100% ++ ACHIEVER
Exceptionally exceeded performance Standard / Targets / Given Work Plan far above expectation
.. VERY GOOD (VG) ..100% + ACHIEVER
Reasonably exceeded performance Standard / Targets / Given Work Plan above expectation.
.. GOOD (G) .. TARGET ACHIEVER
Met performance standard /targets /given work plan satisfactorily within expectations.
.. AVERAGE (AVG) .. NEARLY TARGET ACHIEVER
Closely Met performance Standard /Targets /Given Work Plan, but not fully satisfactory
.. BELOW AVERAGE (BAVG) .. POOR
Performance far below the Standard expectation / Targets / Given Work Plan A poor performer.
5.4 Annual Performance Appraisal & Standard Performance Distribution ( SPD) :
Each employee will be appraised by the immediate supervisor annually against targets/given work plan/responsibilities within the meaning of the policy guideline and as per standard format designed & developed.
HR in coordination with the Divisional / Departmental Heads will monitor, educate & guide and ensure policy compliance. As a matter of policy, HR will ensure compliance of the following Standard in Performance Distribution amongst population in a department / section / branch.
Performance Appraisal System of AB Bank Limited, HR Division, Head Office. Each Head of the function in joint consultation with HR will ensure that the given principles as far as practicable are in place so as to keep consistency.
5.5 Types of Performance Appraisal Form
AB Bank Limited has two types of performance appraisal forms. One is for the branch managers or department heads and another is for the other employees who are working under them. The performance appraisal form of the relationship managers or the department heads are filled by the Management Committee. And the employees other then Managers performance appraisal forms are filled up by the relationship managers of the branches and the department heads. Managers fill this performance appraisal form and send it directly to the HR Division as TOP CONFIDENTIAL papers. After receiving the document HR Division informs the manger that the documents are received and also make sure that how many forms they received. If the document cover is tempered then HR Division refuses to receive the document. Because this is a confidential paper that should be sent properly.
Performance Appraisal System of AB Bank Limited, HR Division, Head Office. 5.6 The completion process of Performance Appraisal Forms:
It is already mentioned that there are two types of forms one is for the managers and another one is for the employees who are working under them that means other then Managers. Now the completion process of two different types of forms will be discussed bellow to make it more understandable:
At first the performance appraisal form of the managers will be mentioned:
The form consists of four pages. At the beginning of the format page one it needs to mention the year for which the organization is evaluating his employees. Then the name of the appraise (the person who is evaluating) and also the designation, age, last promotion date, service period with AB Bank etc informations have to be mention. Service period of the present position and also need to mention the job location means where the employee was working on that particular period of time.
Then the Management Committee have to fill up the section A where they need to mention the profit that the branch Manager achieved and the targeted profit that was decided by the authority. After finishing section A management have to fill up part B which is named other strategic targets contributed to part A. If A is achieved then B may be ignored. But if A is not achieved then they must fill up the percentages of different factors that is mentioned in that particular area. These factors are deposits, loans, advances, imports, exports, remittances, bonds etc. After completing section B they have to complete section C. in this section they have to give some points about quality of achievements. These achievements are audit compliances, NPL new and recovery, operating budget, employee development etc. after completing this three part they put the marks below and add them. If the average is:
Performance Appraisal System of AB Bank Limited, HR Division, Head Office. Less than 65% Below Average 65 - 79% Average 80% -100% Good 101% - 109% Very Good Equal or above 110% Excellent Far below target Near to target Achieved target Exceeded target Exceptionally exceeded target
Then after completing first page they have to move to page 2. Here they need to fill up some Assessment of Knowledge & behavioral competence for Potential Listing only. Scoring will be like this: 1 = Need development, 2 = Average, 3 = Good, 4 = Very Good & 5 = Excellent.
Here they have to fill up nearly fifteen questions about the knowledge &
behavioral competence factors of Managers. These questions vary according to the situation. The questions that are asked in this section are: 1. Overall Knowledge profile in assigned job responsibilities (core job) 2. Knowledge about AB Bank s product & services , Organization, Policies & Processes (updated) 3. Appreciation in banking business 4. Computer literacy & IT knowledge relates to banking 5. Planning: Ability to plan own job activities and able to prioritize and drive actions for results 6. Customer understanding and care 7. Awareness about compliance issues 8. A self starter with drive & initiatives 9. Attitude ( a positive thinker & adoptable to change ) 10. Analytical ability 11. Communication ability
Performance Appraisal System of AB Bank Limited, HR Division, Head Office. 12. 13. 14. 15. Inter-personal relationship A team worker believes in team commitment Ability to influence others & gain commitment Speed in action
These are the questions that are mainly asked in this section. Management has to put tick mark on the number that the person (Manager) deserves. Then they have to comment on question number 16 about his Integrity & Conduct in service. This is a very crucial part for the Manager. Because it shows the job sincerity of the Managers.
In section D the evaluator tries to identify two key areas that should be developed. There are two areas like Knowledge and Behavioral competence. If the appraise needs any development in this two areas then they have to mention them in this box. Basically from this box information employees are selected for training on that basis.
In section E Supervisor s overall comment (Performance Summary & Rating) is given. Actually it shows the summary of the appraisal. This rating is directly entered into the performance appraisal calculation software. The input process of software will be described later. After completing this part appraiser have to sign below.
Employee view point about this appraisal and own career wishes will be mentioned in the section F. if appraise agrees with the appraisers evaluation then he has to write agreed and sign below. If any appraise feels that their performance evaluation by the line managers is influenced by discrimination or unfair and biased judgment the appraise may appeal to Head of HR with their grievance in writing. In such cases the Head of HR will be the first point contract. If the issue remain unresolved than it will referred to the MD for his/her review and decision and in that case the decision of MD will be final.
Performance Appraisal System of AB Bank Limited, HR Division, Head Office. Special Recommendations (career etc.) Place with justification are filled up in section G. if the appraiser think that the employee should get the annual increment then they have to write it in this box. If employee is eligible for ne xt higher level promotion then it also has to mention there. If the appraiser think s that the employee should get both of them then he must write that in this box with proper justification.
In section H there is a box for HR review and comment. If HR thinks that there should be added any more things than they can add it here. Even if they think that this evaluation is not properly completed then they can also write it here. Then the proper actions will be taken further.
Interview outcome & comment by HR Steering Committee is written here in section I. This part is mainly considered if the person is recommended for promotion. This part is optional. HR can directly put this comment in the Managers personal file. If the person is not recommended then this part does not count or necessary to complete. These are the main things that are to be considered when the appraisal form of the managers evaluated.
Now the performance appraisal form of all employees other then manager will be explained. In that case the last three pages of the appraisal form are similar to the Manager s form. The basic difference is in the first page of the form. So the first page of the form will be described. At the beginning of the form as previous it needs to mention the year for which Managers are evaluating the employees. Then they have to fill up the name of the appraise (the person whom we evaluating) and also the designation, age, last promotion date, service period with AB Bank, service period of the present position and also the job location means where the employee was working on that particular period of time. Then in section A mangers have to write the key job responsibilities, targets and work plans of the employee in brief. Here they have to mention all the work which is done by the employee in that particular period of time.
Performance Appraisal System of AB Bank Limited, HR Division, Head Office. Then the manger has to fill section B which is called performance category. Here manger has to mention in which category this employee fall in to with proper justification. There are five performance categories. They are:
1. EXCELLENT (EX) .. 100%++ ACHIEVER: Exceptionally Exceeded Performance Standards / Targets / Given Work Plan far above expectation. 2. VERY GOOD (VG) .. 100%+ ACHIEVER: Reasonably Exceeded Performance Standards / Targets / Given Work Plan above expectation. 3. GOOD (G) .. TARGET ACHIEVER: Met Performance Standards /Targets / Given Work Plan satisfactorily within expectation 4. AVERAGE (AVG).. Nearly TARGET ACHIEVER: Closely Met Performance Standards / Targets / Given Work Plan, but not fully satisfactory. 5. BELOW AVERAGE (BAVG) .. Performance Far Below the Standard Expectation / Targets / Given Work Plan A poor performer.
Mangers have to describe the category which the employee belongs to and also have to give a tick mark in the right side of the form. After that section all the sections are similar as the mangers form. The Manager has to fill this form accordingly.
With a view to explaining the performance appraisal system of AB Bank Limited a small case study has been undertaken where in the performance appraisal of a respondent has been described. For the sack of anonymity the name of the respondent has not been disclosed in the present report. This is a performance appraisal form for year 2009 of an employee who is other then manager. So as it mentioned earlier that in section A manger
Performance Appraisal System of AB Bank Limited, HR Division, Head Office. have to describe the key job responsibilities of that employees. In this case the employee s key job responsibilities are:
.. L/C Opening. .. Management of SWIFT. .. Preparation of PSI forms. .. Preparation of CCIE statement. .. Preparation of Land Customs statement. .. Management of TI systems. .. TR disbursement and adjustment when related officer is absent or overloaded. .. To develop myself in banking carrier and serve the bank effectively and efficiently. .. To improve business worthiness & Marketing of the products to improve Bank profit. .. Other assignment as assigned by the branch management time to time. .. Successfully achieved my business target for Tk,70.00 (Seventy) lacks set by the branch management.
In section B manager has to mention in which category the appraise fall into. In that case the manger selected him in as EX (excellent) category. Appraiser also wrote the justification for that category.
Performance Appraisal System of AB Bank Limited, HR Division, Head Office. B. PERFORMANCE CATEGORY: Given the job responsibilities and considering Quantity & Quality of On-the-job performance, evaluate performance category: (An y one of the following performance category) 5 (Five) Performance Categories Justification in brief Tick v RATING EXCELLENT (EX) .. 100%++ ACHIEVER: Exceptionally Exceeded Performance Standards / Targets / Given Work Plan far above expectation. He is very much knowledgeable about his job. He has been performing very efficiently with and at most satisfaction. Please give examples
v VERY GOOD (VG) .. 100%+ ACHIEVER: Reasonably Exceeded Performance Standards / Targets / Given Work Plan above expectation.
GOOD (G) .. TARGET ACHIEVER: Met Performance Standards /Targets / Given Work Plan satisfactorily within expectation.
AVERAGE (AVG).. Nearly TARGET ACHIEVER: Closely Met Performance Standards / Targets / Given Work Plan, but not fully satisfactory
BELOW AVERAGE (BAVG) .. Performance Far Below the Standard Expectation / Targets / Given Work Plan A poor performer.
In section C Manager has to assess the knowledge and behavioral competences of the employees. In this case the employee rating was in this manner.
Performance Appraisal System of AB Bank Limited, HR Division, Head Office. C. Assessment of Knowledge & behavioral competence for Potential Listing only ) 1=Need development, 2=Average, 3=Good, 4=Very Good & 5 =Excellent
KNOWLEDGE & BEHAVIORAL COMPETENCE FACTORS RATING .. Tick v 1 2 3 4 5
1. Overall Knowledge profile in assigned job responsibilities (core job)
v 2. Knowledge about AB Bank s product & services , Organization, Policies & Processes (updated)
3. Appreciation in banking business
v 4. Computer literacy & IT knowledge relates to banking
5. Planning: Ability to plan own job activities and able to prioritize and drive actions for results
6. Customer understanding and care
7. Awareness about compliance issues
v 8. A self starter with drive & initiatives
9. Attitude ( a positive thinker & adoptable to change )
v 10. Analytical ability
11. Communication ability
12. Inter-personal relationship
13. A team worker believes in team commitment
14. Ability to influence others & gain commitment
15. Speed in action
So it is visible that in this category the employee did very well. His performance was very satisfactory to his managers. His average in this section was (6*5) + (9*4)/15 = 4.4 which is very much satisfactory.
Then the manger has to write about the integrity & conduct in service of the employees. In this case manger commented as follows:
16. Integrity & Conduct in service ( comment ) : is the honest sincere & well
behaved person. He has the good communication skill and he has ability to attract the customers to our products.
In section D Mangers have to identify the areas in knowledge and behavioral competence that should be develop in employees characteristics. In this case manger identified two knowledge factors that should be improved. These are
D. Development Needs - 2(Two) areas in knowledge and 2(two) areas in behavioral competence Knowledge Behavioral competence 1. ..Export & BB.
2. ..Foreign remittance. 1. ..
2. ..
After finishing that section manger commented on the supervisor s overall comment box which is in section E. it can also described as the summary of the appraisal form where supervisor make comment and give the final grade. In this case the manager has given the respondent the following comment and grade in his evaluation form:
Performance Appraisal System of AB Bank Limited, HR Division, Head Office. E. Supervisor s overall comment Rating v _________________cosistently performs his job with high satisfaction and he has sound knowledge about the bank rules and regulations. Performance Summary & Rating
___________________ Supervisor ( Appraiser ) EX v VG
AVG
BAVG
So according to the manger the employee got overall EX rating. This rating will be entered in the performance appraisal software. So from this box it is easily identified that the manger is completely satisfied with the performance of the employee.
After this section there is a box for employee view point about this appraisal form which is in section F. Here employee comments about the grading. In this case the employee gave the comment as follows:
F. Employee view point about this appraisal and own career wishes:
Agreed.
__________________ Employee (Appraise)
Here employee is completely agreed with the managers rating. So the appraise wrote agreed. If appraiser feels that performance evaluation by the line manager is influenced by discrimination or unfair and biased judgment then he may appeal to Head of HR with his grievance in writing. In such cases
Performance Appraisal System of AB Bank Limited, HR Division, Head Office. the Head of HR will be the first point contract. If the issue remain unresolved than it will referred to the MD for his review and decision and in that case the decision of MD will be final.
After that part there is the box for special recommendations. In this case Manger things that the appraise is eligible for recommendation. So the remark was as follows:
G. Special Recommendations (career etc.)
Place with justification
Recommended for annual increment and promotion to the next higher level.
___________________ Supervisor ( Appraiser)
So this is the total performance appraisal form for this employee. This form is included only for better understanding about the performance appraisal system of AB Bank Limited. At the end of the report this Performance Appraisal Form is included as appendix.
Performance Appraisal System of AB Bank Limited, HR Division, Head Office. 5.7 The input process of Performance Appraisal Form in Database:
There is a systematic process of entering performance appraisals into the database. Well AB Bank Limited has their personal database where each and every single thing of an employee is inserted in their profile. But now only the input process of performance appraisal will be discussed in this section of the research. In the database this section of the software is called SCALED . SCALED stands for Skill Set Competency Assessment for Logical Evaluation and Development . This is an appraisal module. To enter in this section everyone (who have the access) have to use their personal user name and password. Because it is a much secured place where most confidential things of an employee are saved. untitled....5.bmp
Performance Appraisal System of AB Bank Limited, HR Division, Head Office. From this section the operator has to go to Appraisal Module which is in the left menu bar. After selecting this button from below another page will
appear which is similar to this. From this menu the staff appraisal button have to be selected from the up menu bar. After that input appraisal button have to be selected. After selecting this menu the page will be appeared like this:
Untitled 1.jpg Untitled.jpg
Performance Appraisal System of AB Bank Limited, HR Division, Head Office. This is the main page of entering performance appraisal. Here at the beginning Staff PIN has to be entered. This is a very crucial point when this pi n is entered for entering performance appraisal. If the wrong pin is entered then the appraisal will be a wrong entry. Because wrong PIN means wrong person. And the evaluation process will be affected. So when the system is in work in progress at least two persons work together to make sure that there will be no confusion or mistakes. When the pin is entered the employee name and other details automatically appears. Here previous entries can be checked.
From here operator have to click add new. Then dates have to be entered in From & To box. For an example if the operator has to enter the appraisal of 2009 then the entry will be like this: 1-1-09 to 31-12-09. Then date format will automatically change like 01-Jan-2009 and 31-Dec-2009. After that the supervisors pin number have to enter. If the correct pin is entered then the
Performance Appraisal System of AB Bank Limited, HR Division, Head Office. name will automatically appear in the next box. After that business contribution button has to click. A new menu will appear which is like the picture below.
Here achievement marks have to enter along with total marks and clicks save. The achievement marks will be as follows: Excellent (EX) = 91 - 100, Very Good (VG) = 71 - 90, Good (G) = 51 - 70, Average (AVG) = 31 - 50 and Below Average (BAVG) = 0 click Point 30. After that it needs to close the menu and
Generation button. Then the operator has to click the point calculator button. Then the ratings Adjective will be appear in the right side of the box. This way each employee s appraisal is entered into the database. This is the systematic process of entering Performance Appraisal Form of the employees of AB Bank Limited.
Chapter
Conclusions & Recommendations
Performance Appraisal System of AB Bank Limited, HR Division, Head Office. 6.0 Conclusion
AB Bank Limited, the pioneer private Bank of the country has created a sense of mass participation through its diversified activities over the last 28 years. Their numbers of client s service recovers and supporters have been increase rapidly. Even their employee number is now around 2000. They are maintaining their banking business with their 77 branches. For its diversified banking service, it has got a wide range of publicity and created a special image the banking area in the country. ABBL has started making profit from 1985 to still now. Now they are the second highest profit making organization among the private commercial banks of Bangladesh.
The report is aimed at the Human Resource Division. AB Bank Limited operating in the market with the ambition of becoming the Bank of choice for its clients and all its stakeholders. It is just natural for ABBL to pitch i ts customer service benchmarks high, at a level where the local standard are far exceeded and global standards are embraces and met.
AB Bank Limited is committed to focus to all its energy on its customer as well as its employees. This is sure a strong Human Recourse practices will help ABBL pave the way leading to outmost destination. Human Resources Division in AB Bank Limited is under massive reconstruction program ensures the future benefits and high corporate culture and the secured place of contribute and dedicate the experience and exposure of high professionalism.
Performance Appraisal System of AB Bank Limited, HR Division, Head Office. 6.1 Ending Remarks
In the fast evolving world, it is very necessary for each and every organization to build a strong presence in the market by maximizing profit margin by satisfying their customers and employees as much possible. As a bank, the manager has to identify the strategies that align, fit or match the banks resources and capabilities to the demands of the environment in order to exploit opportunities and counter threat and to correct company weakness building on the strength. It is also necessary to make their human resource more efficient to face all the challenges effectively. It is like a process containing corporate planning, performance analysis, program or service delivery, and evaluation and review.
After completing my internship program with AB Bank Limited, HR Division, Head office, I think the following recommendations will help them to improve the employee satisfaction and also the HR Division:
Identical Human Resource Policy: There should be a unique HR policy in the organization immediately; through the recognition of HR policy is under progress supervised by the Manager and the head of HR.
Human Resource Development: There should be all kinds development activities as individual, career and organizational by the Human Resource Department for enhancing the employee s growth as well as achieve organizational hierarchy.
Training Need Assessment: AB Bank Limited has all the potential capabilities to make its employee more efficient and help being the future leader. Training is a common practice for the employees of any bank. This training should be organized by the human resource department only through need
Performance Appraisal System of AB Bank Limited, HR Division, Head Office. assessments. it can be examines through the performance evaluation process by which HR Division will determine where he/she should have some more exposure.
Post Training Assessment: AB Bank Limited has many training programs local and abroad as well. Many employees sent to these programs every year. But a biggest loophole is they don t take any steps to measure the efficiency of the employees after the training program. The training program is helpful or not for the employees they don t measure it. But this not he proper way. They should evaluate the previous performance and the after training performance to identify the improvements. It will help the bank to identify which training program is helpful for which skill development.
Performance Appraisal System: The existing appraisal system can be changed or modified and new system could be developed which will articulate the accurate picture. The criteria of evaluation should cover more competencies of an employee. The system could cover criteria as individual, social along with the core business competencies. The result can be used for training need assessment and help taking proper development initiatives.
Linkage among Other Division: A department like HR Division cannot perform isolated where Human Resource Department is in the core of all other department with the responsibilities of maximizing the employee s benefits as well as achieving organizational objectives. For better services, HR Division must establish a proper linkage within the other functional departments.
Reward and Recognition: Only higher salary package cannot satisfy a self motivated and exposed employee in higher level. The employee wants recognition and reward for their self actualization. There are few reward and recognition options is available in AB Bank Limited should review for deals
Performance Appraisal System of AB Bank Limited, HR Division, Head Office. with employee turnover. The workforce should be structured and the standard functional designation should be in act.
Annexure
PERFORMANCE APPRAISAL FORM (Managers) Year: __________
Name of the Employee (Appraise): Position ..
Age : Service with AB Service Present position Name of Supervisor (Appraiser):
Date of last promotion Rating .. Year 2007 Year 2006
Job location ..
A. Factors Target (s) Achievement % Score 1. Profit
Other Strategic Targets contribution to (A) .. NB: If A ignored % Score 1. Deposit
is achieved, B
rating may be
2. Loans / Advances 3. Exports
4. Imports
5. Remittance
6. Guarantee/Bond
7. Other income
Quality of Achievements: 25 points PLUS or MINUS over achievement of (A) (To be applied proportionately) % Score 1. Audit Compliance 100% compliance = 5 point 2. NPL (New) 100% compliance= 5 point 3. NPL Recovery 75% achievement = 5 point
4. Operating Budget 5% saving = 5 points 5. Employee development Monthly meetings, Weekly coaching , Employee feedback = 5 points Total 25
Over Score .. .. .. : (A) ______(B)______(C)_______= ____________
PERFORMANCE SCORE CARD ( Tick v ) Less than 65% Below Average 65 - 79% Average 80% -100% Good 101% - 109% Very Good Equal or above 110% Excellent Far below target Near to target Achieved target Exceeded target Exceptionally exceeded target
C:\Users\ABDULL~1.ABB\AppData\Local\Temp\AB-Logo-New.jpg
Performance Appraisal System of AB Bank Limited, HR Division, Head Office. 11. Planning: Ability to plan own job activities and able to prioritize and drive actions for results
D. Assessment of Knowledge & behavioral competence for Potential Listing only ) 1=Need development, 2=Average, 3=Good, 4=Very Good & 5 =Excellent
KNOWLEDGE & BEHAVIORAL COMPETENCE FACTORS RATING .. Tick v 1 2 3 4 5
8. Knowledge about AB Bank s product & services , Organization, Policies & Processes (updated)
10. Computer literacy & IT knowledge relates to banking
17. A self starter with drive & initiatives
19. Analytical ability
24. Speed in action
25. Integrity & Conduct in service ( comment ) :
D. Development Needs - 2(Two) areas in knowledge and 2(two) areas in behavioral competence Knowledge Behavioral competence 3. ..
4. ..
4. ..
F. Supervisor s overall comment Rating v
Performance Summary & Rating
____________________ EX
VG
3. ..
Supervisor ( Appraiser ) G
AVG
BAVG
F. Employee view point about this appraisal and own career wishes
___________________ Employee ( Appraise )
H. HR review & comments:
________________ HR Representative
I. Interview outcome & comment by HR Steering Committee ry to organize)
Sign & Date ( if necessa
________________________________ HR Steering Committee Representative
PEM RFORMANCE APPRAISAL FOR(All employees other than Managers)
Name of the Employee (Appraise): Position ..
Age : Service with AB Service Present position
Rating ..
Year: __________ ID # Name of Supervisor (Appraiser): Date last promotion Y 2008 Y 2007 Job location .. A. Key Job responsibilities / Targets / Work plan (in brief) of the employee in Y ..
.. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. ..
B. PERFORMANCE CATEGORY: Given the job responsibilities and considering Quantity & Quality of Onthe-job performance, evaluate performance category: (Any one of the following pe rformance category) 5 (Five) Performance Categories Justification in brief Tick v EXCELLENT (EX) .. 100%++ ACHIEVER: Exceptionally Exceeded Performance Standards / Targets / Given Work Plan far above expectation. Please give examples
Reasonably Exceeded Performance Standards / Targets / Given Work Plan above expectation.
GOOD (G) .. TARGET ACHIEVER: Met Performance Standards /Targets / Given Work Plan satisfactorily within expectation.
.. .. .. ..
RATING VERY GOOD (VG) .. 100%+ ACHIEVER:
AVERAGE (AVG).. Nearly TARGET ACHIEVER: Closely Met Performance Standards / Targets / Given Work Plan, but not fully satisfactory
BELOW AVERAGE (BAVG) .. Performance Far Below the Standard Expectation / Targets / Given Work Plan A poor performer.
E. Assessment of Knowledge & behavioral competence for Potential Listing only ) 1=Need development, 2=Average, 3=Good, 4=Very Good & 5 =Excellent
RATING .. Tick v 1 2 3 4 5
14. Knowledge about AB Bank s product & services , Organization, Policies & Processes (updated)
16. Computer literacy & IT knowledge relates to banking
17. Planning: Ability to plan own job activities and able to prioritize and drive actions for results
KNOWLEDGE & BEHAVIORAL COMPETENCE FACTORS
26. A self starter with drive & initiatives
28. Analytical ability
33. Speed in action
34. Integrity & Conduct in service ( comment ) :
D. Development Needs - 2(Two) areas in knowledge and 2(two) areas in behavioral competence Knowledge Behavioral competence 5. ..
6. ..
5. .. 6. ..
G. Supervisor s overall comment Rating v
Performance Summary & Rating
___________________ EX
VG
Supervisor ( Appraiser ) G
AVG
BAVG
H. Employee view point about this appraisal and own career wishes:
Employee ( Appraise )
I. HR review & comments:
________________ HR Representative
J. Interview outcome & comment by HR Steering Committee ry to organize):
Sign & Date ( if necessa
_________________________________
HR Steering Committee Representative
References
8.0 References
Dewakar Goel (2008) Performance Appraisal And Compensation Management: A Modern Approach. pp 8 - 272.
Dulewicz V. (1989) Performance appraisal and counselling, in Herriot, P., Assessment and selection in organizations: methods and practices for recruitment and appraisal, John Wiley & Sons, New York, pp645649.
Baron, R.A. (1988) Negative effects of destructive criticism: impact on conflict, selfefficacy, and task performance, Journal of Applied Psychology, Vol 73, pp199-207.
Bannister, B.D. & Balkin, D.B. (1990) Performance evaluation and compensation feedback messages: an integrated model, Journal of Occupational Psychology, Vol 63, June, British Psychological Society.
Heneman, R.L., Greenberger, D.B. & Anonyou C., (1989) Attributions and exchanges: the effects of interpersonal factors on the diagnosis of employee performance, Academy of Management Review, Vol 32, No 2.
Larson, J.R. (1989) The dynamic interplay between employees' feedback-seeking strategies and supervisors' delivery of performance feedback, Academy of Management Review, Vol 14, No 3. Cash, M. (1993) [in] Collins, R. (1993) (Ed.), Effective Management, CCH International, Sydney. Harris, D.M. & DeSimone, R.L. (1994) Human Resource Development, Dryden Press, Forth Worth.
Bernardin, H. J., Kane, J. S., Ross, S., Spina, J. D., and Johnson, D. L. (1996) "Performance Appraisal Design, Development, and Implementation." In Handbook of Human Resource Management, Gerald R. Ferris, Sherman D. Rosen, and Darold T. Barnum ed., Cambridge, Mass: Blackwell, pp462-493.
Illgen, Daniel R., Barnes-Farrell, Janet L., and McKellin, David B. (1993) "Performance Appraisal Process Research in the 1980s: What Has It Contributed to Appraisals in Use?" Organizational Behavior and Human Decision Processes, 54: pp321-368.
Jawahar, I. M., and Stone, T. H. (1997) "Influence of Raters' Self-Consciousness and Appraisal Purpose on Leniency and Accuracy of Performance Ratings" Psychological Reports, 80: pp323-336.
Jourdan, J. L., and Nasis, D. B. (1992) "Preferences for Performance Appraisal Based on Method Used, Type of Rater, and Purpose of Evaluation" Psychological Report, 70: pp963-969.
Deets, N.R. & Tyler, D.T. (1986) How Xerox improved its performance appraisals, Personnel Journal, Vol 65, April, pp50-52.
Kaplan, R. E. (1993) "360-Degree Feedback Plus: Boosting the Power of Co-Worker Ratings for Executives." Human Resource Management, 32: pp299314.
Kravitz, D. A., and Balzer, W. K. (1992) "Context Effects in Performance Appraisal: a Methodological Critique and Empirical Study" Journal of Applied Psychology, 77: pp24-31.
Mount, M. K., Judge, J. A., Scullen, S. E., Sytsma, M. R., and Hezlett, S. A. (1998).
"Trait, Rater, and Level Effects in 360-Degree Performance," Personnel Psychology, 51,3:557.
Peach, E. B., and Buckley, M. R. (1993). Pay for Performance. In H. J. Bernardin and J. Russell (eds.), Human Resource Management: An Experiential Approach. New York: McGraw-Hill, 482-515.
Sanches, J. I., De La Torre, P. (1996) "A Second Look at the Relationship Between Rating and Behavioral Accuracy in Performance Appraisal," Journal of Applied Psychology, 81:3-10.
Schneier, C. E. and R. W. Beatty (1979) "Developing Behaviorally Anchored Rating Scales (BARS)" The Personnel Administrator, August (1979),60.
John Wiley & Sons (2007) Performance appraisal and counselling, in Herriot, P., Assessment and selection in organizations: methods and practices for recruitment and appraisal p 35 .
Baron R. A. Negative effects of destructive criticism: impact on conflict, selfefficacy, and task performance, Journal of Applied Psychology, Vol 73, pp199-207.
AB Bank Limited, 2010. www.ababnk.com.bd AB Bank Limited internal Web site (Intranet).
May 2010. www.performanceappraisalprocess.com http://www.humanresources.hrvinet.com/graphic-rating-scales/ www.performanceappraisalprocess.com http://en.wikipedia.org/wiki/AB_Bank_Limited
Mr. M. Shabbir Ali SVP, Acting Head of HR Division. Head Office, Motijheet, Dhaka 1000.
Mr. Mehedi Hasan AVP, Human Resource Division, Head Office, Mitijheel, Dhaka 1000.
Mr. M. Hasan Mottalib Chowdhury Principle Officer, Human Resource Division, Head Office, Motijheel, Dhaka 1000.
Mr. M. Mahmudur Rahman Officer, Human Resource Division, Head Office, Motijheel, Dhaka 1000.

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Internship Report

Performance Appraisal System

Performance Appraisal System of AB Bank Limited, ABBL

Of logo-ab-bank.gif HR Division, Head Office.

Date Of Submission 13th May, 2010.

BRAC University logo.jpg

I hereby announced that the extensive study entitled

Performance Appraisal System of AB Bank Limited, ABBL

(Conducted on behalf of AB Bank Limited, Head Office, HR Division)

BRAC University BBS Department.

MD. ULLAH AL MAMUN Student ID: 06104007. logo.jpg

The internship report of

MD. ULLAH AL MAMUN Student id: 06104007. BBS Department,

Performance Appraisal System of AB Bank Limited, ABBL

(Conducted on behalf of AB Bank Limited, Head Office, HR Division)

Is approved and is suitable in eminence and figure

. (Signature) Probal Dutta. Senior Lecturer.BBS Department, BRAC University.

The internship report of

MD. ULLAH AL MAMUN Student id: 06104007. BBS Department,

Performance Appraisal System of AB Bank Limited, ABBL

(Conducted on behalf of AB Bank Limited, Head Office, HR Division)

Is approved and is suitable in eminence and figure

The internship report of

MD. ULLAH AL MAMUN Student id: 06104007. BBS Department,

Performance Appraisal System of AB Bank Limited, ABBL

(Conducted on behalf of AB Bank Limited, Head Office, HR Division)

Is approved and is suitable in eminence and figure

. (Signature) Shantu Kumar Ghosh. Senior Lecturer.BBS Department, BRAC University.

Certificate of the project Guide

This is to certify that the extensive study entitled

Performance Appraisal System of AB Bank Limited, ABBL

(Conducted on behalf of AB Bank Limited, Head Office, HR Division)

Is a record of extensive researrch work carried out By

MD. ULLAH AL MAMUN Student ID: 06104007. BBS Department,

(Signature) Probal Dutta

Lecturer.BBS Department, BRAC University.

Subject: Submission of the internship working report.

104-108 105 106

AB Bank Limited HR Division, Head Office, Dhaka. logo-ab-bank.gif

logo-ab-bank.gif Executive Summary

Performance Appraisal System of AB Bank Limited, HR Division, Head Office. P Performance_appraisal_process3.jpg

1.2 Purpose of the study

1 For achieving the specific objectives o b

Performance Appraisal System of AB Bank Limited, HR Division, Head Office. P

2 "To be the best performing

N Effective 01 January 2008, ABBL changed its Logo as we

2.5 Corpo Name of the Company AB Bank Ltd

Performance Appraisal System of AB Bank Limited, HR Division, Head Office.

Director Director Director

Director Director Director

Director Director Director

Performance Appraisal System of AB Bank Limited, HR Division, Head Office.

Performance Appraisal System of AB Bank Limited, HR Division, Head Office. Chairman

Senior Executive Vice President

Senior Vice President