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Internship Report on
Learning part is the heart of this report based on different Human Resources
aspects and practices in Banking Business in perspective of Al- Arafah Islami Bank
Limited (AIBL) outlined with the objectives of the department, its core functions,
structure, visions, problem identification and recommendations. To be more
precise this report mostly pointed out the operations of Human Resources. This
part mainly describes the major functions of Human Resources Department, which
are; Recruitment and Selection, Training and Learning, Compensation and\
Benefits etc. The main vision of this department is to motivate employees for
efficient performance and ensuring a fun working environment. Like any other
business units, Human Resources Department of Al-Arafah Islami Bank
Limited(AIBL) lies on some fundamental problems regarding its identical Human
Resources Policy, modern Human Resource Management System, Human Resource
planning, Learning and Development, Constant Performance Evaluation Process,
lack of linkage with other functional units to add superior value to the organization
etc.
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HRM POLICY & PROCEDURE OF AIBL
Specific Objectives:
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HRM POLICY & PROCEDURE OF AIBL
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HRM POLICY & PROCEDURE OF AIBL
Theoretical Framework
HRM
HRM deals with the design of formal system in an organization to ensure effective
and efficiency use of human talents to accomplish organizational goals.
On the other hand, selection is the process of choosing among those who do apply.
Once an effective recruitment program has supplied enough applicants’ pool the
organization faces the task of choosing the best ones for specific jobs.
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HRM POLICY & PROCEDURE OF AIBL
Training is the process of teaching new employees the basic skills they need to
perform their job.
Promotion
In the Promotion the employees& executives have to work a specific duration in
the certain level. They have to work that level to get promotion.
ORGANIZATIONAL PROFILE
History of Al-Arafah Islami Bank Limited(AIBL)
With the achieving of success life here and hereafter following the way directed by
the holy Quran and the path shown by rasul(SM) al Arafah Islami bank Ltd was
established as public limited company on 18 June 1995.The inaugural ceremony
took place on 27 september 1995.The authorized capital of the bank is Tk. 5000.00
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HRM POLICY & PROCEDURE OF AIBL
Vision
To be a pioneer in Islami banking in Bangladesh and contribute significantly to the
growth of the national economy.
Mission
Balanced growth
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HRM POLICY & PROCEDURE OF AIBL
Stable dividend
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HRM POLICY & PROCEDURE OF AIBL
Since Riba is prohibited in the Holy Quran and interest in all its form
being akin to Riba as, confirmed by Fukaha and Muslim economists
with rare exceptions, the first distinguishing feature of an Islamic
bank must be that it is interest-free, while the abolition of Riba
would be the first and essential difference between the conventional
interest-based commercial banks and Islamic banks, if would not the
constitute the only difference between them. The nature, outlook and
operations of an Islamic bank would have to undergo a complete
transaction.
Activity of commercial banks being primarily based on the use of
public funds, public interest rather than individual or group interest
will be served by Islamic commercial banks. The Islamic banks
should use all deposits, which come from the public for serving
public interest and realizing the relevant socio-economic goals of
Islam. They should play a goal-oriented rather than merely a profit-
maximizing role and should adjust themselves to the different needs
of the Islamic economy.
Another substantial distinguishing feature is that Islamic banks will
be universal or multi-purpose banks and not purely commercial
banks. These banks are conceived to be a crossbreed of commercial
and investment banks, investment trusts and investment
management institutions and would offer a variety of services to
their customers. A substantial part of their financing would be for
specific projects or ventures. Their equity-oriented investments
could not permit them to borrow short and lend long. This should
tend to make them less crisis-prone compared to their capitalist
counterparts. Since the overnight, call loan or very short-term inter-
bank market may be available to them only to a limited extent, they
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HRM POLICY & PROCEDURE OF AIBL
All activities of the bank are conducted according to Islamic shariah where
profit is the legal alternative to interest.
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According to the needs and demands of the society and the country as a
whole the bank invests money to different halal business. The bank
participates in different activities aiming at creating jobs, implementing
development projects taken by the government and developing
infrastructure.
To render improved services to the clients imbued with Islamic spirit of
brotherhood, peace and fraternity and by developing an institutional
cohesion.
Bonus .
No. of Shareholders 5379 5402 4487 12013
Number of Branches 40 41 46 46
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At the end of the year 2009the amount of investment of the bank was Tk.17423.19
million in comparison to tk.11474.41 million of the last year 2005. The amount of
investment has increased 5948.78 million taka within this period, which is around
5184%. The bank extends investments to the clients under the following modes of
investment under Islamic Shariah:
Murabaha
Bai-Muazzal
Bai-Salam
Mudaraba
Musharaka
Qard
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HRM POLICY & PROCEDURE OF AIBL
Special Investment
Murabaha:
Murabaha mode of finance means purchase of commodities as per request of
the client permissible by Sharia and sale thereof with profit to the client i.e.
cost plus sale of a commodity to the investment client. The commodity is
procured at the instance of the investment client from a third party/firm.
Purchase price and profit are disclosed to the client. Goods are kept under
bank’s custody as security and the client lifts the same gradually or at a time on
payment of sale price of the commodity.
Bai-Muazzal:
Bai-Muazzal means cost plus sale of the commodity on deferred payment basis
against adequate collateral. The commodity is procured at the instance of the
investment client from a third party as per firm agreement between the client
and the bank and sale price( bank’s dues) is paid by the client within stipulated
period of time. After having possession of the goods, the bank delivers the same
to the client on credit which is required to be paid at a specified future date
(adjust proportionately) with the progress of sale of goods within the given
period.
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Industrial
Commercial
Transport
DDIS
SSBI
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Musharaka:
Capital is provided by both bank and investment client on the basis of Shirkatul
Innan principal of Islamic Shariah Partnership. Profit is shared as per agreed
ratio and equity ratio. The bank supervises the utilization of investment and
participates in decision making.
Quard:
The bank also allows Qard in very special cases on obtaining proper security.
Service charge equal to cost of fund is recovered on Qard amount
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HRM POLICY & PROCEDURE OF AIBL
b)Industry
10277.03
c)Construction
1812.86
f)Storage 13.99
g)Trade finance
23884.46
h)Miscellaneous
664.25
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HRM POLICY & PROCEDURE OF AIBL
CHAPTER FOUR
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4.1 INTRODUCTION
Employee’s are the core resources of any organization, without them, one can not
run their organization, and human resources is conducted with the growth of
development of people toward higher level of competency, creativity and
fulfillment. It help employee’s become better more responsible person and then it
tries to create a climate in which they contribute to the limits of their improved
abilities. It assumes that expanded capabilities and opportunities for people with
lead directly to improvements in operating effectiveness. Essentially, the human
resource approach means that people better result. Bank always determine what
jobs need to be done, and how many and types of workers will be required.
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VP HR
AVP/Director Compensation
AVP/Director Training &
AVP/Director Recruitment & Benefits
Development AVP/Director of employee AVP/director labor relation
and Selection
A
Make people feel that they are most valuable asset for the
organization.
♦ To give loan for house building, car, motorcycle and ensure their proper
Utilization
activities.
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HRM POLICY & PROCEDURE OF AIBL
CORE HR PROCESS
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sources. Set of skills, need availability, education, job description are the
prerequisite criteria for a successful recruitment.
Authority of Recruitment
As per Bangladesh Bank BRPD Circular 2009, “Appointments to the services of the
bank up to the two levels below the rank of the Managing Director shall be made
by the Board of Directors of the Bank. All other appointments shall be made by the
Managing Director of the bank as required under the organogram of the Al-Arafah
Islami Bank Limited (AIBL) bank duly approved by the Board
Recruitment Process
The good design of the recruitment process is a key to the successful recruitment
and staffing process. The HRM Function has to focus on the design of the process
and to cooperate with all the involved parties - managers, employees, agencies and
web recruitment services. The recruitment process is unique for each organization
and the HRM Function has to make adjustments in the general design of the
recruitment process, which can be taken from any source. The recruitment process
design is not an easy job, but the HR Recruiter has to be smart enough to bring the
recruitment design, which will fit the organization’s need. The recruitment process
of Al-Arafah Islami Bank Limited (AIBL) is like the following flow chart-
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HRM POLICY & PROCEDURE OF AIBL
1. First a vacancy arises. This is due to the creation of a new job, on other
occasions it may be because an existing member of staff has been promoted
or is retiring.
2. The job description is updated and an employee specification is written. The
job description lists the duties of the job whilst the employee specification
gives details of the experience, skills and abilities needed to carry out the
job.
3. A vacancy advertisement is written and is circulated via the recruitment
channel that the bank uses. The channels including newspapers, internet
recruitment sites, corporate web-site.
4. A shortlist (According to CV) is compiled of applicants who are going to be
invited to attend for interview. This is done by the recruitment panel that
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HRM POLICY & PROCEDURE OF AIBL
External Recruitment
The External Recruitment is the source of the fresh blood for the organization. As a
very critical HR Process, the external recruitment process has to be set up very
carefully. The external recruitment is a process, which is very sensitive to changes
on the external market like unemployment rate, labor-market conditions, economic
factors and others and the managers are very sensitive about that as well.
In Al-Arafah Islami Bank Limited (AIBL) HR managers are mainly concern about
how to be successful with external recruitment and an obvious job market analysis.
To use the external recruitment channel HRM department has to prepare the
recruitment plan in the beginning of the year so that the bank can allocate funds
per channel. The entire HR department has to be the decision maker as this
department is responsible for the cost and quality of the delivered candidates.
Internal Recruitment
Internal recruitment refers to the filling of job vacancies from within the business
-where existing employees are selected rather than employing someone from
outside.
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HRM POLICY & PROCEDURE OF AIBL
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Selection
The purpose of selection is to pick up the most suitable candidate who would meet
the requirements of the job in an organization best, to find out which job applicant
will be successful. To meet this goal, the company obtains and assesses
information about the applicants in terms of age, qualifications, skills, experience,
etc. The most suitable person is then picked up after eliminating the unsuitable
applicants through successive stages of selection process. Any mismatched in this
regard can cost an organization a great deal of money, time and trouble.
Selection Process
Selection Process of Al-Arafah Islami Bank Limited (AIBL) starts with the
screening of available resumes for a particular job.
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Survey Analysis
Frequently used External Recruitment Sources
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HRM POLICY & PROCEDURE OF AIBL
Corresponding to this data I have drawn a pie chart. According to the responder
most of them answered newspaper is mostly used for recruiting people externally.
From the answer given by different employees in the bank most of them had
responded in case of internal recruitment employee referrals is widely used.
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HRM POLICY & PROCEDURE OF AIBL
The employees at Al-Arafah Islami Bank Limited (AIBL) expressed their varied
views about the best way, to recruit people. The employees in bank bear an opinion
(about 40%) that advertisement is the best way to recruit people. Advertising helps
to define exactly the need of the company, and what separates it from its
competitors.
Willingness to do Job
From the chart it can be understood that most of the employees are inspired by the
reputation of the bank. Also the respect in banking job matters for people to job
according to the respondents.
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HRM POLICY & PROCEDURE OF AIBL
From the above chart it is seen that most of the respondents think that the current
process of recruitment is effective for the organization. Some think that the bank
should be more economic when it is about to advertise vacancy in publicly.
Effectiveness of Selection Process
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HRM POLICY & PROCEDURE OF AIBL
Almost all of the respondents are satisfied with the process of selection of the bank
which is seen from the graph.
In term of reliable source the attitude of the respondents were in favor of external
because they think candidates from outside are more experienced and skilled. Less
were in favor of internal source of recruitment.
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Training to new employees is important for the reason that they need to acquire
basic skills related to the particular job in which he is employed and development
mean aims to increase abilities in relation to some future position or job-usually
management.
Objectives of training
Like every organization, Al-Arafah Islami Bank Limited(AIBL) and the employees or
human resources of this organization have some objectives. The organizational and
individual objectives are complementary. So a training program is directed toward
the accomplishment of both organizational and individual objectives. We can
classify the objectives in two major headings.
1. Reducing inherent fear about jobs: Training is reducing inherent fear about jobs.
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Methods are the ways through which employees are trained. Al-Arafah Islami Bank
Limited (AIBL) uses several methods of training depending on the situation and
training objectives. However, the methods of training can primarily classify into
two types.
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On –the – job training is not just for non managers. Managerial on –the –job
training methods include job rotation the coaching/unduerstudy approach, and
action learning.
1. Job Rotation
2. Coaching/Understudy Approach
Here the trainee works directly with a senior manager or with the person he or she
is to replace, the latter is responsibly for the trainee’s coaching. Normally, the
understudy relieves the executive of certain responsibilities, giving the trainee a
chance to learn the job.
3. Action Learning
Action learning programs give managers and others released time to work full-time
on projects, analyzing and solving problems in departments other than their own.
The basics of a typical action learning program include. Carefully selected teams of
five to 25 members; assigning the teams real world business problems that extend
beyond their usual areas of expertise and structured learning through coaching
and feedback. The employer’s senior managers usually choose the projects and
decide whether to accept the teams’ recommendations.
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HRM POLICY & PROCEDURE OF AIBL
1. Lectures
2. Programmed Learning
3. Audiovisual-Based Training
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1. When there is a need to illustrate how to follow a certain sequence over time,
such as when teaching fax machine repair. The stop-action, instant replay, and
fast- at slow-motion capabilities of audiovisuals can be useful here.
3. When you need organization wide training and it is too costly to move the
trainers from place to place.
Simulated training may take place in a separate room with the same equipment the
trainees will use on the job. However, it often involves the use of equipment
simulators. In pilot training, for instance, airlines use flight simulators for safety',
learning efficiency, and cost savings, including sayings on.
5. Case Study: Case study method helps students to learn on their own by
independent thinking. A set of data or some descriptive materials are given
to the participants asking them to analyze, identify the problems and also
tc5 recommend solutions for the same.
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Al-Arafah Islami Bank Limited (AIBL) training institution was established in 2002.
Since then, institute has been conducting various types of training programs on
different banking affairs in order to develop knowledge, skill, and attitude of the
employees of Al-Arafah Islami bank. Limited (AIBL).
Year No. of
officers’/staff
2006 500
2007 1000
2008 1200
2009 1300
2010 800
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Benefits are indirect financial payments given to employees. They may include
health and life insurance, vacation, pension, education plans, and discounts on
company Products or instance.
a) DMD to MD: One full time car with fuel, driver & maintenance expense. In
addition, 1 car provided as per rank. Existing car loan scheme.
b) AVP to SEVP: Car will be providing as par the Bank existing car loan
scheme.
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Bonus/incentive :
Every employee get 1+1 =2 Festival Bonus in a year, which is 100% of the basic
salary. Beside this, they also get incentive bonus that is given on the profit of the
Bank, generally they get 4-8 incentive bonus, which is Also 100% of their basic
salary
There is a welfare trust in Al-Arafah Islami bank. Limited (AIBL) the compensation
is determined according to the nature of case.
Al –Arafah Islami bank has been providing treatment facilities for its personnel’s.
There are two doctors in the head office for the employees.
For example, if anybody needs open heart surgery he/she will get taka for
treatment.
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HRM POLICY & PROCEDURE OF AIBL
Al-Arafah Islami Bank Limited (AIBL)has pay scales for its own employee’s .It
follows the pay structured of it’s won Bank.
Gratuity Calculations
Gratuity Tables
Tk. 43450(SVP) 1
TK43450
Tk. 31500(AVP) 1
Tk. 31500
Tk. 26000(SPO) 1
Tk. 26000
Tk. 29750 ( PO) 1
Tk.29750
Tk. 29750 (PO) 1
Tk. 29750
Tk.21950 (PO) 1
Tk. 21950
Tk. 20750 (PO ) 1
Tk.20750
Tk. 19600(SR.OFFICER) 1
Tk19600
Tk. 14900(OFFICER) 1
Tk.14900
Tk.12, 875 (JUNIOR Officer) 1
Tk.12875
Tk. 13500 (ASSTT.Officer) 1 Tk.1350
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HRM POLICY & PROCEDURE OF AIBL
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HRM POLICY & PROCEDURE OF AIBL
Define Promotion
Promotion is defined as a movement to a position in which responsibilities and
prestige are increased. Promotion satisfies the needs of human beings in the
organization. Since the promotion depends upon capabilities and good
performance, people will try for that if the venues for promotion exit. We also mean
that refers to the filling of a vacancy at an upper level of the organization by the
internal movement of a present employee from an immediate
Lower level, the new position having higher pay, status and job conditions as
compared with the old. Very simply promotion is a higher position at a higher level
from people within the organization itself.
Objectives of promotion
Promotional Policies:
a) Promotional Line
There are two promotional lines and these are—
1. Clerical:
The clerical category includes Junior Clerks, Senior Clerks, Sub-Accounts and
Junior Officer. A junior clerks can move up to junior officers, senior officers.
2. Officers and Managers
For promotion at officer levels, a quota system operates 50% of the vacancies for
Junior and senior officers are filled through internal promotions and the remaining
50% through fresh recruitment from outside.
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HRM POLICY & PROCEDURE OF AIBL
d) Rating Procedure
Criteria Points
ACR 20
Academic Qualification 70
Banking Diploma Certificate 05
Training Received 05
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HRM POLICY & PROCEDURE OF AIBL
The ACR form used for them is very brief and contains these items
♦ Intelligence and mental alertness.
♦ Initiative and drive.
♦ Quality and output of works..
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HRM POLICY & PROCEDURE OF AIBL
The ACR form for the officers is quite lengthy and comprehensive and it has three
Major parts such as
a) Evaluation of officer:
Good A
Average B
Below average C
b) Information contains about the progress of the branch Spaces for recording
information on the conduct of the officer
Criteria Points
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HRM POLICY & PROCEDURE OF AIBL
SSC 03
HSC 03
Simple Graduation 03
Honors 02
Masters 02
Banking Diploma 05
Training Taken 02
Every one year of service 03
SPO 20 as Viva
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HRM POLICY & PROCEDURE OF AIBL
CHAPTER FIVE
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HRM POLICY & PROCEDURE OF AIBL
Strength:
All activities of the bank are conducted according to Islamic shariah where
profit is the legal alternative to interest.
Using up to date software in all the subsection of foreign exchange Section
that will reduce time and labor of employee.
Skilled manpower and efficient employees are being involved in busy
subsection of this section to meet the client’s satisfaction.
The total deposit of the bank was TK.16775.33 million at 31 st December
2009. At the same time in the last year 2005, the amount of total deposits
was 11643.66 million taka. In this area the growth rate is 44.07%. So
deposit is a good strength of Al-Arafah Islami Bank (AIBL).
Weakness:
Opportunity:
High finding cost for lending is great opportunity for the bank. Due to lack
of poor performance of NCB’s in our country though they are grabbing an
huge deposits from the market, PCB’s are fulfilling the high demand of the
financial marketing lending money towards deficit sources in
High rate of interest. So PCB’s are making well done in regards of lending
and besides deposit collection from the market. Govt. Banks are not able to
fulfill market demand and this opportunity is taking by the PCBs.
Threats:
This is a threat for Al-Arafah Islami Bank Limited (AIBL) because the
financial market strength of our country is not so strong. As such to recover
the lending money is a great threat. Because in our country’s business chain
like other countries is dependable each other. So, if the monetary flow faces
any obstacle it hampers the running of full chains. As a result recovery face
a great threat for commercial banks of Al-Arafah Islami Bank Limited (AIBL)
and this is not out of this threat.
Another major obstacle for banks is its classified loan. Through this picture
is not new for this particular bank it is exists to all commercial banks
throughout the world. But in our country this bad culture created by the
NCBs and its impacts comes to the PCBs also. But over viewing the bank’s
performance we found that it is still in safe side in comparison with others
but in should be careful to overcome this threat.
It is the order of the day to deliver prompt service to the customers taking
assistance of modern facilities. We have recognized this and taken all
possible steps to introduce technology-based Banking service to the
customers. It is a greatest threat for Al-Arafah Islami Bank Limited (AIBL) .
We recognize that Bank’s are not mere profit earning institutions rather they
have great responsibility towards the society in which they are operating. In
this respect, I am happy that our Bank has been able to make its presence
felt in the national level. A number of seminars have been arranged under its
auspices on the topics of economic and social aspects which provided a way
of looking at the picture from different perspectives.
As per guidelines and prudential guidelines of Bangladesh Bank, appropriate
measures have been taken to manage core risks in 06 major areas of
Banking operation as identified in the said guidelines namely, Credit Risk,
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HRM POLICY & PROCEDURE OF AIBL
5.2 Findings
Findings:
After analyzing my report I have found several findings. In these findings I have
figured out some problems in bank’s recruitment and selection process.
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HRM POLICY & PROCEDURE OF AIBL
CHAPTER SIX
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HRM POLICY & PROCEDURE OF AIBL
RECOMMENDATION
AND
CONCLUSION
Recommendation
Al Arafah Islami Bank Limited (AIBL) is one the leading banking institute in
Bangladesh. To recommend Al -Arafah Islami Bank Limited (AIBL) is quite difficult
thing for me as an internee. The HR function is adding more and more value to
modern organizations. I have found some points to be noticed to Recruitment and
selection section for betterment of this bank.
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should be given equal importance with internal source. By which new brain
will be inducted in the company with skill, talent, efficiency etc.
2. Al Arafah Islami bank Limited (AIBL) does recruitment budget at the
beginning of the year only once in a year. It should be done periodically
when bank needs to hire new employees.
3. The bank’s recruitment and selection process is not computerized. The bank
should use HR software to this recruitment and selection process to make it
smoother.
4. Sometimes after following the proper recruitment and selection process
reliable employees are not hired. So before employing the bank should
check the employee’s past employment histories for leaving the job.
5. For purpose of recruitment there are no separate HR employees. The bank
should assign employees who will do only recruitment and selection of HR
function.
6. Al Arafah Islami bank Limited (AIBL) spends a lot after advertising when
recruiting externally. The bank should promote employees and can design
training program to make them more capable. This can lower the budget for
external recruitment.
7. Al Arafah Islami bank Limited (AIBL) never uses any recruitment agency for
external recruitment. Sometimes it is beneficiary for the bank if they use
recruitment agency as the agency helps to find appropriate candidates.
8. To measure efficiency the bank can initiate some other test. Like available
applicants should be in a room for a while and there will be a panel to
monitor how they act with each other. Through this their mentality to co-
operate can be reflected.
9. Again Al Arafah Islami bank Limited (AIBL) should establish HR software to
make the selection process smother. HRIS software can make easy the task
of screening available resumes or applications which are sent via web.
10. Generally in Bangladesh HR department is limited in Head Office. All of the
branches should have HR department so that it can measure future
employment need and job analysis properly.
Conclusion
Human Resource Department is the most confidential department for any
organization as well as Human Resource Division in Al Arafah Islami Bank. Limited
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HRM POLICY & PROCEDURE OF AIBL
Despite Al Arafah Islami Bank Limited (AIBL) follows modern recruitment policy.
There are avenues where some improvement can be done. The points I already
discussed before in the recommendation part of my report which may be
considered by the bank.
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Bibliography
1. Annual Report of Al Arafah Islami Bank Limited (AIBL)
2. www.AIBL .com
3. www.google.com
4. Annual Report -2009
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HRM POLICY & PROCEDURE OF AIBL
Appendix
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HRM POLICY & PROCEDURE OF AIBL
Questionnaire
6. What benefits does the bank get by external recruitment (Open Ended
Questions)?
If you’re above answer is yes then please state the process in synopsis.
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68