Performance Appraisal of Al-Arafah Islami Bank Limited free essay sample

Every company has its own vision and mission. Achieving of its vision and mission is primarily depends on the performance of the employees. If the employees are not dedicated to their works, they will not achieve company’s mission as well as its vision. It is the duty of the Human Resource department in a company to measure the performance of the employees and based on their performance appraisal report and considering the need of the organization assigning employees with different training and development programs so that the employees can develop their skills as well as contribute in the development of the organization. As a result, the organization can achieve its goal from their employees. This performance appraisal and training program has great impact on financial institution to achieve its targeted profit and competitive advantage. As a part of our BBA Program, our Human Resource Management Course Instructor Mr. Faisol Chowdhury assigned us to prepare a report on the employee performance measurement in an organization, the training and development program offered in an organization and the benefit the organization gets from these training and development programs. We will write a custom essay sample on Performance Appraisal of Al-Arafah Islami Bank Limited or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page We have selected our report topic as, â€Å"Performance appraisal, training and development programs and its benefits in AL-Arafah Islami Bank LTD†. 1. 2 Background of the Company: Al-Arafah Islami Bank Limited is a scheduled commercial bank. With the objective of achieving success here hereafter by pursuing the way directed by Allah and the path shown by His Rasul (SM), Al Arafah Islami Bank Ltd was established under the Bank Companies Act 1991 and incorporated as a public limited company under the Companies Act 1994 in Bangladesh with the primary objective to carry on all kinds of banking business in Bangladesh. The Bank is listed with Dhaka Stock Exchange Limited and Chittagong Stock Exchange Limited in 1998. For the purpose of maintaining boost modern management, advanced technology, good profitability and steady growth transparency Al-Arafah Islami Bank started its journey in 1995 with the said principles in mind and to introduce a modern banking system based on Al-Quran and Sunnah. A group of established, dedicated and pious personalities of Bangladesh are the architects and directors of the Bank. Among them a noted Islamic scholar, economist, writer and ex-bureau craft of Bangladesh government Mr. A. Z. M. Shamsul Alam is the founder Chairman of the bank. His progressive leadership and continuous inspiration provided a boost for the bank in getting a foothold in the financial market of Bangladesh. A group of 26 dedicated and noted Islamic personalities of Bangladesh are the member of executive committee of the bank. MR. Badiur Rahman and MR. Ekramul Hoque are the existing chairman and the managing director of the bank. Now AIBL is one of the top ranked banks in Bangladesh. Recently it has introduced its 100th branch milestone by opening its 100th branch in Teknaf, Cox’s Bazar. AIBL annual Report, 2011) Vision: †¢ To be a pioneer in Islamic Banking in Bangladesh and contribue significantly to the growth of the national economy. Mission: †¢ Achieving the satisfaction of Almighty Allah both here hereafter. Proliferation of Shariah Based Banking Practices. †¢ Fast and efficient customer service. †¢ Quality financial services adopting the latest technology. †¢ Maintaining high standard of business ethics and competitive return on shareholders equity. †¢ Firm commitment to the growth of national economy. †¢ Innovative banking at a competitive price. Attract and retain quality human resources. †¢ Balance growth. 1. 3 Objective of this report: We have prepared this repost based on two purposes: Primary Objective †¢ To provide detailed information about the performance appraisal process of AL-Arafah Islami Bank LTD †¢ To provide detailed information on training and development †¢ To figure out the benefits of the training and development program Secondary Objectives †¢ It is an assessment criteria for our MGT-351 (Introduction to Human Resource Management Course) †¢ It is a practical implementation of our theoretical knowledge 1. 4 Scope of the Study As we have an assigned topic we have covered only that certain topics in this report. For covering that certain topics we talked to the Human Resource Division head and the training institute principal of AL-Arafah Islami Bank LTD. As a result we got some valuable information about the performance appraisal method of bank and their training programs which helped us to justify our theoretical concept of performance appraisal, training method and its real life benefit. As AIBL is a Shariah based Islamic bank we have also gathered some valuable information about Islamic banking system. 1. Methodology For making any report we have to collect primary and secondary information which reflect the actual situation of the company. We have collected both primary and secondary data for making our report. I. Primary data: The data we have collected from Mr. Md. Rafiqul Islam, Deputy Managing Director of AIBL, Mr. Mazharul Islam, Vice President the Head of HRD, AIBL, Mr. Zahid Hasan, Assistant Vice President Principal of the AIBTRA through interview are considering as primary data. II. Secondary data: The data we have collected from their AIBL website (http://www. al-arafahbank. om), Annual Report, periodicals, various books, articles etc regarding banking activities, different literature and official records ) are considered as secondary data. 2. 0 Literature Review 2. 1. 0 Performance Appraisal: What is Performance Appraisal? Performance Appraisal (PA) means evaluating an employee’s current and previous performance relative to his or her performance standards. (Dessler Varkkey 2012, p. 318) Performance = f (A, M, O) A = ability, M = motivation, O = opportunity It is not a process that happens once a year or every six months, but one that happens every day. It should focus solely on employee performance improvement. It is an element of the Performance Management system. Performance appraisal always involves 1) Setting work standard 2) Assessing employees actual performance relative to those standard 3) Providing feedback to their employee with the aim of motivating him or her to eliminate performance deficiencies Potential Benefits of Performance Appraisals There are a number of potential benefits of organizational performance management conducting formal performance appraisals (PAs). There has been a general consensus in the belief that PAs lead to positive implications of organizations. Furthermore, PAs can benefit an organization’s effectiveness. One way is PAs can often lead to giving individual workers feedback about their job performance. From this may spawn several potential benefits such as the individual workers becoming more productive. Other potential benefits include: †¢ Facilitation of communication: communication in organizations is considered an essential function of worker motivation. It has been proposed that feedback from PAs aid in minimizing employees’ perceptions of uncertainty. Fundamentally, feedback and management-employee communication can serve as a guide in job performance. †¢ Enhancement of employee focus through promoting trust: Behaviours, thoughts, and/or issues may distract employees from their work, and trust issues may be among these distracting factors. Such factors that consume psychological energy can lower job performance and cause workers to lose sight of organizational goals. Properly constructed and utilized PAs have the ability to lower distracting factors and encourage trust within the organization. Goal setting and desired performance reinforcement: Organizations find it efficient to match individual worker’s goals and performance with organizational goals. PAs provide room for discussion in the collaboration of these individual and organizational goals. Collaboration can also be advantageous by resulting in employee acceptance and satisfaction of appraisal results. †¢ Performance improvement: Well-constructed PAs can be valuable tools for communication with employees as pertaining to how their job performance stands with organizational expectations. At the organizational level, numerous studies have reported positive relationships between human resource management (HRM) practices and performance improvement at both the individual and organizational levels. †¢ Determination of training needs: â€Å"Employee training and development are crucial components in helping an organization achieve strategic initiatives†. It has been argued that for PAs to truly be effective, post-appraisal opportunities for training and development in problem areas, as determined by the appraisal, must be offered. PAs can especially be instrumental for identifying training needs of new employees. Finally, PAs can help in the establishment and supervision of employees’ career goals. 2. 1. 1 Performance Appraisal Methods: Many organisations have eliminated formal appraisal programs, preferring a structured hiring, training and organisational culture centric employee performance. Most organisations still practice some sort of appraisal methods to evaluate employee performance. A mixture of different appraisal methods is always recommended for a better and meaningful result. (Dessler Varkkey 2012, p. 324) GRAPHIC RATING SCALE: The graphical rating scale is the simplest and most popular method for appraising performance. A graphical rating scale list traits (such as â€Å"communication or teamwork†) and a range of performance values (from â€Å"uncertainty† to â€Å"outstanding† or â€Å"below expectation† to â€Å"role model†) for each trait. The supervisor rates each subordinate by circling or checking the score that best describes the subordinate’s performance for each trait. [pic] Alternation ranking Method: Ranking employees from best to worst on a particular trait, choosing highest, then lowest until all are ranked [pic] Paired Comparison method: Paired comparison method helps to make the ranking method more precise. For every trait (quantity of work, quality of work, and so on), you pair and compare every subordinate with every other subordinate. Forced Distribution Method: The forced distribution method is similar to grading on a curve. With this method, anyone can place predetermined percentages of rates into several performance categories. The proportions in each category need not to be symmetrical. Critical Incident method: Keeping a record of uncommonly good or undesirable examples of an employee’s work related behaviour and reviewing it with the employee. Manager then uses the record to assess the employees’ performance when it is time for PA. Not helpful for comparing employees and making salary decisions. Behaviourally Anchored Rating Scales (BARS): A behaviourally anchored rating scale (BARS) is an appraisal tool that anchors a numerical rating scale with specific examples of good or poor performance. Essay Description: A written statement describes employee’s strengths, weaknesses, past performance and future development. Managers write the descriptions of the employees. So, good writing skill is the pre-requisite for this method. Management by Objectives: MBO is a comprehensive and formal organization-wide goal setting and appraisal programme, used sometimes as a primary appraisal method or a supplementary method. Electronic Performance Monitoring: Electronic performance monitoring (EPM) systems use computer network technology to allow managers access to their employees computers and telephone. So managers can monitor employees rate, accuracy and time spent working outline. 2. 1. 2 Performance Appraisal Problems (Dessler Varkkey 2012, p. 333) †¢ Unclear Standard Most of the appraisal scales are unclear. Standards and traits are interpreted differently by different people. †¢ Halo Effect – When a supervisor’s rating of a subordinate on one trait biases the rating of all other traits. E. g. an unfriendly employee will often be rated ‘unsatisfactory’ for all traits rather than just for that specific trait. †¢ Central Tendency – Tendency to rate all employees the same way – the middle of the rating scale; which is usually rating an average rating. †¢ Leniency or Strictness – Tendency to rate all subordinates either ‘high’ or ‘low’. Biasness – Tendency to rate employees based on their differences on age, race, sex, background and other characteristics. 2. 2. 0 Definition of training and development: Training means giving new or current employees the skills they need to perform their jobs. It is the process of providing employees with the knowledge, skills and attitudes they need to successfull y perform their current job. It usually involves teaching operational or technical employees how to do their jobs more effectively and efficiently. (Dessler Varkkey 2012, p. 274) Development is the process that provides employees knowledge, skills and attitudes they will need to perform jobs at present and jobs they aspire to in future. It is generally aimed at helping top level executives better understand and solve problems, make decisions, and capitalize on opportunities. The cost and budget of development program is higher than training. (Dessler Varkkey 2012, p. 295) 2. 2. 2 Training Programs There are several training programs- (Dessler Varkkey 2012, p. 283) †¢ On the job training: It having a person learns a job by actually doing the tasks by him. Apprenticeship: It is a process by which people become skilled workers, usually through a combination of formal learning and long-term on the job training. †¢ Job instruction: listing each job’s basic tasks, along with key points, to provide step-by-step training for employees. Sometimes position description (PD) can be used as job instruction. †¢ Coaching: Under an official appointed teacher employee learn the basic tactics of the job. †¢ Mentoring: linking an experienced employee with less experienced employee to share experience, knowledge and skills. Helping someone to change his attitude, not his skills. Lectures/Seminar/Workshop: Lecture is a quick and simple way of providing knowledge to large groups of trainees. †¢ Audiovisual/Multimedia: Audiovisual based training techniques like DVDs, films, PowerPoint, and audiotapes are widely used. †¢ Vestibule: Vestibule training is a method in which trainers learn on the actual or simulated equipment they will use on the job, but are trained off the job(perhaps in a separate room or vestibule). †¢ Computer Based Training (CBT): With computer based training, trainers use interactive computer-based and DVD system to increase knowledge and skills. Role Play: Role playing is to create a realistic situation and then have the trainees assumes the part (or roles) specific person in that situation. †¢ Action Learning: Action learning programs give managers and others released time to work analyzing and solving problems in departments other than their own. †¢ Assessment centres (in-house / off the job) : centre that assesses participants performance, benchmark this against established standards, and consider remedial resources. E. g. Ernst Young. Simulated training: provides trainees with the opportunity to learn on the actual or simulated equipment while off the job in a risk free environment. E. g. driving, medical examinations, pilots. †¢ E-learning: learning delivered, enabled and mediated by electronic technology. E. g. computer / internet web based training sessions on cost effective, OHS issues. †¢ Vestibule Training: training that takes place away from the production area on equipment that closely resembles the actual equipment used on the job. 2. 3. 0 Development methods (Dessler Varkkey 2012, p. 296) There are several development methods- Job Rotation: Job rotation means moving managers from department to department to broaden their understanding of the business to test their abilities. Action Learning: Action learning programs give managers and others released time to work analyzing and solving problems in departments other than their own. Case study: giving employees a written description of an organisational problem to diagnose and solve. Management games: computerised management game where trainees are divided into five or six person companies, each of which has to compete with the other in a simulated marketplace. Outside seminars: attending seminars arranged by outside organisations. E. g. AHRI. University programs: continuous education programs in leadership, supervision etc. Role Play: Role playing is to create a realistic situation and then have the trainees assumes the part (or roles) specific person in that situation. In house Development centers/Corporate University: In house development center typically offer a catalogue of courses and programs aimed at supporting the employers’ management needs. Executive Coaches: Executive coaches is an outside consultant who questions the executive’s boss, peers, subordinates, and (sometimes) family in order to identify executive’s strengths and weakness and how they can capitalize their strength and overcome the weakness. 3. 1. 0 Performance Measurement in AL-Arafah Islami Bank LTD. AIBL has its own Human resource department. Personal data and the records of service and performance are recorded and maintained separately for each employee by HRD. HR executive and HRD head regularly measure their employee’s performance.