HUMAN RESOURCE POLICIES OF ASA

Chapter: 01 Introduction
This term paper is prepared with an intention to meet partial requirement of the course "Human Resource Management". We have chosen ASA for this purpose. We performed an analysis on the HR policies of the organization and tried to evaluate its justification with the acquired knowledge from the course. 1.1 Objective of the Study: The objective of this term paper is to get familiarize with the real market situation and compare it with the theoretical concepts. The main objective of this term paper is to have an assessment about the HRM activities of ASA. In addition, the term paper seeks to achieve the following objectives: 1. To have a brief idea about ASA. 2. To present an overview of the Human Resource Management Policies of ASA. 3. To identify the strengths and problems of ASA and suggest corrective measures. 1.2 Methodology of the Study: We have collected the necessary data from two (02) sources: 1. Primary Sources: We have taken the primary data by interviewing the HR Manager of ASA who is directly involved in the decision making process. 2. Secondary Sources: We have taken further necessary data from: Annual Report of ASA 2010 & 2011. ASA Manual 2009 & 2007. 1.3 Scope of the Study: This term paper is prepared through extensive discussion with the HR Manager of ASA and his shared experience with different microfinance institutions and their HR policies. It is a great opportunity to have an in depth knowledge of all the HR activities and policies practiced by ASA.

HUMAN RESOURCE POLICIES OF ASA 1.4 Limitations of the Study: Some restraints that we have faced at the time of preparing the report are given below: 1. The insufficiency of information is the main constraint of the study. Moreover, management was not interested to provide all the information due to security and secrecy. 2. The employees were busy to provide time for the interview 3. Inexperience, time limitations and political hazards also created some obstacles.

Chapter: 02 Overview on ASA

2.1 About ASA:

HUMAN RESOURCE POLICIES OF ASA ASA is a non-governmental organization founded in 1978 by MD. Shafiqual Haque Choudhury, which offers micro-credit financing. It focuses on consciousness raising, group development and training among the rural poor. Microfinance of ASA has an attractive ease and a record of success not just in promoting financial flexibility but in achieving other social objectives like empowering women and developing the capacity of small groups of people to take control of their own lives. Being a non-profit organization, ASA realized the significance of Microfinance addressing the lack of access in capital for the underprivileged community and thereby in later transformed itself as an operator of Microfinance in Bangladesh. Now, ASA has emerged as one of the largest and most efficient Microfinance Institution (MFI) in the world and has been working relentlessly to assist the poor since its inception in 1978. ASA wanted to change its operations to become self-reliant and move away from depending on donor funding and grants. ASAs Microfinance Model gradually transformed itself to become the globally renowned ASA Costeffective and Sustainable Microfinance Model. This model is different from other models and has already been proven as one of the best in the world. It is simple as well as cost-effective. This cost effective method, from Branch Office to the Central Office ensures ASAs dedication towards its mission for reducing poverty. This model has proven itself in different countries in Asia and Africa. By following this model, ASA declared itself a donor free MFI in 2001. ASA has been rated to have the highest Operational Self Sufficiency (OSS) and Financial Self Sufficiency (FSS) compare with Global MFIs and Asian Largest FIs. According to the Bangladesh Microfinance Statistics 2010 published by the Credit and Development Forum (CDF) and Institute of Microfinance (InM), there are 773 NGO MFIs in Bangladesh (including ASA). And ASA has 5.56 million members which is 16.06 % of all members of these NGO MFIs. In result of a statistic of December 2011, ASA has successfully extended its outreach in Bangladesh through 3,154 branches and it has over 250,000 employees who work relentlessly to serve the clients. ASAs total fund for providing microfinance services was BDT 66,221 million (USD 809 million) as of June 30, 2012. The sources for this fund were ASAs own funds (including

HUMAN RESOURCE POLICIES OF ASA reserve fund), members savings, members security fund, CORDAID loan, loan insurance, Debt Management Reserve (DMR), ADB through EBL, Basic Bank and other sources. 2.2 Goals & Objectives: 2.2.1 Goals: The main goal of ASA is poverty reduction through micro-credit and empowering women. ASA provides financial assistance to the poor through systematic process by bringing them under an organizational structure. Through this process, ASA becomes a sustainable organization. 2.2.2 Objectives: 1. To form groups of the poor and the oppressed and to attain the improvement of their socio-economic condition through economic activities. 2. To give priority to women and to involve them directly in productive activities so that the opportunities are created for extra income. 3. To create employment opportunity for both male and female by involving them in income generating activities for increasing the income of the family and to continue gradual support for attaining self-sufficiency. 4. To provide assistance so that the poor becomes self-dependent by accumulating their own capital through savings from increased income. 5. To provide assistance so that the poor can gradually decrease their dependence on the moneylenders, borrowing at high interest, advance sale of crops, selling and mortgaging of lands and finally can abandon these practices. 6. To attain self-sufficiency by decreasing its external dependence through the service charges earned from the credit program.

2.3 Savings & Loan Program: 2.3.1 Types of Savings: 1. Compulsory weekly saving and voluntary saving. 2. Associate members savings.

HUMAN RESOURCE POLICIES OF ASA 3. Long-term savings. 4. Term deposit. 2.3.2 Loan Program: 1. Micro credit for male. 2. Micro credit for female. 3. Loan for small businesses. 4. BDS loan. 5. Hardcore poor loan. 6. Agriculture loan. 2.4 Organizational Structure at Field Level:

District

Region

Branch

Figure: Organizational Structure at Field Level of ASA

2.4.1 Branch Structure:

Employee Designation
Branch Manager (BM)

No of Employee(s)
01

Remarks
Responsible for branch operation

HUMAN RESOURCE POLICIES OF ASA Assistant Branch Manager (ABM) Computer Officer (CO) Loan Officer (LO) Peon 01 01 04 to 05 01 Assist to Branch Manger

2.4.2 Regional Structure:

Designation
Regional Manager (RM)

Working Area (No. of Branches)

5-7

Number of Region
1

Office
Regional Office (The RM will reside in the centrally located branch within the region)

2.4.3 Divisional Structure: Designation District Manager (DM) Working Area (No. of Branches) 5-7 Number of Region 08-10 Office The district consists of 08-10 regional offices. DM will reside in the centrally located branch of the district

2.5 Organogram of ASA:

HUMAN RESOURCE POLICIES OF ASA

2.6 Sister Concerns of ASA:

HUMAN RESOURCE POLICIES OF ASA Organization/Institution Catalyst Microfinance Investors (CMI) ASA International (ASAI) Year of Establishment 2006 2006

ASA Foundation International (AFI)

ASA University Bangladesh (ASAUB)

2007
2006

2.7 Some Special Achievements: Year 1992 1993 1998 Achievements Microfinance as the specialized program Started providing Technical Assistance (TA) internationally Selected as the International Technical Service Provider (ITSP) by UNDP

2001
2002 2005

ASA declared itself as the self-reliant MFI

Selected as the best TA provider globally by UNDP Placed in all the six categories with exceptionally best results in the MIX Report titled 2005 MIX Global 100: MFI League Table presented in the Micro-credit Summit Campaign (MSC) 2006, Canada

2007

Selected as the best MFI in Forbes List: 2007

Chapter: 03

HUMAN RESOURCE POLICIES OF ASA

Findings & Analysis of the Study

We have done a study on the HR policies of Three (03) specific areas of ASA. The findings of our study are given below: 3.1 Recruitment & Selection Policies: 3.1.1 Mid-Level & Field-Level Recruitment & Selection Process: For mid-level and field level recruitment, ASA mostly relies on external sources. The recruitment and selection procedure for mid-level and field-level candidates of ASA is given below:

Advertisement & Collection of CV's

CV Screening & Shortlisting Candidates

Written Test (For Mid Level) & Practical Test (For Field Level)

First Interview (Both Field & Mid Level)

Final Interview (Both Field & Mid Level)

Background Check (Only Mid Level)

Offering Appointment Letter

Training & Development

Figure: Recruitment & Selection Process of Mid-level & Field-level Employees in ASA

1. Advertisement & Collection of CVs: If there is any vacancy in field-level (such as vacancy for Loan Manager), ASA gives advertisement in the local newspaper only. On the other hand, if there is any vacancy in mid-level (such as vacancy for Regional Manager), they do give advertisement in local newspapers as well on the website of ASA and in BD jobs. After the advertisement procedure, they collect only the hard copies of the CV for field level vacancy and for mid-level vacancy, they collect only

HUMAN RESOURCE POLICIES OF ASA the soft copies of the CV. After collecting all the CVs within the deadline of the advertisement, they move to the next phase. 2. CV Screening & Shortlisting Candidates: After collection of CVs from the interested candidates, the District Manager shortlists the CVs of the field-level candidates and the HR Department screens the CVs of mid-level candidates. Based on the required skills and qualification, the candidates are shortlisted for the written test for both field and mid level vacancy. 3. Written Test or Practical Test: Written test is taken for the mid-level candidates where theoretical questions related to job description are asked and mathematical reasoning of candidates are checked. Moreover, the field-level candidates have to go through a practical test where they have to perform a sample task related to job description. Candidates with good marks in written or practical test will be called for the first interview in the central office. 4. First Interview: Three members from the HR Department will be there in the interview board and they will conduct interview sequentially. The questions will be pre-determined and the candidates will be asked basically about ASA, micro-credit, their past experience etc. The shortlisted candidates will be called for the final interview. 5. Final Interview: Three members from the top-level and HR department will conduct the final interview sequentially. Questions for this interview will not be predetermined and basically in this interview, candidates skills will be judged through situational questions. Moreover, for the mid-level candidates, verbal communication skills and smartness will also be a key factor. 6. Background Check: After the final interview, ASA conducts a background check only for the selected mid-level candidates. No background check is done for fieldlevel candidates. The information that are checked is given below: Whether the submitted certificates are correct or not. For the verification of certificates, they do contact with the respective educational institution. Permanent address and other relative information are confirmed by physical verification. 7. Offering Appointment Letter: After the final interview, the selected field level candidates are appointed by the District Manager. On the other hand, the mid-level employees are appointed by the HR department of ASA.

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HUMAN RESOURCE POLICIES OF ASA 8. Training & Development: The selected candidates in both field level and mid-level will be on the probation period for one year. Within this one year, the candidates will be given training so that they can conduct their daily duties smoothly and also to enhance their skills and practical knowledge. After one year, candidates with good performance will become the permanent employees of ASA. 3.1.2 Top-Level Recruitment & Selection Process: For top-level recruitment, ASA also relies on external sources. The recruitment and selection procedure for top-level recruitment of ASA is given below:

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Advertisement & Collection of CV's

CV Screening & Shortlisting Candidates

Interview

Offering Appointment Letter

Figure: Recruitment & Selection Process of Top-level Employees in ASA 1. Advertisement & Collection of CVs: If there is any vacancy in top-level (such as vacancy for Director HR), ASA gives advertisement in local newspapers as well as on the website of ASA and in BD jobs. After the advertisement procedure, they collect only the soft copies of the CV. After collecting all the CVs within the deadline of the advertisement, they move to the next phase. 2. CV Screening & Shortlisting Candidates: After collection of CV from the interested candidates, the EVP of HR shortlists the CVs of the candidates. Based on the required skills, qualification and level of experience, the candidates are shortlisted for the interview. 3. Interview: Three members from the top-level will conduct the final interview sequentially. Questions for this interview will be based on the skills and level of

HUMAN RESOURCE POLICIES OF ASA experience of the candidates. Mainly the leadership quality, verbal communication, and knowledge about the related field will be judged in this interview. 4. Offering Appointment Letter: After the final interview, the proper candidate(s) will be appointed by the EVP (HR) of ASA.

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3.2 Compensation Policies: 3.2.1 Pay Scale or Salary Grade:

HUMAN RESOURCE POLICIES OF ASA In ASA, salary and remuneration of its employees are determined based on the pay scale or salary grade of the organization. ASA provides salary and remuneration to its employees in two (02) categories:

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General Grade:
Grade VII Designation Jr. Assistant Director / HR Manager / Accounts Manager / Finance Manager / Manager MIS / Audit Manager / Computer System Manager / District Manager District Manager / Accounts Officer / Finance Officer / Audit Officer / Additional District Manager / Senior Regional Manager / Field Auditor District Manager / Accounts Officer / Finance Officer / Audit Officer / Personnel Officer / Media Relation Officer / Additional District Manager / Regional Manager / Field Auditor Junior Regional Manager / Senior Branch Manager Branch Manager / Assistant Support Engineer Assistant Branch Manager / Senior Loan Officer Loan Officer Scale of Pay 9,650-560-23,650

VIII

8,600-515-18,900

IX

7450-475-16,950

X
XI XII XIII

7,000-445-16,950
6,600-390-12,450 5,250-355-10,575 4,800-335-9,825

XIV

Loan Assistant

4,200-320-9,000

Supplementary Grade: Grade SG-I SG-II SG-III SG-IV SG-V Designation Driver / Store Assistant / Messenger Messenger / Peon / Guard / Lift Operator Peon / Guard / Junior Messenger Peon / Guard Peon Scale of Pay 5,150-335-10,120 4,200-320-8,680 3,550-290-7,610 3,000-265-6,710 2,100-205-4,970

3.2.2 Financial Compensations & Benefits:

HUMAN RESOURCE POLICIES OF ASA 1. Salaries: Employees of every level can draw their monthly salaries from the 25th day to the last day of the month according to ASA salary structure and conditions in the appointment letter. Employees employed in the central office must open a savings account in a bank selected by ASA and field-level employees will receive salary and allowances in cash at the time stated above. 2. Allowances: Housing Allowance: Within Dhaka City, all the employees will get 70% of the basic pay as housing allowance. For all branches outside Dhaka, male employees will get 60% and female employees will get 65% of the basic pay as housing allowance. Medical Allowance: 30% of the basic pay is given as medical allowance for all the employees of ASA. Transportation Allowance: All the employees of ASA receive 950 TK for transportation with their basic pay. Daily Allowance: All the employees of ASA receive a minimum 1,000 TK (monthly) as a daily allowance with their basic pay. Daily allowance will increase based on the pay grade of the employees. Field & Conveyance Allowance: For every field visit, employees are given allowance for their visit and for transportation based on their grade and designation. Travel on Official Business: Based on the pay grade of the employees, they will receive allowance of their travel on hourly basis and all the travel expenses will bear by ASA. Accommodation Allowances: Employees will get middle class hotel rent for staying at night and they will also get allowance on hourly basis because of their field visit. The allowance structure is given below: Grade VII VIII-X XI-XII Allowance (Per Hour) TK. 280 TK. 250 TK. 210

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HUMAN RESOURCE POLICIES OF ASA Other Grades TK. 180

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3. Increment & Other Related Issues: All permanent employees are eligible to receive a yearly increment. Yearly increment for probationary employees will be effective on the date when they will be a permanent employee having a regular salary structure. In case of promotion or demotion, the increment is added on the date when they are permanent employees having regular salary structure. The number of yearly increment depends on the pay grade of the employees and their performance. 4. Provident Fund Loan (PF Loan): All permanent employees can get a short-term loan of their provident fund without interest based on their service year. The PF loan is given based on this proportion: Service Year(s) 3 Years 5 Years PF Loan Percentage 50% 70%

8 Years & Above

100%

5. Festival Bonus: All permanent employees will receive two festival bonuses in a year. Generally, Muslim employees will get the festival allowance in Eid-ul-Fitr and Eid-ul-Azha and employees from other religions will get one bonus in Eid-ul-Azha and another on their respective festivals (Durga Puja, Christmas etc.). 100% of the basic pay is given as festival bonus to all the employees of ASA. 6. Retirement Benefits: Gratuity: All permanent employees will get the facility as gratuity as per his or her last basic salary up to the service year including probationary period. The amount will be the same amount of 1.5 times of the total month of service as per last basic salary. Calculation of gratuity is given below: Gratuity = Last Basic Salary * 1.5 / 365 Days * Total Working Days (Excluding leave without pay) Provident Fund: 1/10 of the basic salary is deducted from the monthly salary for provident fund and ASA will also give the same amount as contribution in the account named Provident Fund Trust at the end of each month. Employees will get the full amount of the provident fund while retirement and

HUMAN RESOURCE POLICIES OF ASA if any employee leaves the organization, ASA will pay the amount up to that month. 7. Insurance Facilities: Life insurance facility is available is ASA where if any permanent or regular employee dies during job executing period, their heir of the employee will get the insurance claim in the following manner: Grade First to Third Forth-Seventh Insurance Claim TK. 400,000 TK. 300,000

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Eight to Last

TK. 250,000

8. Staff Security: Each employee have to deposit a sum of money specified by ASA at the time of the appointment. When the employee leaves the organization, the money is refunded with interest. 3.2.3 Non-Financial Compensations & Benefits: 1. Medical Facilities: ASA will bear all the actual expenses in employees fall in accidents for official work within the working area. 2. Housing Facility: Housing facility is also available in ASA where the permanent employees with the service year of minimum 3 years become eligible for the housing facility. 3.2.4 Leave: 1. Annual Leave: Employees who worked for at least 1 year in the organization will enjoy a maximum 22 days in a calendar year. 2. Accident & Medical Leave: The district committee can approve 3 months leave with pay based on the nature of the accident. 3. Maternity Leave: Women employees can enjoy maternity leave for maximum 2 times for a period of 4 months at each time. They can go for this kind of leave before eight weeks of the expected delivery. They will receive their gross salary without field allowance in this period.

HUMAN RESOURCE POLICIES OF ASA 4. Special Leave: After the expiry of earned leave, if any employee requires leave (except maternity and illness leave), the Chief Executive can approve maximum 6 days leave based on the situation.

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Chapter: 04

HUMAN RESOURCE POLICIES OF ASA

18

Positive Aspects of The HR Policies

Several positive aspects are there in the HR policies of ASA. Some of the main factors are given below: 1. Proper Assessment of Candidates: Theoretical background of the candidates is assessed through written test, past experience, knowledge of candidates about the organization is measured through first interview and lastly through final interview, the skills of the candidates are judged. So, we can see that, from this step by step evaluation, they are getting the best candidates for the job. As a result, the reliability of the candidate and the productivity of the organization are increasing. 2. Work Sample: For field-level candidates, ASA takes practical test, which means the candidates have to perform a task based on the job description which increases the efficiency of the candidates and effectiveness of the organization. 3. Advance Payment of Salary: ASA provides early payments of salaries to their employees, which means employees can withdraw their current months salaries form the 25th day of that month which motivates the employees to work more efficiently. 4. Home Recruitment Facility: After the selection in the field level, the candidates are normally posted to their home district which allows the candidates to work closer to their home environment and also they can be cost effective. 5. Transparency in Selection of Candidates: Before recruiting mid-level or field-level employees, a committee consists of 3 members is created. All the information about the selection procedure for field-level and mid-level recruiting will be disclosed to these committee members. The committee members then inform the higher authority about the selection progress and the higher authority takes the final decision at the end.

Chapter: 05

HUMAN RESOURCE POLICIES OF ASA

19

Recommendations
Despite of the positive aspects, ASA needs to improve in some areas. Some of the key factors are given below: 1. Adjustments with Inflation Rate: ASA does not frequently change their salary structure because of inflation, which makes the situation difficult for the employees to meet their necessary needs with the existing salary. As a result, many of the employees especially in the mid-level are shifting to other organizations. So to keep their employees motivated to stay and work efficiently, ASA should adjust their salary structure more frequently with the inflation rate. 2. Proper Salary: In many of the position in ASA, employees are not satisfied about their salaries because the organization is paying less salary form what they deserve and also from their competitors which another big reason that ASAs turnover rate is increasing in recent times. So, they need to focus on their salary structure to meet the demands of their employees and also to reduce the turnover rate. 3. Proper Probationary Training: Organization is not updating their probationary training with time. After selecting a candidate for a specific position, they are giving the same type training as they used to give in the past for the same position. As a result, the probationary training process is becoming obsolete and they are not able to utilize the skills of the employees properly. So, they need to improve their probationary training to bring out the skills of their employees. 4. Proper Knowledge among Recruiters: In field-level recruitment, recruiters are not that much experienced and knowledgeable about the recruitment and selection procedure. As a result, they are sometimes recruiting ineffective employees which are reducing the effectiveness of the organization. So, organization should take initiative to train those recruiters so that they can improve their knowledge and skills in recruitment and selection process. 5. Decentralized Decision Making: While recruiting and selecting new employees, the top-level authority takes all the decisions whether to take the candidates or not. To increase the belongingness and to motivate the mid-level employees, the top-level authority should include them in the decision making process.

Chapter: 06

HUMAN RESOURCE POLICIES OF ASA

20

Conclusion
ASA is a microfinance institution and most of its human resources are involved in field based operations. Here, in this term paper we have discussed on three of the HR activities: Recruitment, Selection and Compensation. From the above discussion we have found out that for all types of recruitment, ASA mostly relies on external sources. The procedure that they follow in recruitment and selection are more or less effective for the organization. Their modern ways of advertisements of vacancies, screening of CVs, interviewing, written test and background checking helps the organization to be safe from deceiving. All these policies help them to find out the best employees, so as to appoint and give training in a cost effective way. In terms of compensation in ASA, salary and remuneration of its employees are determined based on the pay scale or pay grade of the organization. They ensure that compensation and benefits are fair, consistent and beneficial for all employees. Employees health and safety are designed and implemented in the programs. After analyzing the whole process, though they are maintaining a standard process but still some of drawbacks are found. If the organization works on the limitations that we have mentioned, they can be more productive, efficient and effective.

References

HUMAN RESOURCE POLICIES OF ASA ASA. (n.d.). Retrieved from ASA: http://asa.org.bd/?page_id=25 ASA. (2007). ASA Manual. ASA. (2009). ASA Manual. ASA. (2010). Annual Report. ASA. (2011). Annual Report. Retrieved from Wikipedia: http://en.wikipedia.org/wiki/Association_for_Social_Advancement

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