Evaluation Of Commendations For The Performance Appraisal System of Berger Paints Bangladesh Limited’

CHAPTER-1 :  INTRODUCTION

 

Origin

After completion of all the required courses, the class of 11th Batch was given the instruction by Director and the Chairman of Internship and Placement Committee to start working with designated organizations from March 2007 to satisfy the requirement for completion of BBA program. As a newly appointed employee of Berger Paints Bangladesh Ltd., I proposed them to allow me to complete my internship in that organization which was accepted both by Berger Bangladesh and Internship & Placement office, IBA.  After confirmation of the organization, I submitted a proposal of the internship project to my honorable Faculty Adviser, Associate Professor Dr. Jahangir Alam, titled ‘Evaluation of & Recommendations for the Performance Appraisal System of Berger Paints Bangladesh Limited’ and he approved the topic. With his consent and suggestion I completed and submitted this internship report on June 24, 2007

  Purpose

The report serves mainly the following two purposes:

To relate the theoretical approaches with the actual existing scenario regarding Performance Appraisal.

To fulfill the requirement of the internship program.

 Specific Objectives

The specific objectives of this report are as follow:

To give an organizational orientation on Berger Paints Bangladesh Ltd.

To state the Human Resource Activities of Berger Paints Bd. Ltd.

To review the existing performance appraisal system of Berger Paints Bd. Ltd.

To highlight the aspects of Performance appraisal process those need improvement.

To make some recommendation to improve the existing Performance Appraisal Process for Berger Paints Bangladesh Limited.

Scope

Scope of the study was limited to Berger Paints Bangladesh Limited because it was not possible to conduct an in depth research in other organizations as the topic is Confidential in nature and no organization wants to share this information completely. Again, some important issues and information relating to BPBL could not be presented and had to be concealed due to the discretion issue of the company.

Methodology

The report is prepared on the Performance Appraisal System of Berger Paints Bd. Ltd. As a result the report has been a composite of both primary and secondary study.

i.    Primary Information

The primary information required for the report was collected through the PPAD forms of Berger Employees for last year and through direct interaction with the concerned personnel of Berger Paints Bangladesh Ltd. and some comparator organizations.

ii.    Secondary Information

The secondary information required for the industry part and organization part was collected from the credentials, website of Berger Paints Bangladesh Ltd. and retail audit of AC Nielsen.

In the Analysis part, the researcher has used the SPSS program, version 12.0.

  Sampling Plan

The Sampling Type that has been used was Probability Sampling. In Probability Sampling every element in the population has a known non-zero probability of selection. The researcher decided to conduct a probability sampling for the survey, because the research intends to project the entire population (senior, mid & entry level Management). Considering the objectives of the research, if probability sampling is not carried out, then the information will be biased and the validity and reliability of the information will be low. As a result, the entire analysis part would be wrong because of wrong sampling. As the population has an exhaustive sampling frame, it was possible to carry out a probability sampling. According to the initial sampling plan, 50 (Fifty) Performance Appraisal Form of past year had been chosen using the Simple Random Sampling Method.

Limitation

The followings are the main limitations that were faced while preparing the report:

The project mainly highlights the lacking of compliance of the present appraisal system with the standard practice. The researcher, with a very limited exposure to the real life practices, had to rely on academic / theoretical parameters for comparison.

For the sake of confidentiality, the organization did not allow to reveal the classified information of the project like financial benefit analysis, formulation, costing details etc. So, some of the figures used in the report had to be presented after manipulation. For the same reason, some aspects of the industry analysis, company analysis and project part were kept concealed.

 

 Report Outline

This report is primarily consisting of two parts. The Organization part discusses the overall aspects of Berger Paints Bangladesh Limited. And the Project Part deals with particularly the activities of Human Resource Department and the potential improvement possibilities of the Performance Appraisal Process.

 

CHAPTER- 2 : ORGANIZATION PART

 

The Company

Berger is one of the oldest names in the paint industry and the country’s major specialty paints businesses with products and ingredients dating back more than 200 years to 1760. Louis Berger, a German national, founded dye and pigment making business in England. Louis Berger & Sons Limited grew rapidly with a strong reputation for innovation and entrepreneurship culminating in perfecting the process of making Prussian blue, a deep blue dye, a color widely used for the uniforms of many European Armies. Production of dyes and pigments evolved into production of paints and coatings, which till today, remains the core business of Berger. The Company grew rapidly by establishing branches all over the world and through mergers and acquisitions with other leading paint & coating companies. With the passage of time Berger has unfolded its kaleidoscopic wings into all kinds of paint solution be it Architectural paints or Industrial coatings, Marine paints or Powder coatings. Berger has it all!

Berger has been involved in the paint business in this part of world since 1950, when paints were first imported from Berger UK and subsequently from Berger Pakistan. In 1970, Berger Paints Bangladesh Limited (BPBL), erstwhile Jenson & Nicholson, had set up its paint factory in Chittagong at an estimated investment of Tk. 4 million. The shareholders were Jenson & Nicholson (J & N), Duncan Macneil & Co. Limited and Dada Group. Duncan Macneil subsequently sold their shares to the majority shareholder J & N Group. The Dada Group’s share ultimately vested with the Government of the People’s Republic of Bangladesh after the independence of the country in 1971. The name of the company was changed from J & N (Bangladesh) Limited to Berger Paints Bangladesh Limited on January 1, 1980. In August 2000, J & N investment (Asia) Limited purchased Government shareholding. In December 2005, the company issued 5% shares to the public and listed with Dhaka Stock Exchange (DSE) and Chittagong Stock Exchange (CSE).

With the entry of Berger Paints into the Bangladesh market, the country has been able to benefit from more than 245 years of global paint industry experience. Over the decades, Berger has evolved to become the leading paint solutions provider in the country and has diversified into every sphere of the industry – from Decorative Paints to Industrial, Marine and Powder Coatings.

Berger has invested more in technology and Research & Development (R & D) than any other manufacturer in this market. It sources raw materials from some of the best known names in this world: MITSUI, MOBIL, DUPONT, HOECHST and BASF, to name a few. The superior quality of Berger’s products has been possible because of its advanced plants and strict quality controls equal to best international standards. Investment in technology and plant capacity is even more evident from the establishment of Powder Coating plant at Dhaka factory. The state–of-the-art of Dhaka factory is an addition to Berger’s capacity making it the paint giant in Bangladesh.

With its strong distribution network, Berger has reached almost every corner of Bangladesh. The nationwide dealer network, supported by seven (7) sales depots strategically located at Dhaka, Chittagong, Rajshahi, Khulna, Bogra, Sylhet and Comilla has enabled them to strategically cater to all parts of the country.

The product range includes specialized outdoor paints to protect against adverse weather conditions, Color Bank, superior Marine Paints, Textured Coatings, Heat Resistant Paints, Roofing Compounds and Epoxies, in each of theses product categories, Berger has been the pioneer. Berger also provides customer support connecting consumers to technology through specialized Home Décor service giving free technical advice on surface preparation, colour consultancy, special colour schemes etc. To bolster customer satisfaction, Berger has recently launched Illusion – the first designer paint solution.

In Bangladesh the major milestones of Berger Paints are given below:

1950 – Started operation in Bangladesh by importing Paint from Berger U.K.

1970 – Establishment of Chittagong Factory

1980 – Named as Berger Paints (BD) Ltd. from Jenson & Nicholson (J&N)

1991 – BMRE in Chittagong Factory

1995 – Establishment of Double Tight Can Manufacturing Plant at Chittagong

1999 – Establishment of Most Modern Sate-of-the-Art Paint Production Plant in Dhaka

2002 – Construction of own building for the Corporate Office in Dhaka

2004 – Establishment of Powder Coating Plant at Dhaka

2005 – Listed in Dhaka & Chittagong Stock Exchanges and issued 5% shares to the public

Corporate Office: ‘Berger House’, H # 8, R # 2, Sector 3, Uttara Model Town, Dhaka 1230

Two State-of-the-Art Factories        :  Savar, Dhaka and Kalurghat, Chittagong.

Legal Status                                       : Public Limited Company

Type of Shareholders                       : 2 types (Foreign & Bangladeshi)

No. of Employees                              : 341 (Mgt.-183, Workers/Staff-158) as of May 2007

Management Structure

The Company is operating through well-defined management structure headed by the Managing Director. Under the Managing Director there are various Departmental heads, senior and mid-level Managers, Officers and staffs. Managing Director and the policy makers meet with regular interval to review various business, operational and administrative issues. (Company Organogram: See Appendix).

The Board of Directors

The list of Board of Directors of the company is given below:

Chairman                   : Mr. Gerald K. Adams

Managing Director   : Mr. Masih Ul Karim

Directors                    : Mr. K. R. Das, Mr. Anil Bhalla, Mr. Subir Bose, Mr. Jean-Claude

Loutreuil, Ms. Rupali Chowdhury, Mr. Abdul Khalek,

Company Secretary  : Mr. Abdul Khalek, FCA

Vision

“We shall remain as the benchmark in the Paint industry by:

Being an innovative and technology driven Company consistently delivering world-class products ensuring best consumer satisfaction through continuous value added services provided by highly professional and committed team.”

Mission

“We shall increase our turnover by 100% in the next five years. We shall remain socially committed ethical Company.”

Spirit

“We undertake our quest with the enthusiasm of entrepreneurs, excited by the constant search for innovation. We value performance achieved with integrity. We will attain success as a world class leader with each and every one of our people contributing with passion and an unmatched sense of urgency.”


Corporate Objective:

Our mission is to add value to life, to outperform the peers in terms of longevity, customer service, revenue growth, earnings and cash generation.

We will be the employer of choice for all existing and future employees.

Strategy

Our strategy is to build long-term partnerships with the customers/consumers. With their support, we aim to maximize the potential of our business – through a combination of enhanced quality of product, service, creative marketing, competitive pricing and cost efficiency.

Objectives of the Company

Objectives of Berger Paints Bangladesh Ltd. is as follows:

  1. To continue as the market leader by working in Harmony with Customers, Employers and Employees.
  2. Consistent sales growth, increasing productivity and developing new products befitting consumer needs.
  3. To achieve total consumer satisfaction by ensuring higher quality with reasonable price.
  4. To bolster customer satisfaction from which one can get an array of services pertaining to painting.
  5. To project itself as an ethical and socially responsible company.
  6. Giving a comprehensive and sustainable painting solution.
  7. Providing best customer support.
  8. Connecting consumers to technology through specialized services.
  9. Strong distribution Networking, Berger has reached almost every corner of Bangladesh.
    1. World-class range and durability, BERGER is always ready to answer to all weather conditions.
    2. Striving for the improvement of Quality of Work Life (QWL) with competitive advantage.
    3. BERGER follows International Quality Management System Standard, ISO-9001: 2000 to ensure the intended levels of quality are achieved and maintained.

 

Functions of the Company

Production Items of Berger Paints

The Product and Service range of Berger Paints Bangladesh Ltd. are as follows:

Regular Coatings

Industrial Paints

Marine Paints

Outdoor Paints Protective

Color Bank

Textured Coatings

Heat Resistant Paints

Roofing Compounds and Epoxies

Powder Coatings

Home Décor

With World Class range and durability, BERGER is always ready to answer to all weather conditions.

People at Berger Paints

We, at Berger Bangladesh, believe that ‘Our People’ are ‘Our Strength’.

It is our people who with their sheer hard work, dynamism and creative minds have made the business succeed. Their professionalism, excellent teamwork and strong commitment to their service, customers, associate and finally to the communities they live in, have enabled us to remain as the market leader in the Paint industry.

We are proud of the dedication and loyalty of many of our employees who have been with us for years. They have the in-depth knowledge of our business that only experience can bring.

We place high priority in developing our human resources. Importance is given on relevant on-the-job, in-house and external training programs, so that our people are well equipped with necessary skills. We augment those skills through appropriate use of information technology in order to maintain our productivity and competitive edge.

Berger Bangladesh’s culture encourages professionalism, stimulates teamwork and promotes innovation reinforced with highest ethical standard.

 

Quality Policy of Berger

Quality Policy of Berger is as following:

Berger Paints Bangladesh Ltd.

Quality Policy

We at Berger Paints Bangladesh Limited are

Committed to achieving total

consumer satisfaction.

We commit to project ourselves as an ethical

and socially responsible company.

We commit to continue as the market leader

through consistent sales growth,

increasing productivity, and developing new

products befitting consumer needs.

We shall ensure continual improvement

in our operations through utilization of our

highly professional and dedicated team,

proper process management and

participation of our stakeholders

  

Berger Paints in the Economic Development of Bangladesh

Berger has been involved in paint business since 1950 in Bangladesh. This has been a footstep to bring more than 230 years of global paint industry experience into Bangladesh. Over the decades, Berger has evolved to becoming the leading paint Company in this country and has diversified into every sphere of the industry – from Decorative Paints to Industrial Coatings, from Marine Coatings to Powder Coatings, Home Décor, Color Consulting and many more.

In Berger, around 450 employees are working and leading their lives conveniently in comparison with other similar companies.  Berger is playing an important role in the Paint Sector of the country and flourishes the economy of Bangladesh in the following way:

 

  1. Industrialization: Berger started its production immediate after independence that was the courageous footsteps of Industrialization in Bangladesh.
  2. Employment: Total employees now at Berger around 500 (five hundred) and they are availing better and competitive Salary and Benefits compared to other similar companies of the country.
  3. Quality of Production: Total products launched in Bangladesh by Berger Paints are the product of its own factories in Bangladesh. Now, more than 25 types of Paints and related items are produced in different categories at BPBL.
  4. Saving Foreign Currency: Berger Paints Bangladesh Ltd. producing & selling goods to Bangladesh Market, so, the country is saving a huge amount of foreign currency because there is no need to purchase or import paint items.
  5. TAX & VAT Paid:  Berger Paints Bangladesh Ltd. paid a huge amount of VAT & TAX to the Government fund every year.
  6. Using native country’s product: Berger Paints Bangladesh Ltd. using a moderate amount of Raw materials produced in our country.
  7. International Standard: Berger Paints Bangladesh Ltd. maintains and produces International Standard Paints.
  8. 8.      Infrastructure Development:  Most of the paint is used in the construction work. People can use best quality paint with cheaper price.
  9. Image Building: Berger Paints Bangladesh Ltd. as a multinational company is building images of the country.
  10. Social Contribution: Berger Paints Bangladesh Ltd. is committed to itself as an ethical and socially responsible Company.

  Performance Analysis of Berger Paints Bd. Ltd.

   National Paint Market

Bangladesh paint market had been experienced a good growth of 8-10% per annum consistently in the late 90s mainly because of a boom in real estate development which now seems to have reached a saturation point.

A market growth trend analysis for Bangladesh during 2001 – 2006 is furnished below

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Table 1: Market growth trend analysis

A good number of local paint manufacturing companies (40 organized and at least 50 more in the informal sector) has been operating in this small market.

The paint industry can be broadly categorized into four segments: Decorative, Industrial, Marine and Automotive paints. The category wise existing market condition is given in the following table:

 

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Table 2: Category wise paint market size in 2006

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Figure 1: Segments of Paint market

 

 

Supply Chain Management / Channel of Distribution

The distribution reach of the company is set basically on the three broad categories: Urban, Semi Urban and Rural. The standing of the major companies on the basis of the distribution reach is given below:

 

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Table 3: Distribution Reach of BPBL & Competitors


 Strategies Pursued by the Company:

 

Corporate Strategy of Berger: Berger’s corporate strategy is to build larger market share through providing quality and speedy service. Its primary focus is to strengthen its current position by provided value added customer service. Berger is also aiming to expand its operation in foreign countries in the long run.

 

Berger Paints Bangladesh Limited is committed to achieving total consumer satisfaction. It commits to project itself as an ethical and socially responsible company. Berger commits to continue as the market leader through consistent sales growth, increasing productivity, and developing new products befitting consumer needs. Berger ensures continual improvement in our operations through utilization of our highly professional and dedicated team, proper process management and participation of our stakeholders.

 

Business Strategy: Berger’s strategy can be termed as the differentiation strategy, the unique attributes and characteristics of the product that provide superior value to its customers. The core competency of Berger is its Quality product, Corporate and Brand Image, Skilled technical human resources, Rapid product innovation through R & D.

 

Market Segmentation: ­For segmenting total paint market, Berger uses more than one basis. Initially, total business of the Company is segmented on the basis of customer types. Berger segments total market as Decorative, Industrial & Marine.

 

Product Differentiation: Berger is committed to offer quality products that satisfy consumers’ ultimate desires from paints with the help of state-of–art technology. Berger always believes in one step ahead in offering new product to create more value for customers’ money.

 

Premium Price: Generally Berger follows cost based pricing method. After calculation of the total manufacturing cost (Direct & Indirect RM cost, Direct & Indirect Labor cost and Manufacturing overhead cost) and adds 20% GP to get the price point of the product. But this is not the rule of thumb in pricing the Berger products. Competitor based pricing policy is also followed as well because of the increased competition in the paint market.

 

Promotion / Communication Mix: Advertising, Sales Promotion, Publicity, Public Relations.

 

Technological Innovation through Research and Development (R & D)

 

  • Product development – New product development, Improvement of existing product
  • Cost reduction strategies
  • Substituting Raw materials with new source and new grade
  •  Quality Improvement, Competitors’ Product Study
  • Complain Handling with care
  • Providing Customer Service- Providing Panel, Sample Delivery
  • Train personnel of different Departments / Painters, Distributors, Dealers

 

Channel of Distribution

 

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Effects of Strategy on Performance

Business Performance

Market Share Analysis: Market Share is one indicator of the success Berger has achieved through implementation of Differentiation strategy. At present Bangladesh paint industry has 6 companies who have significant market share. Berger Paints Bangladesh Ltd. is operating as the market leader and enjoying almost 52% of national paint market share.

 

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Table 4: National Standing (Volume Share %)

****Source: Retail Store Audit by AC Nielsen

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Figure 3: Market share of different companies

Positive Sales Growth: The business level strategies that are taken to increase sales and productivity at Berger Paints have so far being proved to be successful as the company is experiencing double digit sales growth for the last few years. The following data represents the scenario.

 

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Table 5: Sales Trend Analysis

      Ratio Analysis: The strategic indicators of Berger Paints in 2006 are as follows:

1        Sales Growth – 35%

2        Gross operating profit – 444 Million

3        Net Profit after tax – 314 Million

4        EPS – 13.54

5        ROE – 64.02 %

6        Current Ratio – 1.91:1

 

Competitor Analysis: The competition in paint sector is very intense. Berger manufactures its products at its local factories and it competes with the present local manufacturers. The number of paint importers is not very high and the competition here is not very structured.

Berger can successfully supersede these local manufacturers/importers with its skilled and experienced Human Resources at all levels, Technical innovation through R & D, Corporate Image, latest Machineries and equipments, Quality Raw Materials, Supply chain management, strong Financial base etc. The experience of almost 55 years in the paint industry and the possession of the best brand image in paint industry will back Berger to be successful against the competitors. Some Competitors are one step ahead than Berger due to their use of the unethical and unfair means of avoiding tax and some times giving contaminated product.

Constraints to Effective Performance

  • Insignificant presence in the international satellite channels
  • Perceived as premium priced company at semi-urban and rural market
  • Higher dependence on large dealers
  • Consumers’ knowledge gap about paints and painting system
  • Fierce competition in the Bangladesh market
  • Credit-driven market
  • Strong command of few dealers in the market through sub-dealer network
  • Unethical and corrupt practices by the local companies
    • Low priced imported products are entering due to trade liberalization; specially from China and South East Asia

Area of Operation

Berger Paints operates in three broad segments of the paint industry.

Decorative Paint

  • The objective is to beautify the surfaces with protection from corrosion and erosion
  • This business category mainly targets household segment
  • Products are being offered to the consumers through a dealer network
  • Products fulfill the aesthetic value of the consumers
  • Major revenue earning business area of BPBL

 

Industrial

  • Tailor made products to cater to the specific needs of customers
    • Products give protection to the surfaces in extreme situations like severe hazardous environment, high temperature, movement of heavy materials and machinery etc.
    • Direct marketing approach is being used to promote the Industrial Coatings
      • Main customer groups: Garments Factories, Chemical Plants, Fertilizer Manufacturing Plants, Consumer Durable Manufacturing Plants etc.

 

Marine

  • Products are being offered mainly through Direct marketing approach.
  • Dock Yards, Bangladesh Navy, Passenger Ships are the main user groups.
  • Market is mostly concentrated in Dhaka and Chittagong.

Manpower Structure

It is consisted of more than 300 employees of whom about 160 are general workers and the rest are White Collar employees. These employees are working in different factories and depots of the company.

The positional hierarchy of the company is as follows:

 

  • Managing Director
  • Director
  • General Manager (Executive -I)
  • Executive -II
  • Senior Manager
  • Manager-I
  • Manager-II
  • Assistant Manager/ Management Trainee
  • Officer (I, II, IIIA, IIIB, IV)

Major Departments of the Company

Major functions, responsibilities & other necessary aspects of the major departments of the company are described below:

Marketing Department: Until 1990, business practice of the Berger Paints Bangladesh Ltd. Was very much conservative in terms of market presence. In 1993, marketing department started. Thereafter Berger has been growing very rapidly in terms of market share and sales growth. In 1994, just after the year of launching marketing department, sales growth was 34%. Berger is enjoying 48% share of the total paint market and established itself as the champion of the market through its commitment, offering the most quality paint and providing the maximum value for customers’ money, to the customers.

Total business of the Berger Paints Bangladesh Ltd. is categorized into three major heads. These are:

  • Decorative
  • Industrial
  • Marine

Although three categories comprise the total business of Berger, contribution of the Decorative sector is 85% (app.) of the total turnover. Because of its contribution, Decorative is considered the main business of the organization and is getting more priority.

Three categories of paints are promoted to the market under three brand names. Decorative is offered to the market under the brand name of “Robbialac” and Industrial & Marine are of “Jensolin” & “Seaborne” respectively. Marketing department handles mainly decorative paints.

The major activities of marketing department are as follow:

  • Estimation of sales growth
  • Preparing Marketing Mix
  • Promotion/Communication Mix

 

Sales Department: This department is broadly categorized into two parts: Decorative and Industrial & Marine. These are respectively discussed in brief below

 

Decorative Sales Department: This department is headed by Director Operations who is assisted by GSM (Decorative). 7 strategic depots manage sales activities all over the country. Activities of all seven strategic depots are monitored and controlled by the Sales (Decorative) Office situated in Corporate Office.

 

Major Functions of Decorative Sales Department:

  • To prepare National Sales Budget detailing sales value, volume & growth and translates it into monthly and half-yearly budget.
  • To express the national sales budget in terms of Sales Area, Zone, Product & Shades of Color.
  • To develop sales strategies to achieve sales budget.
    • To respond to complains of customers efficiently and take necessary action(s) for arriving a favorable solution to the problem.
    • To maintain relationship with existing dealers of the Co. and develop new dealers.
      • To suggest marketing department to introduce incentive programs to enhance sales volume.
      • To scan current market condition including competitors’ current and probable future action pattern, customers’ preference, dealers’ business situation and etc.
      • To monitor sales position of the company. and initiate necessary actions if any deviation exists.
      • To arrange sales review meeting timely basis.
      • To ensure smooth distribution of paints
      • To train the sales personnel to handle customers efficiently.

 

Sales (Industrial and Marine): This department is headed by Director Operations who is assisted by the Manager – Industrial & Marine for all the activities & performances of the department. These business groups contribute 15% (app.) of the total turnover of the BPBL. All paints of these groups are offered to the customers under two categories: premium products are under two different Brand names that is, Jensolin and Seaborne for Industrial and Marine paints respectively and the other category is Economy products. Economy products are represented by another two different Brand names Berger Industrial and Berger Marine.

 

Special Features of the Business Groups in BPBL

  • All customers are institutional
  • Direct marketing (Personal Selling) is the only mean to promote the brand.
  • More resistance power than decorative products.
    • These two categories include high performance coating paints and other protective coatings.
    • Lower discount rate than decorative paints. 2% discount on MRP for Industrial paints and 3% for Marine paints are offered, whereas discount rate is 5% for decorative paints.
    • Number of customer is limited. But consumption per customer is much higher in this area than decorative area.
    • Incentives are rarely offered to the customers. Sometimes, volume incentives are offered to the regular customers during the buying of bulk quantities.
    • Institutional customers, if they buy decorative paints, buy decorative paints through Industrial and Marine sales personnel.

 

Industrial Sector: Only in Dhaka and Chittagong sales area, individual sales personnel promote the paints to the current and potential customers directly. In other areas, sales people of Decorative communicate with prospects and collect order & place it to the concerned department of industrial paints. Sales people engaged in Dhaka and Ctg. with Industrial Paint perform the duties as same as the sales people of decorative. Some dealers in Dhaka and Ctg. are involved with the trade of industrial paints with smaller quantities.

 

Types of Customers:

Industrial Customers are of two types:

  • OEM customers: This is the Original Equipment Manufacturer who uses the paint as the raw material and eventually buys frequently.
  • Protective Coating (PC): This group is the infrequent buyers of the industrial brands. Most of their consumption is for the maintenance purpose.

 

Marine Sector: Like Industrial Paints, individual sales personnel are engaged in Dhaka and Ctg. to communicate with the customers. All products are promoted in the market under “Seaborne” and “Berger Marine” brand name. Most of the transactions (large volume) take place through personal selling although 12 dealers in Dhaka & 6/7 dealers in Ctg. offer Marine Paints to the customers.

 

Finance Department: Director – Finance who is assisted by Financial Controller (FC), Accounts Manager and Cost Accountant Manager, heads finance department. Three sections – finance, personal accounts and costing, perform all activities of the department.

 

Activities of Finance Section: 

Financial Controller is responsible for all the activities of this section. This section handles absolute debtors (customer related) related all activities.

 

Bill Payment System: Bills are considered as external & internal. Payment of internal bill is made as early as possible. But external bills are paid twice, 10th and 25th day of the month, in a month. All bills are approved by DFM provided that there is no provision for VAT and amount of bill is not more than Tk. 5000. If the amount of bill is more than Tk. 5000 to Tk. 10,000, then, GM decides on the bill. There after, only authorized person to approve the billing amount is MD.

 

Private Accounts Section: An Accounts Manager who deals with Salary Payment, Group Insurance, Foreign Affairs and issues related with corporate heads this section.

 

Costing Section: A Cost Accountant Manager who is assisted by four Officers heads this section. Main function of this section is to find out per liter Production Cost of a paint category. This section finds out Gross Profit (GP=MRP– Dealers’ Commission – Total Production Cost) of a specific category of paints and shows more than one price points by considering different GM percentage on total production cost of that paint. In addition, this section calculates the total costing and GP of PTC (Pre Treatment Chemical) and other finished goods imported from abroad. Moreover, this section performs inventory valuation activities including factories and depots. Costing section prepares profitability analysis report for most of the paints. If profitability of any paint is not satisfactory they inform relevant authority.

 

Other Sections in Finance Department: VAT and Audit activities are also included in Finance Department. Activities of these two sections are briefly described below:

Audit: An internal auditor performs audit-related activities in Berger. The person who is responsible for auditing, reports to Director- Finance directly. External auditors are also employed for time-to-time basis. Internal auditor audits sales depots twice in a year, generally in June & November. And yearly audit of total organization takes place once in a year.

 

VAT: This section assesses VAT amount that has to be deposited to Govt. exchequer on the bill payable to the external parties. Moreover, some external parties deposit VAT amount in favor of Berger Paints and that amount need to be adjusted with financial activities of Berger. An Assistant Manager, reporting directly to the Director-Finance. and an Officer manage the activities of the section.

 

Planning and Materials Department: Main responsibility of this department is to collect raw materials at right time from right vendors at right price and at right quantity. Moreover, this department also purchases required machinery and other stationery necessary for the organization.


Functions of P & M Department:

  • To find out material and machinery sources: This department continuously scans the Internet, Literatures and other related publications to identify new sources from where raw materials & machinery can be collected.
  • To communicate with the sources: They communicate with the sources and collect information regarding price, quality, terms and conditions of payment & other relevant matters about raw materials and machinery.
  • To buy raw materials, machinery & other necessary items from internal (domestic) and external sources.
  • To develop new vendors: When raw materials source is very much limited, sometimes buyers have to accept unfavorable terms and conditions because of not having sufficient bargaining power. To gain adequate bargaining power this department tries to develop new vendors in areas where they are in disadvantageous position.
  • To reduce the cost of raw materials: If access power to different vendors is high, this department collects raw materials from the substitute vendors to get some types of advantages (such as lower price) provided that this source meets all other criteria.
  • To find out substitute raw materials.
  • To send the sample to R&D for assuring the quality of the raw materials.
  • To provide support to the Marketing Department in developing container.
    • To provide new ideas regarding raw materials, packaging, machinery and help to reduce cost.
    • To support R&D to make new formulations.
    • To suggest maintenance department for doing their jobs efficiently.
    • To buy gift items for marketing department.
    • To buy shade cards for Marketing Department from India & Singapore.
    • To collect color bank materials from Italy.
    • To buy raw materials for Jenson & Nicholson.

 

Research and Development Department: R & D is playing very vital role in the operations of Berger Paints Bangladesh Ltd. Their continuous dedicated efforts help the organization to offer different types of products ranging from economy paint such as JSE & JSD to premium brand of paint such as Weather Coat (WC) & LSE to solve different motives of different users.

 

Major functions of R&D are described below:

  • Product development: Two type of product development activities are performed by R&D. Product development activities of R&D are depicted below:
  • New product development
  • Improvement of existing product
  • Cost reduction exercise
  • Substituting Raw materials with new source and new grade
  • Complains Handling (Site visit, Sample testing
  • Providing Customer Service (Providing Panel, Sample Delivery
  • To Train the personnel of different departments

 

Production Department

 

The Production Process:

The production process consists of the following departments:

 

Raw Materials Department: There are various raw materials that are required for producing different paints. These raw materials are gathered both from local and international sources. At the beginning of the year, the total projected raw materials requirement is submitted to the department and the department sources out the raw materials and ensures the availability of the materials at the right time. They are also responsible for storing and dispatching of the raw materials.

 

Water-based Plant: All types of Water-based products are produced in this plant. The major products produced here are SPD, PSD, APE, LSE, Weather Coat, Tartaruga, Water Sealer and Roofing Compound. There are 5 types of machine here – TSD1, TSD2, Master Mixture, HSD4 and HSD7.

 

Solvent-based Plant: All the solvent-based paints are produced here. The major products are RSE, PSE, Wood Keeper, Hammer Finish, Epoxy paints, Plastron Sealer, Stoving Paint, Various Primers and all other solvent-based paints.

 

Durocem Plant: As Durocem is a different type of product (offered in powdered shape), a separate plant has been established for the production of Durocem. As Durocem is basically cement paint, the main raw material used for producing Durocem is White Cement. The

Table 5: Sales Trend Analysis

      Ratio Analysis: The strategic indicators of Berger Paints in 2006 are as follows:

1        Sales Growth – 35%

2        Gross operating profit – 444 Million

3        Net Profit after tax – 314 Million

4        EPS – 13.54

5        ROE – 64.02 %

6        Current Ratio – 1.91:1

 

Competitor Analysis: The competition in paint sector is very intense. Berger manufactures its products at its local factories and it competes with the present local manufacturers. The number of paint importers is not very high and the competition here is not very structured.

Berger can successfully supersede these local manufacturers/importers with its skilled and experienced Human Resources at all levels, Technical innovation through R & D, Corporate Image, latest Machineries and equipments, Quality Raw Materials, Supply chain management, strong Financial base etc. The experience of almost 55 years in the paint industry and the possession of the best brand image in paint industry will back Berger to be successful against the competitors. Some Competitors are one step ahead than Berger due to their use of the unethical and unfair means of avoiding tax and some times giving contaminated product.

Constraints to Effective Performance

  • Insignificant presence in the international satellite channels
  • Perceived as premium priced company at semi-urban and rural market
  • Higher dependence on large dealers
  • Consumers’ knowledge gap about paints and painting system
  • Fierce competition in the Bangladesh market
  • Credit-driven market
  • Strong command of few dealers in the market through sub-dealer network
  • Unethical and corrupt practices by the local companies
    • Low priced imported products are entering due to trade liberalization; specially from China and South East Asia

 Area of Operation

Berger Paints operates in three broad segments of the paint industry.

Decorative Paint

  • The objective is to beautify the surfaces with protection from corrosion and erosion
  • This business category mainly targets household segment
  • Products are being offered to the consumers through a dealer network
  • Products fulfill the aesthetic value of the consumers
  • Major revenue earning business area of BPBL

 

Industrial

  • Tailor made products to cater to the specific needs of customers
    • Products give protection to the surfaces in extreme situations like severe hazardous environment, high temperature, movement of heavy materials and machinery etc.
    • Direct marketing approach is being used to promote the Industrial Coatings
      • Main customer groups: Garments Factories, Chemical Plants, Fertilizer Manufacturing Plants, Consumer Durable Manufacturing Plants etc.

Marine

  • Products are being offered mainly through Direct marketing approach.
  • Dock Yards, Bangladesh Navy, Passenger Ships are the main user groups.
  • Market is mostly concentrated in Dhaka and Chittagong.

   Manpower Structure

It is consisted of more than 300 employees of whom about 160 are general workers and the rest are White Collar employees. These employees are working in different factories and depots of the company.

The positional hierarchy of the company is as follows:

  • Managing Director
  • Director
  • General Manager (Executive -I)
  • Executive -II
  • Senior Manager
  • Manager-I
  • Manager-II
  • Assistant Manager/ Management Trainee
  • Officer (I, II, IIIA, IIIB, IV)

 

Major Departments of the Company

 

Major functions, responsibilities & other necessary aspects of the major departments of the company are described below:

Marketing Department: Until 1990, business practice of the Berger Paints Bangladesh Ltd. Was very much conservative in terms of market presence. In 1993, marketing department started. Thereafter Berger has been growing very rapidly in terms of market share and sales growth. In 1994, just after the year of launching marketing department, sales growth was 34%. Berger is enjoying 48% share of the total paint market and established itself as the champion of the market through its commitment, offering the most quality paint and providing the maximum value for customers’ money, to the customers.

Total business of the Berger Paints Bangladesh Ltd. is categorized into three major heads. These are:

  • Decorative
  • Industrial
  • Marine

 

Although three categories comprise the total business of Berger, contribution of the Decorative sector is 85% (app.) of the total turnover. Because of its contribution, Decorative is considered the main business of the organization and is getting more priority.

 

Three categories of paints are promoted to the market under three brand names. Decorative is offered to the market under the brand name of “Robbialac” and Industrial & Marine are of “Jensolin” & “Seaborne” respectively. Marketing department handles mainly decorative paints.

The major activities of marketing department are as follow:

  • Estimation of sales growth
  • Preparing Marketing Mix
  • Promotion/Communication Mix

 

Sales Department: This department is broadly categorized into two parts: Decorative and Industrial & Marine. These are respectively discussed in brief below

 

Decorative Sales Department: This department is headed by Director Operations who is assisted by GSM (Decorative). 7 strategic depots manage sales activities all over the country. Activities of all seven strategic depots are monitored and controlled by the Sales (Decorative) Office situated in Corporate Office.

 

Major Functions of Decorative Sales Department:

  • To prepare National Sales Budget detailing sales value, volume & growth and translates it into monthly and half-yearly budget.
  • To express the national sales budget in terms of Sales Area, Zone, Product & Shades of Color.
  • To develop sales strategies to achieve sales budget.
    • To respond to complains of customers efficiently and take necessary action(s) for arriving a favorable solution to the problem.
    • To maintain relationship with existing dealers of the Co. and develop new dealers.
      • To suggest marketing department to introduce incentive programs to enhance sales volume.
      • To scan current market condition including competitors’ current and probable future action pattern, customers’ preference, dealers’ business situation and etc.
      • To monitor sales position of the company. and initiate necessary actions if any deviation exists.
      • To arrange sales review meeting timely basis.
      • To ensure smooth distribution of paints
      • To train the sales personnel to handle customers efficiently.

 

Sales (Industrial and Marine): This department is headed by Director Operations who is assisted by the Manager – Industrial & Marine for all the activities & performances of the department. These business groups contribute 15% (app.) of the total turnover of the BPBL. All paints of these groups are offered to the customers under two categories: premium products are under two different Brand names that is, Jensolin and Seaborne for Industrial and Marine paints respectively and the other category is Economy products. Economy products are represented by another two different Brand names Berger Industrial and Berger Marine.

 

Special Features of the Business Groups in BPBL

  • All customers are institutional
  • Direct marketing (Personal Selling) is the only mean to promote the brand.
  • More resistance power than decorative products.
    • These two categories include high performance coating paints and other protective coatings.
    • Lower discount rate than decorative paints. 2% discount on MRP for Industrial paints and 3% for Marine paints are offered, whereas discount rate is 5% for decorative paints.
    • Number of customer is limited. But consumption per customer is much higher in this area than decorative area.
    • Incentives are rarely offered to the customers. Sometimes, volume incentives are offered to the regular customers during the buying of bulk quantities.
    • Institutional customers, if they buy decorative paints, buy decorative paints through Industrial and Marine sales personnel.

 

Industrial Sector: Only in Dhaka and Chittagong sales area, individual sales personnel promote the paints to the current and potential customers directly. In other areas, sales people of Decorative communicate with prospects and collect order & place it to the concerned department of industrial paints. Sales people engaged in Dhaka and Ctg. with Industrial Paint perform the duties as same as the sales people of decorative. Some dealers in Dhaka and Ctg. are involved with the trade of industrial paints with smaller quantities.

 

Types of Customers:

Industrial Customers are of two types:

  • OEM customers: This is the Original Equipment Manufacturer who uses the paint as the raw material and eventually buys frequently.
  • Protective Coating (PC): This group is the infrequent buyers of the industrial brands. Most of their consumption is for the maintenance purpose.

 

Marine Sector: Like Industrial Paints, individual sales personnel are engaged in Dhaka and Ctg. to communicate with the customers. All products are promoted in the market under “Seaborne” and “Berger Marine” brand name. Most of the transactions (large volume) take place through personal selling although 12 dealers in Dhaka & 6/7 dealers in Ctg. offer Marine Paints to the customers.

 

Finance Department: Director – Finance who is assisted by Financial Controller (FC), Accounts Manager and Cost Accountant Manager, heads finance department. Three sections – finance, personal accounts and costing, perform all activities of the department.

 

Activities of Finance Section: 

Financial Controller is responsible for all the activities of this section. This section handles absolute debtors (customer related) related all activities.

 

Bill Payment System: Bills are considered as external & internal. Payment of internal bill is made as early as possible. But external bills are paid twice, 10th and 25th day of the month, in a month. All bills are approved by DFM provided that there is no provision for VAT and amount of bill is not more than Tk. 5000. If the amount of bill is more than Tk. 5000 to Tk. 10,000, then, GM decides on the bill. There after, only authorized person to approve the billing amount is MD.

 

Private Accounts Section: An Accounts Manager who deals with Salary Payment, Group Insurance, Foreign Affairs and issues related with corporate heads this section.

 

Costing Section: A Cost Accountant Manager who is assisted by four Officers heads this section. Main function of this section is to find out per liter Production Cost of a paint category. This section finds out Gross Profit (GP=MRP– Dealers’ Commission – Total Production Cost) of a specific category of paints and shows more than one price points by considering different GM percentage on total production cost of that paint. In addition, this section calculates the total costing and GP of PTC (Pre Treatment Chemical) and other finished goods imported from abroad. Moreover, this section performs inventory valuation activities including factories and depots. Costing section prepares profitability analysis report for most of the paints. If profitability of any paint is not satisfactory they inform relevant authority.

 

Other Sections in Finance Department: VAT and Audit activities are also included in Finance Department. Activities of these two sections are briefly described below:

Audit: An internal auditor performs audit-related activities in Berger. The person who is responsible for auditing, reports to Director- Finance directly. External auditors are also employed for time-to-time basis. Internal auditor audits sales depots twice in a year, generally in June & November. And yearly audit of total organization takes place once in a year.

 

VAT: This section assesses VAT amount that has to be deposited to Govt. exchequer on the bill payable to the external parties. Moreover, some external parties deposit VAT amount in favor of Berger Paints and that amount need to be adjusted with financial activities of Berger. An Assistant Manager, reporting directly to the Director-Finance. and an Officer manage the activities of the section.

 

Planning and Materials Department: Main responsibility of this department is to collect raw materials at right time from right vendors at right price and at right quantity. Moreover, this department also purchases required machinery and other stationery necessary for the organization.

 


Functions of P & M Department:

  • To find out material and machinery sources: This department continuously scans the Internet, Literatures and other related publications to identify new sources from where raw materials & machinery can be collected.
  • To communicate with the sources: They communicate with the sources and collect information regarding price, quality, terms and conditions of payment & other relevant matters about raw materials and machinery.
  • To buy raw materials, machinery & other necessary items from internal (domestic) and external sources.
  • To develop new vendors: When raw materials source is very much limited, sometimes buyers have to accept unfavorable terms and conditions because of not having sufficient bargaining power. To gain adequate bargaining power this department tries to develop new vendors in areas where they are in disadvantageous position.
  • To reduce the cost of raw materials: If access power to different vendors is high, this department collects raw materials from the substitute vendors to get some types of advantages (such as lower price) provided that this source meets all other criteria.
  • To find out substitute raw materials.
  • To send the sample to R&D for assuring the quality of the raw materials.
  • To provide support to the Marketing Department in developing container.
    • To provide new ideas regarding raw materials, packaging, machinery and help to reduce cost.
    • To support R&D to make new formulations.
    • To suggest maintenance department for doing their jobs efficiently.
    • To buy gift items for marketing department.
    • To buy shade cards for Marketing Department from India & Singapore.
    • To collect color bank materials from Italy.
    • To buy raw materials for Jenson & Nicholson.

 

Research and Development Department: R & D is playing very vital role in the operations of Berger Paints Bangladesh Ltd. Their continuous dedicated efforts help the organization to offer different types of products ranging from economy paint such as JSE & JSD to premium brand of paint such as Weather Coat (WC) & LSE to solve different motives of different users

 

Major functions of R&D are described below:

  • Product development: Two type of product development activities are performed by R&D. Product development activities of R&D are depicted below:
  • New product development
  • Improvement of existing product
  • Cost reduction exercise
  • Substituting Raw materials with new source and new grade
  • Complains Handling (Site visit, Sample testing
  • Providing Customer Service (Providing Panel, Sample Delivery
  • To Train the personnel of different departments

 

Production Department

 

The Production Process:

The production process consists of the following departments:

Raw Materials Department: There are various raw materials that are required for producing different paints. These raw materials are gathered both from local and international sources. At the beginning of the year, the total projected raw materials requirement is submitted to the department and the department sources out the raw materials and ensures the availability of the materials at the right time. They are also responsible for storing and dispatching of the raw materials.

 

Water-based Plant: All types of Water-based products are produced in this plant. The major products produced here are SPD, PSD, APE, LSE, Weather Coat, Tartaruga, Water Sealer and Roofing Compound. There are 5 types of machine here – TSD1, TSD2, Master Mixture, HSD4 and HSD7.

 

Solvent-based Plant: All the solvent-based paints are produced here. The major products are RSE, PSE, Wood Keeper, Hammer Finish, Epoxy paints, Plastron Sealer, Stoving Paint, Various Primers and all other solvent-based paints.

 

Durocem Plant: As Durocem is a different type of product (offered in powdered shape), a separate plant has been established for the production of Durocem. As Durocem is basically cement paint, the main raw material used for producing Durocem is White Cement. The

machines that are used for the production process are basically Ball Mills. There are three Ball Mills in the plant – One with ½ M. Ton capacity and Two with 1 M. Ton capacity.

 

Resin Plant: Resin works as the binder for the solvent-based paints. Resins are of various types and different types of resins are required for different type of paints. Most of these resins are produced in this resin plant. But the resin for the Epoxy paints is imported from foreign countries. In this resin plant twelve types of resins are produced.

 

Distribution: Distribution is the way of dispatching the produced items as per the requirement of different depots. First, the distribution department hands over the container wise requirements of various products to the plants. Then the distribution department plans the truck loading for different depots. In this purpose they give the first priority to the Project Requirements, second priority to the critical requirements of the depots and third priority to other requirements that are not termed as critical by the depots. During this process, the Dhaka depot is given the most priority, as there lies a huge volume of business.

 

Administration: Administration handles the labors of the factory. The Administration department looks after the welfare of the labors as well as officers of the factory.

 

Role of R&D in Production:  R&D is not directly related with the production process. Its main duty is to check the new options of raw materials, search for better ways of production, developing the guideline for production of paints and developing new products. But, sometimes R&D gets involved in the production process as per requirement and solves the problem if any.

 

FG Planning Department (Distribution): The organization’s business philosophy has turned into “Marketing Concept” from the previous “Sales Concept”. For every year a target of sales is established by considering current market size, market growth rate, consumers’ preference trends, govt.’s plan to develop infrastructure, foreign aid available for Socio-economic development of the country, trade policy of the govt. and some other issues related with the business of the organization. Then, total yearly target is broken down into monthly target.

 

Decorative paints are basically sold through Company’s registered Dealers, whereas Industrial & Marine paints are basically sold through personal selling.

 

Untitled

Figure 4: Distribution Flow (Currently)

Major functions:

  • To monitor current stock position in the depots
  • To place indent to the factory
  • To know the last month’s sales and sales month to date
  • To place additional/minus indent if necessary
  • To inform the expected delivery date of paints from factory.
    • To assist production department in developing production plan so that utilization of the resources – men, machines, materials & etc- can be optimized.

 CHAPTER- 3: PROJECT PART

 

  Introduction

As the researcher has been employed as a Management Trainee in the Human Resource Department of Berger Paints Bangladesh Ltd, it was possible for her to observe the Activities & Policies of the concern department. From this experience and observation, various aspects of this department are discussed here which consists of the Project part of this report. And among all these aspects, the Performance Appraisal process has been chosen as the key discussion point.

    Evaluation of HR Policies

After collecting, exploring and evaluating all the available Information, some of the major findings and analysis are presented here:

 

   HR Position at Berger- At a glance

 

Berger Paints Bangladesh Limited is not a very large organization in terms of employees. At present (for the year 2007) the Board of Directors has approved 341 permanent employees out of which 183 are Management members and the rest 158 are workers. Besides this, there are few contractual and casual employees.

 

Table 6: Headcount of Human Resources (Location-Wise) as of May 2007

Untitled

 

* 08 (eight) persons are working on Contract basis.

** 15 (fifteen) persons are working as “Casual Worker”.

* 08 positions are currently Vacant.

 

  Recruitment & Selection Policies

Two of the most important functions of any organization are the recruitment and selection of employees. The health and well being of an organization depend in large part on a steady flow of new people. Employees must be hired to fill newly created positions and to replace

people who have left. Acquiring new employees can be a costly and difficult undertaking. It involves the following four steps:

  1. Planning the need for employees
  2. Getting appropriate people to apply for positions (recruitment)
  3. Deciding whom to hire (selection)
  4. Getting the selected people to take the jobs.

Recruitment and Selection process begin in Berger only after the HR Planning has been made. These plans include both a consideration of the organization’s needs for people and the supply of possible people to hire.

At BPBL, in order to initiate the procedure of Hiring, there are 3 requirements, which must be met:

  1. Employee Requisition by the Authority or Concern Department: Whenever there is a vacant position in a department or unit, the departmental head raises an employee requisition to the Human Resources Division.
  2. Standard of the Quality of the Personnel (Job Description & Job Specification): The second step is to generate a Man Profile based on the Job Profile provided by the relevant department. It includes the type of the job, the involved functions, and most importantly the required qualifications (both educational & professional) to perform the job.
  3. A Planned Recruitment Program: When the above mentioned steps are completed the HR department takes initiative to arrange for the proper recruitment procedure.

 

Recruiting Applicants:

To be able to hire good people, an organization must have a large number of job applicants because there are many available people who are easily attracted. For jobs in which there is an undersupply of people, an organization must expend considerable effort to attract the right people to fill its job vacancies. Several methods can be used to recruit applicants for a vacant position. For Recruitment and Selection both sources are examined:

  1. Internal Source: This includes current employees (promote able/ transferable), Employee Referral etc.
  2. External Source: This comprises of the whole labor market outside the organization.

After selecting the source, HRD decides on the appropriate media like, Newspaper, Internet, Notice Board, Agents for publishing the advertisement for Recruitment. In Berger Paints Bd. Ltd. recently almost all the career opportunities are exposed through web site/ internet. Very few ads are published in the leading newspapers. And some specific job opportunities (mostly contractual) are circulated in related educational / professional institutes.

Selection Process:

  1. Screening: Initial Screening of resumes is conducted to match the requirements of the job with the applicant profiles. Sometimes there are preliminary interviews according to the nature of job.
  2. Employment Interview: In most of the cases Written Tests are carried out for entry-level jobs.
  3. Applicant Appraisal Form: A prescribed Application Form has to be filled in before the Interview.
  4. VIVA: A Viva is conducted after passing the Written Test, if any. 1 / 2 Interviewers from the related departments along with HR personnel usually conduct the interview session.
  5. Conditional Job Offer: Depending on the performance of the final interview, few applicants are offered the respective job.
  6. Physical Examination: If the individual(s) accept(s) the offer, they are sent for a medical examination. This is mandatory for all.
  7. Appointment: If they are found medically fit and eligible, Appointment /Employment Letter are handed over.

 

  1. Induction/ Orientation: The Induction to the new employee takes place after joining.  The duration of orientation program can be for minimum 1 (one) day to maximum 30 (thirty) days depending on the nature of Job.

This is the actual end of the Selection process.

 

 Promotion Policies

Human Resources Department (HRD) of Berger Paints Bangladesh Ltd. always cares about the motivational tool-Promotion for its personnel. Promotion Policies of the Company are as follows:

  1. In every year, after conducting the Annual Performance Appraisal (PPAD-Performance Planning Appraisal & Development), HRD get recommendations for Promotion from the various Departmental Head’s.
  2.  Bases on the selected criteria for the respective personnel, HRD proposes to the Top Management for approval for Promotion, if any.
  3. Berger Paints Bangladesh Ltd. believes in “Ability and Seniority” both for giving Promotion to the employees.

 Transfer Policies

The company may transfer any employee to other Department or to other Offices, Factories or Depots located in different places in the country at its full discretion according to the situational demand of the Company.

The Company has 2 Factories, 2 Sales Offices, and 7 Depots in different parts of the country including its Head Office at Dhaka. Transfer is a normal practice in the Company and most of them are found horizontal Transfer.

 

Training Policies

The Human Resources Training section begin its function of providing whatever Training and Orientation the employees might need in order to make certain that they are well equipped to perform their duties as per desired level of the Company

After conducting Training Needs Assessment (TNA) or getting the summary of needs from Annual Appraisal (PPAD), HRD arrange Training for the respective employees. Training may be different types according to the needs:

  1. On-the-Job
  2. Off-the-Job

It may be Tailor made Training or Local or International Training according to the needs and demand of the situation. Berger Paints Bangladesh Ltd. believes in investment of people.

In the Table below shown the Training Program arranged for the employees in the preceding 3 years as follows:

 

Untitled

Table 7: Statement of Training Given to the Employees

 

  Job Evaluation and Analysis

The Company conducts Job Evaluation & Job Analysis Program as a means of controlling Wage & Salaries, Equity of Pay, Hiring Decisions, and Appraisal Functions; to have better Knowledge and control of the employees and to ensure competitiveness in Wage & Salaries.

For Appraising and Grading the Job, Berger Paints Bangladesh Ltd. practices the following procedures:

  1. Wage & Salary Survey with the similar companies.
  2. Made a Guideline or Plan of Salary Range.
  3. Analysis, Evaluation, Weighing & Scoring of the information.
    1. Observe Survey Result, Company Chart, Questionnaire (if used), Compiled Job Descriptions (to account for each job being performed in the company), and chosen Wage & Salary Plan- the Company determine the value or weight on each Job Descriptions.
    2. When Jobs are Evaluated, Written, Scored & Approved, they must then be maintained on a periodic basis.

 

Merit Rating/ Performance Appraisal

Berger has a Systematic, and Periodic Appraisal Process to assess its employee’s performance. As this is the focus of the recent study, it will be covered in details later on.

 

Pay Scales

Berger Paints Bangladesh Ltd. is a Private Limited Company. As there is no Government prescribed Pay Scale for the Private Company, Berger has its own Pay Scale.

There are 16 Grades found on that Pay Scales from Worker to The Managing Director. But according to the Management of Berger Paints Bangladesh Ltd. it is completely restricted and prohibited to express their Pay Scale to others in any form. So, it is not possible to attach the Pay Scale of Berger Paints Bangladesh Ltd. with this report.

But the Management informed that their Pay Scale is Competitive, Consistent and Commensurate with other similar companies of the country.

   Disciplinary Program

The objective of the Disciplinary Program is to make conscious and to motivate the employee to the extent possible to improve performance and not to indulge in any activity detrimental to the Company.

Whenever Disciplinary action is required, it is important that the penalty fit the offence (after assuring that there was in fact an offence) and that the Labour Code be followed with regard to all Disciplinary actions.

The following Data shows Disciplinary Actions taken during the last 5 years:

 

Untitled

Table 8: Disciplinary Actions Taken in Last 5 Years

   Health & Safety

Berger Paints Bangladesh Ltd. taking the following measures for maintaining Health & Safety at the work place:

  • Smoking Free Environment
  • Medical Allowance
  • Lunch at Canteen
  • Canteen Facilities
  • Mineral Water
  • Proper Ventilation
  • Adequate Lighting
  • Neat and Clean Environment


Activities for Ensuring Safety & Security:

  1. Creating Awareness regarding Accident from Fire
  2. Creating Awareness for any injuries those may cause from Unsafe Act & Unsafe Conditions
  3. Mandatory Physical Examination before joining
  4. Employ Security Guard for ensuring safety & security
  5. Security Watch
  6. Adequate Exit Doors
  7. Fire Extinguisher
  8. Sand / Water Tub
  9. Safe Guards for Machines
  10. Safety Belts

  Benefits & Rewards Packages

Berger Paints Bangladesh Ltd. gives the following Benefits and Reward Package for its employees:

  1. Provident Fund (10% + 10 %)
  2. Gratuity
  3. Festival Bonus (2 Bonuses)
  4. Profit Participation Scheme
  5. Leave Fair Assistance
  6. House Loans
  7. Group Insurance
  8. Conveyance
  9. Entertainment Allowance
  10. Product Discount
  11. Medical Allowance
  12. Laundry Allowance

xiii.Uniform Cost

  1. Car Facilities
  2. Driver’s Allowance
  3. Lunch Allowance
  4. Canteen Facilities
  5. Service Awards

xix.Certificate of Appreciation

  1. Travel Allowance

xxi.Dearness Allowance

  1. Company Picnic

Trade Unionism

Berger Paints Bangladesh Ltd. has only 1 (one) Registered Trade Union named “ BERGER PAINTS SRAMIK UNION”, Registration No. 275, Established in 1972, situated in Kalurghat, Chittagong. It is also the legal Collective Bargaining Agent (C.B.A.) for the employees in the company.

The Elections for “Office Bearers” of the Trade Union held on regularly. Total number of Office Bearers is 8 (eight). 1 (one) Labour Welfare Officer (LWO) is working closely with the Trade Union or C.B.A regarding Employer-Employee related matter.

It is a matter of proud that there was no Strike Called by the Trade Union or major conflict happened / dispute arisen between The Management and The Trade Union or C.B.A during this long period since 1972 and there was no need to appointment of Conciliator or to go to the Court for any of the matter or issues for final settlement / judgment. In minor cases, both the Management and the C.B.A are conscious to handle and settle such type of dispute quickly and fairly by a sitting as per the provisions of Law and in voluntarily.

As per mutual understanding, The C.B.A submits the “Charter of Demands” after every 2 years and “The Representatives of the Employers” sit with them for negotiating a contract for mutual benefits.

It is found that, The Company bears a good Labour Management Relations (LMR).

Performance Appraisal

 

Introduction

Performance appraisal may be defined as a structured 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 improvement and skills development.

Any organization requires consistent levels of high performance from its employees in order to survive in a highly competitive environment. Many firms use some form of results oriented planning & control systems. Managements by objectives (MBO) is a cyclical process that often consists of four steps as a way to attain desired performance:

  • Setting Objectives
  • Action planning
  • Periodic Reviews
  • Annual Evaluation

Performance appraisal plays a key role in a reward system. It is the process of evaluating the performance of employees, sharing that information with them, and searching for ways to improving their performance. It is also a formal opportunity to express appreciation for employee contributions. Appraisal systems are therefore necessary for proper management and for employee development.

The hallmarks of modern appraisal philosophy are as follows:

  1. Performance orientation: It is not enough for employees to put forth effort; that effort must result in the attainment of desired outcomes (products & services).
  2. Focus on goals or objectives: Employees need to have a clear idea of what they are supposed to be doing and the priorities among their tasks.
  3. Mutual goal setting between supervisor & employee: This is the belief that people will work harder for goals or objectives that they have participated in setting. Among their desires are to perform a worthwhile task, share in a group effort, share in setting their objectives, share in the rewards of their efforts and continue personal efforts and continue personal growth. The Theory Y assumption is that people want to satisfy some of their needs through work and that they will do so if management will provide them with a supportive environment.
  4. Extensive feedback systems: Employees can fine-tune their performance better if they know how they are doing in the eyes of the organization.

 Approaches to Performance Appraisal

There have been two prevalent approaches to performance appraisal. The first approach has been the traditional approach.  This approach has also been known as the organizational or overall approach. The traditional approach has been primarily concerned with the overall organization and has been involved with past performance.

The second approach to performance appraisal has been the developmental approach. This approach viewed the employees as individuals and has been forward looking through the use of goal setting.

Purposes of Traditional Performance Appraisals

Performance appraisal for evaluation using the traditional approach has served the following purposes:

  1. Promotion, separation, and transfer decisions
    1. Feedback to the employee regarding how the organization viewed the employee’s performance
    2. Evaluations of relative contributions made by individuals and entire departments in achieving higher level organization goals
    3. Criteria for evaluating the effectiveness of selection and placement decisions, including the relevance of the information used in the decisions within the organization
    4. Reward decisions, including merit increases, promotions, and other rewards
    5. Ascertaining and diagnosing training and development decisions
    6. Criteria for evaluating the success of training and development decisions
      1. Information upon which work scheduling plans, budgeting, and human resources planning can be use

Two serious flaws in the traditional approach to performance appraisal exist. These are:

  • Organizational performance appraisal is typically primarily concerned with the past rather than being forward looking through the use of setting objectives or goals.
  • Performance appraisal is usually tied to the employees’ salary review. Dealing with salary generally overwhelmed and blocked creative, meaningful, or comprehensive consideration of performance goals.

Purposes of Developmental Performance Appraisals

The development approach contained all of the traditional overall organizational performance appraisal purposes and the following additional purposes:

  1. Provided employees the opportunity to formally indicate the direction and level of the employee’s ambition
  2. Show organizational interest in employee development, which was cited to help the enterprise retain ambitious, capable employees instead of losing the employees to competitors
  3. Provided a structure for communications between employees and management to help clarify expectations of the employee by management and the employee
  4. Provide satisfaction and encouragement to the employee who has been trying to perform well

 Expectations of a Manager in doing a Performance Appraisal

The following is typically expected from company managers when doing performance appraisals:

  1. Translate organizational goals into individual job objective.
  2. Communicate management’s expectations regarding employee performance.
  3. Provide feedback to the employee about job performance in light of management’s objectives.
  4. Coach the employee on how to achieve job objectives/requirements.
  5. Diagnose the employee’s strengths and weaknesses.
  6. Determine what kind of development activities might help the employee better utilize his or her skills improve performance on the current job.


 The Performance Appraisal Process

The performance appraisal process typically consists of four inter-related steps as follows:

  1. Establish a common understanding between the manager (appraiser) and employee (appraisee) regarding work expectations; mainly, the work to be accomplished and how that work is to be evaluated.
  2. Ongoing assessment of performance and the progress against work expectation. Provisions should be made for the regular feedback of information to clarify and modify the goals and expectations, to correct unacceptable performance before it was too late, and to reward superior performance with proper praise and recognition.
  3. Formal documentation of performance through the completion of a performance and development appraisal form appropriate to the job family.
  4. The formal performance and development appraisal discussion, based on the completed appraisal form and ending in the construction of a Development Plan.

 

Appraisal Method

Terms used to describe the various type of rating systems as well as a definition for performance appraisal is as follows:

Behavioral Anchored Rating Scales –

The term used to describe a performance rating that focused on specific behaviors or sets as indicators of effective or ineffective performance, rather than on broadly stated adjectives such as “average, above average, or below average”. Other variations were:

  • Behavioral observation scales
  • Behavioral expectations scales
  • Numerically anchored rating scales

Checklists –

The term used to define a set of adjectives or descriptive statements. If the rater believed the employee possessed a trait listed, the rater checked the item; if not, the rater left the item blank. Rating score from the checklist equaled the number of checks.

Critical Incident Technique –

The term used to describe a method of performance appraisal that made lists of statements of very effective and very ineffective behavior for employees. The lists have been combined into categories, which vary with the job. Once the categories had been developed and statements of effective and ineffective behavior had been provided, the evaluator prepared a log for each employee. During the evaluation period, the evaluator recorded examples of critical behaviors in each of the categories, and the log has been use to evaluate the employee at the end of the evaluation period.

Forced Choice Method –

This appraisal method has been developed to prevent evaluators from rating employees to high. Using this method, the evaluator has to select from a set of descriptive statements, statements that apply to the employee. The statements have been weighted and summed to at, effectiveness index.

Forced Distribution –

The term used to describe an appraisal system similar to grading on a curve. The evaluator had been asked to rate employees in some fixed distribution of categories. One way to do this has been to type the name of each employee on a card and ask the evaluators to sort the cards into piles corresponding to rating.

Graphic Rating Scale –

The term used to define the oldest and most widely used performance appraisal method. The evaluators are given a graph and asked to rate the employees on each of the characteristics. The number of characteristics can vary from one to one hundred. The rating can be a matrix of boxes for the evaluator to check off or a bar graph where the evaluator checked off a location relative to the evaluators rating.

Management by Objectives (MBO) –

The management by objectives performance appraisal method has the supervisor and employee get together to set objectives in quantifiable terms. The appraisal method has worked to eliminate communication problems by the establishment of regular meetings, emphasizing results, and by being an ongoing process where new objectives have been established and old objectives had been modified as necessary in light of changed conditions.

Paired Comparison. –

The term used to describe an appraisal method for ranking employees. First, the names of the employees to be evaluated have been placed on separate sheets in a pre-determined order, so that each person has been compared with all other employees to be evaluated. The evaluator then checks the person he or she felt had been the better of the two on the criterion for each comparison. Typically the criterion has been the employees over all ability to do the present job. The number of times a person has been preferred is tallied, and the tally developed is an index of the number of preferences compared to the number being evaluated.

Ranking. –

The term ranking has been used to describe an alternative method of performance appraisal where the supervisor has been asked to order his or her employees in terms of performance from highest to lowest.

Weighted Checklist. –

The term used to describe a performance appraisal method where supervisors or personnel specialists familiar with the jobs being evaluated prepared a large list of descriptive statements about effective and ineffective behavior on jobs.

  Who Should Do Appraising

Input into the appraisal of worker performance may come from many sources including the employee, co-workers, supervisors, subordinates, or even persons outside the organization. Ratings from multiple sources usually yield more reliable performance appraisals.

  • Self-Ratings: Usually the employee has a good understanding of his daily performance and how it can be improved. Employees can be the most important persons in the evaluation process, as we saw in the negotiated performance appraisal approach. Nevertheless, employees have a vested interest in making positive comments about their own performance, and no matter how motivated they are, can usually benefit from outside evaluation.
  • Peer Appraisals: At times co-workers have a better grasp for a colleague’s performance than the supervisor, but co-worker evaluations have a tendency to be lenient. Sometimes co-workers hope management will read between the lines and praise irrelevant or insignificant factors. Peer review is usually anonymous and several peers are involved in the evaluation. This anonymity, while often needed, can also lend itself to abuses.
  • The Immediate Supervisor: Performance appraisal data obtained from the immediate supervisor is the most common rating source. Supervisors are often in the best position to give workers an honest evaluation. The danger in supervisory evaluations is the substantial amount of power and influence wielded, often by the hand of a single rater.
  • Appraisal By Subordinates: Formal evaluation by subordinates is unusual, although from time to time subordinates may be asked for input into the evaluation of their supervisor. When subordinates have an input into their supervisor’s evaluation, supervisors have been known to improve their interpersonal relations and reduce management by intimidation. Issues of anonymity and adequate sampling of subordinates may be important in traditional appraisals.
  • Outsiders: Evaluations by outside clientele may be useful in instances when there is much personal contact with outsiders or when the person being evaluated knows more about aspects of the job than the farmer or supervisor.
  • 360-Degree Feedback: 360 degree appraisals are a powerful developmental method and quite different to traditional manager-subordinate appraisals. As such a 360-degree process does not replace the traditional one-to-one process – it augments it, and can be used as a stand-alone development method. 360-degree appraisals involve the appraisee receiving feedback from people (named or anonymous) whose views are considered helpful and relevant. The feedback is typically provided on a form showing job skills/abilities/attitudinal/behavioral criteria and some sort of scoring or value judgment system. The appraisees should also assess themselves using the same feedback instrument or form. 360-degree respondents can be the appraisee’s peers, up-line managers/execs, subordinate staff, team members, other staff, customers, and suppliers – anyone who comes into contact with the appraisee and has opinions/views/reactions of and to the appraisee.

 Appraisal Interview

Appraisal interview is an interview, in which the supervisor and subordinate review the appraisal and make plans to remedy deficiencies and reinforce strengths. Four things are needed to conduct appraising interviews:

(i)                 Be direct and specific,

(ii)               Don’t get personal,

(iii)             Encourage the person to talk and

(iv)             Don’t tiptoe around.

 

The prevailing Controversy regarding Performance Appraisal

Few issues in management stir up more controversy than performance appraisal.
There are many reputable sources – researchers, management commentators, psychometricians who have expressed doubts about the validity and reliability of the performance appraisal process. At the other extreme, there are many strong advocates of 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 opinions on how and when to apply it.

Appraisers often know their appraisees well, and are typically in a direct subordinate-supervisor relationship. They work together on a daily basis and may, at times, mix socially. Suggesting that a subordinate needs to brush up on certain work skills is one thing; giving an appraisal result that has the direct effect of negating a promotion is another. The result can be resentment and serious morale damage, leading to workplace disruption, soured relationships and productivity declines.

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 may be openly and fairly distributed to those most deserving on the basis of merit, effort and results.

There is a critical need for remunerative justice in organizations. Performance appraisal is the only process available to help achieve fair, decent and consistent reward outcomes.

 

Findings

Existing Performance Appraisal System in BPBL:

Berger has a Systematic, and Periodic Appraisal Process to assess its employee’s performance. BPBL conduct Performance Appraisal / Merit Rating on yearly basis to determine and take actions accordingly on Increment, Promotion, Transfer, Training, Separation, Job Rotation etc.

Performance Appraisal is done by the Human Resource Department (HRD). There are 3 types of Performance Appraisal for 3 different categories:

  1. Performance Appraisal for Senior Managers and above
  2. Performance Appraisal for Officers to Managers
  3. Workers & Staffs Performance Appraisal

Appraisal Form is given to the Supervisors for appraising their subordinates. Appraisal Forms for Workers and Staffs and the Management members are attached in the Appendix, which are Self-Explanatory.

After collecting the Performance Appraisal Form from the Departmental Heads’, HRD forward it to the Top Management for Approval of the same.

The Multiple Regression Model:

The statistical tool with the help of which we are in a position to estimate (or predict) the unknown values of one variable from known values of two or more variable sis called Multiple Regression.

The general form of the linear multiple regression function for n independent variables is:

Y = a + b1 x1+ b2 x2+ b3 x3+ ………………… + bn xn

where Y is the dependent variable o be estimated and x represents various independent variables. In this equation a and b are unknown constants (fixed numerical values) which determine the position of the model developed through this equation.

The researcher has developed a Multiple Regression Model using the data collected from 50 sample PPAD forms in order to determine the relationship prevailing between Overall Performance Rating of an employee with the various criteria upon which s/he is being evaluated. This model had been developed using the Statistical Package for Social Science (SPSS) program. The main findings of the analysis are presented below in a tabular format:

 

Untitled

Dependent Variable: Performance

Table 9: Output of Regression Analysis

 

Now, we can incorporate these findings into the Regression Formula as follows

Performance =  -1.217 + (-0.164) X People Leadership + 0.582 X Resource Management + 0.03143 X Business Development + 0.0711 X Communicating + 0.227 X Influencing + 0.434 X Creative Thinking + (-0.232) X Rational Decision Making + 0.293 X Career Commitment + 0.177 X Professionalism

 

We can verify this model by considering another PPAD form (outside the sampling frame) and put into the respective marks of the independent variables to come up to the overall Performance indicator. If the real outcome is similar to this result for a significant number of incidents, then we can say that the model is valid and reliable.

This model pin points some very important aspects as following:

1. All the independent variables are believed to be positive in nature with respect to their impact on Performance. So, hypothetically all the coefficients of independent variables were supposed to be positive. But we have found People Leadership and Rational Decision Making to have reverse/ negative relationship with Performance. This indicates some sort of inconsistency in the Appraisal process and requires serious attention.

2. The model further specifies Business Development and Communicating to be the most significant elements in evaluating an employee’s Performance.

3. The coefficient of determination (r2) is 0.624 which is the proportion of the variation in the independent variable Performance explained by regression on an independent variable (remaining all other things constant).

 

Expert Opinions

The researcher has conducted a qualitative survey to have/ obtain some expert opinion to know how do they evaluate the existing performance appraisal system of BPBL and what are their suggestions/viewpoints to increase the efficiency & effectiveness. The experts were chosen from a broad category of industries e.g. Manufacturing, Telecommunications, Airlines, Banking, and Education etc. The informal survey questionnaire and the responses can be found in the Appendix.

The main findings from the Expert Opinion are:

  1. Almost all the experts suggested that the Performance Appraisal Form should be designed differently for the Senior and Mid & Entry Level Management.
  2. Even if the forms remain the same, the weightage of factors/variables/criteria (up on which an employee is evaluated) should be different.
  3. According to the experts, for the Senior level of managers the most significant factors are Leadership, Influencing, Creativity, Professionalism, Communication and Business Development. And the other aspects (Resource Management, Rational Decision Making, Career Commitment) are comparatively less significant.
  4. Some additional factors were identified as strategically important e.g. Job Knowledge, Behavioral Skills etc.
  5. Again, for the Mid & Entry level management factors like Resource Management, Communication, Career Commitment, Professionalism, Creativity etc. were found important/vital. For them, IT skills, Job Knowledge and Discipline are some added factors suggested by the experts.

Comparison with Similar Organizations

At this point of the study, the researcher tried to gain some knowledge/ insight regarding the PA process of some other similar/ comparator organizations. These are discussed briefly here:

a) Nestle Bangladesh Ltd.: They also follow a Management by Objective (MBO) approach towards evaluation of an employee. At the end of the year, the appraiser and appraisee sit together and decide on/ consider how far the individual employee has achieved the pre-determined targets in different aspects. These are combination of qualitative & quantitative criteria. The appraisee is ranked on an alphabetic manner (A, B, C etc) and these ranking is done based on the overall evaluation of the appraisee. Various questions (behavioral, business- oriented etc.) regarding accomplishment of targets are measured on different scales provided with the explanations.

b) Grameenphone Ltd: In Grameenphone Ltd. performance appraisal is very much formalized like other managerial practices. Several characteristics of this performance appraisal practices have been found. To comment about these practices, the interviewed person mentioned about transparency and fair treatment to potential and existing employees of the organization. More over, he mentioned that GP follows a predetermined and formal appraising method for evaluating employee performance and mostly they use Management by Objective (MBO) for this purpose. In GP, the whole Performance appraisal process is done online. The immediate supervisor and the immediate supervisors are involved in the appraising process. They sit together at the beginning of the year to set Key Performance Indicators (KPIs) for the whole year. While evaluating any employee the appraiser discusses with the appraisee to determine to what extent these objectives were achieved. The employee is rated on a 6 (six) point scale where 6= Outstanding, 5= Exceeds Expectations, 4= Meets Expectations, 3= Meets most expectations, 2= Below expectations, 1= Significantly below expectations. All these criteria have their own definitions and the appraiser & appraisee are well communicated about it.

In addition to that, all employees have to face performance interviews at least once a year. And the best part with GP is that, employees have the privilege to inform higher authorities about any kind of irregularities. In that case, they can directly contact with the top management without any hesitations. Another important positive side of GP is that, they provide instant feedback to their employees about their performance evaluation. Besides, employees are also allowed to set up their own performance criteria, which motivate them to achieve their targets. They also have employees’ development wing that run several employee development functions such as training, workshop etc.  

c) Reckitt Benckiser: Reckitt being a very concerned organization regarding its employees, practices a well organized and defined Performance Appraisal system. Like other organizations, the appraiser and appraisee consult with each other to settle on the KPIs for the coming year. They also have an online, software based appraisal system where the concern employee is rated depending on the answers of various questions relating to his/her achievements. For some aspects a Likert scale is used and for the qualitative/ subjective features the criteria for appraising are defined/ outlined beforehand. When both the appraiser & appraisee agree upon the final rating, the appraisal is submitted to the Human Resources Department and subsequent steps (bonuses, trainings, workshops etc.) are undergone depending on the recommendations by the appraiser or needs of the appraisee.

d) Banglalink: It was found that Banglalink’s HRM practices features are more or less similar with Grameenphone’s features. They use predetermined and formal appraisal method to evaluate their employees. To maintain the performance level high they use Management by Objective (MBO) as an appraisal method because, it allows the employees to present in setting up their own performance criteria. The immediate supervisor is highly responsible to evaluate their subordinates fairly. In addition to that, in Banglalink all employees have to face performance interviews at least twice in a year. And another significant thing is that, employees have the privilege to inform higher authorities about any kind of abnormality and how they can contact with their top management it depends on the seriousness of the situation.

An additional essential helpful side of Banglalink’s employees is that, their immediate supervisors always provide instant feedback to their employees about their performance evaluation fairly so that their employees can perform better in near future. Employees are also empowered as they are permitted to set up their own performance criteria. But in terms of the employee development session Banglalink is in the higher position than Grameenphone as they give importance to the cross-functional training in the foreign country. They also provide in-house training and workshop to enhance the employees’ quality.

e) British American Tobacco Bangladesh: BATB has a rigorous and very much structured & result oriented performance appraisal system in practice. Each and every employee, in discussion with his / her line manager sets targets for the whole year. These targets can be classified in 5 (five) categories i.e. Business result, Leadership, Management, Relationship building and Innovation. The rankings are in some cases Qualitative & in some cases Quantitative. At the end of the year, the appraiser & appraisee evaluate the past performance and upon agreement they submit the final appraisal through a software (namely “Perform”) to the Human Resources Department. The ultimate appraisal is a Qualitative expression/ phrase such as Exceed, Succeed, Nearly There and Inadequate.

3.9       Some Problem Areas Related to Human Resource Management and Recommendations

As the researcher went through the Human Resource activities and functions of Berger Paints Bangladesh Limited, it was gradually revealed that there are certain aspects, which should have been dealt with more attention and care. Few of the issues are briefly discussed here:

  1. First of all, the organizational structure and culture need some improvement. The organization has too many layers. Starting from the Managing Director to the Officer Grade – IV, there are 14 ranks altogether! This has been shown in the Organogram.

Soln: This problem requires the attention of the Top management, as the solution will involve major changes in the organizational structure.

  1. BPBL has a tradition of some sort of favoritism/partiality in case of employment opportunities. Though it is a very usual practice among all organizations to favor employee referrals to some extent during the recruitment process, but it seemed to the researcher that BPBL stands in the higher end. Even if it is restricted up to getting a call for interview, sometimes it turns out to be very costly for the company.

Soln: This issue should be handled in a very careful manner as not to hamper the organizational environment. It can be made evident to the employees that nepotism/ favoritism is harmful for the organization in the long run.

  1. Another evident feature of the company is it has grown a regional culture among itself. More than 85% of the total employees are from a certain locality of the country. It has created a strict unique provincial tradition/ custom within the organization, which is not at all expected.

Soln: This is a very tough situation to get rid of. But as time goes by, it is hoped that the scenario will get better. The reason being the shift of the Company to the capital, it can attract an employee from any corner of the country, which was not possible before.

  1. The organization nurtures a very rigid and formal work environment, which is entirely resistant to any sort of changes. New rules or practices are not warmly welcomed.

Soln: Any change is usually un-welcomed. It needs a very patient and careful approach to make people understand the positive aspects of a new rule or practice. This can be done through effective orientation programs, time to time counseling and reducing communication gap.

  1. Departments other than the Human Resources Department are not much supportive / cooperative towards the latter one. It creates a lot of misunderstanding and information gap among the different units of the organization. The importance of Human Capital and its development is not yet well perceived by the employees.

Soln: This is a very common problem in recent times, which needs to be addressed seriously. The importance and involvement of Human Resource Department in the operation of an organization should be clarified to the employees through various Workshops, Participative Sessions and through an ongoing process of discussion & real life examples.

  1. While considering the various HR policies, it was noticed/ detected that the employees are not given a clarified perception regarding their career progression. They actually do not know where they are heading towards, or what is expected from them. This ultimately leads toward de-motivating employees, decreasing productivity or hindering the potentials of the employees.

Soln: Whenever a new employee steps inside the organization s/he should be given a clear conception regarding his/her duties & responsibilities (preferably by the concerned Supervisor), about the future/ career paths lying ahead of him/her (given by the HR personnel) and a proper orientation to perform the tasks smoothly. If someone feels to be treated unjustly, there should be ways to express the grievances. And the responsible persons should take care of it to clarify the situation to the person. This practice has to be developed in the organization with great care and rationale.

  1. There is a tendency to exploit some HR policies of the organization by the employees. For example, while taking Leave, instead of following the rule, they try to take advantage (mostly financial) through submitting/ putting forward misleading / fallacious information.

Soln: Any kind of exploitation and manipulation should be handled strictly. As the profession demands, a HR professional needs to be very fair and firm in whatever s/he does. The message has to be passed on to every one that no such dishonest or unlawful acts will be entertained.

 

Recommended Performance appraisal form

The content and the direction of personal development are as flexible as any organization allows, or can be persuaded to allow. One should use one’s imagination to develop people in the way they want to go, not just the way the organization thinks it needs people to be.

Depending on the analysis, expert opinions, theoretical approaches and existing practices of comparative organizations, the researcher would like to propose a slightly modified Performance Appraisal Form for Berger Paints Bangladesh Limited as follows:

Obviously, the first part of a formal document, like these needs to contain essential identifying data:

  • Organization, division and department
  • Year or period covered
  • Name
  • Position
  • Location/site/based at/contact details (e.g., email)
  • Months in present position
  • Length of service (Optional)

Part A (to be completed by the appraisee before the interview and sent to the appraiser X days before the appraisal)

A1 Here the appraisee will state his/her understanding of own duties and responsibilities.

A2 Discussion points: (not exhaustive or definitive)

  1. Has the past year been good/bad/satisfactory or otherwise for the appraisee, and why?
  2. What does s/he consider to be the most important achievements of the past year?
  3. What does s/he like and dislike about working for this organization?
  4. What elements of his/her job do they find most difficult?
  5. What elements of the job interest them the most, and least?
  6. What does s/he consider to be the most important tasks in the next year?
  7. What action could be taken to improve the performance in his/her current position by the appraisee, and his/her boss?
  8. What kind of work or job would s/he like to be doing in one/two/five years time?
  9. What sort of training/experience would benefit him/her in the next year? This question should be broadened to include ‘whole-person development’ beyond job skills – for example: Do you have a personal passion for that we might help you to pursue?

A3 List the objectives the appraisee set out to achieve in the past 12 months (or the period covered by this appraisal) with the measures or standards agreed – against each comment on achievement or otherwise, with reasons where appropriate. The performance will be scored against each objective (1-3 = poor, 4-6 = satisfactory, 7-9 = good, 10 = excellent):

A4 Score his/her own capability or knowledge in the following areas in terms of the current role requirements (1-3 = poor, 4-6 = satisfactory, 7-9 = good, 10 = excellent). If appropriate s/he will bring evidence with them to the appraisal to support their assessment. Other roles in other industries, for example technical, engineering, healthcare, legal, finance, leisure, transport, etc, will require different skill sets. These are examples of a typical commercial or management skill set.

  1. Business / commercial judgment
  2. Product/technical knowledge
  3. Time management
  4. Planning, budgeting and forecasting
  5. Communication skills
  6. IT/equipment/machinery skills
  7. Meeting expectations, deadlines and commitments
  8. Creativity
  9. Problem-solving and decision-making
  10. Team-Working and developing/helping others
  11. Steadiness under pressure
  12. Leadership and integrity
  13. Adaptability, flexibility, and mobility

A5 In light of your current capabilities, your performance against past objectives, and your future personal growth and/or job aspirations, what activities and tasks would you like to focus on during the next year? Any ‘Whole-person non-work-related development’ should be included in this that the person feels would help them to grow and become more fulfilled as a person.

Part B (to be completed during the appraisal by the appraiser – where appropriate and safe to do so, certain items can be completed by the appraiser before the appraisal, and then discussed and validated or amended in discussion with the appraisee during the appraisal.)

Name of appraiser:

Position:

Time managing appraisee:

B1 Describe the purpose of the appraisee’s job. Discuss and compare with self-appraisal entry in A1. Job purpose and priorities will be clarified where necessary.

B2 Review discussion points in A2, and note the points of interest and action.

B3 List the objectives that the appraisee set out to achieve in the past 12 months (or the period covered by this appraisal) with the measures or standards agreed – against each comment on achievement or otherwise, with reasons where appropriate. Score the performance against each objective (1-3 = poor, 4-6 = satisfactory, 7-9 = good, 10 = excellent). Compare with the self-appraisal in A3. Discuss and note points of interest and action, particularly training and development needs and wishes.

B4 Score the appraisee’s capability or knowledge in the aforementioned areas in terms of their current role requirements (1-3 = poor, 4-6 = satisfactory, 7-9 = good, 10 = excellent). Compare with the self-appraisal in A4. Discuss and note points of interest and action, particularly training and development needs and wishes.

B5 Discuss and agree the appraisee’s career direction options and wishes, and readiness for promotion, and compare with and discuss the self-appraisal entry in A5. Some people do not wish for promotion, but everyone is capable of, and generally benefits from, personal development – development and growth should be available to all, not just the ambitious. Again ‘whole-person’ development should be considered outside of obvious work-related training.

B6 Discuss and agree the skills, capabilities and experience required for competence in current role, and if appropriate for readiness to progress to the next role or roles. Consider the connections between a person’s natural talents, personal interests, passions, etc., to their work roles and their work aspirations.

B7 Discuss and agree the specific objectives that will enable the appraisee to reach competence and meet required performance in current job. These must adhere to the SMARTER rules – specific, measurable, agreed, realistic, time-bound, enjoyable, recorded.

B8 Discuss and agree the specific objectives that will enable the appraisee to move towards, or achieve readiness for, the next job level/type, or if no particular next role is identified or sought, to achieve the desired personal growth or experience. Must also adhere to SMARTER rules.

B9 Discuss and agree as far as is possible (given budgetary, availability and authorization considerations) the training and development support to be given to help the appraisee meet the agreed objectives.

Avoid giving commitment to an appraisee for any training expenditure before suitable approval, permission or availability has been confirmed – discuss likely training and development requirements with the relevant authority before the appraisal to check on policies and options and approvals. Raising false hopes is not helpful to the appraisal process.

B10 Any other issues (it’s important to offer the opportunity to the appraisee to raise any other points, even if they need to be discussed at another meeting, outside of the appraisal process.)

Signed and dated appraiser and appraisee:

(Finally it’s advisable to show instructions as to the distribution of copies of the completed form, a reminder of its confidential nature, and a statement as to the individual’s rights under the data protection laws applicable.)

 Train the Appraisers

One of the key functions of a manager is to Plan, appraise and develop the performance of each employee whom s/he supervises. This is a systematic process to ensure that an individual employee performs to the best of his/her abilities and realizing own potential and thus fulfill individual and Company’s objectives. Each of the elements – planning, appraisal & development is of equal importance; each must be fully considered while evaluating an employee.

Therefore, to be most effective in making an annual achievement evaluation for each employee, appraisers must be clear about the terms being used. The main objectives of this whole exercise should be:

  1. To identify performers
  2. To create a culture of Transparency
  3. To develop Employees

The successful operation of the Appraisal process mostly depends on how well the appraisers can identify the performance of a particular employee in line with the standard set by the management. From our earlier analysis, we have identified the possibility of some sort of inconsistency in part of the Appraisers while they rank the overall performance of an employee depending on the fixed criteria. In order to enable the managers to comfortably handle this responsibility, the Management might consider the following suggestions:

  1. Understand the Relationship: While a manager evaluates his/her subordinates, s/he must keep in mind the impact of individual factors on the overall performance of the employee. They must make sure a steady affiliation between the final evaluation and the competence based evaluation.
  2. Orientation: Whenever an employee is appointed in a supervisory position, s/he should be given a proper in depth orientation regarding the pros and cons of appraising method along with other job related responsibilities.
  3. Continuous Course of Action: This is not a “once in a year” topic to be covered. They have to be given this impression/ conception that in order to evaluate an employee at the end of the year, s/he must always become aware of/ perceive the appraisee’s performance continuously.
  4. Training: Time to time In-House Training or Workshops should be conducted to share views & ideas of individual managers alongside updating with respect to modern approaches of appraisal systems.
  5. Communication: This is a very important and crucial factor, which needs the most attention. While setting up the Key Performance Indicators (KPIs) for an individual employee, there must be two way effective communication to finalize what would be expected from the appraisee. In addition to that, there must be adequate scope/ opportunity for the appraisee to share his/her views, problems and so on with the supervisor. This sort of open relationship makes the organizational environment healthier and motivates employees to a great extent.
  6. Identify Training Needs: One of the direct outcomes of the performance evaluation is the identification of developmental needs and potential improvement areas. This must be done with a careful eye on personal & professional requirements of that individual and the organization as well.


Conclusion

“People are the Key”- So, emphasis should be given to this most important, complex and valuable resources. The Company that handles these assets properly is the company that prospers and survives. Berger Paints Bangladesh Ltd. is one of the prosperous Multinational Company in Bangladesh providing Quality service and it is the Market Leader in the Paint Sector. Behind the success story of the organization, the contributions of its employees are mention worthy. And the Human Resources Department (HRD) is working hard to meet its employee’s needs and demands in every situation and tries to ensure better Quality of Work Life (QWL).

It has been found that HRM Practices in BPBL are advanced and development oriented. Berger Paints Bangladesh Ltd. has a full fledge HRD but to achieve more growth and advancement in the future challenge of Global Competitiveness, they may take initiative to implement the before mentioned suggestions & recommendations.

HR Policies and its implementation at Berger Paints Bangladesh Ltd. were found consistent and commensurate to some extent with similar Multinational Companies. HRM functions found involved in mostly all aspects of Employer-Employee Relationships of the Company.

As the study concentrated around the Performance Appraisal Process of BPBL, it was observed that there are several opportunities to make it more efficient and effective for the betterment of the organization in the long run. And all these improvements and changes can only take place if each and every member of Berger family works together with a vision for a fruitful outcome. The members of the Human Resource Team will have to play the leading role in guiding them. Before all these happen, a more communicating and flexible environment has to be introduced within the organization.

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