Competitive Advantage through Human Resource ( a section of my book-HRM)

Organizations are operating in a dynamic and competitive environment. They need to create and sustain competitive advantage if they want to survive and grow. A traditional source of competitive advantage has been eroded. Now it is believed that productivity is through people. People provide an organization with the source of competitive advantage. Various studies have concluded that that an organization’s human resources can be a significant source of competitive advantage (Wright and McMahan, 1992; Lado and Wilson, 1994; Gordon, 1986; Pfeffer, J, 2005). Human factor is the only organizational  resource which is able to develop competitive advantage.  Porter (1990) argues that people are becoming a great differentiating factor. Managers should select those people who are smarter, better trained, more motivated, and more committed.  Jeffry Pfeffer (1994) in his famous book “Human equation" argues that source of competitive advantage has shifted over time. Successful companies of USA for their sustained advantage tend to rely not on technology, patents or strategic position, but on the way they manage their workforce. Achieving competitive success through people requires a basic change in how managers think about their employees and how they view the work relationship. For gaining competitive advantage through people, Professor Pfeffer of Harvard University suggested few HRM guidelines and these are listed below:

Employment Security

Employment security is a critical element of high performance work arrangement.   Security of employment signals a longstanding commitment by the organization to its workforces. Feeling of stable employment may generate loyalty, commitment or willingness to expend extra efforts for the organization’s benefits.  Employment security enhances employee involvement because employees are more willing to contribute to the work process when they need not fear losing their own or co-workers' jobs. Security of employment contributes to training as both employer and employee have greater incentives to invest in training because there is some assurance that the employment relationship will be of sufficient duration to earn a return on the time and resources expended in skill development.   The employee will come up with new ideas when their jobs are secured because they know that introduction of the new system will not affect their employment stability. They will welcome to change.

Selective recruiting

Organizations serious about making profit through people will expend the efforts needed to ensure that they recruit the right people in the first place. Organizations need to have a large applicant pool from which to select the right person. For example, Public Service Commission of Bangladesh receives almost three lakhs job applicants, interview only 5% and hires only 0.02% (Wikipedia, 2013). Security in employment and reliance on the workforce for competitive success mean that one must be careful to choose the right people in the right way. Firms serious about selection put applicants through several rounds of interviews and a rigorous selection procedure.  Japanese companies have a reputation for their extensive screening of employees. Screening is done carefully to find people, who could work better in the new work environment, learn and develop quickly and needed less supervision. Organizations need to be clear about what are the most critical skills and attributes needed in its application pool.  Care must be taken while selecting employees. If we select less qualified employee, he or she will be a burden for the organization for a long time.

High and lucrative wages

An organization can attract and retain qualified candidates if it pay high and lucrative pay package. Higher wages tend to attract more outstanding applicants, permitting the organization to be more selective in finding people who will be committed to the organization. Higher wages send a message that the organization values its people. Low labor cost cannot ensure competitive success for a long time.

                                        

Incentive pay

Pay system should be based on performance or productivity of employees. Employee will contribute more if they earn more.  Contingent incentive can take many forms such as gain sharing, profit sharing, stock ownership, pay for skills, or various forms of individual or team incentives. Microsoft, for example, encourages sharing ownership (Pfeffer, 2006). When employees are owners, they act and think like owners. Moreover, the conflict between capital and labor can be reduced by linking them through employee ownership. Profit sharing causes employees to focus on costs and profits because they receive a percentage of those profits.  Paying for skills acquisition encourages people to learn different jobs and thereby to become more flexible. There is a tendency to overuse money to solve organizational problems. But this is not always a true solution. Many people prefer recognition, security, appreciation and fair treatment and these things matter a lot (Huselid, 1995).

Employee ownership

Make employee a mini-employer. This can be done by stock ownership plan. This may increase their sense of ownership. Employee ownership reduces conflict between labor and capital.  Employee ownership puts stock in the hands of people, employees who are more inclined to take a long term view of the organization, its investment policies and strategies and less likely to support hostile takeovers and acquisitions. It has a positive effect on firm's performance, if managed properly. Stock ownership plan makes the employee a mini-employer. This may increase their sense of belongingness and ownership.

Employee empowerment and participation

Empowerment indicates many things  to many experts. It refers to mutual influence, creative distribution of power and shared responsibility. It is a  democratic, and long-lasting process. Empowering enables people to use their talents and capabilities, fosters accomplishment, invests in learning, finds the spirit in an organization and builds effective relationships, informs, leads, coaches, serves, creates, and liberates. Participation increases both satisfaction and employee productivity. Managers should encourage decentralization of decision making. Autonomy is one important dimension of the job and was the focus of the many job redesign related efforts undertaken by many companies in the early 1980s as a part of movement of quality of working life. The basic change involves moving from a system of hierarchical control and coordination of activity to one in which lower-level employees are permitted to do things to increase performance.  In Germany, for example, employee empowerment in the board of directors occurs through the system of co-determination. It is also known as industrial democracy.

Information sharing

If people are to be a source of competitive advantage, they must have the   information necessary to do what is required to be successful. Information sharing is an essential element of high performance work systems. The sharing of information on issues like budget, strategy and financial performance conveys the people of an organization that they are trusted.  Even motivated and trained people cannot contribute to increased organizational performance if they do not have information on important dimensions of performance. Stack (1993) articulates the importance of sharing information. He argues, “Do not use the information to control or manipulate people. Use it to teach people how to work together to achieve common goals and thereby gain control over their lives. Provide people with information that allow them to make the right decisions”.

Training and development of skills

Training is an essential component of high performance work systems because these systems rely on front line employee’s skill and initiate to identify and resolve problems, to initiate change in work methods, and to take responsibility for quality. All of this requires a skilled and motivated workforce that has the knowledge and capability to perform the requisite tasks. As time goes on employee`s skill may become obsolete. They need to be retrained to upgrade and acquire new skills. Training also changes and modifies employee attitudes and behaviors. Trained people must be placed in jobs in which they can apply their acquired skills.

Treat people with respect and dignity

Dignity is a term used in moral, ethical, legal, and political discussions to signify that human being  has  an innate right to be valued and receive ethical treatment.  At the heart of human right, it is the belief that everybody should be treated equally and with dignity – no matter what their circumstances. This means that nobody should be tortured or treated in and inhuman or degrading way. It also means that nobody has the right to ‘own’ another person or to force them to work under threat of punishment. And it means that everybody should have access to public services and the right to be treated fairly by those services. This applies to all public services, including the criminal justice system. For example, if you are arrested and charged, you should not be treated with prejudice and your trial should be fair.  Dignity of Labor indicates that all types of jobs are respected equally, and no occupation is considered superior. Though, one's occupation for his or her livelihood involves physical work or mental labor, it is held that the job carries dignity compared to the jobs that involve more intelligence than body. No work is superior or inferior in itself. Work is work. It is absolutely wrong to consider any work as high or low. The work itself is a dignity. Every work has some dignity attached to it. It is improper for anybody to think that a certain kind of work is undignified or below his status. No work is meant high or low. Social reformers like Mahatma Gandhi, Martin Luther King, and Ram Mohan Roy were prominent advocates of the Dignity of Labor.

Wage compression

Pay differential among the levels of management should be lower. Wage compression between senior managers and other employees will reduce status differences and develop a sense of common fate.   A huge pay gap may damage the cooperative spirit between managers and workers. High pay gap causes employees to feel less valued.  The pay gap is the lowest in Japan and highest in the USA. Wage compression is the situation that occurs when there is only a small difference in pay between employees regardless of their skills or experience. It is also referred to as salary compression. Pay compression is the result of the market-rate for a given job outpacing the increases historically given by the organization to higher tenure employees. Therefore, newcomers can only be recruited by offering them as much or more than senior professionals. Pay inequities exist in all public and private sector organizations and may be caused by: overtime, talent acquisition, reorganizations, demotions, reassignments & transfers, demand for technical expertise and seniority. Some organizations conduct compression studies to achieve certain levels of internal equity, so that people in relatively similar jobs in the organization receive equal pay.

Promotion from within

It is of vital importance to encourage employee promotion from within the organization. This practice may boost employee morale. It encourages training and skill development because of availability of promotion opportunities within the firm bind workers to employers and vice versa. It facilitates decentralization, participation and delegation because it helps promote trust across hierarchical levels. Promotion is a reward that is  status-based. It provides a sense of fairness and justice in the workplace. Another advantage of promotion from within is that it tends to ensure that people in management positions actually know something about the business, the technology and the operation they are managing.

tanuzanathdu@yahoo.com

Preface

Human resource is the lifeblood and the most valuable asset of an organization. Without this valuable resource, other factors of production (land, capital, technology) are useless. It is an employee who makes other factors productive. Considering the importance of human resource, we have written a book on Human resource Management in the context of Bangladesh.  In the present work, almost all the common and traditional functions of HRM have been discussed sequentially.   This book has many salient features compared to a number of books published both within and outside the country.   It contains many new and contemporary issues which are multidimensional covering such as green HRM, Digital HRM, Human Resource Accounting, HRM practices in  the advanced countries (USA, Germany, Japan, China, and India), HRM practices in Bangladesh, productivity through people, Labor-management cooperation, etc. These new issues are the unique addition of this book.

The government of Bangladesh is trying hard to digitize our country. We have tried to write a new chapter on E-HRM in order to build a digital Bangladesh. We have explored the benefits and limitations of E-HRM and suggest guidelines to make E-HRM effective in our country.

We also focus on maintaining and sustaining an environment- friendly management system in our country. To this end, we have written a chapter on Green Human Resource Management. The reserve of non-renewable natural resource is declining due to over consumption and mismanagement. We hope that Green HRM practices make our students, employees and managers, and the public at large aware of environment management. 

Our book contains a chapter entitled Human Resource Accounting. Although human resources are the most valuable asset, they are not shown in the traditional accounting system. Investment in human resource should be considered as a capital expenditure, which yields benefits for a long time. We have reviewed methods and models so far developed about human resource accounting, although it is difficult to make valuation of human resources.

Bangladesh is facing a stiff competition due to globalization. The developed countries are monopolizing the benefits of globalization and the developing countries like Bangladesh are becoming marginalized. Globalization creates both challenges and opportunities for the developing countries like Bangladesh. To meet the challenges and reap the benefits of globalization, we have to improve our employee productivity. Our book contains a chapter on productivity through people in the age of globalization. We try to provide arguments about how productivity in an organization can be improved through the utilization of human resources- the best creature of Almighty Allah, in an efficient and effective manner. Although there are different strategies to improve productivity, we focus on people –driven strategy because of its unique emphasis on the utilization of the unlimited potential of human beings.  We conclude that wisely managed human resources could be a competitive advantage for Bangladesh leading to increased profit.

We selected a few advanced countries and tried to explain their HRM practices. Economically advanced countries have their own unique HRM systems and these countries are enjoying a competitive advantage because of managing their human resources properly. Our students and employees can take many lessons from the superior HRM system of the advanced countries.

We wrote a chapter on labor-management cooperation because without a sound and cooperative relationship between the employees and managers, Bangladesh could not attain its desired goals. Labor unrest is a serious threat to our economy. Our managers should be leaders, role models and heroes, not masters/ bosses. Both managers and workers should work together as a partner in progress. A cooperative attitude and relationships between the union and management can contribute materially to discipline and productivity within the organization. Many sensible union leaders and employer representatives realize the fact that cooperation between management and labor unions is essential if organizations are going to compete in a global economy.

This book has covered the syllabus of all the universities- public, private, Open and National, of Bangladesh. HRM as a discipline is gaining popularity in Bangladesh. That’s why; HRM has been introduced at the BBA and MBA levels in the universities and colleges in our country. But unfortunately, the standard textbook in our cultural context is very scarce.

Most of the Western books have been written from their cultural and social context, which may not be compatible to our cultural context. In those books, examples and cases are cited from their organizations and cultural perspectives. Our students find it difficult to understand those examples and cases. We have tried to cite local stories, examples, and cases to make our students and readers understand easily the basic concepts of HRM. We have tried our best to explain the terms and concepts of HRM in a lucid and simple language.  We believe that our students will feel comfortable to read our book. Our long teaching experience helps us to determine the needs of our students and we have tried to meet  their needs.

There is no denying the fact that we have drawn immense materials from many standard books, both published and on-line articles on this subject. Yet, the book is original in the exposition and presentation of the subject matter.  In our work, our goal is to produce the most complete and useable book on the market.

We are grateful to some of four colleagues at the Department of Management, University of Dhaka, especially Prof. Dr. S.G. Maola and Prof.Dr. Faruq Ahemd, who have made extremely helpful comments on the various parts of this manuscript and we made good use of their advice. We are also  thankful to some of our colleagues at the Department of Management, Univeristy of Dhaka, specially Manika Chakraborty, Mohammad Abdul Jabber, Nadia Ahmed, Tanuja Nath, Ethica Tianjin, Kazi Md Moinuddin who have helped us a lot in proofreading. Mr. Shariful Alam Khandakar, Assist Professor, Department of Tourism and Hospitality Management, University of Dhaka , also has encouraged us to write a book on HRM. He must deserve our thanks. We are also thankful to Masud Rana, faculty member, Kobi Nozrul University and Tamanna Parveen faculty member, East West University.

Lastly, and most importantly, we acknowledge the personal contributions of four families. On the Akkas side, sincere gratitude goes to my wife Rawshonara and my two beloved sons-Amit and Sumiot. The patience and love of those people most dear to me provided the positive climate to complete this task. Through their support this book ‘ Human resource Management: Theory and Practice’ have become a reality.

Appraisal system in Bangladesh

Prof.M.A. Akkas, MGT Deptt.DU.

Akkas (1995), Professor of Management, University of Dhaka, in his article “Employee Performance Appraisal System in the Nationalized Commercial Bank of Bangladesh”, has made a vivid explanation of the employee performance appraisal practices in the enterprises of Bangladesh.  He indicates that both public and private enterprises in Bangladesh are using some sort of employee performance appraisal technique. In most cases, an appraisal is done annually. The widely used method of appraisal is known as Annual Confidential Report (ACR). It contains traits and performance related factors. ACR form has been examined and found that that the ACR system is mainly trait -based and thus neglects the reviews on direct job related dimensions. The factors are very much subjective in nature. In many cases, the last few months before the appraisal dates are crucial in influencing the assessment of appraisal. Repetition of interrelated criteria has made the ACR long and complicated. The supervisory officer is reluctant to give negative feedback from the understanding that they have to work with employees next days. The ACRs are applicable to all employees irrespective of the grades. However, forms are different for different grades of employees.

The immediate supervisor usually appraises his subordinates, which is countersigned by the immediate supervisor’s superior. The counter signing officer indicates his or her rating. If he disagrees, he must give reasons. Employees are rated against a five point scale starting from excellent to very poor. An excellent employee is one who demonstrates complete mastery of the job and is recognized as a rare professional in the field. Employee showing unacceptable performance with frequent failures to meet expected result is rated as very poor. All employees are rated on 100 marks. 100 marks are allocated to different factors as they apply to different group of employees. Here there is a tendency to keep the result of the rating is secret.

The ACR is filled up confidentially. This non-communication keeps the employee in the dark about what is expected of them or where they stand.  Some companies feel that rating discussions lead to needless controversy and allegation. To bring improvements, an open appraisal system should be introduced and the results of the appraisal, particularly, when they are negative, should be communicated to the employees, so that try to improve their performance. An atmosphere of trust and confidence should be developed so that the raters and the employees may discuss matters frankly and offer suggestions, which may be beneficial to the organization and the employees.

Few words about people

People are the best creature of the universe. They have unlimited creative potentials. If they are given the proper opportunity, they can come up with new and radical idea, which is the basis of innovation. Innovation provides a firm a source of competitive advantage. It changes the rules of competition.

Selection practices in the public universities ( source: HRM: Theory and Pratice by Akkas and Zaman)

  

In the case of public universities, teachers at the entry level are selected mainly on the basis of academic qualifications (CGPA), very little consideration is given to candidates’ communicative skill. Recruiters are making errors that are called halo effect. The halo effect is an error that occurs when too much emphasis is placed on one point or factor, ignoring other relevant factors.  Few teachers  could not deliver good lectures in the classroom due to lack of communicative skill, and knowledge of current affairs although they are having very sound academic records. It is well known that academic results in a few cases are also manipulated.  It is reported that in spite of poor performance in the viva board, one gets final selection only because of good academic records. It is suggested to consider both academic result and oral communication while finalizing a candidate as a teacher. Lesiker and Flatley (2010) concluded that an employee must have communication skill to get ahead. Most people do not communicate well.  Studies show that there is a high correlation between commutation skill and career success. One of the Ex-Vice Chancellors of a public university alleged that few brilliant candidates are not given the chance to join at the entry level due to the excessive political syndrome (Mannan, 2014).

Student Evaluation

Summary of a paper titled"  Human Resource Management Practices in Bangladesh

The full version of the chapter is available in my book:  HRM: Theory & Practice

Problems of HRM in Public & Private Organizations

HRM maximizes output and efficiencies of employees. It ensures conductive human relations for uninterrupted production. Therefore, it deserves implementation  in all organizations of all the countries in the world including Bangladesh. HRM is a critical competitive edge under the present homogeneous technological world. Therefore, a special attention and recognition to the HRM  is required to win the competition and to sustain in the volatile sharply competitive market economy. Nevertheless, the management of the firms in Bangladesh doesn’t give much attention to this pivotal resource. Several researchers have identified numerous problems that are involved in the effective functioning of HRM in Bangladesh.

 They are discussed below:

Faulty employee selection criteria

Employees at all levels should be selected on merit, qualification and experiences. Nepotism, regionalism, and political affiliation are given more emphasis in the employee selection process. Even top Managerial positions in the public sector industrial enterprises are selected on the basis of political affiliation.  Many public industrial enterprises are becoming an island of surplus employees. Overstaffing is a serious problem. Many enterprises are becoming sick. They are running at a loss. This is a colossal waste of national resources. Private enterprise, on the contrary, is understaffed in order to maximize profit.

As universities are human capital intensive organizations, HRM practices of a university can be of great help in hiring and managing the highly skilled and competent teachers. Through research, new ideas and innovation can generate; which help us in promoting higher education in the development of human resources.  We come to know that there is no Bangladeshi university even in the top 500 universities of the world, according a ranking given by the website.  Why it is so? We lack in funding, research culture, HRM practices (e.g. Selection, training, performance appraisal, job definition, compensation, career planning, and employee participation), productive politics, highly qualified staff, training of the staff, etc. No adequate research has been conducted on HRM practices at higher education level. Therefore, it is imperative to review HRM practices in the universities.

 In the case of public universities, teachers at the entry level are selected mainly on the basis of academic qualifications (CGPA), very little consideration is given to candidates’ communicative skill. Recruiters are making errors that are called halo effect. The halo effect is an error that occurs when too much emphasis is placed on one point or factor, ignoring other relevant factors.  Few teachers  could not deliver good lectures in the classroom due to lack of communicative skill, and knowledge of current affairs although they are having very sound academic records. It is well known that academic results in a few cases are also manipulated.  It is reported that in spite of poor performance in the viva board, one gets final selection only because of good academic records. It is suggested to consider both academic result and oral communication while finalizing a candidate as a teacher. Lesiker and Flatley (2010) concluded that an employee must have communication skill to get ahead. Most people do not communicate well.  Studies show that there is a high correlation between commutation skill and career success. One of the Ex-Vice Chancellors of a public university alleged that few brilliant candidates are not given the chance to join at the entry level due to the excessive political syndrome (Mannan, 2014).

Most of the private universities (PUs) in Bangladesh are depending on part-time faculties. According to the UGC report, 2008, number of part time teacher is 3,543 out of the total number of teachers 8,364. They greatly depend on teachers who retired from other universities, particularly from public universities, retired bureaucrats, and part timers from public universities who teach at several universities to maximize their ready cash. Dearth of teachers causes some collateral damages on quality (Siddique, 2012). Being part time, these teachers' often fail to be punctual and are unable to concentrate on their classes. Much of their time is taken off in commuting from one university to another (Ehasan, 2008). Some universities do not have the required number of experienced teachers, but are being run by junior and inexperienced faculties (Naser, 2007).   Faculty recruitment system is not well structured and motivation level is very low (Rouf, 2006). Even authorities do not pay their salary on time. No doubt PUs are contributing to meet the growing demand. But only a few are ensuring a regional or global level of standard. Most are not quality concern. Poor infrastructure facilities, inefficient and inexperienced low quality teaching staff with the profit motive of the founders put the sub-sector in a critical situation (Fakhrul (2006). Even founders are not willing to abide by related Act or Guidelines. As an apex body UGC cannot fight against irregularities with weak legal strength and logistics.

Lack of trust

Owners of private firms do not rely on or trust their salaried managers, hire their relatives in key managerial positions. Employees in the private sector organizations are treated as personal servants, mostly are underpaid with low esteem and empowerment.

Lack of HRM expert:

HRM is not recognized by many entrepreneurs as essentially distinct specialized knowledge. Moreover, institutional facilities to train and develop HRM are also very important. Therefore, there is a shortage of specialized knowledgeable  HRM experts.  There is also a  lack of recognition to HRM to contribute to the efficient supply of HRM experts is an important problem of HRM in Bangladesh.

 No separate  HR department:

It is found that HRM is generally performed by people to designate as manager, administration. A very few organization has a separate HR department. Only large organizations have maintained a separate HR department. The HR department is only engaged in routine activities. Employment developmental activities are not given due consideration. Therefore, the function of HRM does not have efficient exposure to the organizational development.

 Lack of effective HR planning:

It is observed that a large number of firms don’t have any formal HR plan, either short term or long term. They go on whims or crisis. This severely affects the organizations in long run performance and survival.

 Lack of career development program

Career development program gives a promotional ladder to the incumbents, and recognition of the talented, high achievement motivated persons to stay in the organization. It is found that, a large number of private concerns don’t have any career development programs for the employees. They rather pressurize to develop themselves in their own cost. Training and development are regarded as useless venture.

Lack of effective evaluation of training and development

The organizations that provide internal and external training and development for employees, don’t give right evaluation and reward to their achievements. Redesigning of jobs with challenging tasks, expanding authorities and/ or appropriate placement where the employees can place their newly acquired knowledge are not done. Therefore, trained and  experienced  employees lost their motivation to contribute effectively to their performance.

 Wrong placement

‘Right man at the right place’ is the doctrine of organizational efficiency. But nepotism, favoritism, partisans, etc. causes the problem of placing the right qualified persons to the appropriate place job. This happens both in private and public organizations in Bangladesh.

Problems associated with performance Appraisal

Siddique (1984) identified many problems of performance appraisal in the industrial enterprises of Bangladesh. Most of the organizations do not write ACR form on time, rather confidential reports are written at a given time to meet specific purposes.  Adverse comments on employee performance are not communicated to the concerned employee. He also identified the reasons behind the dissatisfaction of employees with the PA system. The main reasons are: absence of measurable standard,   nepotisms and favoritism in  the evaluation process, inadequate number of qualified and trained raters, absence of feedback, absence of rewards and penalties for good and poor performance.   Siddique also makes a  few recommendations to improve the PA system in the enterprises of Bangladesh: a) introducing   two way appraisal system, b) training  the appraising officer, c)  establishing proper performance standard, d) focusing on behavior/ performance rather than traits, e) providing timely feedback, f) keeping records in support of adverse comments, 

 Unhealthy trade union movement:

A trade union is an inevitable part of the industrial democracy. It supports moves and prospers the organizational purpose and thereby increases the welfare of the workers. But trade union in Bangladesh is highly polarized, detracted and least committed to their purpose. Politicization of trade unionism is the root of many problems. Akkas (1998) in his article on Trade union movements  in Bangladesh observed that politicization leads to multiple trade unions, inter-union rivalry, poor membership, and weak financial position. Most of the unions are affiliated with the political parties. Every political party has its own labor front. Union leaders are found to be more loyal to the political parties in which they belong. They are not dedicated to the interest of general workers and to the organization. They always try to maximize their self interest by using their political power. Because of political affiliation, there exist multiple trade unions in the public sector enterprises. As long as a multiparty system exists in Bangladesh, the problem of multiple trade unions will prevail in our industrial organizations, whether the legal framework permits it or not (Bhattacharjee, 1983).  In 1978, the then military junta of Bangladesh promulgated that every political party could form its labor front. Thereafter, the political involvement of trade union went on increasing. Moreover, outsiders are allowed to be members of union in Bangladesh.  Outsiders are the potential troublemakers and often initiate labor movement (Talukder, 1998). Trade unions in Bangladesh are enterprise based, rather job based and industry-wise.

Management does not allow the RMG workers to join the trade union or formation of trade union, though the workers have the trade union rights according to the labor law and ILO conventions. Management fires the workers if he/she joined in the trade union. Sometimes they threatened the workers and even close down the plant for the formation of trade unions.

Trade Union movement in garments sector is very weak. Even it is weaker than other sectors. The main reasons of the Weakness of the trade union movement of the garment sector in Bangladesh are: disunity and division of organizations, unlimited and long working hours, absence of Job security, migration from factory to factory, absence of weekly holiday and other holidays, the majority of women workers, state policy, elite class ownership, low wage and unemployment in the country (Shahiduzzaman, 2013).

Democracy International conducted a survey on 150 RMG factories in Bangladesh  and found  that 87% of workers were  not members of any trade unions;  56% of workers did  not have any knowledge about trade union. 35% of the respondents expressed that trade union might create conflicts and workers might engage in party politics. ( Daily Prothom Alo, May, 05, 2014).

 Unfavorable pay structure:

The pay is the vital source of motivation for our people who are struggling for their subsistence. The general wage level of Bangladesh is not favorable to maintain minimum cost of living. Moreover, there is no protection for future uncertainty. Therefore, it affects the labor productivity and labor relations. Siddique (1984) observed that executive performance has little bearing on their compensation. That is, appraisal results are not considered while designing executive compensation structure.  In most of the RMG enterprises, management does not pay the monthly wage and overtime payment within 7th of the next month. In many cases monthly wage and overtime payment is outstanding for 2/3 months.

Government interferes in wage determination bypassing the CBA.CBA is not allowed to play its legitimate role. Government intervention in wage determination, which is a subject matter of CBA, should be stopped with delay.

 Lack of job security

Security is a desirable condition for getting motivation and commitment from people. Jobs of private firms are totally insecure. Financial protection  is insufficient and inconsistent. Gutter protections are not guaranteed. The provisions of existing labor laws are not maintained.  All these situations create an unhealthy, unfavorable and hostile environment to the work force.

 Shahiduzzaman (2013)  has written a paper on compliance in the RMG sector of Bangladesh.  He found that most of the garment factories are not following the labor law and ILO conventions. In many cases the workers do not enjoy the weekly holiday. There is no job security, social security, gratuity or provident fund for the garment workers. Management does not provide appointment letters/ contract letters, identity cards and service books. According to the Labor Law, the maximum working hour per day is 10 including the 2 hours overtime. But in most of the case workers are forced to work 14 to 16 hours per day. Sometimes they work whole night. Overtime work is compulsory and forceful. Management does not ensure the security of the women workers. Women workers face physical and mental harassment outside the factories and sometimes inside the factories. There is another form of gender discrimination. Women workers are deprived from equal wage, equal dignity, equal rights and equal promotions.

Hostile labor-management relations

Labor- management relations in Bangladesh is not cordial and friendly, rather hostile. Workers and managers do not trust each other. Employees are not viewed as an unlimited creative potential. They are not provided with enough opportunity to unlock their creative potentials. Managers are not sincere in its dealings with workers. They play favoritism and partiality. They play dirty game of rule and divide with the workers (Akkas, 1998). The government of Bangladesh, as an important factor of the labor-management relations, is not always neutral and fair. The government tends to interfere in the internal affairs of trade unions. This had led to inter-union rivalries.

Human Resource Management: Theory & Practice written by Prof. M A Akkas is going to be published very soon. The preface of the book is posted for your understanding.

Preface

Human resource is the lifeblood and the most valuable asset of an organization. Without this valuable resource, other factors of production (land, capital, technology) are useless. It is an employee who makes other factors productive. Considering the importance of human resource, we have written a book on Human resource Management in the context of Bangladesh.  In the present work, almost all the common and traditional functions of HRM have been discussed sequentially.   This book has many salient features compared to a number of books published both within and outside the country.   It contains many new and contemporary issues which are multidimensional covering such as green HRM, Digital HRM, Human Resource Accounting, HRM practices in  the advanced countries (USA, Germany, Japan, China, and India), HRM practices in Bangladesh, productivity through people, Labor-management cooperation, etc. These new issues are the unique addition of this book.

The government of Bangladesh is trying hard to digitize our country. We have tried to write a new chapter on E-HRM in order to build a digital Bangladesh. We have explored the benefits and limitations of E-HRM and suggest guidelines to make E-HRM effective in our country.

We also focus on maintaining and sustaining an environment- friendly management system in our country. To this end, we have written a chapter on Green Human Resource Management. The reserve of non-renewable natural resource is declining due to over consumption and mismanagement. We hope that Green HRM practices make our students, employees and managers, and the public at large aware of environment management. 

Our book contains a chapter entitled Human Resource Accounting. Although human resources are the most valuable asset, they are not shown in the traditional accounting system. Investment in human resource should be considered as a capital expenditure, which yields benefits for a long time. We have reviewed methods and models so far developed about human resource accounting, although it is difficult to make valuation of human resources.

Bangladesh is facing a stiff competition due to globalization. The developed countries are monopolizing the benefits of globalization and the developing countries like Bangladesh are becoming marginalized. Globalization creates both challenges and opportunities for the developing countries like Bangladesh. To meet the challenges and reap the benefits of globalization, we have to improve our employee productivity. Our book contains a chapter on productivity through people in the age of globalization. We try to provide arguments about how productivity in an organization can be improved through the utilization of human resources- the best creature of Almighty Allah, in an efficient and effective manner. Although there are different strategies to improve productivity, we focus on people –driven strategy because of its unique emphasis on the utilization of the unlimited potential of human beings.  We conclude that wisely managed human resources could be a competitive advantage for Bangladesh leading to increased profit.

We selected a few advanced countries and tried to explain their HRM practices. Economically advanced countries have their own unique HRM systems and these countries are enjoying a competitive advantage because of managing their human resources properly. Our students and employees can take many lessons from the superior HRM system of the advanced countries.

We wrote a chapter on labor-management cooperation because without a sound and cooperative relationship between the employees and managers, Bangladesh could not attain its desired goals. Labor unrest is a serious threat to our economy. Our managers should be leaders, role models and heroes, not masters/ bosses. Both managers and workers should work together as a partner in progress. A cooperative attitude and relationships between the union and management can contribute materially to discipline and productivity within the organization. Many sensible union leaders and employer representatives realize the fact that cooperation between management and labor unions is essential if organizations are going to compete in a global economy.

This book has covered the syllabus of all the universities- public, private, Open and National, of Bangladesh. HRM as a discipline is gaining popularity in Bangladesh. That’s why; HRM has been introduced at the BBA and MBA levels in the universities and colleges in our country. But unfortunately, the standard textbook in our cultural context is very scarce.

Most of the Western books have been written from their cultural and social context, which may not be compatible to our cultural context. In those books, examples and cases are cited from their organizations and cultural perspectives. Our students find it difficult to understand those examples and cases. We have tried to cite local stories, examples, and cases to make our students and readers understand easily the basic concepts of HRM. We have tried our best to explain the terms and concepts of HRM in a lucid and simple language.  We believe that our students will feel comfortable to read our book. Our long teaching experience helps us to determine the needs of our students and we have tried to meet  their needs.

There is no denying the fact that we have drawn immense materials from many standard books, both published and on-line articles on this subject. Yet, the book is original in the exposition and presentation of the subject matter.  In our work, our goal is to produce the most complete and useable book on the market.

We are grateful to some of four colleagues at the Department of Management, University of Dhaka, especially Prof. Dr. S.G. Maola and Prof.Dr. Faruq Ahemd, who have made extremely helpful comments on the various parts of this manuscript and we made good use of their advice. We are also  thankful to some of our colleagues at the Department of Management, Univeristy of Dhaka, specially Manika Chakraborty, Mohammad Abdul Jabber, Nadia Ahmed, Tanuja Nath, Ethica Tianjin, Kazi Md Moinuddin who have helped us a lot in proofreading. Mr. Shariful Alam Khandakar, Assist Professor, Department of Tourism and Hospitality Management, University of Dhaka , also has encouraged us to write a book on HRM. He must deserve our thanks. We are also thankful to Masud Rana, faculty member, Kobi Nozrul University and Tamanna Parveen faculty member, East West University.

Lastly, and most importantly, we acknowledge the personal contributions of four families. On the Akkas side, sincere gratitude goes to my wife Rawshonara and my two beloved sons-Amit and Sumiot. The patience and love of those people most dear to me provided the positive climate to complete this task. Through their support this book ‘ Human resource Management: Theory and Practice’ have become a reality.

Background of the Book- Human Resource Management: Theory & Practice

Management is a comprehensive and thrilling  subject. It is a universal  function because it is essential  to run any human undertaking. Management is getting things done with and  through others.  Here others refer to employee or staff. From this point of view, management is nothing but managing people at the work place. Thus management and human resource management  are the same or identical. It is also true that management also deals with non-human resources. But, the main focus is on managing people in the organization  effectively and efficiently. Managing people or human resources is a challenging and difficult task because human resources are not identical; they are different in terms of personality, likings and  dislikings, emotions, value and perception. A person may be qualified at the entry level but he may be obsolete as time goes on unless he is not trained, retrained  and updated. It is the duty of HR manager to help his people to grow and develop. During any stage of career, an employee may be de-motivated and frustrated. His performance may not be up to the mark. An HR manager needs to identify those employees related problems quickly and addresses them without delay. Attracting, selecting, retaining and motivating employees for higher performance are a challenging job for an HR manager.  As a result,  HRM as a separate branch of the discipline is gaining popularity with the growing size and complexity of organizations. HRM as a subject  helps a manager to select, train, motivate, maintain and sustain  people properly so that they can be able to make a productive contribution to the organization. Without productivity improvement, an organization cannot survive and flourish.