Performance Appraisal of Al-Arafah Islami Bank Limited Essay Example

of prominent individuals in Bangladesh, who are known for their dedication and strong religious beliefs, are responsible for establishing and leading the Bank. This group includes Mr. A. Z. M., who is a renowned Islamic scholar, economist, writer, and former government official in Bangladesh.

Shamsul Alam, the bank's founder Chairman, played a crucial role in the bank's establishment in the financial market of Bangladesh thanks to his progressive leadership and constant inspiration. The executive committee of the bank consists of 26 esteemed Islamic personalities from Bangladesh.

Badiur Rahman and MR. Ekramul Hoque currently hold the positions of chairman and managing director at the bank, respectively. AIBL has achieved a prominent status among banks in Bangladesh and has recently reached a significant milestone by establishing its one hundredth branch in Teknaf, Cox's Bazar.

The AIBL annual Report for 2011 states the following objectives and goals:
- Vision: To be a pioneer in Islamic Banking in Bangladesh and contribute significantly to the growth of the national economy.
- Mission: Achieving the satisfaction of Almighty Allah both here and hereafter.
- Proliferation of Shariah Based Banking Practices.
- Fast and efficient customer service.
- Quality financial services adopting the latest technology.
- Maintaining high standard of business ethics and competitive return on shareholders' equity.
- Firm commitment to the growth of national economy.
- Innovative banking at a competitive price. Attract and retain quality human resources.
- Balance growth.The objective of this report is to provide detailed information about the performance appraisal process of AL-Arafah Islami Bank LTD and training and development. It aims to figure out the benefits of the training and development program. The secondary objectives are to serve as an assessment criteria for the MGT-351 course

and a practical implementation of theoretical knowledge. The scope of the study is limited to the assigned topic. To gather information, we interviewed the Human Resource Division head and training institute principal of AL-Arafah Islami Bank LTD, which provided valuable insights into the bank's performance appraisal method and training programs, helping us justify our theoretical concepts with real-life examples.

Operating in accordance with Shariah principles, AIBL is an Islamic bank that has gained significant expertise in the Islamic banking system.

Methodology

To produce a comprehensive report, it is crucial to gather primary and secondary information, which accurately represents the current state of the company. For our report, we have collected both primary and secondary data.

I. Primary data: This data has been gathered from Mr.

Md. Rafiqul Islam, Deputy Managing Director of AIBL, Mr. Mazharul Islam, Vice President and Head of HRD at AIBL, and Mr. Zahid Hasan, Assistant Vice President and Principal of the AIBTRA, are considered as primary data sources through interview.

Secondary data includes the data collected from their AIBL website (http://www.).

Secondary data related to banking activities, including the al-arafahbank.om website, annual reports, periodicals, books, articles, literature, and official records are considered resources in this study.

Literature Review

Performance Appraisal:

Performance Appraisal (PA) is the assessment of an employee's current and past performance in relation to their performance standards. According to Dessler & Varkkey (2012), an individual's performance is influenced by ability (A), motivation (M), and opportunity (O). Instead of being conducted biannually, it is an ongoing process that occurs daily.

The text emphasizes the importance of employee performance improvement as a component of the Performance Management system. A performance appraisal process involves setting work

standards, evaluating an employee's actual performance against these standards, and providing feedback to motivate them to address any deficiencies. Organizational performance management conducting formal performance appraisals can yield several potential benefits, such as enhancing organizational effectiveness and leading to positive outcomes.

Potentially, PAs can provide workers with personalized feedback on their job performance, resulting in several benefits. These advantages include the promotion of communication within the organization, the reduction of employees' uncertainty, the fostering of trust and concentration among employees, the alignment of individual and organizational objectives, as well as ensuring employee acceptance and satisfaction with appraisal outcomes. Appropriately designed and utilized PAs can act as a roadmap for improving job performance and increasing worker productivity.

Numerous studies have shown a strong correlation between HRM practices and improved performance at both individual and organizational levels. It is crucial for organizations to identify their employees' training needs in order to achieve strategic goals. Conducting performance appraisals helps determine problem areas that require training and development opportunities. Performance appraisals also assist in setting and monitoring employees' career goals.

Furthermore, performance appraisals can aid in the establishment of structured hiring, training, and cultivating a culture of employee performance, as many organizations have shifted away from formal appraisal programs.

According to Dessler ; Varkkey (2012), numerous organizations still utilize various appraisal methods to assess employee performance, aiming for more effective and meaningful results.

Graphic rating scale:

The graphic rating scale remains the most widely used and uncomplicated approach for evaluating performance.

The text describes the utilization of a graphical

rating scale to display traits and performance values for each trait. The supervisor assigns a score to each subordinate by circling or checking the most fitting score that represents their performance. There are various approaches accessible for evaluating employees, including the Alternation Ranking Method, Paired Comparison Method, and Forced Distribution Method. In the Alternation Ranking Method, employees are ranked from highest to lowest based on a specific trait. In the Paired Comparison Method, subordinates are paired and compared against each other for every trait. The Forced Distribution Method involves distributing predetermined percentages of ratings into different performance categories, similar to grading on a curve.

The proportions in each category do not need to be symmetrical. The Critical Incident method involves keeping a record of exceptional or undesirable instances of an employee’s work-related behavior and discussing it with the employee. The manager then utilizes the record to evaluate the employee's performance during performance appraisal, but it is not useful for comparing employees or making salary decisions. The Behaviourally Anchored Rating Scales (BARS) is an appraisal tool that links a numerical rating scale with specific examples of good or poor performance. The Essay Description entails a written statement that outlines the employee’s strengths, weaknesses, past performance, and future development.

Managers are responsible for writing employee descriptions, so having good writing skills is necessary for this approach. Management by Objectives (MBO) is a comprehensive and formal goal-setting and appraisal program used as either the primary or supplementary appraisal method. Electronic Performance Monitoring (EPM) systems utilize computer network technology to provide managers with access to their employees' computers and telephones.

Managers use performance appraisals to monitor employees' rate, accuracy, and time spent

working outline (Dessler & Varkkey, 2012, p. 333). However, there are several problems associated with these appraisals.

• One issue is the lack of clarity in many appraisal scales.
• Another problem arises from the varying interpretations of standards and traits by different individuals.

In addition, a phenomenon called the Halo Effect can occur during performance appraisals. This occurs when a supervisor's rating of a subordinate on one trait influences the rating of all other traits.

An unfriendly employee may receive an 'unsatisfactory' rating for all traits, not just a specific one. Central Tendency refers to the tendency to give all employees average ratings in the middle of the scale. Leniency or Strictness is the tendency to rate subordinates as either 'high' or 'low'. Biasness refers to rating employees based on differences in age, race, sex, background, and other characteristics.

Training involves giving new or current employees the necessary skills for their jobs. It equips them with knowledge, skills, and attitudes for successful job performance. Training focuses on improving operational or technical job performance.

Development provides employees with knowledge, skills, and attitudes for their current jobs and future aspirations. It helps top-level executives solve problems, make decisions, and seize opportunities. Development programs have higher costs and budgets compared to training programs (Dessler & Varkkey 2012).

Dessler & Varkkey (2012, p.283) state that there are various training programs available, including on the job training, apprenticeship, job instruction, coaching, and mentoring. These programs focus on changing individuals' attitudes rather than their skills. Lectures, seminars, and workshops are efficient ways to impart knowledge to large groups of

trainees. Audiovisual and multimedia techniques such as DVDs, films, PowerPoint presentations, and audiotapes are commonly used for training purposes. Vestibule training involves learning on actual or simulated equipment off the job. Computer Based Training (CBT) uses interactive computer-based and DVD systems to enhance knowledge and skills. Role playing creates realistic scenarios for trainees to assume specific roles.Action Learning programs enable managers to address issues in departments other than their own. Assessment centres evaluate participants' performance based on predetermined criteria and offer support if necessary. Ernst & Young stands as a prominent example of an assessment centre.

Simulated training: gives trainees a chance to learn on actual or simulated equipment while not on the job, in a safe environment. This can apply to activities such as driving, medical examinations, and pilots.

g. Online computer and internet-based training sessions focused on cost-effective OH;S issues.

296) There are various ways to promote development, such as Job Rotation, Action Learning, Case Study, and Management Games. With Job Rotation, managers are transferred between departments to enhance their understanding of the business and test their skills. Action Learning allows managers and others to dedicate time to analyzing and solving problems in different departments. Case Study involves presenting employees with a written description of an organizational problem for them to diagnose and solve. Management Games utilize computerized simulations where trainees are

divided into small companies that compete in a simulated marketplace.

Outside seminars involve attending seminars organized by external organizations such as AHRI. University programs offer continuous education programs in areas such as leadership and supervision. Role playing involves creating a realistic situation and having the trainees take on the role of a specific person in that situation.

In-house Development centers/Corporate University: These centers typically offer a range of courses and programs focused on supporting the management needs of employers. Executive Coaches: An executive coach is an external consultant who interviews the executive's boss, peers, subordinates, and sometimes family members to identify the executive's strengths and weaknesses. They help the executive capitalize on their strengths and overcome their weaknesses.

Performance Measurement in AL-Arafah Islami Bank LTD

AL-Arafah Islami Bank LTD (AIBL) has its own Human Resource Department (HRD). The HRD maintains and keeps separate records for each employee, recording personal data, service history, and performance evaluations.

HR executives and HRD heads regularly assess the performance of employees at AIBL. The HRD department uses an Annual Performance Report (APR) to measure employee performance. According to AIBL's employee service rule on page 27, the Board will establish a system for generating APRs, which are reports on the work and conduct of employees. The bank may also request special performance reports for specific employees when deemed necessary for the bank's interests.

AIBL has two specific formats for its annual performance report:

• Role Play: Trainees are sent to the nearest branch of the bank after completing each topic in the training institute to apply their learning in real-life situations.
• In

house Development centers/Corporate University: AIBTRA provides a range of courses and programs to meet the management needs of employers.

Organizational Benefits of Training ; Development program

Productivity: (M. Islam 2012, pers. Comm., 26 November) Training is a process of learning and acquiring knowledge to improve employee performance, while development helps employees build their personalities and realize their full potential. To improve overall performance, organizations require trained and experienced individuals.

AIBL believes that training and development practices are essential for increasing employee efficiency. They are of the opinion that these programs play a crucial role in equipping employees with the necessary skills required for specific jobs. Additionally, when employees fail to meet expected performance levels or when productivity declines, organizations must implement training and development programs. Building team spirit is also deemed extremely important for any organization as all employees work together as a team and heavily rely on each other. Without team spirit and coordination, they will be unable to achieve their goals and add value to the company.

The significance of training and development programs arises from the complexities of different jobs. AIBL recognizes this and therefore provides training to its employees in order to foster team spirit. They understand that by promoting team spirit among employees, the overall productivity will ultimately increase. The organizational climate at AIBL is characterized by discipline and a unique corporate culture. The bank values shared meaning, shared understanding, and shared sense making.

The individuals in the Bank have a unique perspective and grasp on events, activities, objects, and situations. They adapt their manners, etiquette, and character to align with the Bank's objectives and the crucial needs of our valued

customers. Within the Bank, there is a strong sense of unity and teamwork, resembling a close-knit family, as we believe in collaborating for mutual growth.

The Bank's offices are located in the city center, usually surrounded by commercial areas. These offices boast a central air conditioning system, stylish decorations, modern furniture, and advanced technical banking equipment.

Technology has enabled Bank offices to become paperless, with most banking tasks now being recorded and accomplished through advanced banking software. Employees are being trained and adapting well to this new system. Communication within and between offices is primarily done through telephone, fax, internet, and cell phones. The office interior has been beautifully decorated, providing a safe and healthy environment for employees. Additionally, the company emphasizes training and development to enhance its image in the industry and among customers, as maintaining a strong reputation is crucial for competing with other companies.

The primary objective of any business is to generate profit. In order to achieve profitability, businesses must focus on delivering high-quality products and services efficiently. AIBL, with its various companies, shares this goal and recognizes the importance of considering other contributing factors to success. Therefore, they prioritize organizing training and development programs.

Communications in the workplace have become more complex due to the growing diversity of languages and customs amongst employees and clients. It is crucial for success to establish effective communication channels with these individuals. Recognizing this need, AIBL offers training and development programs specifically designed for their mid-level and top-level employees.

Today's society has higher expectations for corporate social responsibility and workplaces now have a diverse workforce with various values and morals. To ensure ethical conduct, organizations are implementing training

and development programs. These programs provide several benefits to employees, such as improving job satisfaction. When employees receive training, they become more efficient in their roles, leading to rewards and recognition from senior colleagues that serve as motivation.

Training not only provides employees with knowledge, but also encourages them to share ideas and become more involved in their work. As their skills and efficiency improve, so does their salary and overall job satisfaction. AIBL also offers orientation programs to introduce employees to new technologies, which increases their motivation to perform well. However, it's important to remember that motivation can also come from simply reminding each other about the most effective methods of performing tasks, rather than always seeking new ways of doing things.

Like any relationship, your employee relationships can become stagnant unless you consistently invest time and effort in reminding them of their importance and the value of their contributions. It is critical to emphasize that they are all part of one team—the same team. Training and development play a crucial role in reducing employee turnover. Employees become more motivated to perform their job with the company, resulting in lower turnover rates and longer tenure within the organization.

Findings

We discovered that all employees at Al Arafah Islami Bank Limited have received training, which has significantly contributed to their potential and skill. The analysis also reveals that respondents have gained a variety of experiences, leading to the improvement of the bank's performance.

The majority of employees at Al Arafah Islami Bank Limited are young and have obtained educational levels beyond a master's degree. This high level of education contributes to the bank's strong performance. Most employees

receive a 60-day entry level training called Foundation Course, as well as 5 to 10 days of mid-level training. Due to the large number of employees, the bank offers advance and other level training based on their succession plan or current situation. While the bank provides both on-the-job and off-the-job training to its employees, they unfortunately do not receive international training from abroad. Overall, respondents indicate that the bank's training and development program is well-organized and comprehensive.

It is also noted that the training and development programs at Al Arafah Islami Bank are overseen by skilled trainers and are tailored to the bank's activities. The bank's employees recognize that the training provided is beneficial for their job performance. Therefore, it is evident that the training and development programs offered by Al Arafah Islami Bank have a positive impact on employee performance.

Recommendations

• Al Arafah Islami Bank Ltd provides initial training for its employees, but lacks well-structured programs for mid-level and advanced level employees. It is recommended that the bank design training programs with longer duration, taking into consideration the specific needs of the trainees in the future. Additionally, these types of training should not interfere with regular activities. By implementing these recommendations, the bank's customer service and customer satisfaction levels will improve.
• Training Needs Analysis (TNA) is crucial for every bank to perform banking activities effectively and achieve its goals. TNA helps in identifying the gap between the expected performance and the actual performance. Therefore, it is advisable for the bank to assess TNA before sending employees for training.

The higher authority should make fair decisions to evaluate TNA for

each employee. It is important for them to understand the needs and shortcomings of the trainees, even though the trainers are skilled and knowledgeable. The training and development department of Al Arafah Islami Bank Ltd strives to improve training and maintain international standards to fulfill the bank's mission and vision. However, there are limitations to this project study. The time limitation of 4 weeks makes it difficult to fully understand an organization like AIBL. Senior managers and officers are busy and may not have enough time to address queries in detail. Some respondents were hesitant to express their true opinions. Furthermore, the bank did not disclose all the necessary data for obvious reasons, which could have been vital. In conclusion, Al-Arafah Islami Bank was founded in 1995 with the principles based on Al-Quran and Sunnah to introduce a modern banking system.Al-Arafah Bank holds a prominent position in the banking sector, showcasing its impact and participation in the socioeconomic landscape. The banking sector greatly influences a country's economic growth and Al-Arafah Bank serves as a key player in this domain.

Within this project, we provide a brief overview of the organizational background, mission, and vision. In terms of topic analysis, we delve into the performance appraisal and training and development program, highlighting the benefits associated with these initiatives. Overall, it can be concluded that in order to compete with other banks, Al Arafah Islami Bank must have skilled employees. This is accomplished through the implementation of an effective training program. Despite having been in operation for 16 years and having established their own services and brand with a strong reputation, Al Arafah Islami Bank still faces

challenges and lags behind their competitors.

Finally, in order to improve the organization, we hope that taking the suggestions mentioned above into consideration will allow them to surpass their close competitors in the banking service.

References:

1. Al-Arafah Islami Bank Ltd., 2012, Employees’ Service Rules 2009
2. Al-Arfah Islami Bank Training and Research Academy, 2012
3. AIBTRA training & workshops 2011 Dhaka AI-Arafah Islami Bank Ltd., 2012
4. Annual Performance Report 2011 Al-Arafah Islam Bank Ltd., 2012
5. Company Overview, [online] Retrieved December 13, 2012, from
6. http:// http://www.al-arafahbank.com/ Dessler, G. & Varkkey, B., 2012,
7. Human resource Management, Pearson, India Wikipedia, 2012
8. Performance evaluation, Potential benefits of PA, [online], Retrieved December 13, 2012