hr policies of asa ngo

HUMAN RESOURCE POLICIES OF ASA

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Chapter: 01

Introduction

This term paper is prepared with an intention to meet partial requirement of the course

"Human Resource Management". We have chosen “ASA” for this purpose. We performed an

analysis on the HR policies of the organization and tried to evaluate its justification with the

acquired knowledge from the course.

1.1 Objective of the Study:

The objective of this term paper is to get familiarize with the real market situation and

compare it with the theoretical concepts. The main objective of this term paper is to have an

assessment about the HRM activities of ASA. In addition, the term paper seeks to achieve the

following objectives:

1. To have a brief idea about ASA.

2. To present an overview of the Human Resource Management Policies of ASA.

3. To identify the strengths and problems of ASA and suggest corrective measures.

1.2 Methodology of the Study:

We have collected the necessary data from two (02) sources:

1. Primary Sources: We have taken the primary data by interviewing the HR Manager

of ASA who is directly involved in the decision making process.

2. Secondary Sources: We have taken further necessary data from:

Annual Report of ASA 2010 & 2011.

ASA Manual 2009 & 2007.

1.3 Scope of the Study:

This term paper is prepared through extensive discussion with the HR Manager of ASA and

his shared experience with different microfinance institutions and their HR policies. It is a

great opportunity to have an in depth knowledge of all the HR activities and policies

practiced by ASA.


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1.4 Limitations of the Study:

Some restraints that we have faced at the time of preparing the report are given below:

1. The insufficiency of information is the main constraint of the study. Moreover,

management was not interested to provide all the information due to security and

secrecy.

2. The employees were busy to provide time for the interview

3. Inexperience, time limitations and political hazards also created some obstacles.

Chapter: 02

Overview on ASA

2.1 About ASA:


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ASA is a non-governmental organization founded in 1978 by MD. Shafiqual Haque

Choudhury, which offers micro-credit financing. It focuses on consciousness raising, group

development and training among the rural poor. Microfinance of ASA has an attractive ease

and a record of success not just in promoting financial flexibility but in achieving other social

objectives like empowering women and developing the capacity of small groups of people to

take control of their own lives. Being a non-profit organization, ASA realized the

significance of Microfinance addressing the lack of access in capital for the underprivileged

community and thereby in later transformed itself as an operator of Microfinance in

Bangladesh. Now, ASA has emerged as one of the largest and most efficient Microfinance

Institution (MFI) in the world and has been working relentlessly to assist the poor since its

inception in 1978.

ASA wanted to change its operations to become self-reliant and move away from depending

on donor funding and grants. ASA’s Microfinance Model gradually transformed itself to

become the globally renowned “ASA Cost–effective and Sustainable Microfinance Model.”

This model is different from other models and has already been proven as one of the best in

the world. It is simple as well as cost-effective. This cost effective method, from Branch

Office to the Central Office ensures ASA’s dedication towards its mission for reducing

poverty. This model has proven itself in different countries in Asia and Africa.

By following this model, ASA declared itself a “donor free MFI” in 2001. ASA has been

rated to have the highest Operational Self Sufficiency (OSS) and Financial Self Sufficiency

(FSS) compare with Global MFIs and Asian Largest FIs.

According to the Bangladesh Microfinance Statistics 2010 published by the Credit and

Development Forum (CDF) and Institute of Microfinance (InM), there are 773 NGO MFIs in

Bangladesh (including ASA). And ASA has 5.56 million members which is 16.06 % of all

members of these NGO MFIs.

In result of a statistic of December 2011, ASA has successfully extended its outreach in

Bangladesh through 3,154 branches and it has over 250,000 employees who work relentlessly

to serve the clients.

ASA’s total fund for providing microfinance services was BDT 66,221 million (USD 809

million) as of June 30, 2012. The sources for this fund were ASA’s own funds (including


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reserve fund), member’s savings, member’s security fund, CORDAID loan, loan insurance,

Debt Management Reserve (DMR), ADB through EBL, Basic Bank and other sources.

2.2 Goals & Objectives:

2.2.1 Goals:

The main goal of ASA is poverty reduction through micro-credit and empowering women.

ASA provides financial assistance to the poor through systematic process by bringing them

under an organizational structure. Through this process, ASA becomes a sustainable

organization.

2.2.2 Objectives:

1. To form groups of the poor and the oppressed and to attain the improvement of their

socio-economic condition through economic activities.

2. To give priority to women and to involve them directly in productive activities so that

the opportunities are created for extra income.

3. To create employment opportunity for both male and female by involving them in

income generating activities for increasing the income of the family and to continue

gradual support for attaining self-sufficiency.

4. To provide assistance so that the poor becomes self-dependent by accumulating their

own capital through savings from increased income.

5. To provide assistance so that the poor can gradually decrease their dependence on the

moneylenders, borrowing at high interest, advance sale of crops, selling and

mortgaging of lands and finally can abandon these practices.

6. To attain self-sufficiency by decreasing its external dependence through the service

charges earned from the credit program.

2.3 Savings & Loan Program:

2.3.1 Types of Savings:

1. Compulsory weekly saving and voluntary saving.

2. Associate member’s savings.


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3. Long-term savings.

4. Term deposit.

2.3.2 Loan Program:

1. Micro credit for male.

2. Micro credit for female.

3. Loan for small businesses.

4. BDS loan.

5. Hardcore poor loan.

6. Agriculture loan.

2.4 Organizational Structure at Field Level:

2.4.1 Branch Structure:

Employee Designation No of Employee(s) Remarks

Branch Manager (BM) 01 Responsible for branch operation

District

Region

Branch

Figure: Organizational Structure at Field Level of ASA


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Assistant Branch Manager (ABM) 01 Assist to Branch Manger

Computer Officer (CO) 01

Loan Officer (LO) 04 to 05

Peon 01

2.4.2 Regional Structure:

Designation Working Area (No.

of Branches)

Number of

Region

Office

Regional

Manager (RM)

5-7 1 Regional Office (The RM will reside in the

centrally located branch within the region)

2.4.3 Divisional Structure:

Designation Working Area (No.

of Branches)

Number of

Region

Office

District

Manager (DM)

5-7 08-10 The district consists of 08-10 regional

offices. DM will reside in the centrally

located branch of the district

2.5 Organogram of ASA:


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2.6 Sister Concerns of ASA:


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Organization/Institution Year of Establishment

Catalyst Microfinance Investors (CMI) 2006

ASA International (ASAI) 2006

ASA Foundation International (AFI) 2007

ASA University Bangladesh (ASAUB) 2006

2.7 Some Special Achievements:

Year Achievements

1992 Microfinance as the specialized program

1993 Started providing Technical Assistance (TA) internationally

1998 Selected as the International Technical Service Provider (ITSP) by UNDP

2001 ASA declared itself as the self-reliant MFI

2002 Selected as the best TA provider globally by UNDP

2005 Placed in all the six categories with exceptionally best results in the MIX

Report titled “2005 MIX Global 100: MFI League Table” presented in the

Micro-credit Summit Campaign (MSC) 2006, Canada

2007 Selected as the best MFI in Forbes List: 2007

Chapter: 03


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Findings & Analysis of the Study

We have done a study on the HR policies of Three (03) specific areas of ASA. The findings

of our study are given below:

3.1 Recruitment & Selection Policies:

3.1.1 Mid-Level & Field-Level Recruitment & Selection Process:

For mid-level and field level recruitment, ASA mostly relies on external sources. The

recruitment and selection procedure for mid-level and field-level candidates of ASA is given

below:

1. Advertisement & Collection of CV’s: If there is any vacancy in field-level (such as

vacancy for Loan Manager), ASA gives advertisement in the local newspaper only.

On the other hand, if there is any vacancy in mid-level (such as vacancy for Regional

Manager), they do give advertisement in local newspapers as well on the website of

ASA and in BD jobs. After the advertisement procedure, they collect only the hard

copies of the CV for field level vacancy and for mid-level vacancy, they collect only

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

Advertisement & Collection of CV's

CV Screening & Shortlisting Candidates

Written Test (For Mid Level) &

Practical Test (For Field Level)

First Interview (Both Field & Mid

Level)

Final Interview (Both Field & Mid

Level)

Background Check (Only Mid Level)

Offering Appointment

Letter

Training & Development


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the soft copies of the CV. After collecting all the CV’s within the deadline of the

advertisement, they move to the next phase.

2. CV Screening & Shortlisting Candidates: After collection of CV’s from the

interested candidates, the District Manager shortlists the CV’s of the field-level

candidates and the HR Department screens the CV’s of mid-level candidates. Based

on the required skills and qualification, the candidates are shortlisted for the written

test for both field and mid level vacancy.

3. Written Test or Practical Test: Written test is taken for the mid-level candidates

where theoretical questions related to job description are asked and mathematical

reasoning of candidates are checked. Moreover, the field-level candidates have to go

through a practical test where they have to perform a sample task related to job

description. Candidates with good marks in written or practical test will be called for

the first interview in the central office.

4. First Interview: Three members from the HR Department will be there in the

interview board and they will conduct interview sequentially. The questions will be

pre-determined and the candidates will be asked basically about ASA, micro-credit,

their past experience etc. The shortlisted candidates will be called for the final

interview.

5. Final Interview: Three members from the top-level and HR department will conduct

the final interview sequentially. Questions for this interview will not be pre-

determined and basically in this interview, candidate’s skills will be judged through

situational questions. Moreover, for the mid-level candidates, verbal communication

skills and smartness will also be a key factor.

6. Background Check: After the final interview, ASA conducts a background check

only for the selected mid-level candidates. No background check is done for field-

level candidates. The information that are checked is given below:

Whether the submitted certificates are correct or not. For the verification of

certificates, they do contact with the respective educational institution.

Permanent address and other relative information are confirmed by physical

verification.

7. Offering Appointment Letter: After the final interview, the selected field level

candidates are appointed by the District Manager. On the other hand, the mid-level

employees are appointed by the HR department of ASA.


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8. Training & Development: The selected candidates in both field level and mid-level

will be on the probation period for one year. Within this one year, the candidates will

be given training so that they can conduct their daily duties smoothly and also to

enhance their skills and practical knowledge. After one year, candidates with good

performance will become the permanent employees of ASA.

3.1.2 Top-Level Recruitment & Selection Process:

For top-level recruitment, ASA also relies on external sources. The recruitment and selection

procedure for top-level recruitment of ASA is given below:

1. Advertisement & Collection of CV’s: If there is any vacancy in top-level (such as

vacancy for Director HR), ASA gives advertisement in local newspapers as well as on

the website of ASA and in BD jobs. After the advertisement procedure, they collect

only the soft copies of the CV. After collecting all the CV’s within the deadline of the

advertisement, they move to the next phase.

2. CV Screening & Shortlisting Candidates: After collection of CV from the

interested candidates, the EVP of HR shortlists the CV’s of the candidates. Based on

the required skills, qualification and level of experience, the candidates are shortlisted

for the interview.

3. Interview: Three members from the top-level will conduct the final interview

sequentially. Questions for this interview will be based on the skills and level of

Advertisement & Collection of CV's

CV Screening & Shortlisting Candidates

InterviewOffering

Appointment Letter

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


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experience of the candidates. Mainly the leadership quality, verbal communication,

and knowledge about the related field will be judged in this interview.

4. Offering Appointment Letter: After the final interview, the proper candidate(s) will

be appointed by the EVP (HR) of ASA.

3.2 Compensation Policies:

3.2.1 Pay Scale or Salary Grade:


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In ASA, salary and remuneration of its employees are determined based on the pay scale or

salary grade of the organization. ASA provides salary and remuneration to its employees in

two (02) categories:

General Grade:

Grade Designation Scale of Pay

VII Jr. Assistant Director / HR Manager / Accounts

Manager / Finance Manager / Manager MIS / Audit

Manager / Computer System Manager / District

Manager

9,650-560-23,650

VIII District Manager / Accounts Officer / Finance Officer /

Audit Officer / Additional District Manager / Senior

Regional Manager / Field Auditor

8,600-515-18,900

IX District Manager / Accounts Officer / Finance Officer /

Audit Officer / Personnel Officer / Media Relation

Officer / Additional District Manager / Regional

Manager / Field Auditor

7450-475-16,950

X Junior Regional Manager / Senior Branch Manager 7,000-445-16,950

XI Branch Manager / Assistant Support Engineer 6,600-390-12,450

XII Assistant Branch Manager / Senior Loan Officer 5,250-355-10,575

XIII Loan Officer 4,800-335-9,825

XIV Loan Assistant 4,200-320-9,000

Supplementary Grade:

Grade Designation Scale of Pay

SG-I Driver / Store Assistant / Messenger 5,150-335-10,120

SG-II Messenger / Peon / Guard / Lift Operator 4,200-320-8,680

SG-III Peon / Guard / Junior Messenger 3,550-290-7,610

SG-IV Peon / Guard 3,000-265-6,710

SG-V Peon 2,100-205-4,970

3.2.2 Financial Compensations & Benefits:


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1. Salaries: Employees of every level can draw their monthly salaries from the 25th day

to the last day of the month according to ASA salary structure and conditions in the

appointment letter. Employees employed in the central office must open a savings

account in a bank selected by ASA and field-level employees will receive salary and

allowances in cash at the time stated above.

2. Allowances:

Housing Allowance: Within Dhaka City, all the employees will get 70% of

the basic pay as housing allowance. For all branches outside Dhaka, male

employees will get 60% and female employees will get 65% of the basic pay

as housing allowance.

Medical Allowance: 30% of the basic pay is given as medical allowance for

all the employees of ASA.

Transportation Allowance: All the employees of ASA receive 950 TK for

transportation with their basic pay.

Daily Allowance: All the employees of ASA receive a minimum 1,000 TK

(monthly) as a daily allowance with their basic pay. Daily allowance will

increase based on the pay grade of the employees.

Field & Conveyance Allowance: For every field visit, employees are given

allowance for their visit and for transportation based on their grade and

designation.

Travel on Official Business: Based on the pay grade of the employees, they

will receive allowance of their travel on hourly basis and all the travel

expenses will bear by ASA.

Accommodation Allowances: Employees will get middle class hotel rent for

staying at night and they will also get allowance on hourly basis because of

their field visit. The allowance structure is given below:

Grade Allowance (Per Hour)

VII TK. 280

VIII-X TK. 250

XI-XII TK. 210


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Other Grades TK. 180

3. Increment & Other Related Issues: All permanent employees are eligible to

receive a yearly increment. Yearly increment for probationary employees will be

effective on the date when they will be a permanent employee having a regular salary

structure. In case of promotion or demotion, the increment is added on the date when

they are permanent employees having regular salary structure. The number of yearly

increment depends on the pay grade of the employees and their performance.

4. Provident Fund Loan (PF Loan): All permanent employees can get a short-term

loan of their provident fund without interest based on their service year. The PF loan

is given based on this proportion:

Service Year(s) PF Loan Percentage

3 Years 50%

5 Years 70%

8 Years & Above 100%

5. Festival Bonus: All permanent employees will receive two festival bonuses in a

year. Generally, Muslim employees will get the festival allowance in Eid-ul-Fitr and

Eid-ul-Azha and employees from other religions will get one bonus in Eid-ul-Azha

and another on their respective festivals (Durga Puja, Christmas etc.). 100% of the

basic pay is given as festival bonus to all the employees of ASA.

6. Retirement Benefits:

Gratuity: All permanent employees will get the facility as gratuity as per his

or her last basic salary up to the service year including probationary period.

The amount will be the same amount of 1.5 times of the total month of

service as per last basic salary. Calculation of gratuity is given below:

Gratuity = Last Basic Salary * 1.5 / 365 Days * Total Working Days

(Excluding leave without pay)

Provident Fund: 1/10 of the basic salary is deducted from the monthly salary

for provident fund and ASA will also give the same amount as contribution in

the account named “Provident Fund Trust” at the end of each month.

Employees will get the full amount of the provident fund while retirement and


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if any employee leaves the organization, ASA will pay the amount up to that

month.

7. Insurance Facilities: Life insurance facility is available is ASA where if any

permanent or regular employee dies during job executing period, their heir of the

employee will get the insurance claim in the following manner:

Grade Insurance Claim

First to Third TK. 400,000

Forth-Seventh TK. 300,000

Eight to Last TK. 250,000

8. Staff Security: Each employee have to deposit a sum of money specified by ASA at

the time of the appointment. When the employee leaves the organization, the money

is refunded with interest.

3.2.3 Non-Financial Compensations & Benefits:

1. Medical Facilities: ASA will bear all the actual expenses in employees fall in

accidents for official work within the working area.

2. Housing Facility: Housing facility is also available in ASA where the permanent

employees with the service year of minimum 3 years become eligible for the housing

facility.

3.2.4 Leave:

1. Annual Leave: Employees who worked for at least 1 year in the organization will

enjoy a maximum 22 days in a calendar year.

2. Accident & Medical Leave: The district committee can approve 3 months leave with

pay based on the nature of the accident.

3. Maternity Leave: Women employees can enjoy maternity leave for maximum 2

times for a period of 4 months at each time. They can go for this kind of leave before

eight weeks of the expected delivery. They will receive their gross salary without field

allowance in this period.


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4. Special Leave: After the expiry of earned leave, if any employee requires leave

(except maternity and illness leave), the Chief Executive can approve maximum 6

days leave based on the situation.

Chapter: 04


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Positive Aspects of The HR Policies

Several positive aspects are there in the HR policies of ASA. Some of the main factors are

given below:

1. Proper Assessment of Candidates: Theoretical background of the candidates is

assessed through written test, past experience, knowledge of candidates about the

organization is measured through first interview and lastly through final interview, the

skills of the candidates are judged. So, we can see that, from this step by step

evaluation, they are getting the best candidates for the job. As a result, the reliability

of the candidate and the productivity of the organization are increasing.

2. Work Sample: For field-level candidates, ASA takes practical test, which means the

candidates have to perform a task based on the job description which increases the

efficiency of the candidates and effectiveness of the organization.

3. Advance Payment of Salary: ASA provides early payments of salaries to their

employees, which means employees can withdraw their current month’s salaries form

the 25th day of that month which motivates the employees to work more efficiently.

4. Home Recruitment Facility: After the selection in the field level, the candidates are

normally posted to their home district which allows the candidates to work closer to

their home environment and also they can be cost effective.

5. Transparency in Selection of Candidates: Before recruiting mid-level or field-level

employees, a committee consists of 3 members is created. All the information about

the selection procedure for field-level and mid-level recruiting will be disclosed to

these committee members. The committee members then inform the higher authority

about the selection progress and the higher authority takes the final decision at the

end.

Chapter: 05


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Recommendations

Despite of the positive aspects, ASA needs to improve in some areas. Some of the key factors

are given below:

1. Adjustments with Inflation Rate: ASA does not frequently change their salary

structure because of inflation, which makes the situation difficult for the employees to

meet their necessary needs with the existing salary. As a result, many of the

employees especially in the mid-level are shifting to other organizations. So to keep

their employees motivated to stay and work efficiently, ASA should adjust their

salary structure more frequently with the inflation rate.

2. Proper Salary: In many of the position in ASA, employees are not satisfied about

their salaries because the organization is paying less salary form what they deserve

and also from their competitors which another big reason that ASA’s turnover rate is

increasing in recent times. So, they need to focus on their salary structure to meet the

demands of their employees and also to reduce the turnover rate.

3. Proper Probationary Training: Organization is not updating their probationary

training with time. After selecting a candidate for a specific position, they are giving

the same type training as they used to give in the past for the same position. As a

result, the probationary training process is becoming obsolete and they are not able to

utilize the skills of the employees properly. So, they need to improve their

probationary training to bring out the skills of their employees.

4. Proper Knowledge among Recruiters: In field-level recruitment, recruiters are not

that much experienced and knowledgeable about the recruitment and selection

procedure. As a result, they are sometimes recruiting ineffective employees which are

reducing the effectiveness of the organization. So, organization should take initiative

to train those recruiters so that they can improve their knowledge and skills in

recruitment and selection process.

5. Decentralized Decision Making: While recruiting and selecting new employees, the

top-level authority takes all the decisions whether to take the candidates or not. To

increase the belongingness and to motivate the mid-level employees, the top-level

authority should include them in the decision making process.

Chapter: 06


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Conclusion

ASA is a microfinance institution and most of its human resources are involved in field based

operations. Here, in this term paper we have discussed on three of the HR activities:

Recruitment, Selection and Compensation. From the above discussion we have found out that

for all types of recruitment, ASA mostly relies on external sources. The procedure that they

follow in recruitment and selection are more or less effective for the organization. Their

modern ways of advertisements of vacancies, screening of CV’s, interviewing, written test

and background checking helps the organization to be safe from deceiving. All these policies

help them to find out the best employees, so as to appoint and give training in a cost effective

way. In terms of compensation in ASA, salary and remuneration of its employees are

determined based on the pay scale or pay grade of the organization. They ensure that

compensation and benefits are fair, consistent and beneficial for all employees. Employee’s

health and safety are designed and implemented in the programs. After analyzing the whole

process, though they are maintaining a standard process but still some of drawbacks are

found. If the organization works on the limitations that we have mentioned, they can be more

productive, efficient and effective.

References


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ASA. (n.d.). Retrieved from ASA: http://asa.org.bd/?page_id=25

ASA. (2007). ASA Manual.

ASA. (2009). ASA Manual.

ASA. (2010). Annual Report.

ASA. (2011). Annual Report.

Retrieved from Wikipedia:

http://en.wikipedia.org/wiki/Association_for_Social_Advancement

hr policies of asa ngo

Documents

microfinance of asa

problems of asa

asa manual

renowned asa

human resource policies

hr manager of asa

hrm activities of asa

annual report of asa