Thesis Report

On
Compensation Management practice of garments industries in
Bangladesh

Submitted By
Tasnim Karim
ID: 18192201015
Program: MBA
Intake: 45
Bangladesh University of Business and Technology (BUBT)

Supervised by
Mrs. Farhana Islam
Assistant Professor
Department of Management
Bangladesh University of Business and Technology (BUBT)

Date of Submission: July 30, 2021

 Student‘s Declaration

I am Tasnim Karim, student of MBA program, Bangladesh University of Business and

Technology (BUBT), hereby declare that the report is prepared under the intensive supervision
and guidance of Mrs. Farhana Islam, Assistant Professor, Department of Management,
Bangladesh University of Business and Technology (BUBT) after completing all course in MBA
program.

I declare that this report is my original work of my experience and prepare for academic purpose
which is a part of MBA program. I have attempted to identify all the risks related to this research
that may arise in conducting this research, obtained the relevant ethical and/or safety approval
(where applicable), and acknowledged my obligations and the rights of the participants.

…………………………………..

Tasnim Karim
ID: 18192201015
Intake: 45
Program: MBA
Bangladesh University of Business & Technology (BUBT)

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 Supervisor’s Certificate

I hereby declare that the concerned report on “Compensation Management practice of garments
industries in Bangladesh” done by Tasnim Karim, Id No. 18192201015, under my supervision as
partial fulfillment of requirement of MBA program.

She has done her job according to my supervision and guidance. She has tried her level best to
do this report successfully. I think this program will help her in upcoming future to build up her
career. I wish her success and prosperity.

--------------------------

Mrs. Farhana Islam

Assistant Professor
Department of Management

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Bangladesh University of Business and Technology (BUBT)

Acknowledgement

For making an internship report a sincere supervision and guidance of expert and experienced
professionals are required. I have received sincere co-operation, valuable suggestions,
professions, and references from my respected Teachers. First of all, I express my profound
gratitude to my honorable supervisor Mrs. Farhana Islam, Assistant Professor and Chairman of
Department of Management, Bangladesh University of Business and Technology (BUBT) for
providing his important instructions, proper suggestions and corrections for improvement.

My deepest gratitude goes to Almighty God for giving me courage and ability to complete this
task.

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 Abstract

Compensation is one the most important functions of human resource management (HRM). The
present study aimed at exploring differences between the public and private sector industrial
enterprises of Bangladesh with respect to overall status of compensation practices. Data collected
from twenty six public and thirty four private sector industrial enterprises show that the overall
status of compensation practices of the private sector industrial enterprises is significantly better
than that of the public sector industrial enterprises. Some implications are also offered for overall
improvement of the compensation practices of the public and private sector industrial enterprises
of Bangladesh. The Readymade Garments (RMG) industry of Bangladesh has been the key export
industry and a main source of foreign exchange for the last 25 years. The sector rapidly became important
in terms of employment, foreign exchange earnings and its contribution to the national economy.
Currently the industry provides employment to about 3 million workers of whom 90% are women (EPB,
2007; BB Report, 2008). They are vulnerable to losing their jobs at any time. Garments workers are
embarrassed with their salary, overtime payment, increment, medical allowance and gender
discrimination. Long working hours without leave with breaks and compulsory overtime are common
problems in this sector. Workers can be fired for refusing overtime. The level of wages is the most
significant source of dissatisfaction for workers in the RMG industry. RMG owner often deny that they
have the power to improve the wages or conditions of workers. Without full payment or being paid on
time, worker often worry and are anxious about the future. This results in low work productivity and job
dissatisfaction (Morshed, 2007). On the other hand, prospects of promotion in the RMG industry of
Bangladesh are rare. The research suggests that there are many benefits from the introduction of modern
HR and IR activities through the establishment of HRM or personnel management unit in the RMG
sector. The government needs to pay much more attention to monitoring compliance. A modified Code of
Conduct and an effective Compliance Monitoring Cell (CMC) are also requir

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 Table of Contents
Particulars Page No
Declaration i
Certificate of Supervisor ii
Acknowledgement iii
Abstract iv
1.0 Introduction 02
1.1 History of RMG Sector in Bangladesh 02
1.2 Present Situation of RMG Sector in Bangladesh 03
1.3 Contribution of RMG Sector to the National Economy 03-04
1.4 The opportunity of RMG Sector in Bangladesh 04-05
1.5 Challenges for RMG Sector of Bangladesh 05
1.6 Hoping for RMG Sector of Bangladesh 05-06
2.0 Objective of the study 06
2.1 Broad objective 06
2.2 Specific Objective 06-07
3.0 THEORITICAL ASPECTS 07-08
3.1 Compensation System Component 08-12
4.0 Methodology of the report 12-14
4.1 Limitations of the report 14
5. Analysis 14
5.0 Basic salary structure of Garments factories 14-15
5.1 Convenience 15-16
5.2 List of all allowance, incentives and other benefits 17
5.3 Leave facility 18
5.4 definitions of basic leave entitlements 18-20
5.5 Employees’ opinion about overtime 20
5.6 The garments factories are not free from gender discrimination 20-21
6.0 Findings of the study 22
7.0 Recommendations 23
8.0 Conclusion 23
9.0 Reference 24

1.0 Introduction: Bangladesh, the southern Asian country has a population of approximately
164 million people. The economy of Bangladesh is significantly dependent on agriculture.
But its great news for the country that, garments sector (RMG) sector of Bangladesh has

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raised as the biggest earner of foreign currency. This sector creates about 4.2 million
employment opportunities and contributes significantly to the GDP. Readymade garments
(RMG) of Bangladesh are powered by young, urbanizing, workers, where most of them are
women.

1.1 History of RMG Sector in Bangladesh:

The foundation of the textile sector was first established in the 60th decade of the 19th
century. For the first time, the industry exported shirts (Mercury shirts) to the European
market in 1965-66, which was produced from Karachi. In the latter, 9 exporting industries
were available in 1977-78. The three largest industries at that time were Riaz Garments,
Jewel Garments, and Paris Garments. Among those, Riaz Garments was the most famous and
oldest industry at that time.

In the earlier stage, Riaz Garments of Mohammad Reaz Uddin started its business with some
tailoring shop in the name of Riaz store. Later, the name turned into Riaz Garments from
Riaz store in 1973, and from 1978 the company started exporting products in the abroad by
exporting 1 million pieces of shirts in the South Korean Company named “Olanda”. “Desh
Garments” is another pioneer of the Bangladesh RMG sector. In 1979, Desh Garments started
a joint project with the South Korean company “Daiyuu”.

At the same time, several garments were introduced such as-Stylecraft limited by Shamsur
Rahman, Aristocraft Limited by AM Subid Ali, Azim Group by Engineer Mohammad Fazlul
Azim, and Sunman Group by Major (Retd) Abdul Mannan.

By following the beginners of the RMG sector, some other discreet and hard-working
entrepreneurs started their RMG business in the country. From there, the RMG sector of
Bangladesh was developing day by day and not needed to look back. Though this sector had
passed various critical stages through the path. In that time, we learned about child labor in
1994, and in 1995 we made our garments industry free from child labor very successfully.

1.2 Present Situation of RMG Sector in Bangladesh:

The quota system was a great blessing for establishing our garments industry. We were
strongly benefited from using that. As a result, we can see a matured garments industry today.
But while the quota system was approaching an end in 2004, there are so many who got upset

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about the RMG sector of Bangladesh. Though in the latter it can’t be affected here as the
experts seemed. We conquered the post-quota challenges and made that a successful story.

In the RMG sector of Bangladesh, there are more than 5000 garment factories (private
statistics) at the current time, employing more than 12 lack laborers, where 85% of the labor
force is women. But, according to BGMEA the number of garment factories in Bangladesh
around 4000. Now, the RMG industry is the country’s largest export earner with a value of
over $24.49bn of exports in the last financial year. It’s great news for us that Bangladesh is
clearly ahead of other South Asian suppliers in terms of the capacity of the ready-made
garments industry.

Though, there are various types of garments are manufactured in Bangladesh, but all the
ready-made garments are classified into two broad categories, where one is woven products
and another one is knitted products. Woven products include Shirts, Pants, and Trousers. On
the other hand, the knitted product includes T-Shirts, Polo Shirts, Undergarments, Socks,
Stockings, and Sweaters. Woven garments still dominate the export earnings of the country.
From the BGMEA website, it’s seen that Day by day knitted items production is increasing at
a considerable rate and now about 40% export earnings have been achieved from knitted
products.

1.3 Contribution of RMG Sector to the National Economy:

The role RMG sector in Bangladesh’s economy is remarkable. It’s seen that, from the last
decade, the RMG sector contributes to the national economy at a considerable rate. About
76% of the total export earnings come from the RMG sector. From statistics, it’s known that
in FY 2003-04 RMG sector of Bangladesh earned US$ 5,686.06 million, in FY 2004-05 the
value was US$ 6,417.67.67 million, in FY 2005-06 the value was US$ 7900.80 million, in
FY

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2006-07 the value was US$ 9,211.23 million, in FY 2007-08 the value was US$ 10,699.80
million, in FY 2008-09 the value was US$ 12.35 billion and finally in FY 2013-14 the value
stands at $24.49billion.

1.4 The opportunity of RMG Sector in Bangladesh:

RMG sector of Bangladesh has some key factors which inspired the steady growth of this
sector. Though it’s a matter of great surprise for so many that how the RMG sector of
Bangladesh continues to show its robust performance in the world.

The main key factors which have a great influence on the RMG sector of Bangladesh
are the following:
1. Vast labor force,
2. Skilled human resources,

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 3. Technological upgrades,
4. Government supports for textile and clothing,
5. Special economic/export processing zones,
6. Creation of textile and clothing villages,
7. The incentive for use of local inputs,
8. Duty reduction for the import of inputs/machines,
9. Income tax reduction,
10. And international supports like GSP, GSP+, duty-free access, etc.

1.5 Challenges for RMG Sector of Bangladesh:

Though the RMG sector of Bangladesh has achieved the second spot for the highest number
of garments exporter, it has a lot of problems. The major problems faced by the RMG sector
currently is the lack of safety in working place and working conditions for the millions of
garment workers. It’s become a great challenge for the upcoming fiscal year of Bangladesh.
Another important one is political stability.

Two major incidents in the RMG sector of Bangladesh are the Tazreen fire and the Rana
Plaza collapse, which have brought the issue of workplace safety to the fore and led all
stakeholders to act accordingly. But it’s good news for the RMG sector that, following the
unfortunate incidents, various platforms such as the Bangladesh Accord on Fire and Building
Safety, the Alliance for Bangladesh Worker Safety, and the National Plan of Action have
been formed to improve building and fire safety of Bangladesh’s garment industry. Also,
BGMEA and BKMEA are working together here to solve such kinds of problems. They have
also taken necessary actions and invested a huge amount of money.

It’s a huge responsibility for the government of Bangladesh to ensure working place safety in
all the garments manufacturing factories. If we can’t do it, foreign buyers will refuse to place
orders here, which will be a massive blow for the RMG sector of Bangladesh. We hope, the
government of Bangladesh, BGMEA, and BKMEA, with the support of global brands and
international development partners, will be able to ensure the safety of the RMG industry and
maintain the momentum of socio-economic development in the country.

Political stability creates a negative impact on the RMG sector of Bangladesh. If it continues,
it will be a massive blow to destroy our most valuable sector. So, political leaders should
come out immediately to solve such kinds of problems.

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1.6 Hoping for RMG Sector of Bangladesh:
According to the McKinsey survey, it’s seen that 86 percent of the chief purchasing officers
in leading apparel companies in Europe and the United States planned to decrease levels of
sourcing in China over the next five years because of declining profit margins and capacity
constraints.

Also, they said in that survey, “Western buyers are evaluating a considerable number of
sourcing options in the Far East and Southeast Asia, many chief purchasing officers said in
the survey that they view Bangladesh as the next hot spot”. Many chief purchasing officers
mentioned Bangladesh as the hot spot in the readymade garments market. Garments are the
country’s most important industrial sector; which represents 13% and more than 75% of GDP
and total exports, respectively. McKinsey forecasts, export-value growth of 7 to 9% annually
within the next ten years, so the McKinsey survey also reported that, with about $15 billion in
exports in 2010, ready-made market will double by 2015 and nearly triple by 2020.

2.0. Objective of the study:

There are two objectives of this study. They are given bellow-

2.1. Broad objective: The broad objective of this study id to know about the
compensation management practice of garments industries in Bangladesh.

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 2.2. Specific Objective: there are some specific objectives. They are as follows:

 To know about the employee’s basic salary of the organization.

 To know about the employee’s overtime payment of the
organization.
 To know about the employee’s increment payment of the
organization.
 To know about the employee’s medial allowance of the
organization.
 To know about the employee’s conveyance facilities of the
organization.
 To know about the employee’s insurance facilities of the
organization.
 To know about the condition of male and female worker in the
organization.
 To know about the organization’s festival bonus.

3.0. THEORITICAL ASPECTS:

A. The impact of Compensation management : Compensation management provides a

step-by-step approaches for designing a remuneration system that recognize job
requirements, employee related knowledge and skills, performance related incentives that
link individual, team, work unit, and organization performance.

According to Richard I. Henderson,

“Compensation management is the process by which the authority of the organization

provides some financial and non- financial benefits to the employees for their contribution”.

Financial compensation:
The organization provides the financial facilities to the employees for doing their job in the
organization. Financial compensation includes the followings:

 Salary.

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  Wages.
 Incentives.
 Fringe benefits.
 Dearness allowance.
 Medical allowance.
 House rent allowance.
 Gratuity.
 Retirement benefits.

Non-financial compensation:

Besides financial compensation, the organization also provides non-financial compensation to

the employees for attracting and performing their jobs in the organization. Non-financial
compensation includes the following:

 Dignity.
 Recognition.
 Working condition.
 Social status.
 Achievement.

3.1. Compensation System Component

Compensation
System

Indirect Direct
Compensation Compensation

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 Basic Pay Merit Pay

Salary Wage

Protection Pay for time not Services and Incentive Pay: Deferred Pay:
Programs: worked: perquisites:  Bonus  Savings
 Medical  Vacation  Recreation  Commission  Stock
Insurance  Holiday Facilities  Price rate Purchase
 Life  Sick  Car  Profit  Annuity
Insurance Leave  Financial sharing
 Disability Planning  Stock option
Income  Low cost  Shift
 Pension or free differential
 Social meals
Security

B.Pay dissatiscation:

When employees are not satisfied with the compensation package, pay dissatisfaction arises.
The pay dissatisfaction has manifold effects on employees. The desire for more pay may
lower performance, increase grievances, cause stress, compel employees to search for new
jobs resulting in loss of time and so on. These are stated below:

Desire for more pay:

 Performance.
 Strikes.
 Grievances.

Search for higher paying jobs:

 Absenteeism.
 Turnover.

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  Low Performance.

Pay dissatisfaction:

 Job dissatisfaction.
 Turnover.
 Absenteeism.
 Psychological withdrawal.
 Poor mental health.

C. Government Regulations
In order to protect the working class from wage exploitation by strong employers, the
government enacts various laws an judicial decisions. Such laws and regulations affect on
employees satisfaction. Because, they emphasize on minimum wage rate, overtime rate,
working hours, equal pay for equal work, payment of bonus, etc. So, an organization has to
design its pay system as per the government rules and regulations.

D. Equity Considerations
Equity considerations hold the philosophy that the compensation system should be fair and
equitable. It means the compensation system should be similar for the same type of work
within the organization. Similarly, it should be fair relative to what other people get for the
similar job in another organization. It is important because any imbalance between what the
employees contribute and what they obtain as return would lead to greater job dissatisfaction,
employee turnover and absenteeism.
E. Union Pressure
Labor unions are pressure groups that work in the interest of the workers. These organized
unions can ensure better wages for employees and the rules were unfair it makes them
dissatisfy.

F. Job Analysis and Evaluation Report

Job analysis is a method through which necessary information about the contents and the
contexts of the job is made available to determine the value of each job. The job evaluation is
a process of determining the value/worth of a job so that a payment system can be specified.
Job analysis and job evaluation determine the relative worth of job which ultimately assist for
the organization. Hence, the evaluation is not fair it makes them dissatisfy.

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G. Cost Of Living
The payment should be adequate to maintain the cost of living of the employees. Hence, the
employer should manage it by viewing the cost of living of each individual.

H. Hazardous working conditions

In certain jobs, workers are expected to perform tasks under dangerous working conditions.
Dangerous working conditions can be defined to include anything from handling dangerous
chemicals in a research facility to walking a police beat in a dangerous section of town.
I. Employee turnover 
Actual Turnover Stages Employee actual turnover is a serious workplace phenomenon. It is
not an instantaneous, but a gradual deliberate process. According to Mobley (1982), this
process is arguably, of seven steps,

1) Job dissatisfaction provoking thoughts of turnover.

2) Evaluating the merits of looking for and getting a new job.
3) Considering the cost of actual turnover.
4) Actual search for a new job opening.
5) Evaluating the acceptability of a new job.
6) Making comparison between current and alternative job positions.
7) A strong intention to effect actual turnover.
Turnover intention, translates into actual turnover. These seven distinct stages, which
generate actual turnover among employees in the workplace. This originates from job
dissatisfaction, when an employee is not happy with his job for whatever reason.
Certain merits to be gained from searching for a new job opening are considered. The
opportunity cost of wanting to change the present job is given adequate consideration.
Eventually, searching for alternative job and the rationale for so doing is also thought
of cautiously. Then the reasonableness of actual turnover is arguably achieved via
comparisons between the current job and alternative job openings, for “a bird at hand
is worth two in the bush”. At this point, the employee may decide on actual turnover,
thus turnover intention eventually, gives birth to actual turnover nature in the form of
gossiping, spreading rumors and social exclusion. Employees exposed to bullying
behavior, develop interpersonal conflicts, role conflicts and role ambiguity. All these

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 will eventually precipitate bullying behavior among the workers. The victims of these
behaviors suffer consequences and the organization is worse off in terms of employee
turnover and turnover costs. Exposure to workplace bullying, coupled with an
unpleasant organizational climate would have detrimental consequences on affected
individuals.
Based on this backdrop, we therefore hypothesize the following relationship:

 The positive relationship between job dissatisfaction and turnover intention Is

enhanced (stronger), particularly among employees who work under
discouraging organizational climate.
 The positive relationship between workplace bullying and turnover intention
is enhanced (stronger), particularly among employees who work under
discouraging organizational climate.

J. Impact of Having Workplace Policies:

 Provide employees with awareness regarding expectations, ex: behaviour,

performance standards, etc.

 Providing clear response across the organization when dealing with situations.

 Provides rules for better decision making.

 Employees will be treated without any bias.

 Gives communication information to new employees.

 A perfect method to deal with complaints and other issues.

 Deliver a clear framework for decision-making delegation.

 Being defensive against employer obligations.

4.0 Methodology of the report:

Methods appropriately selected and followed to perform a job or conduct activities to
complete a task is called methodology. There is an extensive literature on the RMG industry
in Bangladesh. Key features of the industry are that the garments workers are grossly

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illiterate; they have very limited knowledge of human rights, working conditions and labor
standards. Most of the garments factories owners maintain good links with political parties
and maintain a regimented environment in the factory through an alliance between the police
force and their own security personnel. In most cases, researchers were prevented from
visiting the factory to monitor the working conditions. Consequently the research technique
has relied on secondary data, collected through Literature review, Case studies in other
countries, Journals, Research articles, Thesis papers, Newspapers, Online news and survey
reports, Garments Manufacturing Industries Annual reports, BGMEA Yearly report and Files
and Focus group discussions. Apparently secondary data often runs the risk of being
journalistic with the potential of being superficial and can be difficult to analyze. However,
the research attempts to provide an insight into condition in the industry that avoids this
difficulty. In conducting this study the following methodology was adopted in collecting data
and information, preparing of reports, interpreting the results etc. The methodology of report
is given below.

Research Type: This is a Descriptive research. The report has been developed based on
secondary data.

Sampling Design:

Target Population: The target population is the collection of elements or objects that
possess the information sought by the researcher and about which inferences are to be
made.

Element: This is the object about which or from which the information is desired. In
survey research, element is usually the respondent. In this perspective, employees of
garments at are the elements.

Extent: This refers to the geographical boundary or location of the respondents.

Sampling Frame: This is the actual list of elements of the population from which the
sample or some stages of the sample is selected. In this case, list of employees of the
garments was articulated in order to make sample.

Sampling Technique: Non-probability convenience sampling technique has been used to

make for this study.

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Data Collection Methods:

To prepare this report all the necessary information were collected from

Secondary sources.

Secondary Source of data

 Annual Report.
 Different text books.
 Various report and articles related to study.
 Different Books, journals, Periodicals, News papers.
 Web base support from the internet.

Data Analysis and Reporting:

For this research the following tools and techniques have been used-Microsoft Word,
Microsoft Excel, Microsoft PowerPoint. Frequency distribution and SWOT technique were
used to interpret data.

4.1. Limitations of the report:

Analyzing the total factors of employee’s dissatisfaction of an organization is not so easy.
Moreover due to obvious reasons of scrutiny and confidentiality, the organization personnel
usually don’t want to disclose all the information. Time is another major limitation, where the
duration of the program was 12 week only. I have tried our level best to make this case study
as perfect as possible; still there are some limitations-
However some of the limitations faced while preparing this report are shown below:

Time Limitation: To complete the study, time was limited by three months. It was really
very short time to know details about the employee’s dissatisfaction of an organization.

Lack of Record: Unavailability of sufficient written documents as required for making a

comprehensive study. In many cases up to date information was not available.

Lack of Experiences: It was not possible on my part to express some of the sensitive issues
as it requires for lack of experiences.

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5. Analysis:

5.0. Basic salary structure of Garments factories:

SL DESIGNATION BASIC SALAY

1 Managing director 142071

2 Vice chairman 106429

3 Head of production 59928

4 GM 49214

5 AGM 45642

6 Cutting manager 42071

7 Swing manager 42071

8 Quality manager 42071

9 Finishing manager 38500

10 Project manager 34928

11 Assistant manager 34928

12 Civil engineer 34928

13 Deputy manager 31357

14 Architecture 27785

15 IT 27785

16 HR & compliance 24214

17 Medical officer 20643

18 Admin officer 20643

19 HR assistant 19214

20 Welfare officer 17071

5.1. Convenience:

SL Designation House rent Medical Convenience

allowance

1 Managing 40% 5% 5%
director

2 Vice chairman 40% 5% 5%

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 3 Head of 40% 5%
production

4 GM 40% 5% 5%

5 AGM 40% 5% 5%

6 Cutting manager 40% 5% 5%

7 Swing manager 40% 5% 5%

8 Quality manager 40% 5% 5%

9 Finishing 40% 5% 5%
manager

10 Project manager 40% 5% 5%

11 Civil engineer 40% 5% 5%

12 Assistant manager 40% 5% 5%

13 Deputy manager 40% 5% 5%

14 Architecture 40% 5% 5%

15 IT 40% 5% 5%

16 HR & compliance 40% 5% 5%

17 Medical officer 40% 5% 5%

18 Admin officer 40% 5% 5%

19 HR assistant 40% 5% 5%

20 Welfare officer 40% 5% 5%

5.2. List of all allowance, incentives and other benefits:

Allowance Incentives/Benefits

 House Rent allowance  Yearly:

 Medical allowance  Leave fare
 Conveyance allowance  Two festival bonuses

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  Annual increment  Performance bonus
 Long term:
 Gratuity
 Insurance benefit
 Medical benefit

Table: 5.2. List of all allowance, incentives and other benefits

 Employees Allowance:

For the purpose of report that is explanation given below-

House rent allowance: RMG sctors Provide 40% of house rent allowance every employee
and that cannot be very their Designation.

Medical Allowance: A fixed amount of medical allowance is allocated. Amount of medical

allowance are 35% of their basic salary for all level employees.

Conveyance Allowance: All employees of garments sector provided convenience allowance

3% of basic for their employee.
Annual increment: All confirmed staffs get increment each and every year based on their
level. And their increment level is 8%.

5.3. Leave facility:

Leave benefits: RMG maintains the leave facilities for their employees following calendar of
the year. Also other leave facilities are maintained here:

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 Types of leave Day of leave

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 Casual Leave(with full wages) 10 days

Earn Leave 18 days

Maternity Leave 16 weeks

Sick Leave 14 days

Festival Leave 11 days

Table: 5.3. Leave facility.

5.4 definitions of basic leave

entitlements:

Casual Leave

Entitlement to casual leave for the employees, it is 10 days based on each

calendar year. The employee is entitled to exercise Casual Leave from the very
next day of joining; though the Casual Leave is pro-rated for the balance period
of the year counting from the joining date.
Casual Leave can be taken with Weekends, Public Holidays, Earned Leaves, etc.
but be limited to only 3 days.

Sick Leave

Entitlement to Sick Leave for the employees. it is 14 days on the basis of each
calendar year. The employee is eligible to exercise the Sick Leave benefit from
the date of his/her joining. The above entitlements represent the maximum
number of days Sick Leave that an employee can avail in a year. If an
employee is sick on Weekend or on a Public Holiday, that day will not be
counted as a sick day and the number of Sick Leave taken out of his/her
allocated days will be excluding those days.

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 Earned

Entitlement to Earned Leave for the employees is 18 days on the basis of each
completed year of service. The entitlement to Earned Leave is exclusive of
Weekends and Public Holidays i.e., Weekends and Public Holidays falling
during the annual leave taken will be considered additional to the entitlement.
Though Earned Leave is counted from the date of joining but it cannot be
taken until the employee passes the probationary period receiving confirmation.

Maternity Leave

Married woman employees are entitled to Maternity Leave benefit as per "The
Maternity Benefit Act, 1939". The period of Maternity Leave shall be 84 actual
days of absence which shall include the Public Holidays and Weekends (non-
working days) and including the day of delivery. The entitlement to maternity
leave is to be availed as follows:

Six weeks or 42 days immediately preceding and including the day of delivery
Six weeks or 42 days immediately following the day of delivery.
A woman shall not be entitled to maternity leave unless she has been
employed by the organization for a period of not less than nine months
immediately preceding the date of delivery.

Leave Encashment

Executives before leaving the organization due to resignation, retirement or

termination are allowed to cash the Earned and Compensatory Leave due to them
up to a maximum of 30 days, while for workers it is 20 days plus the prorated
entitlement for the current year. The amount paid on encashment includes only the
employee's last drawn basic salary for the period. Allowances are not included in
this amount.

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5.5. Employees’ opinion about overtime:
Overtime is a source of dissatisfaction for worker but not always for the same
reason. Workers motivation for favoring overtime is financial, since substantial
overtime of doubles rates means substantial additions to wages. Overtime payment
represents an important, routinely expected compound of earnings, and workers
add of this. Without full payment or being paid on time, worker often worry and
are anxious about the future. This results in low work productivity and job
dissatisfaction. In the RMG sector, workers never receive their payment regularly
and late payment is common. Payments are delayed routinely by two or three
months or more, sometimes held back deliberately to ensure that workers do not
leave, or because employers themselves face delays in payment from buyers.
Irregular wage payment is a violation of the Labor Law, 1965 which provides that
wages in a factory employing less than one thousand persons is to be paid within
seven days after the expiry of the wage period. While employers are no legally
obliged to pay monthly wages on the same day each month, there is a legal limit to
delays in payment, which many employers violate regularly in the RMG sector.
Usually most of the factories do not provide any pay slip. The factories, which
provide pay slips, don’t have transparency. It is not uncommon for garments
workers.

5.6. The garments factories are not free from gender discrimination:

Discrimination in the workplace is illegal but the wage gap between genders and other groups
is a persistent problem. Fair wages and equal remuneration for work of equal value without
distinction of any kind, in particular women being guaranteed conditions of work not inferior
to those enjoyed by men, with equal pay for equal work under the Universal Declaration of
Human Rights. The ILO adopted two conventions that are now listed among the eight core
Conventions, Convention No. 100 (1951) on equal remuneration and Convention No. 111
(1958) on non-discrimination in employment and occupation (ILO and BGMEA, 2003; ILO-
NATLEX, 2005). Despite the fact that Bangladesh has ratified ILO Core Labor Conventions
100 and 111 and that the national law prohibits certain forms of discrimination based on
gender, the enforcement of these legal instruments is very weak (ILO, 2004). Legal
provisions demonstrate specific rules for employment such as women shall have equal rights
with men in all spheres of the state and public life. The Act provides for the payment of equal
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remuneration to men and women workers and for the prevention of discrimination, on the
ground of sex, against women in the matter of employment and for matters connected
therewith or incidental thereto (Ali, 2003). In general, the level of wages in the RMG sector
is low for both males and females. Low wages go a long way in illuminating the
attractiveness of Bangladesh readymade garments to foreign buyers. Mostly abundant cheap
labor and its low opportunity cost lead to low wage levels, providing a comparative
advantage to female labor in particular operations in the RMG production sector. In the
(irrespective of his or her designation and functions, who draws salary less than taka 9000 per
month is deemed a worker under the Act)
RMG sector female workers are considered low skill, workers.
Gender differentials in garments industry
Categories of workers Male wage TK/pm Female wage TK/pm
Operator 2254 1536
Cutting Master 3935 -
Ironer 1894 1106
Sewing helper 1200 762
Cutting helper 1512 837
Finishing helper 1209 1023
Folder 1528 1157
The table 5.6 shows the differential in wages between female workers and their male
counterparts in the garments sector.

6.0 Findings of the study:

1. Employees are dissatisfied with their organization’s basic salary.

2. Employees are dissatisfied with their organization’s overtime payment.

3. Employees are dissatisfied with their organization’s increment.

4. Employees are dissatisfied with their organization’s medical allowance.

5. Employees are satisfied with their organization’s conveyance facilities.

6. Employees are satisfied with their organization’s insurance facilities.

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7. Employees are dissatisfied because they are discriminated.

8. Employees are satisfied with their organization’s house rent allowance.

9. Employees are satisfied with their organization’s festival bonus.

7.0 Recommendations:

If the works get proper opportunity in the organization, it should be motivated them to do work and
encourage them to give their best effort.

By analyzing I got some problems. To overcome the problems following measures may be takes:

1. Employees of the organization do not get proper basic salary and overtime, which produces a large
dissatisfaction. It is recommended here that the organization should shoulder the responsibility of
given proper basic salary & overtime at the right time base on their performance & woks
responsibility.
2. Medical allowance is found as inadequate. Particularly, the amount of allowance is predetermined
and encouraged to keep low. It makes an embarrassment for employees. A sufficient amount should
be providing for each employee.
3. The employees of the organization do not get sufficient increment to their desire. So it makes them
dissatisfied. So the organization should increase their increment .

4. The organization does not consider an employee as male or female. The employer should
think that they are asset for the organization and evaluate them based on their quality & job
responsibility. The organization should be free from gender discrimination.
8.0 Conclusion:
Standard salary, right time overtime payment, increment, medical allowance and respect for
equality can change into better and more satisfied workers and a lower turnover of staff. In
the RMG sector workers constantly feel that they have been largely deprived of the rights and
benefits in the existing labor laws, especially the rights and benefits related to issue of
appointment letters, job security, and working hours. The reasons is that most of the garment
factories do not practices HR and IR issues and have no well-defined HR or Personnel unit.
In the RMG sector, workers are controlled by a work supervisor who works on behalf of the
factory owner. But the typical work supervisor has no training in leadership, human resource
policies, law and legislation, and health and safety policies (Ahamed F., 2011). The human

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resources or personnel managers are adequately qualified and handle the issues professionally
and efficiently. Therefore the research suggests that the RMG sector would benefit by the
introduction of modern HR and IR activities through the establishment of HRM or personnel
management functions unit in the industry. As a powerful stakeholder, the Bangladesh
government can put pressure on garment manufacturing enterprises for the improvement of
working conditions through best practice of HRM and IR activities. For example, in 1980 the
New Zealand Government introduced an ordinance for reform of public sectors employees
called Good Employer Obligation. This provided a mandate for all public sector employers to
develop and implement policies aimed at promoting best practice HRM practices in the four
functional areas of health and safety, training and development, equal employment
opportunity (EEO), and recruitment and selection under section of 56 and subsection 2, the
State Sector Act 1988 (Edgar, Fiona, Geare and Alan, 2007). In fact, the infrastructure of
Bangladesh RMG sector is poor due to a lack of financial support as well as government and
policymaker’s inadequate attention to this sector. Assuring job satisfaction, over the long-
term, requires careful planning and effort both by management and by workers. Therefore,
the government, international community and stakeholder should work in synergy in
improving working conditions in the RMG sector with the establishment of a HRM unit or
Personnel Management unit in each RMG industries.

9. References:

Text book:

 Izabela,R. 2006. Human Resource Management in Organizations. Chartered

Institute of Personnel & Development.

 Henderson,R. I. 2005. Compensation Management in a Knowledge Based

World.Pearson Prentice Hall.

 Kothari,C. R., and G. Garg. 2013. Research Methodology: Methods and

Techniques.NEW AGE.

Website:

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 Web-1:http://www.studymode.com/essays/Document-533090.html

Web-2: Definitions: Wikipedia.com

Web-3: Definitions: Investopedia.com

Web-4: https://en.wikipedia.org/wiki/Textile_industry_in_Bangladesh

Web-5: https://www.dhakatribune.com/

Web-6: https://www.mckinsey.com/

Web-7: https://textilelearner.net/

Web-8: https://www.textiletoday.com.bd/

Web-9: https://www.bgmea.com.bd/

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