Human Resources Development in Islamic Banks

The Islamic Banks have their own human resources consisting of recruitment, placement, promotion, transfer, and termination. The components of the Personnel Policy are discussed below.

Recruitment

Islamic Banks assess their needs for manpower recruitment with the company’s organizational goals. Open positions are advertised the National Dailies. The advertisement mainly provides a description of the positions, scale of pay, age, nationality, educational qualifications, experience and other terms and conditions of the application and service. Current employees may apply to fulfill the advertised open positions. In terms of age of a candidate, normally he shall not be less than twenty years and more than thirty years of age at the time of appointment by direct recruitment as an officer, and not less than eighteen years and more than thirty years of age at the time of appointment by direct recruitment, as an employee other than an officer in the service of the banks. However, in special cases, the employer can relax the upper age limit for reasons to be recorded in writing. In terms of nationality, Islamic banks do not appoint any person to any post unless he is a citizen of Bangladesh. Physical fitness is another important factor in the recruitment of personnel at a bank. Thus an applicant must be declared physically fit by the Medical Officer of the bank or some other Medical Authority specified by the bank on their behalf.

Placement:

Positions may be filled by direct recruitment or by the promotion of an existing employee. Prior to starting in a new position, a new employee must fulfill the terms and conditions stipulated in the appointment letter he receives notifying him of the offer.

Promotion:

Islamic banks may consider promoting an employee according to his merit based upon the total marks obtained on his Annual Confidential Report (ACR). The ACR keeps track of an employee’s academic qualifications, professional qualifications, training, seniority in the feeder grade, adverse service record in the feeder grade, promotion examination (viva-voce or written test or both). In the event two candidates have the same quality marks, seniority may be used as a determining factor. Seniority is calculated by years of service with fractions of the year being calculated on a pro rata basis rounding towards the nearest whole number.

Transfer:

An employee may be transferred between locations or job classifications as per the order of the competent authority. Normally an employee must be in a position for at least three years prior to being transferred. Transfers result in new challenges, environment and employee relationships revigorate an employees interest in his work.

Dismissal:

Islamic banks may dismiss the service of an employee at any time once he has been given at least one month’s written notice. As an alternative, an employee can be terminated immediately if the bank chooses to make payment equal to one- month's salary in lieu of giving such notice. In addition, the employee may not be entitled to any form of compensation for termination of service. The duration of such notice depends upon the nature of service, whether it is temporary, probation or confirmed. Normally disciplinary issues or medical concerns may be given as causes for dismissal from service.

TRAINING

Need for Training

Training is widely considered as an important tool for enhancing a person’s Attitude, Skill and Knowledge (ASK). It is the process of assisting a person for developing his efficiency and effectiveness at work by improving and updating his professional knowledge, by developing skills relevant to his work and growing appropriate behavior and attitude towards work and people. Training is, therefore, an effective tool for Human Resource Development (HRD) as well as for achieving the goals of an organization.
Islamic banking is a Shariah-based interest-free banking system. It has to operate in a way that benefits society as a whole. Its features and functional procedures are quite distinctive than that of the traditional banking system. To satisfy the objectives of the Islamic banking and to face the challenge of the next century, the job of Islamic banking is becoming more complicated and more technical day by day. The personnel of Islamic banks require special ASK, which can be developed through proper training. Obviously, that a large number of properly trained employees would result in increased output and reduced costs, further resulting in maximum utilization of human resources, which will ultimately benefit the entire nation.

The four (4) Islamic banks of the country also have recognized the importance of training for their employees. This can be substantiated from the following paragraphs:

Islami Bank Bangladesh Limited (IBBL) has mentioned that “since our system is new, training is considered to be sin-qua-non for successful operations of the Bank. Before establishment of the Bank, Bangladesh Islamic Bankers’ Association (BIBA) conducted several Orientation Courses on Islamic Banking in which senior and mid-level bankers, lawyers, chartered accountants, media-men, management experts participated. Most of the officers of the Bank were selected from their list. Training academy of the Bank has also been established. Orientation and skill development courses are conducted regularly. Special attention is paid to on-the-job training on the basis of job rotation plan. Besides, the officers and employees periodically attend seminars and symposiums organized by the Bank and other bodies.

Similarly, Al-Arafah Islami Bank Limited has mentioned that “Since Islamic banking is different in many respects than that of conventional system of banking, the officers are, therefore, required to attain thorough knowledge about the Islamic banking system in order to explain the same to the clients properly. Therefore, effective training program for the officers are being undertaken. Side by side, on-the-job training is also being imparted specially for the new employees. The Board of Directors is aware that the objectives of the Bank might be defeated if the officers don’t practice the Islamic rituals in their daily life. Therefore, all officers are being motivated to be practicing Muslim in their daily life apart from saying prayer in Jamaat. It may be mentioned that every branch has hours at the time of prayer. Nevertheless Dars-e-Quran and Hadith is also being held after Asar-Prayer everday”.

The Social Investment Bank Limited (SIBL) has also recorded that “training is the basic need for the development of Human Resources. Accordingly, SIBL has decided to establish one training academy in the name of University School of Social Economics and Management. The new recruits (officers) would be inducted with basic foundation training including advanced training courses to get them fully acquainted with the basic concept and objectives of SIBL. There is an ultimate aim of development this training academy to a real-life university which will be staffed by eminent professional bankers, economist and scholars from home and abroad.”

Al-Baraka Bank Bangladesh Limited has also indicated the necessity of the training mentioning that “Despite their unequivocal commitment to provide only Islamic banking they were unable to deliver full Islamic finance which was a major disappointment. The Shariah Council had, once again, pointed out these failures.”

A.K.N. Ahmed, Former Governor of Bangladesh Bank is of the opinion that each bank officer and stuff should subject to intensive training on banking ethics and customer service before they are put to the job. He also suggests that the activities of training academies should be revived to ensure that each bank is getting proper output from these institutions.

Conceptual Framework for Training Management
Training is provided to the employees of an organization in order to achieve the goals of the organization. Thus, for any management training exercise, the goals and objectives of the organization must be taken into consideration. In fact, management of training gets its direction from the organizational goal set by the management at a macro level. This implies that the first thing that comes into consideration for training management is the organizational goals and objectives.

Organizational goal setting is followed by the formulation of a training plan based on a training needs assessment. Once a plan is in place, management has to execute the plan. At this stage training is provided to the trainees on a needs assessment basis. The training institutes conduct workshops and seminars. The final process of a training management system can be illustrated.

Types of Training

Training in Islamic banks may be of three types: (i) Ideological (ii) Theoretical and (iii) Practical. Ideological training may be related with the holy Quran and Sunnah and Shariah issues on banking. The practical training may conducted through discussions and exercises on banking issues in a classroom setting. In addition, some training may be administered while the employee is on the job, to allow the employee to learn Islamic banking through practice. The theoretical training may equip an employee with Islamic knowledge and values, which is considered to be essential for Islamic banking.

Theoretical training may provide a conceptual clarity on the understanding of Islamic banking. However, practical training of Islamic banking provides the skills and art necessary to perform a job. An employee should have all types of training in order to best prepare him to perform his job requirements.

Possible Areas of Training

Since Islamic banking mainly practices general banking, investment and foreign exchange, training should focus on these three areas of banking. Islamic banks may consider the following areas while devising their training programs:
1. Induction / Foundation Training
2. Banking Laws and Practices
3. Foreign Exchange and Foreign Trade
4. Investment Management
5. Branch Management
6. Customer Services Development
7. Audit and Inspections in Banks
8. Islamic Economics and Banking
9. Islamic Banking and Insurance
10. Performance Budgeting
11. Managing the Managers
Furthermore, Islamic banks need to be careful to tailor the training session to the specific employee’s needs. Training should be designed to address the needs of senior management all the way down to the line workers in order to be most productive.
Islamic banking needs morally sound customers for its smooth operation. Islamic value oriented customers are essential for growth in Islamic banking. Therefore, value oriented customers training may be another main area of training for Islamic banks.

The Lecture Method

Quite a good number of training methods generally used in academic and training institutions can be effectively applied to personnel development of Islamic banks. A brief discussion on the lecture method may be relevant for Islamic banks as well.
Lectures have several advantages. One instructor can handle a large class. In addition, little or no equipment is needed. Finally, a well-prepared lecture can be repeated without any great effort on the part of the lecturer, thereby allowing large groups of people to be trained on the exact material in smaller group forums.
Lectures are especially valuable for introducing a new subject and it allows the trainees to interact in the process, which would otherwise be very intimidating to them. Where knowledge is advancing rapidly, textbooks may not be available. Lectures awaken a critical attitude in trainees. Lectures can provide aesthetic pleasure inspiring a large number of trainees in an economical way.
The main disadvantage is that knowledge gained by passive listening to a factual lecture, without some participation by the class, is not readily assimilated, and boredom sets in very quickly. The lecture sometimes offers no opportunity for class participation and is, therefore, of little use in providing skills. Thus there are advantages and disadvantages so a proper mix has to be found in order to be effective.