The Impact of HR Policies over the Financial Soundness of Commercial Banks: A Study on Dhaka Bank Limited

Abstract

Presently Human Resources (HR) Management has become one of the burning topics in our corporate world to operate overall activities of the organizations smoothly to ensure financial stability and banking industry is not an exception. Banking is one of the most significant sectors of the world economy and especially in a developing country like Bangladesh. Bank employees are the representative of the bank as it is a service-oriented organization, and they are providing banking services to the clients. The more customers’ retention will lead to more revenue as well as financial profit. The banks are now more concern about their employee’s development to make sure the highest productivity of their employees. The paper shows the importance of efficiency and effectiveness of HR policies to upward financial profit and sustainable growth of the bank. Dhaka Bank Limited (DBL) has taken as a sample bank among all the private commercial banks in Bangladesh to conduct the study. The study includes both descriptive as well as quantitative analysis like showing performance by using financial ratios and the impact of HR costs over the profitability.  Sample survey has done among the DBL employees to collect data for the study. The study discloses that the banks are investing the huge amount of fund to develop HR strategies and to motivate employees so that the employee turnover will reduce and productivity will increase which leads to better performance to make sure financial profitability and growth. Usually to maintain all rules and regulation of HR, the banks have to expense more but its conveying long-term productive effect on business growth. It also creates a competitive advantage of the bank to compete with others bank. This study may be helpful for banks regarding dealing with profitability and HR strategies.