Domestic Banks in Bangladesh Could Ensure Efficiency by Improving Human Resource Management Practices

Abdul Kadar Muhammad Masum; Md Abul Kalam Azad; Kazi Enamul Hoque; Loo-See Beh

doi:10.1371/journal.pone.0121017

Domestic Banks in Bangladesh Could Ensure Efficiency by Improving Human Resource Management Practices

PLoS One. 2015 Jul 29;10(7):e0121017. doi: 10.1371/journal.pone.0121017. eCollection 2015.

Authors

Abdul Kadar Muhammad Masum¹, Md Abul Kalam Azad², Kazi Enamul Hoque³, Loo-See Beh¹

Affiliations

¹ Department of Administrative Studies & Politics, Faculty of Economics and Administration, University of Malaya, Kuala Lumpur, Malaysia.
² Department of Applied Statistics, Faculty of Economics and Administration, University of Malaya, Kuala Lumpur, Malaysia.
³ Department of Educational Management, Planning and Policy, Faculty of Education, University of Malaya, Kuala Lumpur, Malaysia.

Abstract

The paper aims to examine the influence of human resource management (HRM) practices on bank efficiency using Malmquist index of total factor productivity. The model comprises HRM index that represents the quality of HRM practices. The results are decomposed into three efficiency scores, namely, technical efficiency, pure efficiency, and scale efficiency. In this study, panel data for 44 banks in Bangladesh are used for the period 2008-2013. This paper reveals that foreign banks are ahead in converting the influence of HRM practices into efficiency scores (0.946>0.833). On the other hand, domestic banks performed better than foreign banks in terms of pure efficiency and scale efficiency. But, in terms of technical efficiency, the domestic banks are regressed by 6.7% annually whereas foreign banks are progressed with a yearly value of 5.8%. The results are robust, because the Mann-Whitney test and Kruskall-Wallis test (non-parametric tests) also confirm the same results. This study emphasizes HRM practices in the banking industry to ensure efficiency in the long-term scenario. Domestic banks are suggested to ensure continuous development in HRM practices in order to compete with foreign banks.

Publication types

Research Support, Non-U.S. Gov't

MeSH terms

Bangladesh
Banking, Personal / economics*
Female
Humans
Male
Models, Economic*
Staff Development / economics*

Grants and funding

This research was funded by grants awarded by Bright Spark Scheme of the University of Malaya, Malaysia. This work was also partially supported by UMRG-Frontier Science Cluster (Project No- RG300-14AFR), University of Malaya, Kuala Lumpur, Malaysia. The funders had no role in study design, data collection and analysis, decision to publish, or preparation of the manuscript.