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

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

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.

Suggested Citation

  • Abdul Kadar Muhammad Masum & Md Abul Kalam Azad & Kazi Enamul Hoque & Loo-See Beh, 2015. "Domestic Banks in Bangladesh Could Ensure Efficiency by Improving Human Resource Management Practices," PLOS ONE, Public Library of Science, vol. 10(7), pages 1-17, July.
    • Handle: RePEc:plo:pone00:0121017
    DOI: 10.1371/journal.pone.0121017
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    2. Nazrul Islam & Md. Nafizur Rahman & Eshnat Mumtahina Mridha & Jasmin Sultana Sharna & Maliha Mosharraf & Nowshin Nower, 2021. "How Effective the Employee Training Programs Are? Evidence from Government Banks of Bangladesh," International Journal of Business and Management, Canadian Center of Science and Education, vol. 15(9), pages 1-57, July.
    3. Md. Abul Kalam Azad & Susila Munisamy & Kwek Kian Teng & Muzalwana Binti Abdul Talib & Paolo Saona, 2018. "Productivity Changes of Pharmaceutical Industry in Bangladesh: Does Process Patent Matter?," Global Business Review, International Management Institute, vol. 19(4), pages 1013-1025, August.

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