Why Bangladesh’s banks should have a common career hierarchy

At the more than 40 private commercial banks in Bangladesh operating as scheduled commercial banks, of which about 10 are relatively strong institutions, employees are facing increasingly demanding performance targets. 

In many cases, the Annual Confidential Report (ACR), which plays an important role in determining an employee's career progression, is largely influenced by the achievement of business and financial targets.

This target-oriented culture has created significant pressure on banking professionals. While performance evaluation is necessary for maintaining productivity and accountability, an excessive focus on quantitative targets may sometimes overlook other important aspects of an employee's contribution, such as customer service, compliance, risk management, teamwork, leadership, operational efficiency and professional development. 

A balanced appraisal system should therefore consider both measurable business results and the overall quality of an employee's work.

Another major concern in Bangladesh's private banking sector is the irregularity of promotions. Many private commercial banks have not provided regular promotions to their employees for several years, particularly since the Covid-19 pandemic. 

The financial difficulties faced by many banks have contributed to this situation. As NPLs have increased and profitability has declined, bank managements have generally become reluctant to increase administrative and personnel costs through promotions and associated salary adjustments.

However, delaying promotions for an extended period can have serious consequences for employee morale. Employees who consistently perform well but remain in the same position for many years may eventually feel undervalued and demotivated. It can also encourage talented professionals to move to other institutions where career progression is more predictable. 

In contrast, some banks with relatively employee-friendly policies have continued to provide promotions despite challenging business conditions. Such initiatives can significantly improve employee motivation, loyalty and productivity.

Against this backdrop, the Bangladesh Bank should consider providing broader guidance on career progression and promotion practices in the banking sector. Banks should maintain a regular, transparent and performance-based promotion policy. 

Employees should know the basic criteria for promotion, the expected period of service at different levels, the competencies required for advancement and the process through which their performance will be assessed.

A particularly important issue is the lack of a common hierarchical structure among banks. 

The designation slabs and career levels differ significantly from one institution to another. A particular designation in one private bank may correspond to a completely different level of responsibility in another bank. This creates confusion for employees, employers and recruiters, especially when experienced banking professionals change jobs.

The situation becomes even more noticeable when private banks are compared with government and specialised banks. In many state-owned and specialised banks, the number of formal designation levels is relatively limited and the hierarchy is more standardised. 

By contrast, private banks often have a much larger number of grades and titles. Only a small number of private banks appear to follow a designation hierarchy broadly comparable with that of nationalised and specialised banks.

The central bank should examine the possibility of introducing a broad, uniform designation framework for all scheduled banks. Such a framework would not necessarily require every bank to adopt identical salary scales. Banks differ in terms of profitability, financial strength, business models, risk profiles and organisational size, so compensation structures should naturally remain flexible. However, the basic ranks, responsibilities and career levels could be standardised to a reasonable extent.

Salary structures can continue to differ according to each bank's financial strength and profitability, but ranks, responsibilities and basic promotion principles should be broadly standardised. Such a system would reduce confusion, improve employee motivation, support fair competition among banks and create a more professional career environment for Bangladesh's banking workforce.

For example, executive-level designations beginning around the AGM or AVP level should have broadly consistent meanings across the banking industry. In some banks, titles such as AVP, VP, SVP and EVP are used according to one structure, while another bank may assign substantially different responsibilities to the same titles. Some institutions also use executive designations for positions that are effectively non-executive. Such practices can create misunderstandings among employees and may lead to unrealistic expectations when they apply for positions in other banks.

A common career hierarchy would also benefit fresh graduates entering the banking profession. A fresher who successfully completes the required examinations, interviews and recruitment procedures may initially have limited knowledge about the internal practices of the institution. Once recruited, however, the employee should have a clear understanding of the career path ahead. Promotion should be based primarily on performance, competence, integrity, professional development and excellence rather than on informal considerations.

A transparent hierarchy would also encourage employees to invest in their skills. If banking professionals know what competencies are required to move from one level to another, they can prepare themselves through training, professional examinations, risk-management courses, technology skills and leadership development. This would ultimately benefit the banks themselves by creating a stronger and more capable workforce.

At the same time, standardisation should not mean that every employee must receive automatic promotion after completing a fixed period. Performance and suitability must remain important. 

A common framework should establish minimum standards and principles, while individual banks retain reasonable flexibility to reward exceptional performance and manage their human resources according to their business requirements.

Salary structures can continue to differ according to each bank's financial strength and profitability, but ranks, responsibilities and basic promotion principles should be broadly standardised. Such a system would reduce confusion, improve employee motivation, support fair competition among banks and create a more professional career environment for Bangladesh's banking workforce.