Square Textiles Limited - Introduction

EXECUTIVE SUMMARY

Square Textile Ltd. started its operation in 1997. It was enlisted in Dhaka
Stock Exchange & Chittagong Stock Exchange in 2002. The business lines
of Square Textile Ltd. are manufacturing and marketing of yarn. Its
factory is located in Gazipur , Dhaka.

The manufactures 100% Cotton Ring Span Yarn or Hosiery , 100% Cotton
OE Rotor For Hosiery and Knit Fabrics for 100% export oriented
readymade Garments Industry.

The strategic Goals and Objectives of the Company are to strive hard to
optimize profit though conduction and transparent business operations
and to create more competitive in the internal and external market.

In home, customer of Square Textile Limited are export oriented

readymade Garments Industry. The Company also exports its products to
the market of Europe & USA .

The export sells increased by 19% in 2003 over the previous year.
Competition level is increasing both in local and abroad market .
Competition will be more stiff after 2005 when multifiber agreement will
be phaced out. Among the other foreign competitors Srilanka , China
Pakistan and India are prominent.

Square is one of the biggest employees in Bangladesh. It has a personnel

and administrative department . The total number of employees are 1223.
For the employees there are systematic in house training in home and
abroad .

The managing director, the CEO is the head of the executive management
team . Below in there are directors , executive directors and general
manager. Under the direct super vision of the general manager a number
of departments are controlled.
The Company is going through continuous growth in production . The
total production increased year on year basis at the rates of 0.43% and
1.467% during 2002 and 2003 respectively . The Company’s operations
are out on a aggregate basis and are managed as a single opportunity
segment . The Company uses Computer Aided Design (CAD) , Computer
Aides Spreading (CAS) and Computer Aided Manufacturing (CAM) in its
plant to increase the overall efficiency and productivity.

OBJECTIVE:

The broad objective of this report is to provide an overview of HRM

practice of Square Textiles Ltd. The specific objectives of this report are :

• To provide Company overview

• To provide market overview and analysis

• To reveal operational, management and HRM planning.

• Discuss all HRM practice

METHOLODGY:

To prepare this report we have collected data from different published

materials. Then we have conducted a secondary study. After that we have
prepared a questionnaire and took interview one of the executive serving
in this Company. We also collect data from internet .This way we collected
primary data. Thus we have used both primary and secondary report to
prepare this report.

INTRODUCTION:
This report is prepared as a requirement of the course “Seminar in Human
Resource Management.” We selected Square Textiles Ltd. Working on this
organization we came to know various Kind of HRM practice which are use
here. Though it is a textile, it has proved itself in the related industry as a
major competitor. In this report we have followed the guidelines provided
by the teacher. Here we have tasked not only the HRM practice but also
the marketing, management, finance and operational area of the
Company.

Square Textiles Limited - Company Overview

1.0 COMPANY OVERVIEW

1.1 ABOUT COMPANY:

Square Textiles Ltd. started its journey by establishing the first unit in
1997. One year later the second unit was established. Square Textile is a
subsidiary company of Square Group .The Company was incorporated as
a public limited company in the year of 1994. The operation was started
in 1997.It was enlisted in Dhaka Stock Exchange & Chittagong Stock
Exchange in 2002. Within a very short time of span the company achieved
some significance success. Square Textile receives Oeko-Tex standard 100
and ISO-9002 certificates in the year 2000. Authorized capital of the
company is tk. 1000 million. It’s paid- up capital is tk. 251.90 million.
1,223 employees are working in this organization. The business lines of
Square Textiles Limited are manufacturing and marketing of yarn. The
factory is located in Saradaganj, Kashimpur, Gazipur, Bangladesh. Its
office is located at Uttara in Dhaka

1.2 MISSION STATEMENT:

The mission statement of Square Textiles Limited is “Our mission is

realization of vision through maximum production of goods and services
strictly on ethical and moral standards at minimum costs to the society
ensuring optimum benefits to the shareholders and other stakeholders.”
This mission is envisioned by the concept of business which ensures well
being of the investors, stakeholders, employees and members of the
society which will create new wealth in the form of goods and services.

1.3. KEY PRODUCT / SERVICES:

As stated earlier the business line of the company is manufacturing and

marketing of yarn. It manufactures:

• 100% Cotton Ring Span Yarn For Hosiery

• 100% Cotton OE Rotor Yarn for Hosiery
• Knit Fabrics for 100% export oriented readymade Garments Industry.

It also performs the following services:-

• Dying & Post Mercerization.

• Fabric Dying

The final output is marketwise by Square Fashion Ltd.

In Square Textile Limited two types of products are produced in two
different units. These are as follows:

Unit 1: Combed and Carded Yarn from a count range of

Ne.10 to Ne.80.

Unit 2: Combed Ring Yarn from a count range of Ne.20 to

Ne.40. In Square Spinning Ltd. 100% Cotton Carded and Combed Yarn in
the count range of Ne.16 to Ne.30 are produces. Finally in Square
Fashion’s Ltd. Readymade Knit Apparels like T-shirts, Polo shirts, Tank
tops, Pajamas, Sport wear, Under garments, Men’s & Ladies fashion wear
, Kids wear etc

1.4 STRATEGIC GOALS & OBJECTIVES:

The company sets the following objectives for it to achieve:
• To strive hard to optimize profit through conduction of transparent
business operations within the legal and social framework with malice to
none and justice for all
• To create more jobs with minimum investments
• To be competitive in the internal as well as external markets
• To maximize export earning with minimum imported in-puts
• To reduce the income gap between top and bottom categories of
employees.
Thus the company focuses to pole-star its mission that fulfill the objective
with emphasis on the quality of the product , process and services
blended with good – governance that help build the image of the most
enable corporate – citizenship at home and abroad . The company wants
to produce such society friendly goods and services that go to satisfy the
wants of all the relevant party without disturbing or damaging the socio-
economic and ecological, balance of the mother earth and the process of
human civilization leading to peaceful co-existence of all the leaving
beings. The company always strives for top quality products at the least
cost reaching the lowest rungs of the economic class of people in the
country. The company values its obligation to the greater society as well
as it strives to protect the interests of it’s shareholders and to ensure
highest return and growth of their assets.
Square Textiles Limited - Marketing Overview

2.0 MARKETING OVERVIEW

2.1 POTENTIAL CUSTOMER:

The target market for products produced in Square Textiles Ltd. and
Square Spinning Ltd. is Export Oriented Readymade Garments Industry.
Readymade Garments exporter that is Knit Fabrics, Sweater and Denim
manufacturer. In Bangladesh Beximco Kitting, Grameen Knitwear, Shasha
Denim, Knit Concern etc are the customers. Target market for products
produced in Square Fashion Ltd. is Europe and U.S.A. Square Textiles
does not direct sales in overseas market but sometimes India, Pakistan &
other countries take their yarn.

2.2 SIZE & GROWTH OF MARKET:

The Company’s marketing operations continued its emphasis on export

sales over the years as depicted below:

Year - 2006 Year - 2005 Year - 2004

(a) Quality sold (Kg)

99,800 527,903 539,417
• Local sales
(0.7%) (3.7%) (3.9%)
14,554,342 13,817,314 13,129,599
• Export Sales
(99.3%) (96.3%) (96.1%)
14,654,142 14,345,217 13,669,016
• Total Sales
(100%) (100%) (100%)

(b) Sales Revenue (

Taka )
9,455,588 32,576,936 46,956,494
• Local Sales
(0.4%) (1.8%) (2.3%)
2,093,214,675 1,756,441,450 2,029,968,545
• Export Sales
(99.6%) (98.2%) (97.7%)
2,102,670,263 1,789,018,386 2,076,925,039
• Total Sales
(100%) (100%) (100%)
The above figures show that the export sales increased by 19% in
2006over the previous year with greater exposure to international market
scenario and risk.

2.3 COMPETITOR ANALYSIS:

Only in few years back textile sector in Bangladesh was left behind but
current scenarios is different. In recent years a mentionable figure of
money has been invested in this industry. Government is also encouraging
this sector. Government is making some favorable policies and minimizing
the regulations, so that this sector can be grown up.

Among the domestic companies Square is one of the leading one. The
other potential competitors are Padma Textiles, Shamim Textile etc.
Competition will be severe after 2005, that is, during the post multifiber
agreement period. World market will be Quota free at that time. So
Bangladesh will have to compete with countries like Srilanka, China,
Pakistan, Vietnam etc.

Square Textiles Limited - Operational Plan

3.0 OPERATIONAL PLAN:

The Company’s installed capacity during the year 2006 remained at the
same level of the previous year at 59,472 spindles 768 Rotor heads with
production capacity (at average 30s/10s counts) as follows:

2006 2005 2004

(1) Spindles/Rotors:
(a)Installation:
No. of Spindles installed 59,472 59,472 59,472
No. of Rotor installed 768 768 768
(b)Operation
No. of Spindles operated 59,472 59,472 59,472
No. of Rotor head operated 768 768 768
(2) Production Capacity
Installed:
At Equivalent 30s Count 11,005,000 10,796,424 10,796,424
At Equivalent 10s Count 2,204,392 2,204,392 2,204,392
Total 13,209,392 13,000,816 13,000,816
(3) Operating Efficiently (%)
30s output 99.26 99.02 97.49
10s output 91.41 92.36 97.41
Total 97.95 97.89 97.48

The above statistics depict a picture of continuous growth in production

and production efficiency which has been achieved by the production –
addicted management at the factory level as well as the top. The total
production increased year-on-year basis at the rates of 0.43% and 1.67%
during the years 2002 and 2003 respectively.

The Company’s operations are carried out on an aggregate basis and are
managed as a single operating segment. Accordingly the Company
operates in one segment of developing manufacturing and marketing of
cotton / mixed yarn for human as well as industrial use.
Besides, to increase efficiency the company uses the following methods :

• Computer Aided Designing (CAD)

A complete designing section. For computer aided designing equipped
with GERBER & INVESTRONICA systems. For marker making 06 different
work stations with digitizing board and full width pattern plotter.

• Computer Aided Spreading (CAS)

Computer Aided Spreading (CAS) 03 nos. cloth spreader from GERBER &
IMA , 4*30 meter long air floating table.

• Computer Aided Manufacturing (CAM)

03 nos. sophisticated LASER guided cutting machine from GERBER
&INVESTRONICA systems. The Company has future plan to expand its
operation plan in yarn twisting doubling.

Square Textiles Limited - Management

4.0 MANAGEMENT

Management:
The entire management process comprises the following units:

4.1. Executive Management:

The Managing Director, the CEO is the head of the Executive Management
Team which comprises senior members of the Management Apparatus.
Within the limits of delegated authority and responsibility by the Board of
Directors , Executive Management operates through further delegation of
authority at every echelon of the line management . The executive
Management operates within the framework of Policy & Planning
strategies set by the Top Management with periodic performance
reporting for guidance . The Executive Management is responsible for
preparation of segment plans / sub – segment plans for every profit
centers with budgetary targets for every items of goods & services and
are held accountable for deficiencies, with appreciation for outstanding
and exceptional performances . These operations are continuously carried
out by the Executive Management through series of Committees , sub –
Committees ,Committees & standing Committees assisting the line
management .

4.2.Management Committee:
Comprising top executives , deal with entire organizational matters.

4.3.Standing Committee:
Standing Committee comprises the following committee:

4.3.1. Audit Committee:

• Internal Audit Committee
• ISO Audit Committee
• Social / Environment Committee
• Performance Evaluation Audit Committee

4.3.2. Employment Relations Committee:

• Remuneration Committee
• Work Environment Committee
• Performance Evaluation Audit Committee

4.3.3. Management Committee:

• Product Planning & Development Committee
• Quality Control & Research Committee
• Production & Inventory Management Committee
• Export Promotion Committee

Square Textiles Limited - Human resource management

5. Human resource management

5.1.Human resource planning

Square has a personal and administrative Department . Square is one of

the biggest employers in Bangladesh. The total number of employers in
Bangladesh . The total number of employees is 1,223. For the employees
there are systematic in house training in home and abroad . To motivate
the employees, along with salary and benefits the company provides
various facilities like free meals , free transportation , 24 hour medical
center , on site sports . Production and accommodation facilities includes
full time supply of safe drinking water, adequate lighting and ventilation
facilities from sheet.

5.2 HR Practices of SQUARE textile

Recruitment

Training

Performance Management

Labor relation

Employee relation

Job analysis

Job design

Selection

Development

Incentives

Benefits

5.2.1 Recruitment and Selection process in SQUARE

Recruitment is the process trough which the organization seeks applicants

for potential employment. Selection refers to the process by which it
attempts to identify applicants with the necessary knowledge, skills,
abilities and other characteristics that will help the company achieve its
goals, companies engaging in different strategies need different types and
numbers of employees. The strategy a company is pursuing will have a
direct impact on the types of employees that it seeks to recruit and
selection.

Source of recruitment

There are two kinds of source SQUARE uses for recruitment .They are

1. External source
2. Internal source.

We try to discuss all relative sources which are used for recruitment in
SQUARE.

1. Internal source

SQUARE thinks that current employees are a major source of recruits for
all but entry-level positions. Whether for promotions or for ‘Lateral’ job
transfers, internal candidates already know the informal organization and
have detailed information about its formal policies and procedures.
Promotions and transfer are typically decided by operating managers with
little involvement by HR department.

1.1Job-posting programs

HR departments become involved when internal job openings are

publicized to employees through job positioning programs, which informs
employees about opening and required qualifications and invite qualify
employees to apply. The notices usually are posted on company bulletin
boards or are placed in the company newspaper. Qualification and other
facts typically are drawn from the job analysis information.

The purpose of job posting is to encourage employees to seek promotion

and transfers the help the HR department fill internal opening and meet
employee’s personal objectives. Not all jobs openings are posted .Besides
entry level positions, senior management and top stuff positions may be
filled by merit or with external recruiting. Job posting is most common for
lower level clerical, technical and supervisory positions.

1.2 Departing Employees

An often overlooked source of recruiters consists of departing employees.

Many employees leave because they can no longer work the traditional 40
hours work week .School, child care needs and other commitments are
the common reason. Some might gladly stay if they could rearrange their
hours of work or their responsibilities .Instead, they quit when a transfer
to a part-time job may retain their valuable skill and training. Even if part-
time work is not a solution, a temporary leave of absence may satisfy the
employee and some future recruiting need of the employer.

2. External source

When job opening cannot be filled internally, the HR department of

SQUARE must look outside the organization for applicants. We discuss all
the external source of recruitment at bellow:

2.1 Walk-ins and Write-ins:

Walk-ins are some seekers who arrived at the HR department of SQUARE

in search of a job; Write-ins are those who send a written enquire .both
groups normally are ask to complete and application blank to determine
their interest and abilities. Usable application is kept in an active file until
a suitable opening occurs or until an application is too old to be
considered valid, usually six months.

2.2 Employee referrals:

Employees may refer job seekers to the HR department .Employee

referrals have several advantages .Employees with hard –to –find job skill
may no others who do the same work.

Employees referrals are excellent and legal recruitment technique, but

they tend to maintain the status quo of the work force in term of raise ,
religions , sex and other characteristics , possibly leading to charges of
discrimination.

2.3 Advertising

Want ads describe the job and the benefits, identify the employer, and tell
those who are interested how to apply .They are most familiar form of
employment advertising .for highly specialist requites, ads may be placed
in professional journal or out of town newspaper in areas with high
concentration of the desired skills

Example:

General Manager- production (ref: PM)

-Age: 28-35 years; Graduate with specialization in garment mfg
technology from NIFT or equiv.

-Minimum 10 years experience in similar position of a unit with a

minimum of 1000machines.
-Must have detailed hands on knowledge of industrial engineering.

We offer competitive salary which is commensurate with experience and

qualification.
If you aspire to an exiting and rewarding career , send your detailed
resume, quoting your present and expected salaries to jobs.

2.4 Internet

Now today no body thinks anything without internet. So SQUARE give

their advertise at internet.

Example:

WWW.bdjobs.com
www.square.bd.com

Square Textiles Limited - Training and Development Program

5.2.2 Training and Development program of SQUARE textile

Training is a process of learning a sequence of programmed behavior. it is

application of knowledge. It gives people an awareness of the rules
procedures to guide their behavior. It attempts to improve their
performance on the current job or prepare them for an intended job.

Development is a related process. It covers not only those activities which

improve job performance but also those which bring growth of the
personality; help individuals to the progress towards maturity and
actualization of their potential capacities so that they become not only
good employees but better men and women. In organizational terms, it is
intended to equip person to earn promotion and hold grater responsibility.

There are many types of method practices in SQUARE .we discuss that
method at bellow:

On the job training

On the job training is a training that shows the employee how to perform
the job and allows him or her to do it under the trainer’s supervision

On the job training is normally given by a senior employee or a manager

like senior merchandiser or a manager. The employee is shown how to
perform the job and allowed to do it under the trainer’s supervision.

Job rotation

Job rotation is a training that requires an individual to learn several

different some in a work unit or department and performer each job for a
specified time period.

In job rotation, individuals learn several different job within a work unit or
department. One main advantages of job rotation is that it makes
flexibilities possible in the department. When one employee like junior
merchandiser absence another merchandiser can easily perform the job.

Apprenticeship training

Apprenticeship training provides beginning worker with comprehensive

training in the practical and theoretical expect of work required in a highly
skilled occupation. Apprenticeship program combined of the job and
classroom training to prepare worker for more than eight hundred
occupation such as computer operator, sewing technician.

Length of selected apprenticeship courses of SQUARE

Occupation length (months)

1. Quality control manager 13

2. Quality control officer 15

3. Cutting Astt. Manager 7

4. Packing Astt. Manager 7

5. Ware house Astt. Manager 5

6. Production officer 3

7. Sewing technician 5

8. Sewing Supervisor 5
Classroom training

Classroom training is conducted off the job and probably the most familiar
training method .It is an effective means of imparting information quickly
to large groups with limited or no knowledge of subject being presented.
It is useful for teaching factual material, concepts principle other theories
.portion of orientation programs, some expects of apprenticeship training
and safety programs are usually presented utilizing some form of
classroom instruction. More frequently however, classroom instruction is
used for technical, professional and managerial employee

Development of the human resources

The long term development of human resources as distinct from training

for a specific job is of growing concern to HR departments of SQUARE
.Throw the development of current employees the department reduces
the company’s dependents on haring new workers .if employees are
developed properly the job openings found throw HR planning are more
likely to be filled internally promotions and transfers also show employees
that they have a career not just a job. The employee benefits from
increased continuity in operations and from employees who fail a greater
commitment.

HR department is also an effective way to meets several challenges

including employee obsolescence, international and domestic diversity,
technical challenges. Affirmative action and employee turn over. By
meeting these challenges the department can, maintain an effective
workforce.

Steps in the Evaluation of training and development

Evaluation criteria > pretest > trained or developed-

workers > posttest > transfer to the job > follow-up studies.

Square Textiles Limited - Performance Management

5.2.3 Performance Management

Performance appraisal is the process of assessing employee’s past

performance, primarily for reward, promotion and staff development
purposes.
‘Performance appraisal (is) a process that identifies, evaluates and
develops employee performance to meet employee and organisational
goals.

Performance Appraisal doesn’t necessarily use to blame or to provide a

disciplinary action.Previous management theories used to view
performance appraisal as a stick that management has introduced to beat
people. Performance appraisals are now more clarified and they
concentrate on developing organizational strengths and employee
performance.

Purpose of Performance Appraisal in SQUARE

To review past performance

To assess training needs

To help develop individuals

To audit the skills within an organization

To set targets for future performance

To identify potential for promotion

To provide legal & formal justification for employment decision

To diagnose the hidden problems of an organization

Performance Appraisal Process

Who Appraises

• Supervisors
• Subordinates
• Peers
• Clients/customers
• Self appraisal
• 180/360 degree approach

Approaches to measuring performance in SQUARE textile

There are various kind of method for measuring performance appraisal.

But we get information that SQUARE uses only three type of performance
method. These are at below:
1. 360- degree feedback
2. Experience based.

We describe those at below:

1.360-degree feedback

One currently popular methods of performance appraisal is called 360-

degree feedback. With this method managers peers, suppliers or
colleagues are ask to complete questionnaire. The questionnaire are
generally lengthy .

2. Experience based

SQUARE measure the performance of employee by experience. For

example MR. X has been working in SQUARE for three years and MR. Y
has been working in SQUARE for two years. So SQUARE favor MR. X for
his more experience.

Square Textiles - Employee relation & Job analysis

5.2.4 Employee relation

Employers and employees each have their own sets of needs and values,
and successful relationship between these two sides requires that some
sort of balance be struck. This balance often takes the form of a
psychological contract, an understood agreement between employer and
employees that defines the work relationship. This contract with or
without support of a formal collective bargaining, agreement influence the
outcome achieve by each side.

SQUARE group the various into three channel categories those are

1. Employee safety

2. Employee health

3. Employee working condition

1. Employee safety

SQUARE provide the employee safety .It ensure the all kinds of job safety
such as insurance of each employee not this it provide insurance to the
labor.

2. Employee health

Free medical checkup, provide health card and also provide necessary
medical facilities for each employee.

3. Employee working condition

The working condition of employee is very hygienic

SQUARE is ISO 9001-2000 Certified company

5.2.5 Job analysis

Job analysis is the procedure for determining the duties and skill
requirement of a job and the kind of person who should be hired for it .

The supervisor or HR specialist of SQUARE normally collects one of the

following types of information:

Work activities
 First he or she collects information about the job actual work activities
such as marketing, sewing, production. This list also include how, why
and when the worker performance each activity.

Education and qualification

Collects the information about education background and qualification.

Experience

Experience must be needed for any job in SQUARE.

Sample of job analysis of SQUARE:

Quality control manager

Qualification

Master in any subject

Bachelor/diploma in textile and clothing or related discipline will be given

preference

Must have at least 7 years practical experience experience in similar

position in any garments factory.

Cutting Astt. Manager (cum in-charge)

Qualification

Masters/ bachelor in any subject preferably commerce.

Bachelor/diploma in textile and clothing or related discipline will be given

preference

Must have at least 7 years practical experience experience in similar

position in any garments factory.

Ware house Astt. Manger

Qualification

Masters/ bachelor in any subject preferably commerce.

Bachelor/diploma in textile and clothing or related discipline will be given
preference

Must have at least 5 years practical experience experience in similar

position in any garments factory

Production Officer (Sewing)

Qualification

Graduate /HSC

Must have at least 3 years practical experience in similar position in knit

garments.

Sewing Technician

Qualification

Graduate /HSC

Must have at least 5 years practical experience in similar position in knit

garments.

Experience and skill for all above jobs:

Candidate must have experience to work with world reputed buyers

Good writing and communication both in Bengali and English

Should be capable of making QA reports on daily basis

Computer literacy in MS world , Excel , e-mail etc.

Square Textiles Limited - Job Design

5.2.6 Job Design

Job design is the process of structuring work and designating the specific
work activates of an individual or group of individuals to achieve certain
organizational objectives.

The job design can generally be divided into three phases:

1. The specification of individual task.

2. The specification of the method of performing each task
3. The combination of individual tasks into specific job to be assign to
individual

Organizational considerations for job design

Effectiveness

In the context of job design, to remain effective, organizations may have

to redefine jobs, monitoring, and using technology so that the firm can
even compete against giant rivals.

Efficiency

Maximum outputs through minimum inputs of time, effort and other

resources. In the context of job design, efficiency in time, effort, labor
costs, and training should be done accordingly.

Technological Considerations

Task Interdependence

The dependence of one task from another is task dependence. In this

context, the task interdependence can be high or low depending on the
product or service.

Technical constraints

Scarcity of machines are constraints, which in turn leads to the increase

and decrease of production.

Ergonomic constraints

Greek word where Ergo = Work & Nomos = Laws, i.e Laws of work.
Optimal productivity requires a relationship between the worker and the
work, thus designing a job needs this consideration.

Employee considerations

Skill variety

Variety refers to the use of different skills and talents to complete an

array of work tasks and activities.
Autonomy

Autonomy refers to the freedom and independence to plan and schedule

the work and determine the procedures used to carry it out.

Task identity

Task identity means doing something from beginning to end rather than
just part of it.

Task significance

It is the degree to which a job has substantial impact on an organization.

Feedback

Feedback is the degree to which employees can tell how well they are
doing based on information from the job.

Environmental considerations

Social expectations

In designing jobs, the surrounding social expectations must be considered

to avoid possible worker dissatisfaction.

Workforce availability

Job requirements should be balanced against the availability of the people

who are required to do the work.

Work practices

Work practices are set methods of performing work. These methods may
arise from tradition or the collective wishes of employees.
 Square Textiles - Incentives

5.2.7 Incentives

Compensation fluctuates according to

– A pre-established formula
– Individual or group goals because group goals are different from
individual goals
– Company earnings

Incentives adds to base pay

It controls costs because the employee is being paid for his/her extra
effort and for the benefits brought to the organization.

Motivates employees

Incentive Pay Categories

Individual

Group

Company-wide

Individual incentive plans

– Quantity of work output (How many units produced)

– Quality of work output (What was the quality of the product or service
being produced or served)
– Monthly sales (How much sales was generated)
– Work safety record (How many hazard or errors are being reduced.
– Work attendance (If the absent is reduced or attendance is good)

Group Incentive

Performance Measures

Group incentive plans

– Customer satisfaction
– Labor cost savings
– Materials cost savings
– Reduction in accidents
– Services cost savings

Company-Wide Performance Measures

Company-wide incentive plans

– Company profits
– Cost containment/prevention
– Market share
– Sales revenue

Individual Incentive Plans (Piecework plans)

• Awards based on individual

production vs. company standards
• Awards based on individual
performance standards using
objective & subjective criteria
• Quantity and / or quality goals

Advantages and disadvantages of Individual Incentive Plan

• Advantages
– Helps relate pay to performance
– Promotes equitable distribution of compensation
– Helps retain best performers
– Compatible with individualistic cultures and societies

• Disadvantages
– May promote inflexibility
– Unrealistic standards may hamper employee motivation
– Setting performance standards is time consuming
– Factors beyond employee’s control may affect outcomes
– Factors not rewarded may be overlooked

Group Incentive Plans

• Rewards employees for their

collective performance
• Group incentive use has increased in industry
• 2 types
– Team - based or small group
– Gain sharing
Company-Wide Incentive Plans

• Rewards employees when company

meets performance standards

• 2 Types
– Profit sharing plans
– Employee stock option plans

Competitive Strategies

• Lowest - cost
– Lower output costs per employee
– Individual & group incentive plans
– Behavioral encouragement plans

• Differentiation
– Unique product or services
– Creative, risk - taking employees
– Long - term focus
– Team - based incentives

Benefits of SQUARE Textile Limited

5.2.8 Benefits of SQUARE

Employee benefits & services were formerly known as fringe benefits and
these benefits were primarily the in-kind payments employees receive in
addition to payments in the form of money.

In addition to paying employees fairly and adequately for their

contributions in the performance of their jobs, organizations assume a
social obligation for the welfare of employees and their dependents

Employee benefits are usually inherent components of the non-

compensation system are made available to employees that provide:

– Protection in case of health & accident

– Income upon retirement & termination
These benefits are components that contribute to the welfare of the
employee by filling some kind of demand.

Legally required benefits of SQUARE

• Social Security
– Social security benefits include the general benefits like unemployment
insurance & benefits, old age insurance, and Medicare facilities.

• Workers’ Compensation
– Worker’s compensation includes the compensation when an employee
becomes injured or disable due to extreme working conditions or while
working at the job site.

• Family & Medical Leave

– Family leave includes the compensation continuation during the family
leave such as maternity or paternity leave and other family leave.

• Old age, Survivor, Disability Insurance requirements for getting

compensation:
– Earn 40 quarters of credit, or
– Be employed for 10 years
– Be age 62 for partial benefits
– Be age 65 for full benefits
– Now the age has been extended to age 67 because more and more
workers are retiring late.
– Widow aged 60 +

Medicare

Depends on the country’s policy, medicare facilities are generally

government services to citizens.Organizations add some value to
medicare facilities. In some countries medicare is financed together by
employees’ tax, employers and the government.

Provided insurance coverage for

– Hospitalization - Covers inpatient & outpatient hospital care & services.
– Major doctor bills – Charges of visiting a doctor or specialist.
– Prescription drug costs.
– Provides unlimited in-home care in certain situations.

Workers’ Compensation
• Workers’ compensation is a legally required benefit is included in the
compulsory disability laws of many countries. Mostly, employer is seen
liable regardless of the fault.

• Objectives of Workers’ compensation:

– Provide income & medical benefits
– Reduce litigation
– Eliminate legal fees & time
– Encourage employer safety
– Promote accident study & avoidance
• Workers’ compensation claims
– Injury
– Occupational disease
– Death

• Workers’ compensation benefits

– Medical services
– Disability income
– Death benefits

Discretionary Benefits

• Discretionary benefits are judgment based benefits that the organization

provides to its employees. These benefits are not legally required benefits
but enhances organizational culture and corporate image.

• Benefits include:
– Protection programs
– Pay for time not worked
– Other services

Pay for time not worked

• Holidays

• Vacations

• Funeral leave

• Marriage leave

• Sick leave

• Stress leave

• Blood donation or welfare work

• Personal leave

• Sabbatical leave/ For Muslims, leave after death

• Other religious leaves such as pilgrimage or preaching

Operating Financial Result of Square Textile

6.0 FINANCING

6.1. Financial Result:

The Company’s operating financial results, as compared to the previous

year, are summarized hereunder:

(Taka) (Taka) (Taka)

Year 2006 Year 2005 Year 2004

Turnover 2,102,670,263 1,789,018,386 2,076,925,039

Cost of
Goods Sold 1,737,055,759 1,500,281,590 1,676,690,068
Gross Profit 365,614,504 288,736,796 400,234,971
Operating &
Financial
Expenses 175,524,220 197,835,510 217,687,872
Operating
Income 190,090,284 90,901,286 182,547,099
Other
Income 225,844 663,215 912,083
Net profit
Before WPPF 190,316,128 91,564,501 1,83,459,182
Contribution
To WPPF 9,062,673 4,360,214 8,736,152
Net Profit (BT) 181,253,455 87,204,287 1,74,723,030
Provision for
Income Tax 13,359,728 5,751,104 -
Net Profit (AT) 167,893,727 81,453,273 174,723,030
Gross Margin 17.39% 16.14% 19.27%
Net Margin 7.98% 4.55% 8.41%
Earning per
Share (EPS) 6.67 3.23 6.94
Outstanding
Shares 25,190,000 25,190,000 25,190,000
Face value
Per share (TK) 10 10 10

The gross margin rose to 17.39% from the level of 16.14% in 2006. As the operating
& financial expenses declined , net margin also rose 4.55% in 2005 to 7.98% in
2006. Net Profit (AT) has been increased due to cost control measures ,
procurement strategies and favorable export prices in the international market.

Products, Price, Place, Promotion, Strength, Weakness, Opportunity

7.1 Products:

In two units of Square Textiles Ltd. The following products are produced :
In Square Knit Fabrics Ltd. Product range Engineering stripe and semi
jacquard, plain , pique , Four Neddle structure , Crepe rib , Interlock ,
Drop needle , Crossmiss , Milano rib , etc.

In Square Fashions Ltd. Following types of products are produced T-shirts

& Polo- shirts, Tank tops , Pajamas, Sport wear , Under garments , Mens
& Ladies fashion wear , Kidswear etc.

7.2 Price:

The unit selling prices over the years varied substantially as shown below:

2006 2005 2004

Local sales 94.75 61.71 87.12
Export Sales 143.84 127.12 154.62
Total sales 143.49 124.71 151.94
(average)

The above indicate that the local and export selling prices increased by
53.54% and 13.14% respectively during the year 2006 over the year
2005after gradual decline during the years 2004 and 2003 over the year
2001. the increase is primarily ascribable to the international situation.

7.3 Place :
Export oriented ready made garments industry operating in Bangladesh
are the main purchaser of products of Square Textiles Ltd. The size of
export oriented RMG industry is fairly large in Bangladesh . So there is a
huge market for Square Textiles Ltd. In Bangladesh. Moreover products of
Square Fashions Ltd. Are exported to Europe and USA.
7.4 Promotion:
Square Textiles Ltd. Does not pursue any rigorous promotional activity .
As most of the purchaser are export oriented garments , they don’t need
to be promoted . Infact, the buyers themselves are aware enough from
where they will get quality products. So there is not much room to
pursue. For the UK and USA based market this fact is true as well .

8.0 SWOT ANALYSIS:

SWOT analysis means the analysis of strength , weakness, opportunity

and threats . For Square Textiles Ltd. It is given below:

8.1 Strength:
Square Textiles Ltd. Is a rapidly expending Company . Standing its
journey in 1998 it has already doubled the net turnover by the year of
2006. All the units of the factory enjoy highly of machinery are imported
from Germany, Switzerland , Italy & japan . As a result it can maintain a
smooth rate of production. Well trained human recourses are another
strength of the Company . They train up their key personally in the
country and abroad . So that the Company can get some competitive
advantages over the competitions. The HRM practice is also remarkable .

8.2 Weakness:
There are too many departments under the super vision of the general
manager which can cause low productivity due to large span of super
vision.

8.3 Opportunity:
There are bright opportunities for the Company in the overseas market .
If is can communicate well and capture a significant market portion in the
Europe and USA market, it can get scale of economic.
 9.0 FINDINGS AND RECOMMEDATIONS

9.1 Findings: Textile industry is a comparatively new in our country . The

size of the industry is still growing. Square Textiles Limited is one of the
first movers in this sector. Starting only in 1997 , it has managed to be
grown up as one of the country’s leading Textile Company . Its increase
turnover has been significantly increasing, since 1997-2007. It is
providing employment to a large number of skilled and unskilled people
all over the country. The Company contributed an amount of taka 37.892
million to the national exchequer in different forms like Cooperate Income
Tax, Advance Income Tax, Ecise, Vat, Import Duties, Taxes, Government
Taxes , Stamp Duties, License Fees etc. The Company contributed
substantially to the Foreign Exchange Reserve of the country through its
export marketing operation. In 2007its net export earning was taka
1021.368 million.

9.2 Recommendations: From the analysis with the organization

structure we have seen that its span of super vision is too large. A
number of departments report directly to the general manager. If the
number were less the efficiency and productivity of the organization might
be increased. Quality control department should remain prompt always.
So that it can maintain a certain level of standard as per the market
demand to capture the foreign market share it should strive more.

10.0 CONCLUSION

The flourishment of any industry requires combined efforts and co-

operation from several parties . Social , political and macro economic
environment play pivotal role in this regard . Though Square Textile is a
newly Ventured Company in the respective sector, its growth and
expansion is praiseworthy. Its contributing the country and serving the
nation in different ways. If it can up hold its much toward advancement, it
will be able to set a role model in our country.