1.

Introduction of Compensation
Compensation refers to the total rewards that employees receive in exchange for their labor or
services. It includes both direct financial payments (like salaries, wages, and bonuses) and
indirect benefits (such as health insurance, retirement plans, and paid time off). Compensation is
a key element of employment because it motivates and rewards employees for their work.

2.Significance of the report

The main reason of this report is to become a familiar with the realistic business world and to
attain practical knowledge about the employee compensation & benefits package of ACI
Limited. It is known that there is no alternative of practical knowledge which is more beneficial
than theoretical aspects. Internship is not only essential for practical experience but also require
for understanding of corporate culture and to cope with the daylong working atmosphere. As a
student of BBA this report will be more significant in my practical life. That’s why my selected
topic is Employee compensation & benefits package. I have worked for three months at ACI
Limited to complete the internship program as an academic requirement.

3.Objective of the study

Broad objective:
To know about the employee compensation and benefits package of ACI Limited.
Specific objectives:
 To know about the employee benefits plan of ACI Limited.
 To illustrate various types of allowances and other compensation related facilities
provided by ACI Limited.
 To identify the problems of employee compensation & benefits package of ACI Limited.
 To suggest some possible recommendations to overcome the problems.

4.Limitations of the report

The report is not free from some practical limitations. Following limitations have faced during
the report and the time of working & data collection:
 In many cases the relevant authorities are not helpful to provide information.
 Up to date information were not available.
 Lack of instrumental facilities to get proper information.
 Lack of Records, Sufficient books, unavailable information in website. These constraints
narrowed the scope of accurate analysis.
 The employees of the company were so much busy with their jobs, which lead a little
time to consult with me.
5.ACI profile Introduction
Imperial Chemical Industries, a British multinational established a Branch in the then East
Pakistan which was converted into a company after liberation, named ICI Bangladesh
Manufacturers Limited. In 1992 ICI divested its investment in Bangladesh to the Management,
when its name was changed to Advanced Chemical Industries (ACI) Limited. ACI Limited,
being one of the largest conglomerates in Bangladesh with a multinational heritage operates
across the country through its four diversified strategic business units. ‘Health Care Division’ is
dedicated to improve the health of the people of Bangladesh through introduction of innovative
and reliable Pharmaceuticals products. ‘Consumer Brands Division’ is adding value to the daily
life of consumers through its Toiletries, Home Care, Hygiene, Electrical, Electronics, Mobile,
Salt, Flour, Foods, Rice, Tea, Edible Oil, Paints and International Businesses. ‘Agribusinesses
Division’ is the largest integrator in Bangladesh in Agriculture, Livestock, Fisheries, Farm
Mechanization, Infrastructure Development Services Motorcycle, Marine & Reverine technology
and Avionics. ‘Retail Chain Division’ is the largest retail chain in Bangladesh operating through
its SHWAPNO outlets including 136 newly opened outlets across the country by touching the
lives of over 65,000 customers each day. ACI and its subsidiaries contributed Taka 16,732
million to the National Exchequer during FY 2022-2023 in the form of corporate tax, custom
duty and value added tax.

6.Methodology of the report

Type of Research:
This report is a descriptive type of research in nature and it administered by collecting both
primary and secondary data. It has tried to use both the primary and secondary sources of
collecting information and some are to make the report presentable with as less abstraction as
possible.
Types of data collection:
In order to attain the objective of the report, all-necessary information’s are prepared by
collecting both primary & secondary sources of data. These are:
Primary data:
Primary data collected directly to provide the ACI Limited companies employees compensation
& benefits package through face-to-face interaction. It is the systematic collection of information
directly from respondents using survey. Several sources of data collection are used to make this
report. The source of data are-
 Questionnaire survey.
 Face to face communication.
Secondary data:
Some secondary data collected to make the report more concrete. These data has been collected
from:
1. ACI Limited annual report 2009, 2010, 2011.
2. ACI Limited statistical report 2011.
3. Web site: www.aci-bd.com.

7.Mission, Vision & Values of ACI Limited

Mission:
ACI’s mission is to enrich the quality of life of people through responsible application of
knowledge, skills and technology. ACI is committed to the pursuit of excellence through world-
class products, innovative processes and empowered employees to provide the highest level of
satisfaction to its customers.
Vision:
1. Endeavour to attain a position of leadership in each category of its businesses.
2. Attain a high level of productivity in all its operations through effective and efficient use
of resources, adoption of appropriate technology and alignment with our core
competencies.
3. Develop its employees by encouraging empowerment and rewarding innovation.
4. Promote an environment for learning and personal growth of its employees.
5. Provide products and services of high and consistent quality, ensuring value for money
to its customers.
6. Encourage and assist in the qualitative improvement of the services of its suppliers and
distributors.
7. Establish harmonious relationship with the community and promote greater
environmental responsibility within its sphere of influence.
Values:
1. Quality
2. Customer Focus
3. Fairness
4. Transparency
5. Continuous Improvement
6. Innovation
8.Business philosophy of ACI limited
There are six (6) core competencies of ACI limited which are listed below
1. Diversified product range with some world recognized brands.
2. Mechanistic organizational structures with strict control form the top management.With
this structure, management is more able to concentrate on the strategic issues
than silly routine works.
3. Strong revenue growth and revenue base. And also has very low possibility of making
loss.
4. Distribution of various products is done under one umbrella which leads to more
efficient use of distribution channel.
5. Lots of market leading products and lots other with potential future growth, both
nationally and internationally.
6. Strong financial strength with a high margin of safety which ensures continuous profit
and stability.
9.Subsidiaries of ACI Limited
 ACI Formulations Ltd.
 ACI Agrochemical
 Apex Leather crafts Limited
 ACI Salt Limited
 ACI Pure Flour Limited
 ACI Foods Limited
 Premiaflex Plastics Limited
 Creative Communication Limited
 ACI Motors Limited
 ACI Logistics Limited

10.Joint Ventures of ACI Limited

 ACI Godrej Agrovet Private Limited
 Tetley ACI (Bangladesh) Limited
 Asian Consumer Care (Pvt) Limited

11.Compensation management practices and policies of ACI limited

Financial compensation:
The organization provides the financial facilities to the employees for doing their job in the
organization. Financial compensation includes the followings:
 Salary.
 Wages.
 Incentives.
 Fringe benefits.
 Dearness allowance.
 Medical allowance.
 House rent allowance.
 Gratuity.
 Retirement benefits.
Non-financial compensation:
Besides financial compensation, the organization also provides non-financial compensation to
the employees for attracting and performing their jobs in the organization. Non-financial
compensation includes the following:
 Dignity.
 Recognition.
 Working condition.
 Social status.
 Achievement.
 Figure.
Consequences of Ineffective compensation:
A compensation consequences of ineffective compensation system, may be termed as over-
compensation and under- compensation . When the employees are paid more than what they
really deserve, the system is called over- compensation and when the employees are paid less
then they really deserve, the system is called under-compensation.
Over-compensation and Under-compensation are both harmful to the enterprise and employees
alike. The effects of over and under-compensation on employees and the enterprise are stated
below:
Table

Consequences of pay Dissatisfaction:

When employees are not satisfied with the compensation package, pay dissatisfaction arises. The
pay dissatisfaction has manifold effects on employees. The desire for more pay may lower
performance, increase grievances, cause stress, compel employees to search for new jobs
resulting in loss of time and so on. These are stated below:
Desire for more pay:
 Performance.
 Strikes.
 Grievances.
Search for higher paying jobs:
 Absenteeism.
 Turnover.
 Low performance.
Pay dissatisfaction:
 Job dissatisfaction.
 Turnover.
 Absenteeism.
 Psychological withdrawal.
 Poor mental health.
Figure
Compensation sub-systems of the reward system:
People obtain compensation rewards that provide money to purchase a wide variety of goods and
services to receive in kind payments of goods and services that would have required the
expenditure of money.
There are eight compensation dimensions. These are as follows:
1.Pay for work and performance:
 Base pay.
 Base pay add-on.
2.Pay for time not worked:
 Holidays.
 Vacations.
 Election official.
 Witness in court.
 Maternity leave.
 Paternity leave.
  Blood donation etc.

3.Disability income continuation:

 Short term disability.

 Long term disability.

4.Loss of job income continuation:

 Unemployment insurance.
 Guaranteed annual income.
 Job contract.
 Unemployment benefits.
5.Deferred income:
 Social security.
 Pensions plans.
 Savings and thrift plans.
6.Spouse income continuation:
 Pensions plans.
 Life insurance.
 Group life insurance.
 Total and permanent disability.
7.Health, Accident, Liability protection:
 Medical, Hospital and surgical insurance,
 Social security.
 Health maintenance organization. (HMO).
8.Income Equivalent payment:
 Child care.
 Certain tax benefits.
 Club membership.
 Giving of gift.
 Subsidized food service etc.

Non-Compensation sub-systems of the reward system:

The other major part of the reward system consists of non-compensation rewards. These rewards
are much more difficult to classify and their components far more complex than is the case of
compensation rewards. Non-compensation rewards are all the situation related rewards not
included in the compensation package.

 Enhance dignity & satisfaction from worked performed.

  Enhance psychological, Health, Intellectual growth, and emotional maturity.
 Promote constructive social relationship with co-workers.
 Design job that requires adequate attention and effort.
 Allocate sufficient resources to perform work assignments.
 Grant sufficient control over the job to meet personal demands.
 Offer supportive leadership & management.

12. Compensation and benefits package of ACI Limited:

Compensation is really very important matter for any business organization. For any business
organization, the employees who make up the workforce are very important. It is also very
important to make an attractive compensation package for these employees. The compensation
package must be very attractive to increase the image of the organization as well as to retain the
employees with the organization.
ACI Limited is also following a compensation package that helps them to retain the full time
employees and the casuals. Though they are on a track to compensate the employees in a
competitive manner, but they try to give a bit higher salaries and wages to the employees to
remain as a competitive organization in the market. They judge the job positions first and then
they go for the study of the same categorized job position in the other organizations, and see the
pay level of these positions. Then, ACI Limited decides that how much will be paid to the
positions that they are defining or examining. In this case ACI Limited tries to be very fair about
the pay levels. They try to fix the pay level in such a manner that is fair and effective for them
and to the employees too.
Incentives:
Compensation fluctuates according to:
 A pr-established formula.
 Individual or group goals because group goals are different from individual goals.
 Company earnings
 An incentive 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:
 Quality 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 Incentives:
 Customer satisfaction.
 Labor cost savings.
 Materials cost savings.
 Reduction in accidents.
 Services cost savings.
Company- Wide:
 Company profits.
 Market share.
 Sales revenue.
Sales Incentive:
 Instead of performance bonus, field sales staff will the rewarded with quarterly sales
incentive for their contribution to the company.
 Incentive schemes for each business will be proposed by respective business head
during budget preparation for the coming year. This scheme will require approval from
the managing director and should be communicated to field force before beginning of
the year.
Provident fund:
 The company has instituted provident fund for management staff.
 All Management employees will join the provident fund scheme after confirmation.
 Along with the confirmation latter Human Resource Department will send a provident
fund joining and nomination form to the employee.
 The provident fund will run on contributory basis, i.e. 10% of basic salary from the
employee and equal amount from the company.
 If any employee leaves the company, he/she will be entitled to the company’s
contribution only after 5 years from the date of confirmation, else, the employee will
only be entitled to his/her own contribution.
 Company has formed a trusty committee to maintain the provident fund.
 Conditions with regard to provident fund shall be regulated as per the rules of the fund.
Insurance:
 The company has instituted a fund for management staff which provides payment of
death during service by any cause, except in the first twelve months of insurance.
 Group life insurance is payable under any kind of death during service except in case of
suicide.
 Staff should advise HR Department the particulars of their nominees including name
and relationship.
 If the nominee is a minor, the name of the minor’s guardian should also be advised.
 The payable insurance amount according to the management grades are given below:

Table
Medical benefits:

All employees of ACI will receive a monthly medical allowance as per respective grade
of the employee. The allowance will be paid together with the employee’s monthly salary
and for this no receipt needs to be submitted. For special case of treatment, following are
the additional support extended to the employee’s.
Table
Table: Medical benefits:

1. In case of hospitalization of the staff, spouse or two dependant child, in any recognized
hospital or clinic, the company will reimburse 50% of the hospitalization charges, which
will include bed/cabin rent, doctor’s fees and laboratory tests & medicine required
during the period of hospitalization. All other charges will be borne by the staff.
2. In case of surgery, the company will reimburse 75% of the total operation charges
comprising of surgeons fee, anesthetist’s fee & O.T. charges and cost of medicine
related to the surgery.
3. Prior approval from the head of business is necessary before hospitalization or surgery.
The name of the patient and the name of the hospital/ clinic need to be stated while
taking the approval.
4. Department heads will approve advance against surgery for staff on a case- to-case
basis.
5. Expenses for delivery under caesarean section will be reimbursed as per clauses 2.
Reimbursement of more than two children will not be allowed.
6. These rules will be subject to modification from time to time at the discretion of the
company.
7. Normally, ACI does not allow treatment abroad, In case where treatment/ surgery are
not sagely/ reliably available in Bangladesh, the ACI may consider allowing the
individual to proceed abroad for such treatment/ surgery. In such cases, the company
shall be totally satisfied as to the merits of the case on the basis of the best medical
 option available. All such treatment abroad should be approved by the managing
director before initiating the formalities.
8. The ACI will not be liable to pay medical charges for any facial or skin beautification
such as Rhinoplasty, Liposuction, Otoplasty, Blepharoplasty or laser/ lasik Surgery,
Facelift, Cosmetics dentistry/ tooth restoration, etc.
9. In case of treatment in the hospitals/ clinics which are not enlisted; the bills will be
settled at the rate of enlisted similar hospital/ clinic.
Leave:
Entitlement:
All management staff will have the following leave entitlement in a calendar year:
Table
Entitlement credit:
1. Full entitlement is credited from the succeeding years on the basis of leave earned in
the previous calendar year.
2. Privilege Leave is (PL) is credited after completion of one year service. However,
there will be proportionate entitlement from the date of joining to the end of that
calendar year.
3. For staff leaving the company’s service, proportionate PL is credited.
4. Sick Leave (SL) entitlement begins from the time of joining proportionate to the
remaining period of the calendar year. Full entitlement is credited from the beginning
of the following calendar years.
5. PL is not normally granted before completion of one year of service. However, in
special circumstances managers my recommend leave for his subordinate and forward
the application form to the head of the department for consideration, if approved,
such leave will be adjusted from future entitlement when due.
6. It is not the policy of the company to grant leave without pay. Under extreme
circumstances such as study leave, staff may make representation to their department
heads. Sanction of such leave should be made in consultation of the HR Department.
7. Leave records for all management staff will be maintained by the HR department at
the Head office. In January every year leave balance will be sent to the respective
management staff for confirmation. On receipt of confirmation the leave application
of the previous year will be destroyed.
8. Leave roster will be prepared by each department for every year and department
Heads should ensure that management staff under him are given leave as per roster.
9. Absence on account of “Hartal” will be adjusted from privilege Leave.
Leave Accumulation:
 1. Leave may be accumulated up to maximum of 4 years entitlement for both office
management & field staff. Utilized leave in excess of 4 years entitlement on 1st
January shall stand lapse.
2. Leave lapsing on account of company’s business and therefore for no fault of the
individual may be allowed to be carried forward in addition to the maximum
entitlement. Such accumulation shall be allowed by the HR on recommendation by
the respective department Head.

12.Findings
 From the analysis it has seen that employees are not satisfied with the organization‘s
incentive systems.
 ACI compensation related benefits and packages are not sufficient.
 Most of the employees are dissatisfied with the TA/DA offered by their organization.
 In the analysis it has seen that most of the employees are dissatisfied with the
insurance coverage offered to them.
 ACI Limited only provides the group insurance facility but does not provide any
individual insurance facility.
 From the analysis I found that ACI pension/ retirement plan is average.
 With the organization’s current salary structure, maximum amount of the employees
are dissatisfied.

13.Conclusion
ACI Limited is one of the leading conglomerates in Bangladesh, with a multinational heritage. In
BD ACI Limited has been doing corporate business and soundly maintaining social
responsibilities. The agenda of this company earning profit, creating job opportunity, though
trade and commerce. Achievement of ACI Limited is beyond description. Maintaining
Government rules and regulations ACI Limited always try to contribute on national G.D.P and
G.N.P. not only local business but also internationally. ACI follows most of the compensation
practices and policy. They always try to contribute to employee satisfaction and given to
employees all types of compensation benefits. It has always been a dream to be able to work for
a highly reputed company and my dream was fulfilled for three months as I was conducting my
internship in ACI Limited. It has been an amazing experience for me as I completed my
internship as well as my first job from such an incredible organization. In this company, interns
are not treated as guests for three months. We are actually involved in real time projects where
our inputs and contributions are highly appreciated and necessary. During my internship or my
first job, I was exposed to many works which I never thought of even doing. As I have Human
Resource Management as my major so working under the department of HRM was really great
to me. Therefore I must acknowledge the fact that there are countless number of things that I
learnt during my internship about how the company operates, its day to day activities, problems
that occur every day and how to resolve them effectively and efficiently. No matter where I
work, I’m confident that I will be able to apply my learning and knowledge in any organization.

14.Recommendation
 The organization should ensure standard incentive policy to their employees for their
high level of satisfaction.
 The organization should increase its compensation related benefits which are provided to
the employees.
 The organization should put more concentration on TA/DA which offered to their
employees.
 The organization should provide effective/acceptable insurance coverage to their
employees.
 ACI Limited should also provide individual insurance benefit along with group
insurance.
 The organization’s pension/ retirement plan should be modified in favor of their
employees.
 The organization may increase current salary structure of their employees.