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Thoughts on Economics

Vol. 22, No. 02

Corporate Human Capital Investments: Global Analytics and Its Evidences from Some Selected Companies in Bangladesh

1Md. Aktar Kamal

2Mohammed Abdullah Raihan

& 3Mohd. Mohsin

Abstract : Human Capital (HC) is increasingly recognized as a key competitive advantage

for companies, as well as a key indicator of a company‟s success. As such, it is important for

organizations to measure the return on HC investments to control, monitor and better invest

their „most valuable asset‟- people. Standard financial metrics—such as Return on Invested

Capital (ROIC), Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA),

and cash flow proxies such as free cash flow (FCF)—are simply too broad to isolate and

measure human capital performance. Therefore, this conceptual as well as empirical paper

explains, in its conceptual part, the financial analytics, monetary analytics and other familiar analytics to measure the return on HC investment as suggested , researched and employed by

other scholars, academicians, research organizations around the globe. As a part of empirical

analysis, the authors have used the Vienna Human Capital Analytics to measure the ROI and

productivity on human capital investment .Data has been collected from the annual report of

25 companies of Dhaka Stock Exchange (DSE) in Bangladesh. As a major result, we find that

the firms in engineering sector are the most successful users of HC both from effectiveness

(HC ROI) and productivity (efficiency) whereas the banking companies have been placed as

2nd position on the basis of productivity and firms in pharmaceutical sectors are selected as

the 3rd best user of human capital investment. This paper also highlights some important

messages to Chief Human Resource Officers (CHROs) which firms are moving to right

direction and which has still room for further development of business and HC practices.

Keywords: Human Capital, Global Analytics, Financial Analytics, Vienna Human

Capital Index, HC ROI and HC Productivity.

1. Introduction

People differ substantially in their economic well being, among countries,

families and corporations within a country or in the arena of the whole globe.

1 Lecturer, Department of Business Administration, International Islamic University Chittagong, Dhaka

Campus. 2 Assistant Professor, Department of Business Administration, International Islamic University

Chittagong, Dhaka Campus. 3 Assistant Professor, Department of Business Administration, International Islamic University

Chittagong, Dhaka Campus.

52 Corporate Human Capital Investments…………..

For a while economist were relating these differences primarily to the

differences in the amount of physicals capital since richer people had more

physical capital than others (Gary,1962).It has become increasingly evident,

however , from studies of income growth (S.Fabricant,1954) that factors other

than physical resources play a larger role than formerly believed, thus focusing

attention on intangible assets like the knowledge possessed, Therefore, a

concern with human capital ties in closely with the new emphasis on

intangible resources.

Investment in human capital consume about 70 percent of organizational cost

in US (www.majorc.com/blog/human-capital-assessment-the-symptom-or-

thediseases).Superior human capital management is a leading rather than

lagging indicator of improved financial success at enterprise level (Watson

Wyatt, 2002).

There is a growing body of evidence that the quality of Human Capital

Management (HCM) is an important factor in a business's competitive

advantage, and correlated with competitive performance. This is especially so

as for the movement of manufacturing economies to a services based

economy, where knowledge is a key differentiator (e.g. in consulting,

investment banking and IT services), and where employee costs can exceed

40% of corporate expense (Foong, 2003). Knowledge is also increasingly

important in high-value-added manufacturing-based businesses

(pharmaceuticals, consumer electronics and electrical machinery). Therefore,

the Chief Human Resource Officers (CHROs) should know whether company

spending on human capital is financially justifiable. But it is difficult to

measure such investment accurately, largely because much of it is not reported

in the company accounts (OECD, 2006). In light of the above background, this

study has been undertaken to explore the most widely used standard tools for

measuring the human capital investment globally and to conduct an empirical

evidence of the tool suggested by Vienna Human Capital Index in some

selected companies in Bangladesh.

2. Rationale of the Study

In business, revenues are driven by two types of investments: human capital

and financial capital (DiBernardino & Miller, 2008). And, for many

companies, the costs of human capital far surpass those of financial capital

.Yet, metrics typically used to measure the performance of human capital—

such as revenue or profit per FTE, turnover rates, costs per hire, and employee

satisfaction percentages—do little to measure the financial return on an

organization‘s sizable investment in people. This leaves CHROs at a distinct

http://www.majorc.com/blog/human-capital-assessment-the

Thoughts on Economics 53

disadvantage, often defending the validity of policies and numbers

(DiBernardino & Miller, 2008).In the latest Strategic HR Management Survey

Report, HR professionals identified their most prevalent barrier to making

effective contributions in the workplace as the inability to directly measure

HR‘s impact on the bottom line and a lack of an established method for

measuring the effectiveness of HR strategy through metrics and analytics

(SHRM research, 2006). In response to these shared frustrations, scholars and

business leaders are calling for financially rigorous performance metrics that

highlight the productivity of people (Barber & Strack 2005).None of the

traditional methods for evaluating business performance can isolate the human

capital investment and determine whether it is improving or eroding

company‘s economic value. In order to boost strategic capabilities and

demonstrate added value to the organization, CHROs need access to data and

information that have the same level of timeliness and validity as those

provided to their counterparts in marketing and finance and they must be able

to apply human capital data and information—on par with what the CFO

would expect in Finance—to drive business decisions (IBM, 2006)

3. Objectives of the Study

The objective of this study is to investigate the much popular analytical tools

of measuring investments used by enterprises around the world to make up

their human capital and an empirical inquiry of Vienna analytics in the

corporate sector of Bangladesh so as to focus some policy implications of the

human capital investment analytics to its stakeholders in Bangladesh.

4. Conceptual Framework on Human Capital

The term ‗HC‘ was first used by Nobel Laureate, Theodore W. Schultz, in the

1961 American Economic Review Article, ‗Investment in HC.‘ The term is

now most frequently used to refer to a combination of skills, experience and

knowledge (Flamholtz, 1981).Human capital is represented by the aggregation

of investments in activities, such as education, health, on-the-job training and

migration that enhance an individual‘s productivity in the labor market. From

a broader aspect, human capital can be defined as the aggregation of the innate

abilities, the knowledge and skills that individuals acquire and develop

throughout their lifetime. HC is an all-encompassing term for the knowledge,

skills, competencies and other attributes embodied in individuals or groups of

individuals acquired during their life and used to produce goods, services or

ideas in market circumstances (Westphalen, 1999)

.A company‘s human

capital asset is the collective sum of the attributes, life experience, knowledge,


inventiveness, energy, and enthusiasm that its people choose to invest in their

work (Laslie, SHRM, 2003).

At country (Macro) perspective, human capital investments are measured

through two aggregated resources, namely money and time, devoted to

learning by individuals ,companies and governments (OECD, 1998).Some

mentionable indicators of a country‘s human capital investments are: share of

national income devoted to education and training, average spending per

student by educational level relative to income per head, spending on public

labor market programmers, spending by enterprise on training, family

computer ownership, expected years of schooling, expected years of tertiary

education, employee participation in job related training and average duration

of job related training. At enterprise perspective, Human capital Investment

(HCI) refers to investing in the people dimensions of the business or unit and

consists of the followings (DiberNardino, 2010):

i. Employee Costs: Pay (base, annual bonus and long-term incentive)

and benefits

ii. Costs in Support of Employees: The variable or incremental costs a

company incurs due to employees. Examples include real estate,

communications, technology and training & development.

iii. Costs in Lieu of Employees: These are essentially outsourcing costs.

5. Reviewing the Literature on Popular Human Capital

Investment Model.

Several strands of practical and theoretical literature have been examined on

this topic of study:

Guest (www. esrc.ac.uk) conducted a study on the link between HR strategy and

financial performance for UK companies for the ―Future of Work‖ program,

and came up with the following model. Business strategy would determine to

HR strategy and practices that would make HC more effective, leading to

higher quality of goods and services, and higher productivity that would lead

to superior financial performance.

The 1994 National Employer Survey (NES) conducted by the National Centre

on the Educational Quality of the Workforce (EQW) shows that investment in

training brings more returns than investment in capital (National Center in the

Educational Quality of the Workforce, (―The Other Shoe: Education‘s

Contribution to the Productivity if Establishments‖. 1995: p.2) They

conducted a telephone survey of approximately three thousand establishments


employing twenty workers or more. The results showed that increases in the

number years of worker schooling contribute proportionally more to

productivity than increases in either capital stock or work hours: a 10 per cent

increase in education is associated with a 9 per cent gain in productivity, while

a 10 per cent increase in capital stock only resulted in a 3 per cent gain in

productivity. The difference is even more dramatic in the non-manufacturing

(e.g. service) sector. A 10 per cent increase in education, work hours, and

capital stock correspond to productivity gains in 11 per cent, 6 per cent, and 4

per cent, respectively

Evidence also suggests that companies that measure intangibles like HC as

well as financial assets distinguish themselves by superior performances.

Companies that regularly measure performance in 6 categories (financial

performance, operating efficiency, customer satisfaction, employee

performance, innovation and change, and community/environmental issues)

excel in three ways: identification as an industry leader over the prior three

years (74 per cent of measurement-managed companies versus 44 per cent of

others), financial performance in the top third of their industry (83 per cent

versus 52 per cent), and self-reported success at major cultural or operational

change (97 per cent compared with 55 per cent).

The Watson Wyatt Human Capital Index (HCI) studies (2001) of 51

companies around the world gives a dramatic answer to this issue: the

correlation of 1999 HCI score × financial performance was 0.41 and the

correlation of 1999 financial performance × HCI score was 0.19 which

demonstrates that the relationship between past human capital practices and

future financial performance is much stronger than the relationship between

the past financial performance and future human capital practices.

Another study of Watson Wyatt (2003) found that firms that carefully link HR

activities to business strategy, measured by metrics, have a 33% higher return

on total capital than organizations that do not.

WM. Schiemann & Associates concluded that a focus on employee

measurement is the single biggest factor differentiating successful firms from

less successful ones (Lingle, J.H. and Schiemann 1996). One of the reasons is

that workers‘ feelings about their jobs and companies have a significant

impact on their performance, and consequently, the companies‘ performance.

Another comprehensive academic study of the relationship between high-

performance work practices and overall firm performance is one carried out by

Huselid (1995) showing that firms with high-performance work practices

reduce turnover and increase productivity. A one standard deviation increase


in the high-performance work practices was linked to $27,044 more in sales,

$18,641 more in market value and a $3,814 increase in profits per employee.

Monti- Belkaoui, et al, (1995) suggested that human resource valuation should

be based on value-addition, as it is a measure of wealth. Value-addition is

defined as the increase in wealth generated by the productive use of the firm‘s

resources before its allocation among shareholders, bondholders, workers and

the government.

Flamholtz, Eric, (1999) said that an individual‘s value to an organization is the

present value of future services that she/he is expected to provide during the

period she/he is anticipated to remain in the organization.

To receive the human capital value, the four elements (value base, value

depreciation, value compensation, and value adjustments) have to be

calculated for all employees of the company from monetary perspective

(Scholz, Stein, & Muller, 2007).

Weiss, David,(1999) researched that as more and more companies move to a

business unit profit centre role, the human resources unit can take on a similar

role. If they were to do that, they need to measure HC in order to ascertain the

cost of investment in HC, and the returns from those investments.

Measurement of best investment in Human Capital (BIHC) also provides a

framework for human resources to move from a soft skill business, to a hard-

skill measurement based one. ‗Best‘ reflects comparative analyses of the

company‘s current investment performance versus external standards,

‗Investment‘ reflects the change in treating the money and effort spent on

developing HC as an investment rather than a cost, while ‗HC‘ is the money

and effort it takes to cultivate people and their talents, reflecting the economic

value of the knowledge, skills, experiences, creativity and innovations of

people in the company that enable the company to be productive and

competitive. As for investments, this should include money that the employee

receives directly (e.g. salaries, stock options and bonuses) money paid to third

parties on behalf of employees (e.g. cellular phones, pensions, health care) and

employee development costs (e.g. search and resourcing costs, training,

rewards and recognition costs).

Mark Huselid and his colleagues developed the Workforce Scorecard to

provide framework specific to HR. According to Huselid, the Workforce

Scorecard is an application of the Balanced Scorecard concept to identify and


measure the behaviors, skills, mind-sets, and results required for the workforce

to contribute to the company‘s success.

6. Research Frame and Data Sources

This study has taken into account the Vienna Human Capital Index, a patent

business intelligent tool to measure and help improve the performance of

company human capital investment as suggested by Vienna Human Capital

Advisors, 2008, in order to comprehensively evaluate the human capital in

terms of Return on Investment (effectiveness), Productivity (efficiency) and

Profit Sensitivity (liquidity) of 25 selected companies of different sectors of

Dhaka Stock Exchange in Bangladesh. Of the total 25 companies, 5 from

pharmaceutical sector, 5 from engineering sector,5 from textile sector ,4 from

ceramic sector and the other 6 from banking sector have been selected

randomly. The list of all selected companies has been given in Appendix

7.The required data inputs to conduct the study have been collected from the

annual reports for the year2009 and 2010 of the sample companies. The

available research paper, journals, working papers, different guidelines,

relevant books and websites on this particular study have been used by the

researchers to collect information associated with the study.

6.1. Explanation of the Vienna Human Capital Index used in the Study.

The Vienna Index consists of three strategic key performance indicators

(KPIs) that measure Human Capital Return on Investment (effectiveness),

Productivity (efficiency), and Profit Sensitivity (liquidity). A company‘s

Vienna Index number itself is the weighted average of its three KPIs (Frank

Dibnerdino, 2008).The different categories of measures as suggested by

Vienna Human Capital Analytics are:

Category Human Capital(Patent

Pending)

Definition

Human Capital

Return on

Investment

(Effectiveness)

Profit- FCC/ HCC

Where:

FCC = Financial Capital

Cost

HCC = Human Capital

Cost

It measures the return on each

dollar invested in human capital

after adjusting for the cost of

financial capital.

Productivity

(Efficiency)

Revenue ( R )– Material

Cost

( MC)/ HCC & FCC

It measures the amount of revenue

generated for each dollar invested in

human capital, after adjusting for the

costs of materials.


Profit Sensitivity

Liquidity ( Acid

Test)

Profit driven Incentive

Compensation (PDIC)/

profit

It measures the ratio between profit driven incentive compensation

(PDIC) and a profit goal determined

by the organization.

Source: Vienna Analytics

6.2. The Vienna Index™ Working Definitions of HCC and FCC

a) Financial Capital Costs = Interest, Depreciation, Amortization, and Cost

of Equity

b) Human Capital Costs = Employee Costs, Costs in Support of Employees,

and Costs in Lieu of Employees

7. Research Findings

7.1. A Checklist of HC ROI and HC Productivity in the Study

Sectors/

Companies

HC

ROI

(Effe

ctive

ness)

Movi

ng in

the

Right

Direc

tion

Opport

unities

for

Improv

ement

HC

Prod

uctivi

ty (

Effici

ency)

Movi

ng in

the

Right

Direc

tion

Opportu

nities

for

Improve

ment

Engineering Sectors

Aftab auto mobile ltd 5.2 --- 7.17 --

Singer Bangladesh Ltd 7.15 -- 18.07 --

national Tube 0.69 -- 2.12 --

Atlas Bangladesh Ltd 3.98 -- 5.325 --

Olympic Industries Ltd 0.24 -- 2.2 --

Pharmaceuticals Sector

Square Pharma 0.820 -- 4.09 --

Gloxco Smith 0.537 ---- 2.79 --

Orion Infusion - 0.18 -- 1.65 --

Pharma aid 0.18 2.3 --

Beacon -2.005 ---- .885 -


Textiles Sector

H.R. Textile -0.55 -- 2.11 --

Tallu Spinning -2.905 -- 1.475 --

The Dacca D -0.45 -- 1.75 ---

Malek Spinning -4.75 -- 1.42 --

Prime Textile - 0.375 -- 3.3 --

Ceramics Sector

Standard ceramics -0.27 -- 1.73 --

Monno Ceramics -0.97 -- 1.725 --

Rak Ceramics -0.025 -- 4.00 --

Fu-Wang Ceramics -1.26 -- 2.055 --

Banking Sector

Shahjalal Islamic LTD 1.885 -- 2.488 ---

IFIC Bank LTD 0.775 -- 1.003 --

SIBL 0.37 -- 1.785 --

City Bank LTD 0.208 -- 1.275 --

NCC Bank LTD 1.30 1.615 --

One Bank LTD 0.92 1.48 --

Source: Authors own calculation on the basis of Vienna Human Capital Index

= Green is ―Go‘‘ signal that indicates business practices are moving in the right

direction.

= Red indicates that results are below average and signals there are opportunities for

improvement.

7.2. HC ROI and HC Productivity on Pharmaceutical Sector

Of the five companies in the Pharmaceutical sector, Square Pharma

Ltd,Glaxco Smith Ltd and Pharma Aid Ltd have been ranked as 1st,2

nd, and 3

rd

in terms of HC ROI on the two years average (2009 & 2010), (Appendix 1),


meaning that all these three have generated positive return in their human

capital by 82%,53% and 18% respectively. The other two companies yielded

negative return on their human capital investment .On the productivity

(efficiency) perspective, all the sample companies have generated positive

revenue on their human capital after adjusting costs of material, shown in

Appendix 1, maintaining same level of efficiency as with effectiveness. The

surprising finding of this sector is that the average HC ROI of this sector is

disappointing.

7.3. HC ROI and HC Productivity on Textile Sector

So far as the HC ROI is concerned, the performance of all sample companies

in the Textile Sector is not really promising. The data given at Appendix 2,

show that all HC ROI are giving negative return, those related to Malek

Spinning and Tallu Spinning being the worst ones. But the human capital

productivity performances of all selected companies of this sector are

generating positive revenues on their total human capital investment. Prime

Textile, HR textile and the Dacca Dying are the three sequential top ranked

companies in generating the highest volume of human capital productivity.

Like the pharmaceutical sector, the average of HC ROI of this sector seems to

be problematic.

7.4. HC ROI and HC Productivity on Engineering Sector

Unlike the previous two sectors, all of the sample companies are yielding a

good margin of return on their human capital investment. Singer Bangladesh

Ltd, Aftab Auto Mobile Ltd and Atlas Bangladesh Ltd, have been positioned

as number 1, 2 and 3, (Appendix 3) on the merit of effectiveness of usage of

human capital. The human capital productivity performance of this sector is

also worthwhile .The same companies which were ranked in the 1st, 2nd and

3rd

position in case of HC ROI are maintaining the same trend in this

measurement.

7.5. HC ROI and HC Productivity on Ceramic Sector

Of the four companies in the Ceramic sector, all the companies two years‘,

(2009 & 2010) average of HC ROI is showing negative rate of return,

Appendix 4, indicates that some of the companies did not properly manage

their human capital nor did they properly nourish the same. However, in the

context of efficiency, all companies are producing positive rate of revenues

meaning that the investment on human capital of these companies are

contributing good amount of revenues.RAK ceramic, Fu Wang ceramic and

Standard ceramic have been ranked as number 1,2,and 3.


7.6. HC ROI and HC Productivity on Banking Sector

All the banks under study were found to be generating positive rate of return

against their human capital investment, (Appendix 5). This means that they are

effectively utilizing their investment on human capital. The Sahajalal Islamic

Bank, NCC Bank Ltd, and One Bank Ltd have been ranked as 1st, 2

nd and 3

rd

respectively as the most effective users of human capital. On the productivity

measures all the banks seemed to be worthy performers of human capital.

7.7. A Cross Sectional Comparison of HC ROI and HC Productivity

The study reveals that the firms in the engineering sector proved to be the

most (1st ranked) lucrative ones both from effectiveness (HC ROI) and

productivity (efficiency) point of view where the investment on human capital

is properly managed, (Appendix 6). On an average, the banking companies

have been placed in the 2nd

position on the basis of productivity measures of

human capital. And the firms in the pharmaceutical sectors are found to be the

3rd

in the race.

8. Policy Implications of the Study

Having summarized the main results of the survey, this study makes some

recommendations for the Chief Executive Officers (CEO), Chief Financial

Officers (CFO), especially, Chief Human Resource Officers (CHROs), the

senior managements, policy makers and, other stakeholders of the companies

studied. The implications are: 1st it gives CHROs a business intelligence tool

that can demonstrate bottom-line results and build credible business cases in

the eyes of the CEO and CFO.2nd

, it makes easy for a CHROs to consistently

chart performance of the human capital as a whole, and also, to identify

specific opportunities to improve productivity and ROI across business units.

3rd

, it can be used by business leaders to test ―what-if?‖ scenarios that project

future outcomes and inform strategic planning decision.4th

, It also enables the

organization to set internal benchmarks against which progress is measured

over time and across business units. 5th

,With this knowledge, CHROs can

predict, with a high degree of certainty, rather than depending on anecdotal

evidence, gut instincts, and trial and error, how Productivity and HC ROI can

be improved and to what extent they can influence company profits and

shareholder value. Last but not the least, externally, this new measurement

tool will allow leaders to compare their business performance trends with

those of similar other companies.


9. Scope of Further Research

The study has been conducted on only 25 selected companies of different

sectors listed with the Dhaka Stock Exchange of Bangladesh partly due to

unavailability of required data and partly due to computational complexity.

Potential researchers can widen the scope of the study by increasing the

sample size. Though the model used in the study can be applied in assessing

return on Human Capital Investments namely Return on Investment

(effectiveness), Productivity (efficiency) and Profit Sensitivity (liquidity), the

analysis of the latter analytic has not been operated. This could be an issue of

further academic research. More sophisticated tools of research could be tested

to come to conclusions on the efficiency, and productivity on the human

capital investment. Moreover, the study can also be done on the selection of

highly/less significant variable (s) influencing the efficiency and productivity

of human capital particularly in the context of Bangladesh corporate culture.

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Www. esrc.ac.uk

www.majorc.com/blog/human -capital-assessment-the -symptom-or-the diseases

www.web books.com/library/NC/B0/B58/101MB58.html Appendix 1: Pharmaceuticals Sector

Companies HC ROI (Effectiveness) Productivity

(Efficiency)

Average Rank

2009 2010 2009 2010 (Effectivene

ss)

(Effic

iency)

(Effecti

veness)

(Effici

ency)

Square

Pharma

0.826919 0.811729 4.038599 4.188416 0.820 4.09 1st 1st

Gloxco

Smith

0.498097 0.577744 2.602169 2.959605 0.537 2.79 2nd 2nd

Orion

Infusion

-0.22707 -0.12734 1.609528 1.679362 - 0.18 1.65 4th 4th

Pharma

aid

0.41378 -0.23773 2.59359 1.999037 0.18 2.3 3rd 3rd

Beacon -0.91683 -3.09779 0.994462 0.767047 -2.005 .885 5th 5th

Avg -0.1296 2.343

Source: authors, own calculation from the annual reports of sample companies.

Appendix 2: Textile Sectors

Companies HC ROI

(Effectiveness)

Productivity

(Efficiency)

Average Rank

2009 2010 2009 2010 (Effectiv

eness)

(Efficiency

)

(Effe

ctive

ness)

(Efficien

cy)

H.R. Textile -0.5485 -0.55129 2.218088 1.994658 -0.55 2.11 3rd 2nd

http://www.majorc.com/blog/human


Tallu

Spinning

-2.98173 -2.81865 1.490899 1.453011 -2.905 1.475 4th 4th

The Dacca

Dyeing

-1.43191 0.52748

6

1.809018 1.665691 -0.45 1.75 2nd 3rd

Malek

Spinning

-2.73622 -6.76717 1.729237 1.110898 -4.75 1.42 5th 5th

Prime

Textile

-0.41972 -0.32938 2.619264 3.989832 - 0.375 3.3 1st 1st

Avg -1.806 2.011

Source: authors, own calculation from the annual reports of sample companies.

Appendix 3. Engineering Sectors


(Efficiency)

Average Rank

2009 2010 2009 2010 (Effect

iveness

)

(Efficien

cy)

(Effectiv

eness)

(Effici

ency)

Aftab auto

Mobile ltd

3.211121 7.171762

5.712078 8.594235 5.2 7.17 2nd 2nd

Singer 2.245237 12.01588 16.94617 19.15525 7.15 18.07 1st 1st

National

Tube

0.860548 0.496642 2.416774 1.822882 0.69 2.12 4th 5th

Atlas

Bangladesh

Ltd

4.652329 3.294619 6.143126 4.499065 3.98 5.325 3rd 3rd

Olympic

Industries

Ltd

0.158737 0.317337 2.18081 2.292278 0.24 2.2 5th 4th

Avg 3.452 7.103

Source: authors, own calculation from the annual reports of sample companies

Appendix 4. Ceramics Sector


(Efficiency)

Average Rank

2009 2010 2009 2010 (Effect

iveness

)

(Efficien

cy)

(Effec

tivene

ss)

(Efficien

cy)

Standard ceramics

-0.33469 -0.18657 1.586249 1.858326 -0.27 1.73 2nd 3rd

Monno Ceramics

-1.08748 -0.8483 1.660501 1.776828 -0.97 1.725 3rd 4th

Rak Ceramics

-0.4401 0.383938 4.378042 3.55768 -0.025 4.00 1st 1st

Fu-Wang Ceramics

-2.07937

-0.44532 2.10995 1.990288 -1.26 2.055 4th 2nd

Avg -0.632 2.38

Source: authors, own calculation from the annual reports of sample companies

Appendix 5. Banking Sectors

Companies HC ROI (Effectiveness) Productivity (Efficiency) Average Rank

2008 2009 2008 2009 (Effective

ness)

(Efficie

ncy)

(Effectiv

eness)

(Efficiency

)

Shahjalal

Islamic

LTD

2.04143164 1.71134004 2.908002 2.076023 1.885 2.488 1st 1st

IFIC Bank

LTD

0.66520347 0.87440278 1.076545 0.920006 0.775 1.003 4th 6th

SIBL 0.04303153 0.69145221 1.562156 1.998827 0.37 1.785 5th 2nd


City Bank

LTD

0.12589337 0.28872456 1.201081 1.332387 0.208 1.275 6th 5th

NCC Bank

LTD

0.92668909 1.65472555 1.745044 1.479646 1.30 1.615 2nd 3rd

One Bank

LTD

0.76112674 1.05498808 1.428095 1.529126 0.92 1.48 3rd 4th

Avg. 0.909 1.607

Source: authors own calculation form the annual reports of sample companies.

Appendix 6. A Cross Sectional Comparison of Effectiveness.

Sectors Average HC ROI (Effectiveness ) Rank Average

Productivity

Rank

Banks 0.909 2nd 1.607 5th

Pharmaceuticals -0.1296 3rd 2.343 3rd

Engineering 3.452 1st 7.103 1st

Textiles -1.806 5th 2.011 4th

Ceramics -0.632 4th 2.38 2nd

Appendix 7

Sectors Name of companies Pharmaceuticals

Sector Square Pharma, Gloxco Smith, Orion Infusion, Pharma aid, Beacon pharma.

Textile Sectors H.R. Textile, Tallu Spinning, The Dacca Dyeing, Malek Spinning, Prime Textile Engineering

Sectors Aftab auto Mobile ltd, Singer, National Tube, Atlas Bangladesh Ltd, Olympic Industries Ltd

Ceramics

Sectors Standard ceramics, Monno Ceramics, Rak Ceramics, Fu-Wang Ceramics

Banking Sectors Shahjalal Islamic LTD, IFIC Bank LTD, Social Islami Bank Ltd, City Bank LTD, NCC Bank

LTD, One Bank LTD

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