The paper aims to examine the influence of human resource management (HRM) practices
on bank efficiency using Malmquist index of total factor productivity. The model comprises
HRM index that represents the quality of HRM practices. The results are decomposed into
three efficiency scores, namely, technical efficiency, pure efficiency, and scale efficiency. In
this study, panel data for 44 banks in Bangladesh are used for the period 2008-2013. This
paper reveals that foreign banks are ahead in converting the influence of HRM practices
into efficiency scores (0.946>0.833). On the other hand, domestic banks performed better
than foreign banks in terms of pure efficiency and scale efficiency. But, in terms of technical
efficiency, the domestic banks are regressed by 6.7% annually whereas foreign banks are
progressed with a yearly value of 5.8%. The results are robust, because the Mann-Whitney
test and Kruskall-Wallis test (non-parametric tests) also confirm the same results. This
study emphasizes HRM practices in the banking industry to ensure efficiency in the longterm
scenario. Domestic banks are suggested to ensure continuous development in HRM
practices in order to compete with foreign banks.