ACKNOWLEDGEMENT We are very thankful to Mr. Naveed Anjum, the course instructor, who assigned such a practical project in which we compelled to apply and use all all skills to do this project successfully. We all are satisfied from our efforts devoted to the compeletion of this project. And To 1. Mr.J Mr.Jaw awad ad Ali Ali Recruitment & Compensation Officer, Mobilink 2. Mr.M Mr.Mum umta taz z Ali Ali Staffing and Compensation Compensation Associate Mobilink, Islamabad
3. Mr. Mr. Sadd Saddat at Shah Shah Compensation Compensation Officer Telenor, Islamabad
4. Mr. Mr. Fai Faisa sall Ame Ameen en People Excellence Officer Telenor, islamabd
5. Mr. Mr. Faha Fahad d Jaha Jahang ngir ir People Support officer Telenor, Islamabd
For devoting us precious time, valuable information and kind assistance in this project, we will remember their kind efforts and saying bundle of thanks.
THANKS Arif and group members
Barriers in the execution of this project
3
The proposal of this project was about the analyzing the compensation strategies of the Mobilink, comparing these with the major competitor Telenor. The compensation strategies of such organizations are very delicate and confidential. We tried all the possible major as well as minor sources to get the access to their strategies. We are not told the core strategies which create the edge in the market, but a general overview has given. So this project finding may not be 100% accurate but we hope h ope best for the significance of these findings. The next phase of this project of conducting salary survey of the telecom industry, targeting the HR people, We are again coming with sorry to expose that no one has granted the permission to go for salary survey. We this survey is not successful because of the limitation and business secret policies.
4
Project out line Studying the Compensation Strategies, policies and practices of Mobilink Focusing on
Individual Incentives plans Incentives Plans Organizational Incentives Plans Incentives Plans
&
Group &
Special
Job Evaluation methods of Mobilink Studying the Compensation Strategies, policies and practices of Competitor: Telenor
Gap Analysis
Salary Survey of HR in telecomm Sector Table of people Contents
Recommendation & Conclusion
5
Sr. No
Topics Preface Introduction The Compensation Strategies of the MOBILINK
INCENTIVES PLAN
Page No. 01 02 03
Job Evaluation methods:
03 04 05 05 05
Point Method Ranking Methods
06 06
• •
Individual Incentives Plan: Group Incentives Plan
Organizational Incentives Special Incentives
Pay Packages and Employee Benefits Promotion Policies
06 08
Overview of Performance appraisal in Mobilink
09
Compensation Strategies of Telenor Telecom 11 Incentives Plans •
Individual Incentives Plans
•
Group Incentives Plan
•
Organizational Incentives Special Incentives
•
Job Evaluation in Telenor Pay Packages and employee benefits GAP Analysis Strong & Weak Points of Mobilink Strong and Weak points of Telenor
Salary Survey Survey Results Recommendations Conclusion
12 13 14 15 15 16 18 18 19 23 25 26 26
Preface This project is about analysis of the compensation strategies of Mobilink Telcomunication Pvt.Ltd. the market leader in telecomm sector and the first GSM Service 6
provider in the area. In this project their compensation strategies of carefully studies, analyzed critically, explored the methods and process of job evaluation and the pay structures of the Mobilink. After that the same procedure is adopted for Telenor in order to conclude the best practices among them. This is done by going for GAP analysis between the Mobilink and Telenor compensation strategies.
This project really polished out compensation Mangement skills and we get aware of the fact that needs to be kept in front while designing the HR strategies. Hence this was a really enjoyable, learning and practical experience, very much related to the application of the basic theoretical knowledge.
The Compensation Strategies of the MOBILINK The Mobilink that claims of the major market shareholder in telecom industry has shown very very tradi traditi tion onal al appr approa oach ch towar towards ds the the comp compen ensa sati tion on mana manage geme ment nt.. The The lead leadin ing g organizations always try best to have a best-fit strategic approach towards the Human Resource Management within organization but unfortunately the leading organization like Mobilink is also use best practice approach in compensating approach. During this research we also come to conclude that these best practice are not fully implemented in whole soul but they are either partially implemented or just remained in name.
Lets the incentives Plan being implemented in Mobilink are:
INCENTIVES PLAN
Incentives are designed to encourage employees to achieve objectives. They are intended to direct motivation for present and future performance, promising “ do this and we will make it worth your while”
7
Incentives are generally financial but they can promise non-financial rewards such as recognition, promotion or particularly interesting assignment.
Individual Incentives Plan:
Individual incentives plans are those that are concerned to compensate the individual efforts that result in organizational outcomes. In Mobilink the individual incentives plans don’t exist in any form. Although this kind of incentives plan is only for the sales people in the form of commission on sale. But we disagree with them because it is individual incentive plan because this is pay at risk and where risk exists its not incentive. One One othe otherr form form of ince incent ntiv ives es plan plan is that that they they are are payi paying ng over overti time me to the the lower lower management on the hour’s basis they spent besides the duty hours. Further discussion revealed that they used to give Departmental objectives that further divided into level objectives and finally individual objectives, if the whole department obje object ctiv ives es are are met met and the the Comp Compan any y perf perfor orma mance nce enha enhanc nced ed than than they they pay pay to all all departments instead of paying right-to-right person. And if the company objectives are not achieved and individual objectives are achieved, than in this case they don’t use to go for incentives to individual or group etc. Group Incentives Plan
The Mobili Mobilink nk prefer prefer to team team and group group workin working. g. People People are recogni recognized zed from from their their respective group or team with in organization. Like sales people, marketing team, finance analysis team, finance allocation team, HR peoples, etc The group incentives are based on the objectives being assigned to each team or group. If they successfully achieved within the given constraints and also these achievement led company performance to enhance than they will be entailed for group incentives in following manner: •
Per unit incentives
•
Monthly incentives
•
Continuous incentives
•
Remote areas incentives
8
The per-unit incentives incentives are given mostly to the sales and production teams, the units they produced produced and similarl similarly y to those the unit sold per/day or week. These per unit incentives incentives are not paid to individual but to the whole team. The monthly monthly incentives incentives are for market marketing ing team, team, Human Human Resour Resource ce Managem Management ent,, and Finance for achieving their excellent performance. The monthly incentives are mostly in the form of a bonus salary, house rent or some other cash-based rewards, but mostly it is in the form of a bonus salary for every member within the team. The contin continuous uous Incenti Incentives ves are are for for thos thosee team teamss whos whosee main mainta tain ined ed and and impr improv oved ed performance with increasing rate for three or more than three months. These are in the form of cash bonus, salaries and other benefits according to the impact of performance on overall organizational achievements. The remote remote areas areas where where the basic basic facili facilitie tiess are limit limited, ed, has little little securi security ty etc like like mountains, deserts and or like FATA. The group incentives pattern is widely spread in Mobilink and they say that we are concentrating on group incentives because to ensure internally and externally that we are unite and the culture is collectivism not individualism. Organizational Incentives
The organizational performance is measured in the form or increase in Annual sales, No of subscribers, and increase in market share. The individual objectives are sequentially tied with the company performance. When company succeed in achieving these objectives. These incentives are in the form of Upper Upper Managem Management ent:: Three Three Gross Gross Salar Salary y in a year year Lower Lower manag manageme ement: nt: Two gross gross sala salarie riess
Special Incentives
According According to the Mobilink Compensation Compensation Officer, Officer, “There “There are very few and rare special incentives because the group incentives and organization incentives plan are designed in such a way that each and every individual is performing special”. But few types of special incentives plan are: •
Recognition:
9
If some some one extra extra ordina ordinary ry perfor perform m in sales sales or product production ion depart departmen ment, t, they they various types of recognition like 1. “Man of of the year” year” which which contain contain certific certificate ate and some some other other prizes. prizes. 2. Exce Excell llenc encee cert certif ific icat atee 3. Placing Placing the name name and Pictur Picturee in organizat organization ion top perfor performers mers galler gallery y •
Appreciation: the individual is appreciated personally by the General manager either meeting personally or through call or through email etc
•
Special Cash Amount is given on the occasion when someone (mostly given to HR) for attracting and hiring top performers of Competitors.
Job Evaluation methods: Mobilink uses two methods for evaluating job in order to know the worth of the job. 1. Poi Point metho ethod d 2. Rank Rankiing met metho hod d
The reason that Mobilink uses two methods is the importance being given to the level of management. Point Method
The point method is used to evaluate the middle level management. The importance is given more to critically know each and every job worth because •
The The midd middle le leve levell is act act is a brid bridge ge betw betwee een n uppe upperr leve levell and and lowe lowerr leve levell mana managem gemen ent. t. If this this level level is enoug enough h stro strong ng to get the the stre stress ss of the the upper upper management as well as to be enough competent to supervise and motivate the lower management to work effectively.
•
The middle level jobs are mostly technical and coordination nature, that’s why point method is best to know the level of competency required for each job.
In this this point point method method beside besidess other other compen compensat sating ing factor factorss more more and large large portio portion n of weighe weighed d is given given to the “Techn “Technical icality ity”” and “Coord “Coordina inati tion” on” this this two compon component entss or factors weight-age is about 70% in all-compensable factors.
10
Ranking Methods
In the top level management the Mobilink is using ranking methods because these people have higher professional profile, what the market is paying, the Mobilink tries to pay them some higher than the market, therefore the point method seems very conflicting in designing the pay structure. And there is a risk if point method is used result in decrease in the current pay, so he/she may leaves. In the lower management the ranking method is used because these jobs are mostly entry level having the specific level of skill requirement, so all jobs at entry level are ranked equally.
Pay Packages and Employee Benefits Mobilink like other organization has three level of management. •
Lower Management
•
Middle Management
•
Upper Management
The pay package and benefits are as under: Lower management
1. Basic Basic Pay (unknown (unknown/co /confi nfiden dentia tial) l) 2. Utilitie Utilitiess (foods, (foods, Cell Cell phone phone connection connection and monthly monthly allowance) allowance) 3. Transp Transport ort faci facilit lities ies (only (only for for females females)) 4. Annu Annual al Incr Increm emen entt 5. Subsid Subsidize ized d rate (disco (discount unt at compa company ny product products) s)
Middle Management
1. Basic Basic Pay (unknown (unknown/co /confi nfiden dentia tial) l) 2. House re rent 3. Utilitie Utilitiess (foods, (foods, Cell Cell phone phone connection connection and monthly monthly allowance) allowance) 4. Tran Transp spor ortt fac facil ilit itie iess 5. Annu Annual al Incr Increm emen entt 6. Medi Medica call all allow owan ance ce 11
7. Subsid Subsidize ized d rate (disco (discount unt at compa company ny product products) s) 8. Cell Cell pho phone ne (Bl (Blac ackb kber erry ry)) 9. Learni Learning ng and and growt growth h oppor opportun tunit ities ies 10. Training Training & Development Development 11. Promot Promotion ionss
Upper Management (Managerial)
1. Basic Pay 2. Annu Annual al Incr Increm emen entt 3. Annual Bo Bonus 4. Medi Medica call all allow owan ance ce 5. Car (limit (limited ed Fuel Fuel & Maint Maintenan enance) ce) 6. Utilitie Utilitiess (foods, (foods, Cell Cell phone phone connection connection and monthly monthly allowance) allowance) 7. Cell Cell Phon Phonee (Bla (Black ck ber berry ry)) 8. Laptop 9. Learni Learning ng and and growt growth h oppor opportun tunit ities ies 10. Training Training & Development Development 11. Life insurance insurance 12. Promot Promotion ionss 13. Subsidized rate rate (discount at company products)
Upper Management (Directors & VP)
1. Basic Pay 2. Annu Annual al Incr Increm emen entt 3. Annual Bo Bonus 4. Car (unli (unlimit mited ed Fuel Fuel & mainte maintenan nance) ce) 5. House 6. Cell Cell phone (Blac (Blackbe kberry rry +postp +postpaid aid connect connection ion)) 7. Laptop 8. Trai Traini ning ng & Devel Developm opmen entt 9. Promotion 10. Medical Medical Allowa Allowance nce 12
11. Life Insurance Insurance 12. Internatio International nal trips trips 13. Social Social clubs memberships memberships
The annual increment is subjected to the annual performance appraisal results. Therefore this increment varies from individual to individual working on same position in same department or other.
Besides these package following facilities are provided 1. Effect Effective ive workin working g envi environ ronmen mentt 2. Offi Office ce fac facil ilit itie iess 3. Flex Flexib ibiility ity 4. Lear Learni ning ng envir environ onme ment nt Promotion Policies
The new company structure is in five layers, comprising associates, specialists, managers, directors and chief officers------in that order starting from the bottom and working towards the top rung of the ladder. Until Until approved approved otherwis otherwise, e, it would would be mandat mandatory ory for the employ employees ees to spend spend the following maximum period at each level before a promotion to the next level depending upon availability of a slot:
Associate
3-4 years
Specialist
3-4 years
Manager
2-3 years
Director
According to the president decision
Chiefs
According to the president decision
However, employees who may not get a chance of promotion due to the non availability of an existing slot, will be compensated by being “moved over” within the new salary range specified by the company
13
Overview of Performance appraisal in Mobilink
The top management decides the company objectives for the particular session. The objectives are translated into the departmental objectives that are further divided and subdivided into group and individual objectives respectively. The indivi individua duall perfor performan mance ce is measur measured ed agains againstt the pre-def pre-define ined d object objective ivess given given individually. The individual appraises self first, than the concerned supervisor appraises it and the concerned concerned supervisor supervisor is supervised/ supervised/evalua evaluated ted by other supervisor. supervisor. Similarl Similarly y the manager measures the supervisor’s performance, the Directors evaluate the manager’s per perfo form rmanc ancee and and the the Vice Vice Pres Presid iden ents ts meas measur uree Dire Direct ctor or’s ’s perfo perform rman ance ce and Vice Vice- presidents are by President. Performance Appraisal in Mobilink Company Objectives Objectives
Deptt: 1 Objectives
Standards
Deptt: 2 Objectives Objectives
Team.1 Objectives
Deptt: 3 Objectives
Standards
Team.2 Objectives
Objectives
Team.3 Objectives Standards
In order to decide which individual, team and team was well performer to achieve the company company objectives objectives in order to facilitate facilitate the process process of employee employee compensation compensation in term Individual.1
Individual.2
Individual.3
Individual.4
Individual.5
of pay raise, raise, increm increment ent level, level, incent incentives ives,, traini training ng and develo developme pment, nt, a perfor performan mance ce appraisal process is carried out to improve the compensation system fairness. Performance Appraisal Process in Mobilink Individual’s Performance
Self-A
raisal
Su ervi erviso sor r
Sr.S Sr.Su u ervi erviso sor r 14 Mana er V.President V.Pre President Director sident
Mobil Mobilink ink Main Main purpos purposee behind behind the above above stated stated strate strategie giess and job evaluat evaluation ion and performance appraisal is to ensure Business Excellence in order to create competitive edge enabling Mobilink to sustain the market leader status.
Let’s have a brief overlook to the compensation strategies of Telenor, a leading competitor and threat to Mobilink.
Compensation Strategies of Telenor Telecom The Telenor entered the market with aggressive strategies at all level, never compromised on quality service and positioned as self as “Better Quality at lower possible rates” services provided in the market, succeed in capturing major market share in a very short time. The Mobilink availing the market leader status didn’t succeed in defending it status. All this credit goes to the Human Resource Management, which strategically aligned all HR practices with the core Business strategies of becoming market leader. We will here discuss only the compensation strategies of Telenor as a tool for attracting, retention and motivation of productive employees. The Telenor from the very first stages concentrated on the “Best fit approach” rather the traditional and “Best Practice Approach”. Follow Following ing are the few compen compensat sation ion strate strategie giess because because their their strate strategie giess are strict strictly ly confidential and the information provider may get lost his/her job.
15
Incentives Plans
The Telenor uses various incentives plan. Different packages and plan are deisgned for different people and groups according to the nature of the job and the impact on the organizational achievement. The commonly used plans are •
Individual incentives plan
•
Group incentives plan
•
Organization incentives plan
•
Special incentives plan
•
Motivation incentives plan
•
Coordination Incentives plan
Let’s discuss the features of these incentives plans and the outcomes created from these outcomes.
Individual Incentives Plans
In Telenor they strongly give importance to the individual performance because it is the indi indivi vidu dual al
perf perfor orma manc ncee
that that
enha enhanc nces es
the the
grou group p
perf perfor orma manc ncee
and and
ulti ultima mate tely ly
organizational performance. According to their words, if we fail to identify the individual performance level, it will leads to the unfair compensation which will definitely result in de-m de-mot otiv ivat atio ion n and and leg-p leg-pul ulli ling ng in the the organ organiz izat atio ion n whic which h is very very dange dangero rous us for for organization on such stage where it has reached to the stage to take over. The individual incentives incentives plans are based on the successfully successfully achievement achievement of the individual predefined predefined goals and objectives. These incentives are in various forms like •
Commission
•
Bonus pay
•
Cash rewards
•
Over-time payments
•
Bonus one month cell phone charges
•
Leaves in cash 16
•
Days off
•
Shift payment and unsocial hours
The The comm commis issi sion on ince incent ntiv ivee is tied tied with with the the sale saless perfo perform rman ance ce or perf perfor orma manc ncee in production and also in customer services where the individual incentive is given for effectively treating the customer. This commission is not like a exposure of employee more pay to risk. If an employee doesn’t succeed in meeting the target, his/her she traini training ng needs needs are identi identifie fied, d, traine trained d accord according ingly ly and if not achievi achieving ng perfor performan mance ce standards after that, than job rotation technique is applied in order to make employee feel secure. Bonus pay is granted to those individual who achieve the targets which more prominent results. Bonus pay is the more successful tool for motivating each and every employee to do some thing extra ordinary. Cash rewards are also subjected to the individual performance in the group. These are given besides the group incentives for the purpose to make differentiation between the higher performer and low performer within the group but it is managed in such a way that eliminated discrimination. These cash bonus are given when group rewards are also granted. One month month bonus bonus cell cell charges charges are are also also used used as a ince incent ntiv ives es plan plan to recog recogni nize ze the the individual efforts to all the people in organization. This will act as tool for motivation. Leave in cash and day off off are are those incentives plan that are mostly granted to mostly every individual but the days off are only granted to those employee who over perform the performance targets.
The The Tele Telenor nor ince incent ntiv ives es plan planss are are not stri strict ctly ly tied tied with with the the comp compan any y obje object ctiv ives es achievement, if the individual objectives are achieved within given constraints than they are eligible for their individual incentives. The shift incentive plans are for those people whose service is for 24/7 times, like the customer representative officer. And unsocial hours like working on the specific festivals like Eid, Sunday etc
Group Incentives Plan
17
Group incentives plan are mostly designed for the technical staff, engineers, sales team and marketing teams. These group incentives plans are •
Project rewards
•
Group rewards
•
Group trips
•
Remote areas incentives
•
Group annual bonus
•
Special assignment or project provision
•
Special group meal
Projects Projects rewards are for the project project teams teams for completi completing ng the projects projects in the given deadlines of time, resources and quality. These rewards are subjected to the extent of the quality and the nature of the projects. These are huge cash bonuses for each and every member but due to individual incentive plan a slight difference may be possible. Group rewards are similar to the project rewards but its amount is lesser and it is given freque frequentl ntly y to the techni technical cal group, group, Market Marketing ing team team and sales sales team team for achiev achieving ing the monthly targets successfully. These are mostly in the form of cash rewards. The group trips are also used a group incentive but as tool of recognition, these trips are fully financed by the organization either national or international level. Here employees are also paid some amount of cash to go for personal enjoyment there, like shopping, playing etc. Remote Remote area incentives are those cash and facilities provision to those teams or groups working in remote areas like mountains, FATA etc. Group annual bonus is in the form of bonus salaries to all the member of the group for showing extra-ordinary result crossing the boundaries of targets given. These are mostly given to the sales groups and production teams. Special Assignment or project provision is also a group incentive plan in the form of career development opportunities, learning and exposure in order to be eligible for the higher position in near future. It is also the form of recognition.
18
Special Meal is also a form of group incentives used as a tool of recognition the group efforts. The group members are served with a special lunch or dinner in five stars of seven stars Hotel. Organizational Incentives
These are those incentives granted to almost all employees when organization meets the set objectives either financial or strategic. These includes •
Bonus pay Payments
•
Cash Bonus
•
Annual Cash Bonus
These organizational incentives in not limited to the one or two level of management but it is subjected to all employees according to the position and pay structures because all these incentives plans are streamed out from the pay grades.
Special Incentives
The The Tele Teleno norr has has a very very dist distin inct ct spec specia iall ince incent ntiv ives es plan plan in comp compar aris ison on to othe other r competitors. Following are the few effective special incentives plan not exist in Mobilink. •
Golden Hellos
•
Golden Handcuffs
Golden Hello is that incentive plan that is used to attract the cream from the competitors. It is either in the form of lump sum payment or in phases and some times for couple of years depending on the nature of the people aimed to attract. Golden Golden handcuffs handcuffs are are also also spec specia iall indi indivi vidu dual al pay ince incent ntiv ives es used used to lock lock the the best best employee employee within organization organization and eliminate eliminate the fear of being attracted attracted or hired by other comp compet etit itor or.. Thes Thesee are are also also in the the form form of lump lump sum; sum; phase phase,, coup couple le or year yearss cash cash payments.
Management Incentives Plan
Management incentives plan are those only for managers for achieving excellence in the management and optimal utilization of organizational resources. These incentives may 19
cover two-three years gross salaries payment or a certain amount of cash payment for fixed time period. The objective of this incentive plan is to keep the managers at optimal level.
Job Evaluation in Telenor The job evaluation in Telenor is used in three different ways, its usage is depend on the nature of the job, demand of that job, supply of people, time and cost constraints. Generally the following three methods are used from time to time: 1. Poi Pointnt-met methods hods 2. Stra Straig ight ht ran ranki king ng met method hod 3. Pair Paired ed com compa pari riso son n The point method is widely used method for almost all jobs evaluation for technical, coordination, production, customer services, managerial, Directors level jobs. The entrylevel jobs, sales jobs and other level jobs, the paired comparison method is widely used because of easiness and cost effective but when there is any thing wrong in such jobs evaluation is also used for confirmation. The higher jobs like Vice-presidents and present jobs are evaluated only through the job ranking method.
Pay Packages and employee benefits Due to hierarchical and nature of jobs the pay packages and benefits plans also varies from level to level and even from employee to employee.
Lower Level Management
1. Base pay 2. Annu Annual al incr increm emen entt 3. Variable ble pay pay 4. Individual Individual incentives incentives (varies (varies due performance performance)) 5. Medi Medica call all allow owan ance ce 6. Tran Transp spor orta tati tion on 7. Loca Locati tion on char charge gess 8. Utilitie Utilitiess (cell (cell phone, limited limited free free service, service, food food etc) etc) 9. Subs Subsid idiz ized ed prod produc ucts ts 20
Middle Management
1. Base pay 2. Annu Annual al incr increm emen entt 3. Individual Individual incentives incentives (varies (varies due performance performance)) 4. Medi Medica call all allow owan ance ce 5. Tran Transp spor orta tati tion on 6. Loca Locati tion on char charge gess 7. Utilitie Utilitiess (cell (cell phone, limited limited free free service, service, food food etc) etc) 8. Subs Subsid idiz ized ed prod produc ucts ts 9. Life Life Ins Insur uran ance ce 10. Annual Annual bonus bonus 11. House allowance allowance 12. Training Training and developme development nt
Upper Management (Managerial)
1. Base pay 2. Annu Annual al incr increm emen entt 3. Manag Managem ement ent Incen Incenti tive vess 4. Medi Medica call all allow owan ance ce 5. Loca Locati tion on char charge gess 6. Utilit Utilities ies (cell (cell phone, phone, free free servic service, e, food etc) etc) 7. Subs Subsid idiz ized ed prod produc ucts ts 8. Life Life Ins Insur uran ance ce 9. Annual bo bonus 10. House allowance allowance 11. Training Training and developme development nt 12. Projects Projects paymen payments ts 13. Car (Fuel (Fuel & maintenanc maintenance) e) 14. Social Social club Membershi Membership p 15. Annual internati international onal trips 16. Laptop Laptopss 21
Upper Management (Directors and above)
1. Base pay 2. Annu Annual al incr increm emen entt 3. Annu Annual al cash cash bonu bonuss 4. Medi Medica call all allow owan ance ce 5. House 6. Car Car (fu (fuel el & main mainte tenan nance) ce) 7. Util Utilit itie iess Expe Expens nses es 8. Inte Intern rnat atio iona nall trip tripss 9. Life Life Ins Insur uran ance ce 10. Social Social club membersh membership ip 11. Two days days off in in a week 12. Children Children welfare welfare allowance allowance 13. Laptop Laptopss 14. Cell phone and unlimited unlimited post paid connection connection 15. Limited Limited shares shares option option
GAP Analysis Strong & Weak Points of Mobilink
Strong Points
The employee satisfaction level is higher in comparison to the expected range. The Mobilink has established a competent HR department consists of 40 HR professional in order to maximize the motivation and commitment co mmitment level of the human resource. The Mobilink has started modifying the management style from the traditional towards modern style in which they can be able to recognize and reward individual efforts in near future. The contin continuous uous incentive incentive plan plan has a positiv positivee impact impact on those those employ employees ees who has received, trying their best to sustain this incentive for longer time and also a tool for motivation to bring up with more innovative efforts to gain this incentive that has not received.
22
One other organizational incentive of “three gross salaries” compel every employees to go for best effort impact in order to ensure the achievements of organizational goals for the specific time period.
Weak points •
Mobil Mobilink ink curren currently tly ignore ignoress the reward rewarding ing of indivi individual dual effort efforts. s. They They reward reward individual efforts when the company meets the targets. If the company fails to do so, they don’t rewards those individual who successfully achieved their individual objectives. Here it may be possible that the objectives assigned by their respective department are not properly aligned with the organizational goals. So here the individual suffers on the cost of their upper manage ment.
•
The The rewa reward rd syst system em is not prop proper erly ly dire direct cted ed or alig aligned ned with with the the busi busines nesss objectives; the goal here should be to bring all employees to a common point in order to create synergy. Because they pay in comparison to the some international company or findings survey firm.
•
The incentives plans are very narrow and limited. It needs to be extended in order to gain the loyalty and commitment at individual, group and organizational level.
•
The base of individual incentives plan p lan is very week and some time non-existing. non -existing.
•
The middle management’s incentive is also not to the extents it is expected from them.
•
The job ranking method is the widely used method in Mobilink, although point method is also used but limited. The job ranking method doesn’t give enough information in deciding how much should be given to the individual.
•
The performance evaluation is also traditional; no proper performance appraisal feedback is given to the employees at the end. The training needs assessment is not tied with the performance results at lower management level.
•
The performance evaluation is linear process where is such dynamic organizations lean leaner er perf perfor orma manc ncee eval evalua uati tion on is not not effe effect ctiv ivee beca becaus usee the the empl employ oyee ee’s ’s performance is measured from multifaceted directions.
•
Mobilink don’t go for the implication of “Best-fit approach” but it is stuck with the initial and old ”Best practice approach”. And one thing more the “BestPractice approach” is also used partially. 23
•
Mobil Mobilink ink strate strategic gic approac approach h is focuse focused d on to sustai sustain n or mainta maintain in the curren currentt market share in this tough competition, where is such scenario it is unwise to go for such approach. It should be focused on growth improvement.
Strong and Weak points of Telenor
Telenor has proved itself as real dynamic a firm who has adapted itself in the tough competition, got major market share from the existing company Mobilink in a very short time. The Telenor has large number of strong points and few weak points.
Strong points •
Telenor focused on individual performance, have made the reward system in such a way to recognize the efforts and effectively remunerate these. Therefore the incentives plans are very diverse and up-to-date. up -to-date.
•
The arrangement is very concise in such manner that it even rewards the marginal higher efforts of individual within the teams or groups.
•
The special incentives like “Golden Hellos” and “Golden handcuffs’ are very efficient in given them the best professional from the market and also the ability to retain them for life time.
•
The perfor performan mance ce of indivi individual dual is even reward rewarded ed if the organi organizat zation ion fails fails to achieve its goal. Once the individual succeed in its targets their rewards are due.
•
The Telenor has specific incentives plan for every level and for every nature. The Management incentives plan is one of the example. This incentive doesn’t exist in Mobilink.
•
The job evaluation method widely used is Point-method. And that’s the reason the employee satisfaction in Telenor is more than Mobilink because the pay structure created from the point method are very concise and reflects the efforts granted.
•
The The pay pay pack packag ages es and and ince incent ntiv ives es plan planss are are attr attrac acti tive ve and and give givess more more remunerations at all level. Wide range of incentives keeps the employees satisfied, committed, loyal and productive all the time.
24
•
It’s the outcome of compensation strategies that attracted the competent and key professional of Mobilink, and retained them for lifetime. Here the Telenor got competitive edge to have such professional whose have sufficient knowledge of competitor in deciding which business strategies can result in overtake.
•
The performance appraisal in Telenor is multifactor and multifaceted that ensures the proper and true evaluation of employee.
Weak Points •
The employee’s interrelationship is not strong as it is in Mobilink. The culture in Telenor is going towards isolated environment where every individual will be concerned for its own o wn self-interest.
•
There There are two types types of employ employees ees.. Perman Permanent ent and contra contract ct employ employees ees.. The Telenor approach towards the contract employee is not so much devoted as it is for permanent employees. This may leads to the employee discrimination and the disloyalty might be result in.
•
Their employees are not aware of the reward policies. This is some time good but some time creates problem. The Telenor has kept confidential the compensation strategies even from the employees.
Gap Analysis (comparison) of Mobilink and Telenor Compensation Strategies
25
Incentives Plan
Mobilink
Telenor
Favorable
Individual Incentive Plan •
Commission
75%
50%
Telenor
•
Bonus pay
5%
80%
Telenor
•
Cash rewards
10%
65%
Telenor
•
Over-time payments
99%
99%
Both
•
Bonus one month cell phone charges
10%
60%
Telenor
Leaves in cash
75%
75%
Both
•
50%
50%
Both
20%
70%
Telenor
•
Days off
Shift payment and unsocial hours Group Incentives Plan •
•
Per unit incentives
80%
10%
Mobilink
•
Monthly incentives
60%
5%
Mobilink
•
Continuous incentives
50%
5%
Mobilink
•
Project rewards
40%
80%
Telenor
•
Group cash rewards
30%
55%
Telenor
Group trips
80%
90%
Both
•
90%
99%
Both
50%
75%
Telenor
30%
75%
Telenor
70%
80%
Both
•
Remote areas incentives
•
Group annual bonus
•
Special assignment or project provision
•
Special group meal
This comparison has been drawn in order to magnify the impact or magnitude of each Mobilink Telenor Favorable incentive incentive in both organizati organizations. ons. The Telenor has advantage advantage over Mobilink in Individual Individual Organizational Incentives incentives. The reason is that Telenor is paying more attention towards the recognition o
Incentives Plan
•
•
•
99% Mobilink Bonus pay Payments indivi individual dual effort efforts. s. Its main main concern conc ern is that tha70% t if indivi individual dual effort effortss are maximi maximized zed,, the 85% Telenor incentive plan from the Cash Bonusorganization will grow that why50% it has a very distinct Individual 60% 65% Same Annual Cash Bonus Mobilink.
Special Incentives •
•
•
•
In all other organizational, group and special incentives both organization are almost 30% 85% Telenor Golden Hellos similar in practices. But due to individual incentives it has attracted competent people 65% 70% Telenor Golden Handcuffs from Mobilink. 65% Mobilink 26 RecognitionFurther clarity will be seen from90% the salary survey. This is mentioned in next cha pter. 90% 65% Mobilink Appreciation Appreciation
Salary Survey In order order to know know the the mark market et rate rate of Huma Human n reso resour urce ce in the the tele teleco com m indus industr try, y, we conducted a salary survey in the following telecom organizations •
Mobilink
•
Telenor
•
Ufone
•
Warid
•
Zong
Neither of the above organization provided sufficient information to make successful this survey, because of their information confidentiality issues. However the Mobilink and 27
Tele Telenor nor has has show showed ed very very litt little le resp respon onse se to our our sala salary ry surv survey ey ques questi tion onna nair ire. e. The The questionnaire is attached at the end of this report. The findings of the salary survey in both organizations are as under. Total number of respondents: Telenor:
06
Mobilink:
04
Let’s summarize the questions and responses Respondent Job Position in the Management hierarchy
Up p e r
Middle
Lower
Telenor 2 Mobilink 3 Respondent’s satisfaction from his/her efforts Yes Telenor 4 Mobilink 4 Provision of case bonus Yes
4 1
No
Don’t Know
1 0
2 0
No
Telenor 3 Mobilink 4 Frequency of cash bonuses Once Telenor 4 Mobilink 4 This bonus based on…? Individual
3 0
Twice
Three times
Irregular
1 0
0 0
1 0
Company Performance
1st and 2nd
Pre-decided
Don’t know
0 1
0 2
0 0
1 1
Food
Transport
Pension
0 0
3 4
0 0
performance
Telenor 5 Mobilink 0 Other non-cash benefits Medical
House Al Allowance
Mobile al allowance
Insurance
Telenor 6 4 6 6 Mobilink 4 2 4 3 Organization paying level in comparison to market
Telenor Mobilink
Above
Middle
Below
1 2
4 2
1 0 28
Pay fairness
Yes
No
Don’t know
Justified
Telenor 1 3 2 Mobilink 2 0 0 If employee were the employer than he/she will pay employees Same Telenor 1 Mobilink 4 Other facilities Comfortable working
0 2
More
Less
5 0
0 0
Offi Office ce faci facili liti ties es
Flex Flexib ibil ilit ity y
Deve Develo lopm pmen entt oppo opport rtun unit itie iess
Learn Learnin ing g envi enviro ronm nmen entt
6 2
6 3
4 3
5 3
environment
Telenor Mobilink
5 4
Comments:
This salary survey indicates that Mobilink has a more stable Human resource system. The employee satisfaction is higher as comparison to the Telenor. The reason may be that in Telenor, they are only paying attention towards the individual environment where in Mobilink the team work culture is more prevailing, It’s may be also concluded from this survey that the financial rewards is not the only tool for employee satisfaction and commitment. A combination of intrinsic and extrinsic reward package should be deigned accordingly keeping the limitation of organizational policies and resources. Mobilink’s employees have the confidence in Mobilink pay rate that it is externally and internally equitable while in Telenor where a large number of employees are on contract based, are paid differently.
Recommendations •
Mobilink should not tied the individual reward with the company performance but the rewards of individual is should be based on individual efforts and results.
•
Mobi Mobili link nk pay pay stru struct ctur ures es grow grow more more seni senior orit ity. y. This This trend trend may may caus causee dede productivity in the new innovators and highly active competent people. Therefore Mobilink should minimize this rate and increase the rate of pay for performance.
•
The performance appraisal process of Mobilink should be more concise in the way where the employ employee ee evalua evaluati tion on contin continues ues for the whole whole year. year. It should should 29
replace the linear performance appraisal with the multi-directional performance appraisal. This appraisal process may be set like o
Planning work and setting expectations
o
Monitoring and measuring performance
o
Developing the capacity to perform
o
Periodically rating performance in a summary fashion
o
Recognizing and rewarding good performance
Prac Practi tici cing ng good good perfo perform rman ance ce manag managem ement ent requi require ress prof profic icie ienc ncy y in cert certai ain n compet competenc encies ies.. Compet Competenc encies ies are observ observabl able, e, measur measurabl ablee Patter Patterns ns of skills skills,, knowledge, abilities, behaviors and other Characteristics that an individual needs to perfor perform m work work roles roles or Occupa Occupatio tional nal functi functions ons succes successfu sfully lly.. Perfor Performan mance ce management Competencies that all supervisors (and team leaders) at Mobilink Should develop and demonstrate include •
The individual incentives plans should be extended up to the competitor scale in order to lock the exit of the talent from the company. And the individual goal setting should be aligned properly with the organizational goal, in order to make effective decision in giving rewards for individual goal a chievements.
•
The job evaluation method should be set according to the culture and need of the mark market et.. The The old old fash fashio ion n of rank rankin ing g meth method od prac practi tice ce shoul should d be redu reduced ced by replacing it with the point-method. This will introduce a culture of performance.
•
Mobilink should increase the special incentives plan and incentives for the lower management as well. Because the lower management carry out the directions of upper management accordingly.
Conclusion
It is concluded from this report findings that Mobilink is no doubt the market leader in HR systems but it needs upgrading, renovation and improvement in order to effective defend the competitors aggressive strategic actions. Mobilink is loosing its market share as well as key employees to Telenor because Telenor is providing attractive packages. The Mobilink should start moving towards the culture of pay for performance instead of pay payin ing g for for tenur tenuree of skil skills ls.. This This can can be achie achieved ved by impl implem ement entat atio ion n of effe effect ctiv ivee performance management and compensation system. Mobilink shouldn’t believe on its 30
current workforce but also seek for the best people in the market, because if these best people are hired by the competitors, this would result in further hardship to defend. Therefore proper performance appraisal, feedback and rewards should be ensured.
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