HUMAN RESOURCE MANAGEMENT FINAL PROJECT ON ORIX LEASING COMPANY Prepared for: Mr. Murtaza Ilyas Instructor, Human Resource Management Iqra University, Karachi. Prepared by:
Executive Summary May 08, 2010
Mr Murtaza Ilyas, Course Instructor Human Resource Management Management IQRA University Karachi
We are pleased to present our final report on “Orix Leasing Pakistan” .
This report includes the information on the company Orix Leasing. In making this report we collected data by visiting visiting Orix Leasing Office in Korangi. Korangi. We also collected collected data from publications publications and various various internati international onal business magazines. The report also includes researches made by us through internet. We have tried our best to gather best possible information for this report. We are of firm belief that this report will not only provide you with all nece necessa ssary ry inform informati ation on perta pertaini ining ng to the topic topic but will will also also cover cover all aspect aspectss and hopefully hopefully meet meet your your expectations.
Executive Summary May 08, 2010
Mr Murtaza Ilyas, Course Instructor Human Resource Management Management IQRA University Karachi
We are pleased to present our final report on “Orix Leasing Pakistan” .
This report includes the information on the company Orix Leasing. In making this report we collected data by visiting visiting Orix Leasing Office in Korangi. Korangi. We also collected collected data from publications publications and various various internati international onal business magazines. The report also includes researches made by us through internet. We have tried our best to gather best possible information for this report. We are of firm belief that this report will not only provide you with all nece necessa ssary ry inform informati ation on perta pertaini ining ng to the topic topic but will will also also cover cover all aspect aspectss and hopefully hopefully meet meet your your expectations.
This report includes Company General Over View, Business over View, Human Resource Department Planning, Role, Hiring Methods, and Development of Employees. It also includes Performance Management and Employee Compensation Policies practiced in the organization.
It will be our pleasure to provide you further details if required.
Sincerely,
Company General Overview
Vision ORIX aims to maximize shareholder value, by drawing on its extensive array of specialized capabilities, to continuously provide our customers with value added financial solutions.’
Mission
ORIX seeks its development through its domestic and international presence by constantly anticipating and monitoring emerging trends and offering new and innovative products that create real and lasting value for our customers.
ORIX pioneers, introduces and offers value added products which are not only competitive in terms of desirability and price, but also fulfils the needs of our customers by constantly increasing our value to them as an efficient source of financial services
ORIX makes all efforts in enhancing superior professional competencies by creating a culture that fosters openness and innovation, promotes individual growth and at the same time rewards initiative and performance.
ORIX contributes to society through participation in poverty alleviation programs, provision of financial assistance at grass root level and assistance to charitable causes.
Brief History of Organization ORIX Leasing Pakistan Limited (OLP), a subsidiary of ORIX Corporation, Japan's leading integrated financial services company spread over 26 countries. OLP was incorporated in Pakistan as a private limited company on July 1, 1986 and was converted into a public limited company on December 23, 1987 OLP is listed on Karachi, Lahore and Islamabad Stock Exchanges. OLP has assets of Rs. 27.81 billion and a net worth of Rs. 2.60 billion as at June 30, 2008. Based on the results for the year ended June 30, 2007 the Pakistan Credit Rating Agency (PACRA) has maintained the Company's entity ratings of AA+ for long term senior unsecured creditors and the highest rating of A1+ for short term senior unsecured creditors. OLP, one of the leading leasing companies in Pakistan, following in the footsteps of its Japanese parent has played a major role in the leasing industry in Pakistan. OLP’s main business activity is leasing of moveable assets. Its strength lies in an extensive branch network, a diversified portfolio of clients, a wide range of financial products, personnel development and business automation. OLP has strategically located branch offices throughout Pakistan that make it easy to provide quality service to its broad client base. Quality service is the driving force behind the OLP work ethics.
ORIX is an integrated financial services group based in Tokyo, Japan, providing innovative value-added products and services to both corporate and retail customers.
Established in 1964.
Global Coverage: 26 Countries
ORIX – Excellent Company in 21st Century In accordance with good corporate governance practices, OIRX Corporation, Japan has identified corporate philosophy and action guidelines in the compliance manual of its EC 21 program which is aimed at making ORIX an ‘Excellent Company’ in the 21st Century Corporate Philosophy ORIX is constantly anticipating market needs and working to contribute to society by developing leading financial services on a global scale and striving to offer innovative products that create new value for customers. Creativity ORIX encourages its employees to constantly strive to be creative and innovative in their work. Integration ORIX requests its employees to enhance the strength of ORIX by actively exchanging knowledge, ideas and experiences
ORIX Leasing Pakistan Ltd.
Established in 1986
Japanese Multinational
39 Branches/Offices all over Pakistan
Staff over 530
Head Office is in Karachi
Overseas Associates The Company’s international activities started in 1993 with the establishment of a leasing company in Oman. ORIX Leasing Pakistan Ltd’s overseas associates are:
Oman ORIX Leasing Co SAOG (OOLC) – 1993
ORIX Leasing Egypt SAE (OLE) – 1997
Saudi ORIX Leasing Company (SOLC) – 2001
MAF ORIX Finance PJSC, UAE (MAFO) – 2002
BTA ORIX Leasing JSC, Kazakhstan (BTAO) – 2005
Associates in Pakistan
ORIX Properties Pakistan (Pvt) Ltd. (OPPL) – 2008 Paid Up Capital – Rs.300 million Share of ORIX Corporation – 45% Share of OLP – 45% Share of Local Investors – 10%
Primary objective of the company is to acquire, develop and manage real estate projects
Organizational Culture ORIX holds a system of norm and belief that support the organization's capacity to receive, interpret and translate signals from its environment into internal behavior changes that increase its chances for survival, growth and development ORIX provides good working place to its employees so that they work comfortably which would ultimately result in high performance, achieving targets on time effectively and efficiently. Employees at ORIX understand their own jobs as well as the way in which their own work interrelates with and influences that of other employees. They have a clear set of do’s and don’ts. Personnel are taught to evaluate the effects of their own behavior on others; so as to maximize their own effectiveness. At ORIX employees are encouraged to do brain storming and question concepts and they are motivated to wishful thinking as to make the subject company an excellent brand name in the market. ORIX gives feed back on how ever employee is performing and keeps motivation them to do even more better job. The main thing that was highlighted was the ORIX knows how to provide employee satisfaction and customer satisfaction. The process are improved and rectified so that humans are not blamed for any kind of deficiency whether it is organization or individuals. The overall culture of OLP is based on open two way feed back to rectify and improve our process. The two way communication helps us to improve mutual trust and also motivate our employees to explore new ideas and set new trends among the team members and colleagues of other departments. OLP encourages its employees to take risk and face challenges. OLP recognizes the importance of Risk Management and have an effective internal control system designed for continuous risk assessment and management.
It even contains positive attitude by providing mental & physical comfort to the department / employees by excellent working environment which can be defined in two words, “sharing & caring”. ORIX has an environment that is no more different then of a family. But still some attention should be given on the motivation factor of the employees. ORIX just not says that we provide a friendly environment but it could be seen by the way our employees do their work. They are allowed to try new things and take risk while doing so. If something goes wrong then we look for the loop holes in the system that could not stop the problem from happening.
Challenges Faced by the Organization •
• • • •
High Turn over Rate Rising Inflation Economic Slowdown and Recession Selection Process Hindrances Lack of Incentives for Industrialists
Business Overview Major Products
Consumer Auto Corporate Lease Operating Lease E-Business Commercial Vehicle
Other Products
Micro Finance Agri Lease Working Capital Factoring Certificates of Deposit
Target Market OLP extends lease facility to all segments of the market. However, its target market remains small to mediumsized companies, spread across different manufacturing and services sectors including textile, sugar, cement, pharmaceutical, engineering, energy, food, paper and board, financial services and distribution. Being the first leasing company to enter this segment of the market, OLP understands the needs of its niche market and has been able to achieve a high degree of risk diversification.
Human Resource Department HR Department Organogram
HR Department Role in Organization Training & Development Stemming from their mission to provide the most enriching professional growth opportunities for their employees, they at ORIX are committed to constantly investing in the growth and development of their employees. For this, they have developed two fully equipped learning centers in Karachi & Lahore where dispensing both technical and managerial skills is an on going activity. Benefits Offered They offer an array of perks and benefits to their employees that are comparable with other multinationals. Along with various interest free loans, the educational assistance program for employees and their children is a prominent feature of our perk policy. Performance Management Upon joining OLP, their competency based performance management system sets a clear agenda for contribution to the organization's goals. Yearly reviews and instant feedback helps to gauge their progress. Their performance is evaluated on the extent to which they have contributed to the organization's goals which results into the deserved intrinsic and extrinsic reward
Manpower Planning and Budgeting Human Resource Planning (HRP) aim at identifying the staff requirement through out the organization at the beginning of a financial year in order to help management in determining the Annual HR Headcount Budget TECHNIQUES USED IN MANPOWER PLANNING How many staff do we have/need? How are they distributed? What is the age profile? How many will leave in each of the next five years? How many will be required in one, five, ten years?
Steps in Manpower planning Predict manpower plans Design job description and the job requirements Find adequate sources of recruitment. Give boost to youngsters by appointment to higher posts. Best motivation for internal promotion. Look after the expected losses due to retirement, transfer and other issues. See for replacement due to accident, death, dismissals and promotion.
Human Resource Planning Purpose: Human Resource Planning (HRP) aims at identifying the staff requirement through out the organization at the beginning of a financial year in order to help management in determining the Annual HR Headcount Budget. The main objectives of HRP exercise are: To project staff requisitions (at all levels) as per the need of Departments / Branches and get it pre-approved from the CEO. •
To ensure control of management over recruitment of permanent staff in a year, overall staff cost and proper allocation of human resources at departments / branches. •
To obtain approval on the Annual HR Budget along with the staff recruitment in a year that will help HRD in streamlining recruitment process (including searching and selection of potential candidate, structuring of compensation package etc) and in planning other employee-related activities (training, orientation, benefits etc). •
HRP Process: At the beginning of each financial year, Departmental Heads will be required to fill in and submit Job Identification Form to HRD. In case of Northern Branches, the forms will be filled by the Branch Managers and will be forwarded to HRD after getting them approved from the Regional Head North. •
•
The job identification will be required for all new permanent employees in the Job Identification Form
The existing strength of the permanent employees in the Department/Branch as on 30 th June will be considered as the Current # of Employees of the Department/Branch; Replacements for the previous year’s resignations will be considered entirely as a new headcount not as a replacement. •
The anticipated promotions in the coming year will not be considered as a new headcount and will not be mentioned in the Job Identification Form. •
HRD will prepare Human Resource Planning Sheet for CEO’s review and approval. On the basis of approved sheet, HRD will then compile the results and prepare Consolidated HRP •
All Departments / Branches will be provided with their approved HRP Sheet , which they can refer in order to initiate the recruitment process. •
HRD will conduct quarterly review in order to inculcate changes and to ensure control over the recruitment process. •
Hiring Process and Recruitment Policy Purpose: The purpose of the Recruitment process is to determine and allocate appropriate human resources to various departments / branches in order to facilitate them in performing their responsibilities. The main objective of this process is to determine the need of human resources at various levels in various departments / branches and then search for the potential candidates to fill those vacancies. This process is designed to ensure fairness, impartiality and quality in recruitment throughout the organization. This will help in avoiding biases and maintaining management’s control in order to ensure smooth functioning.
Types of Recruitment: Vacant positions may occur due to • • • •
Staff members leaving the organization Inter-department / branch transfers Deputation / promotions Creation of new job positions as a result of increased activity in the organization.
Recruitment can be classified as: • • •
Permanent Employment Contract Employment Internship
Recruitment of Permanent Staff
Purpose: To determine manpower requirement at different levels in the organization and to fill the vacancy by recruiting permanent staff members. The process involves: Identifying sources of potential recruits Assessing and selecting suitable candidate for the vacancy Appointing and orienting staff member by on-job training and evaluating his performance during the probation before confirming his services. • • •
Recruitment Channels: •
Department will submit Staff Requisition Form to HRD in order to help them in initiating the Search Process.
•
The Recruitment channels used in Search process can be
a)
Internal Advertisements
b)
Available Resumes
c)
External Advertisements
d)
Executive Search Consultants
e)
E-mail & online applications
HRD will select the channel of search process depending upon the nature and requirement of the job, person specification and available resources. In case internal sources / available resumes fail to satisfy the criteria then Head of HRD can utilize sources like external advertisement and professional agencies and consultants. •
In case of Northern Branches, Branch managers in coordination with HRD will initiate the search process and initial screening. •
Selection Process: In Karachi: •
HRD will prepare Interview Schedule keeping in mind the availability of the interviewer. The interviewer will be given Candidate Assessment Form along with the respective resumes.
•
FH will submit assessment, recommendations and list of short listed candidates to HRD. In certain cases HR will short list candidates profile and forward to concerned departments.
•
Head of HRD will conduct interviews of short-listed candidates
•
After interview, HRD will prepare Employment Approval Form for CEO’s review and approval.
•
CEO will make the final decision after taking into consideration the information provided in the Employment Approval Form. Before approval, CEO can also interview the candidate if needed.
In Branches: •
•
•
Branch Managers in consultation with Regional Head North will interview the candidates and will forward the resumes along with their assessments (of minimum five candidates) to HRD. Head of HRD will visit branches for interviewing short-listed candidates. After interview, HRD will prepare Employment Approval Form for CEO’s review and approval. CEO will make the final decision after taking into consideration the information provided in the Employment Approval Form. Before approval, CEO can also interview the candidate if needed.
Final Selection: •
After obtaining approval, Head of HRD will inform FH / BM about the approved salary and designation of the candidate.
•
HRD will communicate the final offer to the selected candidate by issuing an Offer letter.. If candidate fails to respond to the offer within specified period after the issuance of the letter, his selection will be treated as cancelled. Offer letter will contain terms & conditions and benefits.
•
HRD will inform selected candidate to submit the following on the date of joining:
•
a) Employee Information Report b) Supporting Documents
Appointment and Orientation: In Karachi: •
•
•
On the date of joining, employee will report to HRD and will submit Employee Information Report and supporting documents. In case of certificates, employees are required to bring originals for verification. HRD will brief the new member about the company and its policies. New incumbent will be sent to the FH who will introduce him to the co-members and explain the job responsibilities as specified in his Job Description. He will also be introduced to other staff members with whom he will be required to interact frequently.
•
FH will be required to submit Employee Joining Report to HRD on the date of joining.
In Branches: •
•
At the date of joining, employee will submit Employee Information Report and supporting documents to Branch Manager. In case of certificates, branch managers are responsible for verification and HRD will only accept the certificates if they are duly signed by the branch managers. Branch Manager will be responsible for an orientation session and submission of complete documentation to the HRD. BM will also issue the JDs.
Issuance of Appointment Letter: •
HRD will issue an Appointment Letter after receiving all the required documents as specified under Appointment Check List
Issuance of Reference check letter: •
Reference check letters will be sent to the three references provided by the inducted employee that are to be completed and sent back to HRD before the employee’s date of confirmation.
•
HR will also send inquiry letter to the previous employer for reference check .
•
Fresh graduates will require at least one reference from the last institution attended.
Probation: •
•
•
•
•
•
•
The employee will be required to serve six months probation period. In case the FH / BM is not satisfied with the performance of the employee; the probation period could be extended by a maximum of three months. During the probation period the employee will be covered under Group Health Insurance (as soon as all the formalities are completed) and Group Life Insurance (90 days from the date of joining) but he will not be entitled to any other staff benefits until his confirmation. During the Probation period, employee will not be entitled to extended privilege leave. If he wants to avail the extended leave it will be treated as unpaid. In cases of genuine need, he can avail extended leaves with the permission of FH / BM and Head of HRD. It is required that at least two references should submit their responses to HRD during the probation period for the confirmation of an employee. HRD will issue Probation Review Form to the FH / BM before the completion of the probation. The FH / BM will complete and return this form to HRD. In case FH / BM recommend an increment / promotion, Head of HRD will obtain approval from CEO/DMD and will communicate it to F&A for updating employee’s status. Either staff member or management can terminate employment during probation as per the period stipulated in the Appointment Letter.
Confirmation: •
•
HRD will issue Confirmation Letter after receiving all the required documents as specified under Confirmation Check List. After successful completion of the probation period the employee will be entitled to all benefits as allowed under the Company’s Policy. Rules: We are an equal opportunity employer and there is no discrimination on the basis of race, gender, religion or ethnic origin. •
•
Dismissed and terminated employees will not be reconsidered for employment.
Dependent relatives of a deceased staff member shall be given preference while selecting a replacement for a vacant position provided he fulfills the selection criteria. •
•
The minimum age for employment is eighteen years.
Existing staff members wishing a transfer and fulfilling the necessary job requirements will be considered and preferred over equally qualified external candidates. •
At the time of recruitment, FH / BM must maintain confidentiality regarding approved salary of the new employee. •
FH / BM are responsible for communicating significant revision in an employee’s Job description to HRD. Changes in Job description will only be incorporated by HRD. •
Hiring Process and Recruitment Policy for Contractual Employees Purpose: To recruit employees on contract for maximum period of eighty-nine days in order to provide temporary assistance required by various departments/ branches. Recruitment on temporary / contract basis occur: •
When there is excessive workload in a particular department/ branch during certain period of time.
When temporary assistance is required especially for the completion of project or for meeting specific deadline. •
Process: •
•
FH will submit Staff requisition form to HRD in order to initiate the search process. Available resumes will be preferable recruitment channel used in case of appointing contract staff. In case of Northern Branches, Branch manager in consultation with HRD will initiate the Search process.
•
•
In case of employees below Assistant cadre, HRD can also utilize External sources for contract employees. Head of HRD will conduct interviews of short-listed candidates. In case of Branches, Branch Manager in consultation with the Regional Head North will submit resumes of the selected candidate along with their recommendations.
•
After interview, HRD will prepare Internee / Contractual Staff Approval form for CEO’s review and approval. Head of HRD will inform the FH / BM and the candidate about his salary and duration.
•
HRD will finalize the Contract Agreement and will get it signed from the staff member.
•
Contract Staff will not be entitled to any staff benefits during their Contract period.
•
•
During the Contract period, employee will not be entitled to extended privilege leave. If he wants to avail the extended leave it will be treated as unpaid. In cases of genuine need, he can avail extended leaves with the permission of FH / BM.
Employee Turn over Rate Employee Turn over rate is 18% and company does not practice any Employee Retention Plans. When a survey is conducted it is revealed that employees do not feel satisfied over Company’s Policies regarding pay and benefits.
EMPLOYEE SATISFACTION FORM:Date: ___________ Designation: ____________________
Employee Name: __________________ Department: ______________________
Kindly rate your satisfaction level on the questions given below: 1) How satisfied are you with your job and job security in your company? 1
Very Dissatisfied
2
3
Dissatisfied
Neither satisfied nor Dissatisfied
4
5
Satisfied
Very Satisfied
2) How satisfied are you with your level of involvement in project planning and execution as
compared to your work responsibility? 1
2
3
4
Very Dissatisfied
5
Very Satisfied
3) How satisfied are you with your direct supervisor/manager? Does he/she keep you well
informed about what’s going on in the company? 1
Very Dissatisfied
2
3
4
5
Very Satisfied
4) How satisfied are you that your views and participation are valued? 1
2
3
4
Very Dissatisfied
5
Very Satisfied
5) How satisfied are you with Company’s Employee Policies? 1
2
3
4
Very Dissatisfied
5
Very Satisfied
6) How satisfied are you with the professionalism and morale of the people with whom you
work? 1
2
3
4
Very Dissatisfied
5
Very Satisfied
7) How satisfied are you with the performance management system and the outcome? Do you
receive appropriate recognition for your contributions? 1
Very Dissatisfied
2
3
4
5
Very Satisfied
08) How satisfied are you with the training and development provided by your company? 1
2
3
4
Very Dissatisfied
5
Very Satisfied
09) How satisfied are you with your salary in the company regarding its competitiveness with the market? 1
2
3
4
Very Dissatisfied
5
Very Satisfied
10) How satisfied are you with the opportunities to advance in your company? 1
Very Dissatisfied
2
3
4
5
Very Satisfied
Performance Management System Performance Management System: The purpose of this process is to evaluate the staff performance during the year, to analyze their potential for future growth, to review areas of their development, to assess suitability for promotion and further training, and to give them feedback on how they should improve their performance in the future. It involves thorough self assessment by the employees and forms a mechanism through which they are able to communicate to the management; this is guided through open-ended questions that are designed to make them think critically of how they have been performing and what are their expectations about the support from the organization. This exercise helps management to foster high performance standards and to take corrective actions wherever deviations are founds. The Performance Management System has 3 phases Phase I: Performance Planning— at the beginning of the performance period, performance expectations are established and agreed to as part of the planning process Phase II: Coaching and Feedback— the employee works to accomplish the performance expectations that have been established. The supervisor observes performance, gives feedback, and provides coaching for continuous improvement
Phase III: Performance Review— the employee offers and receives feedback about his or her performance on the 17 performance dimensions identified. This is done formally through two forms Post-Review Feedback: formal one to one feedback is provided on performance to each employee appraised, this feedback is developmental in nature, and uses the past performance behaviors to help staff to do better in future. This feedback may involve seniors other than t he appraiser and/or the HR department. The Performance Assessment Tools This system is divided into two reviews Annual Review: (Performance Development Statement 1), that is more detailed and forms the basis for increments & /or promotions. More formalized and involves the Supervisor, the HR, & the Panel. Mid Year Review: (Performance Development Statement 2) – Mid Year Review. Each employee is also evaluated formally on a mid-year basis. The objective of this to let him/her know formally how she/he stands as far as performance review is concerned. This is also done through a form, which is simpler & gives adequate feedback. This involves the Supervisor and the HR only.
Compensation
Compensation policy aims at determining the balanced and competitive compensation package for employees at various levels in order to attract and retain a productive work force. The main objective of this policy is •
To design the package in alignment with the industry / market rates.
•
To establish the package that commensurate with the image of the Company
Factors to determine Compensation Package: The salary is determined after taking into consideration the following factors: •
The position offered (Designation)
•
Educational qualification
•
Work experience
•
Professional background
Salary Break-up:
The break-up of the monthly salary varies as per the designation of the employee.
Assistant Managers and above:
Gross Salary
100%
Basic Salary
66.67% of Gross
House Rent
45% of Basic
Utilities
5% of Basic
Assistants to Senior Officers:
Gross Salary
100%
Basic Salary
64.52% of Gross
House Rent
45% of Basic
Utilities
10% of Basic
Below Assistants:
Gross Salary
100%
Basic Salary
[Gross-Rs. 660 (Special Allowances)] * 64.52%
House Rent
45% of Basic
Utilities
10% of Basic
Company Allowance (COLA) Rs. 280 Government Allowance
Rs. 200
Other Allowance
Rs. 180
Payment of Salary: •
On the last working day of the month, salaries are directly transferred to the employee’s bank account by the F&A
•
If the employee joins the company during the last week of the month his salary of the number of days worked in that month will be paid in arrears in the following month.
Increment in Salary:
HRD will inform both the employee and the F&A regarding the changes in the compensation package due to increments.
Deduction of the Salary:
It includes: •
Income tax
•
Monthly installments of loans and advances taken from the company
•
Deduction due to unpaid leave
•
Provident fund deduction
•
Others (if any)
Overtime:
•
•
•
•
Employee below the level of Assistant, who is asked to work and who agrees to work on any day beyond normal working hours, is paid overtime Prior approval from FH / BM and Head of Administration is required to work overtime After receiving the Overtime sheet from the employee, Administration will calculate the overtime amount for the month and will submit the sheet to the F&A for the payment.
Calculation of hourly overtime rate include a: Basic Salary b: All Allowances (COLA, Government Allowance, Other Allowance) c: a + b d: Daily Wage Rate e: Normal working Hours (9 to 5 i.e. 8 Hours) Hourly Rate: a + b = (c / d) / e Advance Salary: •
•
If an employee has applied for extended privilege leave and is not physically present to receive the salary on the normal payday of that month, he can apply for the advance salary. Staff member applying for advance salary facility must specify his request on leave application form to the HRD.
•
The HRD will verify the leave information given in the form and will forward it to F&A for payment.
SALARY RANGES
Designation General Managers Assistant G. Managers Senior Managers Managers Assistant Managers Senior Officers Officers Assistants Below Assistant
From 230,000 150,000 75,000 50,000 40,000 21,000 17,000 9,000 7,000
To 290,000 200,000 120,000 80,000 64,000 35,000 29,000 15,000 11,000
