HR Process and Impact of Training and Development on Employee’s Performance at PSO

INSTITUTE OF BUSINESS AND TECHNOLOGY HR Process and Impact of Training and Development on Employee’s Performance at PSO Prepared By Ayesha Mirza BM-25067 Course Code :

MKT-606

MBA (Human Resource Management) FACULTY OF MANAGEMENT AND SOCIAL SCIENCES FALL - 2010

HR process and Impact of Training and development on Employee’s Performance at PSO

INSTITUTE OF BUSINESS AND TECHNOLOGY ABSTRACT SUBMITTED BY:

Ayesha Munawwar Mirza

DISCIPLINE:

MBA (HRM)

TITLE OF PROJECT REPORT:

HR process and Impact of Training and Development on Employee’s Performance at PSO.

MONTH OF SUBMISSION:

November, 2010

NAME OF PROJECT SUPERVISOR: Dr. Noor Ahmed Memon

ABSTRACT This project discusses research that was undertaken about the HR process and impact of training and development on employee’s performance at Pakistan State Oil. I have studied all the HR practices of the company but the main focus was to study the impact of training and development on employee’s performance in the company. A theoretical framework is developed from a literature search and this is used by me as a model for further research. I have collected data within this framework and analyzed it according to the requirements of the project. To collect the data required I have also visited regional office of PSO in Karachi and also collected data from several outlets of PSO. The web site of PSO is also used as source of data by the group.

Institute of Business and Technology


At PSO, they strongly believe that Human Resource are the asset that should be appreciated with the passage of time. Consequently, PSO considers the strong focus on training and development of their employees a value added and worthwhile investment. Then, In the last by the detailed study of the impact of training and development practices used by the company some recommendations are made and on the basis of the analysis of company’s practices conclusions are drawn.



ACKNOWLEDGEMENT

All praises for Almighty Allah whose uniqueness, Oneness and wholeness is not challengeable. All respect for his Holy Prophet Hazrat Muhammad (P.B.U.H) who enabled us to recognize our creator.

I am grateful and deeply indebted to Dr. Noor Ahmed Memon my teacher, mentor and project advisor for his helpful insights, cooperation, support and continuous encouragement throughout this project. Without his guidance I will not be able to do this of a good standard and a quality. He really is a person from whom I learnt a lot and who knows how to motivate other person.

Many people have contributed in the completion of this project and I would like to thank my friends Mairaj and Yasir for sparing their precious time, whose support and guidance help me throughout my work to complete this project in time.

Last but not least I would like to thank my parents for their moral support and prays and my lovely sister Madiha for always being there for me when I need her.

Ayesha Mirza



TABLE OF CONTENTS

ABSTRACT

2

ACKNOWLEDGEMENT

4

1. INTRODUCTION

1

1.1 Introduction.................................................................................................1 1.2 Purpose of Study........................................................................................1 1.3 Research Objectives..................................................................................1 1.4 Research Methodology..............................................................................2

2. LITERATURE REVIEW

3

2.1 Human Resource Management ................................................................3 2.2 Recruitment and Selection ........................................................................4 2.3 Training and Development ........................................................................6 2.4 Local Literature on Training and Development........................................11 2.5 Foreign Literature on Training and Development....................................12

3. PAKISTAN STATE OIL

14

3.1 Introduction...............................................................................................14 3.2 Vision and Mission....................................................................................23 3.3 Corporate Planning .................................................................................24 3.4 Brand Management and Communication Department ............................25 3.5 PSO’s Physical Resources ......................................................................28

4. HR PRACTICES AT PSO

32

4.1 Human Resource Management..............................................................32 4.2 Recruitment..............................................................................................33 4.3 Derecruitment...........................................................................................34 Institute of Business and Technology


4.4 Selection...................................................................................................34 4.5 Orientation................................................................................................35 4.6 Compensation and Benefits.....................................................................35 4.7 Appraisals.................................................................................................37 4.8 Decesion Making......................................................................................38 4.9 Motivation.................................................................................................38 4.10 Controlling..............................................................................................40

5. TRAINING AND DEVELOPMENT AT PSO

41

5.1 Training.....................................................................................................41 5.2 SAP...........................................................................................................43 5.3 HR Module................................................................................................43 5.4 Development............................................................................................53 5.5 Relationship with Society.........................................................................54 5.6 Social Welfare Activities...........................................................................55

6. ANALYSIS OF HR PRACTICES

59

6.1 Comparison of HRM Practices at PSO and SHELL ................................59 6.2 Comparison of HR Practices with SHELL Planning ................................60 6.3 Recruitment..............................................................................................61 6.4 Selection ..................................................................................................62 6.5 Employee Training Methods and Development ......................................63 6.6 Compensations and Benefits: .................................................................63 6.7 Performance Management ......................................................................64 6.8 Employee Relations ................................................................................64 6.9 Company’s Performance .........................................................................65 6.10 Future of PSO As Compared with Its Competitors ...............................65

7. ANALYSIS OF TRAINING AND DEVELOPMENT AT PSO

67

7.1 Responsibilities Related To Training .......................................................67 7.2 Training and Development on Need Assessment ...................................68 7.3 Training Types at PSO ............................................................................69 Institute of Business and Technology


8. RESEARCH FINDINGS

70

8.1 The Questionnaire....................................................................................70 8.2 Summary of Findings...............................................................................88

9. CONCLUSION AND RECOMMENDATIONS

90

9.1 Conclusion................................................................................................90 9.2 Recommendations....................................................................................92

BIBLIOGRAPHY

94

APPENDIX

95



1. INTRODUCTION 1.1 Introduction In today’s fast and competitive business environment any company can’t grow without giving importance to its HR strategies and practices, and among those the most important is the practice of employee training and development. The research had tried to study the HR practices that are being practiced by the PSO and area of main focus is the practices of employee training and development. We have find that alongside the development of its physical facilities, PSO is deeply conscious of the pivotal role that human resources play in the success of an organization. As a matter of fact, human resource development has been identified as an area of key importance. While strengthening the ranks of its work force with quality professionals at various levels of management, the company also undertakes several initiatives for improving productivity and efficiency at all levels of services. Through computer training, various courses, sponsorships of staff for studies at professional institutions and seminars, the company is providing its employees on going opportunities for continuous self-improvement and learning. 1.2 Purpose of Study The purpose of this research is to explore various HR practices and procedures adopted by the successful organization PSO and how they can contribute to the development of a sustainable competitive advantage. 1.3 Research Objectives The objective of the research, which is the Impact of HR practices on PSO, their importance and the effects that they have on employee development. This research also makes recommendation for PSO. The idea behind this study is also to understand the various training methods that have been used by PSO


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as a measure to improve their productivity and performance for the overall organization. 1.4 Research Methodology In order to conduct the research work a number of research methods are used which includes intensive web search, interviews, and visits at PSO (Pakistan State Oil). The research also seeks to analyze the training methods that have today become prevalent in a reputable organization PSO and the impact that they have had on employee development through out the organization. For this purpose the following research methodologies are followed:  Primary data o Questionnaires, Interviews  Secondary data o

Libraries, Articles, Research material, Internet, Financial

Magazines.


2


2. LITERATURE REVIEW 2.1 Human Resource Management Managing people is one of the most critical aspects of organizational management in the 21st Century. No matter whether an organization is a nonprofit, start-up enterprise, or mature business employees are crucial to achieving objectives, delivering results and being successful. The activity once known as personnel and now more commonly described as human resource management (HRM) is a fundamental aspect of successful management. The most important HRM practices are : 1) HR planning (i.e. to forecast and foresee the future business and employee needs and plan for them) 2) Recruitment and selection job descriptions, selection tools, background checks, offers 3) Compensation (i.e. methods, consistency, market) 4) Employee relations(i.e. labor agreements, performance management, disciplinary procedures, employee recognition) 5) Mandated benefits (i.e. social security, unemployment insurance, worker's compensation, COBRA/HIPPA) 6) Optional group benefits (i.e. insurance, time off benefits, flexible benefits, retirement plans, employee assistance programs, perks) 7) Payroll (i.e. internal vs. external options, compliance) 8) Recordkeeping (i.e. HRIS, personnel files, confidential records, I-9, other forms) 9) Training and development (i.e. new employee orientation, staff development, technical and safety, leadership, tuition reimbursement, career planning)


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10) Employee communications (i.e. handbook, newsletter, recognition programs, announcements, electronic communication) 11) Internal communications (i.e. policies and procedures, management development, management reporting) 2.2 Recruitment and Selection The Recruitment and Selection process promotes successful hiring decisions that can truly impact the success of a department or faculty. The selection of a candidate with the right combination of education, work experience, , and creativity will not only increase the quality and stability of the workforce, it will also play a large role in bringing management strategies and planning to fruition. Important steps of the process are: Initiating The Recruitment Process

•

In initiating the recruitment process following matters should

be considered: Clarification of the scope and skill sets required to successfully perform the duties of the position •

Review of the Job Fact Sheet or Position Description to

ensure that the skills and abilities required coincide with the current expectations of the position. If they do not, then a position evaluation should be undertaken. •

Review of the compensation available to the position (i.e.

salary and benefit plans, etc.) •

Analysis of the impact that the hiring will have on the

budget. Screening Applicants Managing The Applications

The following steps should be completed when screening the applications, both for organizational:


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•

Record the names of all applicants who submitted

applications/resumes •

Specify the short-list criteria

•

Record All Short-Listed Applicants Selecting the Interview

Panel •

Research shows that the panel or team interviewing

approach produces more reliable results than does any other type of interviewing process. A panel of 2-4 interviewers is usually recommended, composed of a variety of direct and indirect members. Consideration might be given to including a group made up of some of the following: •

Direct supervisor of the position

•

Departmental Personnel Administrator

•

Vacating incumbent

•

Subject matter expert from another department

•

Senior co-worker that interacts closely with the position

Interview Scheduling And The Interview Environment

•

Schedule the interviews within as short a time frame as

possible.

Allow

approximately

10-15

minutes

between

interviews to record your evaluation. •

Arrange for interview space where there will be no

interruptions. •

Configure the furniture in the interview room in a way that

will enhance dialogue and interaction, such as at a round table. Making The Selection Decision Candidate Evaluation

Each member of the selection committee should carefully review each candidate’s resume, any notes made during the interviews, and the


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completed Candidate Rating forms, to determine which of the candidates should proceed to the next step of the Selection process, where reference interviews are conducted.

Discussion should be held about each candidates’ qualifications in regard to: •

Education

•

Experience

•

Knowledge and Technical skills

•

Problem-solving abilities

•

Oral and written communication skills

•

Personal Effectiveness

•

Evidence of Team working abilities

These factors should be considered against not only the position requirements, but its environment as well. Once the panel has completed its discussion a member should be chosen to conduct the reference interviews on the candidates most likely to be offered the position. Reference Checking

A reference check is an essential tool in the employment selection process — be it a new appointment, or a transfer or promotion within the organization. It provides the opportunity to verify and gain information in addition to that received directly from the applicant.

2.3 Training and Development Training involves an expert working with learners to transfer to them certain areas of knowledge or skills to improve in their current jobs. Development is a broad, ongoing multi-faceted set of activities (training activities among them)


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to bring someone or an organization up to another threshold of performance, often to perform some job or new role in the future.

Training And Development Goals

The types of training and development goals identified will depend on the personal and organizational objectives identified through the strategic planning process and the agreed appraisal procedure. In any event the goals shall, as a minimum standard, take account of the following: •

The Mission

•

The Values

•

The strategic objectives of the company

•

Equal Opportunities Policy

•

Requirements for core competencies

•

Continuing personal and professional development

•

Requirements for professional and vocational qualifications

in further education •

Requirements for professional, vocational and workplace

updating •

Requirements for organizational change

•

The operational objectives of the schools / faculties /

departments / units •

Operational performance requirements

•

Personal performance requirements

•

Team performance requirements

•

Self assessment and action planning

Types Of Training And Development Support

The following facilities should be provided to the staff: Institute of Business and Technology

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•

All employees shall have access to the staff development

program. They shall also have the full opportunity to attend courses and conferences to develop their professional expertise relevant to the fulfillment of the requirements of their job. The induction procedures shall be fully integrated into the training and development program for new employees. •

The agreed Appraisal Scheme shall be applied equally to all

employees. •

All employees shall be given opportunities to attend

meetings to the fulfillment for the requirements of their job, e.g. team meeting and course development meetings. •

Managers shall endeavor to arrange such meetings at

times, which are mutually convenient to all employees.. •

There should be clear procedures whereby employees may

apply for training and development opportunities, and are given clear reasons for the acceptance or rejection of their applications Workplace Learning

For the work place training following points should be kept in consideration: •

All employees shall be encouraged to learn regularly and

rigorously from their workplace activities and share their learning experiences and outcomes with their peers. •

Mentoring of new, existing employees and job changers is

recognized as a valuable means of achieving shared workplace experience and promoting excellence in the workplace. Values

•

The implementation of these guidelines should seek to

encourage an organizational culture in which learning thrives. •

Both sides recognize that high quality and appropriate


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training opportunities support the achievement of the colleges’ strategic objectives and empower employees to achieve high standards. Typical Reasons For Employee Training And Development

Training and development can be initiated for a variety of reasons for an employee or group of employees, e.g. •

When a performance appraisal indicates performance

improvement is needed •

To "benchmark" the status of improvement so far in a

performance improvement effort •

As part of an overall professional development program

•

As part of succession planning to help an employee be

eligible for a planned change in role in the organization •

To "pilot", or test, the operation of a new performance

management system •

To train about a specific topic

Typical Topics Of Employee Training 1. Communications

The increasing diversity of today's workforce brings a wide variety of languages and customs. 2. Computer Skills

Computer skills are becoming a necessity for conducting administrative and office tasks. 3. Customer Service

Increased competition in today's global marketplace makes it critical that employees understand and meet the needs of customers. 4. Diversity


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Diversity training usually includes explanation about how people have different perspectives and views, and includes techniques to value diversity 5. Ethics

Today's society has increasing expectations about corporate social responsibility. Also, today's diverse workforce brings a wide variety of values and morals to the workplace.

6. Human Relations

The

increased

stresses

of

today's

workplace

can

include

misunderstandings and conflict. Training can people to get along in the workplace. 7. Quality Initiatives

Initiatives such as Total Quality Management, Quality Circles, benchmarking, etc., require basic training about quality concepts, guidelines and standards for quality, etc 8. Safety

Safety training is critical where working with heavy equipment , hazardous chemicals, repetitive activities, etc., but can also be useful with practical advice for avoiding assaults, etc. 9. Sexual Harassment

Sexual harassment training usually includes careful description of the organization's policies about sexual harassment, especially about what are inappropriate behaviors.

General Benefits From Employee Training And Development

These reasons include: 1. Increased job satisfaction and morale among employees


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2. Increased employee motivation 3. Increased efficiencies in processes, resulting in financial gain 4. Increased capacity to adopt new technologies and methods 5. Increased innovation in strategies and products 6. Reduced employee turnover 7. Enhanced company image, e.g., conducting ethics training (not a good reason for ethics training!) 8. Risk management, e.g., training about sexual harassment, diversity training. 2.4 Local Literature on Training and Development In terms of local literature, I have found certain articles regarding the training and employee skill development techniques from the Internet and from different sources For instance an article was available regarding the health and safety and environment training that was provided to employees. It claimed that Health Safety and Environment (HSE) Department conducted a Fire fighting and emergency response training session at MCB Tower's Auditorium on 13 October 2005, which was attended by floor coordinators and staff of security department. Training was imparted to 37 employees. Anas Hammad Sr. Executive HSE & QA delivered the presentation and describes the concept of fire and fire triangle, types of fire and use of fire fighting equipments. He also briefed on the regarding importance of emergency response system and types of emergencies. Another article, concerning local literature, also published in October 2005, spoke of Lotus Smart Suite training that was being undertaken by PSO in an attempt to develop the skills of their employees regarding computers and software programs that have become an essential skill that any employee should


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posses. It spoke of the training that was given to 300 employees and also said that plans were being taken to expand the training for employees working at up country locations In addition, an article regarding WOW training for employees, so that the petrol station attendants could learn more in terms of customer courtesies. It talked about T&OD staff continuing their input at Karachi, Lahore and Rawalpindi/Islamabad. In October the training teams concentrated on other divisions in N.W.F.P, Central and Southern Punjab as well as Interior Sindh. The names of trainers were also provided in this article. Trainers included Aftab Mirani,Ghulam Haider Marri, Kamal Magsi , Javed Bashir, Sikander Rind, Nazir Sheikh, Zahid Memon, Aijaz Qazi, Mohammad Tahir and Fazal-e-Mansoor. By looking at the summary of these articles, an idea can be gained on the different and diverse types of training that are being undertaken by PSO Amongst the other local literature sources that I have used are the material provided to me by the management of PSO and any additional information I could gather by the newspaper and magazines that provided any sort of information regarding the topic I am researching on. 2.5 Foreign Literature on Training and Development The greatest source to me of foreign literature was the Internet. I was able to gather immense information regarding technical training and employee skill development not only at PSO but what actually occurs in general around the world. This helped increase my comprehension of the topic much more vastly. An article on the Internet published on May 1st 2005, spoke of why creating formal employee skill development and technical training strategies is essential for continual success of one’s business. It spoke of the investment in training that should be made not only in monetary terms but rather talking in nonmonetary terms. Business owners frequently send their people to training courses that seem right and sound good without knowing what to expect in


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return. But without measurable results, it's almost impossible to view training as anything more than an expense Through this article I was able to compare the mistakes that management make when they don’t properly attempt to understand the purpose of training and whether PSO is actually making the same mistakes or not. Similarly, in another article, it said: “"We are entering a world where the old rules no longer apply." The opening quote in the bestseller Rising Sun by Michael Crichton ( 1992) sums up how rapidly the future is changing and becoming unpredictable. In response to calls for changes in the way training has traditionally been done, many have responded by calling for redefining the mission of training, renaming training (i.e., witness the recent movement to referring to training and development professionals as "performance consultants"-- Robinson & Robinson 1995), and even firing or getting rid of in-house training altogether because it is not cost effective (see Furnham 1997 for a more detailed discussion of this last point). In short, the pressure is on for trainers and training functions to reinvent, reengineer, revitalize, remake, and improve what they do (Shandler 1996).” Therefore, by looking at this piece of information present in this foreign article, I was able to comprehend more and improve the quality of my study. Such articles not only helped me in my study and research but also generally, proliferated my knowledge of technical training and employee skill development today. Other sources of foreign literature, were books, such as “ Human Resource Management” by Gary Dessler, “Human Resource Mangement” by David A. Decenzo & Stephen P. Robbins, “An Integrated Approach to Business Studies” by Bruce R. Jewell, and “Business Studies” by Dave Hall


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3. PAKISTAN STATE OIL 3.1 Introduction What Is PSO?

PSO is engaged in the storage. Distribution, and Marketing of Petroleum Products, Petrochemicals. LPG and CNG. It is continuing to expand its physical and marketing resources to meet the requirements of the country. Central Background Information History

Pakistan state oil company limited was established in 1976,PSO was formed through the amalgamation of three state controlled oil marketing and storage companies, Pakistan National Oil {PNO}; Premier Oil Company {POC} and oil company Limited {SOCL}, formerly ESSO Undertakings. Chronology Of Events Leading To The Formation Of Pakistan State Oil Co. Ltd

01-01-1974 Federal Government takes over management of PNO [Pakistan National Oil] and DLP [Dawood petroleum Limited], renamed into POCL [Premier Oil company Limited] under marketing of petroleum products [Federal control] Act, 1974. 03-06-1974 Government incorporates. ‘Petroleum Storage Development Corporation PSDC 23-08-1976 Name of PSDC change to state oil company limited [SOCL] 15-09-1976 Government purchases ESSO undertakings, vests the same in SOCL. 30-12-1976 Government


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merges PNO and POCL into SOCL. [state Oil company limited], and named it as Pakistan state oil company Limited. Company Overview

As the largest oil marketing company of Pakistan, PSO is engaged in storage, import, distribution marketing of petroleum products petrochemicals aviation and bunker fuels LPG and CNG dominates the country’s fuel and energy need. The company has largest retail network in the country and the most extensive terminal and depot network. PSO has listed in Asia’s largest 1000 companies by Asia Week. Since its inception in 1976, the company has been meeting more than 70% of country’s fuel needs. PSO’s 3805 outlets all across the country markets more than 12 million tons of fuel products annually. This network is supported by PSO’s 28 storage facilities with a capacity of more than 800,000 tons. PSO took a major step in improving its distribution facilities by acquiring 12% equity in the 800 km long KarachiMehmoodkot White oil Pipeline. As part of PSO’s policy of providing better customer service it has embarked upon its new vision retail development program. Equipped with the most modern facilities like •

Electronic dispensing units,

•

Auto car wash,

•

Convenience stores,

•

Internet facilities and business centers these state of the art

designed stations provide greater customer confidence and a friendly environment. As a manifestation of PSO’s greater customer focus a 24hr PSO customer service had been launched where customer’s can lodge their queries and suggestions about various PSO products and services. Strong Financial Performance


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PSO has an impressive record of profitable financial performance. Revenues has grown at a CAGR of 13.8% since 1996 and earnings before interest, depreciation amortization (“EBITDA”) has grown at a CAGR of 10.6% over the same period. For the fiscal year ended June 2001, PSO generated sales volume of 12.6 million tons with sales revenue in excess of Rs. 169 billion (US $ 2.8 billion) and after tax profits of Rs. 2.25 billion (US$ 37.5 million). PSO is the third largest publicly listed company in Pakistan by equity market capitalization, and a recipient of the Karachi Stock Exchange Top 25 Companies Award for 17 consecutive years. Market Share Retail

PSO is the market leader in the retail sector in Pakistan with approximately 40% market share in motor gasoline and over 60% in diesel oil. PSO owes this competitive position in part to its extensive dealer financial retail network of more than 3,750 outlets, which if by far the largest in the country In the last two years the company has embarked on a scheme of rationalization, closing down unprofitable stations, and upgrading and rebranding others. Industrial Consumer

The industrial consumer division enjoys high volumes and generates steady profitability and cash flows. The division has long-term contracts in place with Independent Power Producers (“IPPs”) in Pakistan. Other major customers include state-owned utilities and various commercial consumers. The division’s primary product is fuel oil in which PSO has an approximate 85% market share. From the locomotives of railways to the giant turbines of power project, all are fuelled by PSO. Structural Reforms

In recent years the GOP has appointed senior management personnel from the private sector to run PSO. The new management team initiated structural reform programme for the company. Upgrading its retail Institute of Business and Technology

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outlets and concentrating increasingly on high margin products. In FY 2000 PSO incurred Rs. 967 million (US$ 18.6 million) of capital expenditure, primarily on the Company’s new vision retail development programme. PSO is now moving towards a marketing strategy which is similar to that employed by multinational OMCs presenting Pakistan.

Infrastructure

PSO owns key important terminals and has an over-whelming advantage in terms of the storage capacity and geographical coverage of its depot network. Growth Of PSO

PSO is the largest of the three marketing companies in Pakistan; it has consistently maintained an edge over its competitors Shell and Caltex. With an overall market share of 72% in 1997-98 it sold 6.244 million tons of petroleum products during the half year ended 31st December 1999 against 5.633 million tones sold during the corresponding period last year, showing an increase of 10.8% Continuous Growth

PSO continues to expand its physical, technical and marketing resources to meet the requirements of the country. PSO has maintained International collaborations to import latest technology. They are: •

Castrol (UK) Blending and marketing of lubricants in

Pakistan. •

Air Total (France) Technical and commercial agreements in

Aviation Sciences and technology. •

Exxon chemicals (Singapore) Petro-chemicals business and

technology. Financial Highlights Of The Year

•

An all-time record sales of Rs. 170 billion, up by 26% over


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the previous year. •

An all-time record gross profit of Rs. 6.4 billion, 12.4% up

over the previous year. •

Earned Rs. 2.25 billion as profit after tax and declared 100%

cash dividends to share holders despite the impact of VVS and other adjustments made. •

Received KSE Top performing company award for the 17th

consecutive year. •

A record 185 new Vision retail outlets commissioned,

bringing the total to 295. •

The first oil company to provide Internet facility at retail

outlets, 150 installed while 450 under implementations. •

The first oil company to provide “Price Display Unit” on

monoliths and pylon signs. •

Launched an innovative service “Mobile Quick Oil Change

Unit for undertaking oil change at customer’s doorsteps. •

Successfully took over the important fuel oil effective from

July 1, 2001 and HSD effective January 1, 2001 form Government of Pakistan. Objectives Of PSO

The company is focused on efficiently meeting the energy requirements of Pakistan. Through its customer satisfaction it is consistently seeking to improve quality of product. •

Giving Momentum to the Nation

•

Energizing Industrial Institution

•

Ensuring Customer Satisfaction

•

Meeting New Business Challenges

Giving Momentum To The Nation


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Meeting the fuel and energy needs of the people of Pakistan and the country’s vital institutions setting the highest standards in customer care offering and maintaining maximum quality control of products and services. Creating an atmosphere of trust and coordinated teamwork that enables sustains peak performance. Operating as the lowest cost supplier with assured access to long-term suppliers, even in the utmost areas of the country. Undertaking initiatives that have an impact on the lives of people in a constructive manner. Fulfilling the responsibility as a national institution by making a dynamic contribution to society and helping to build a progressive Pakistan. Energizing Industrial Institution

Throughout the 26 years of its existence, PSO has been a company that has merged sound business sense with its national obligations. Taking immense pride in being “Pakistan State Oil”, PSO has always been there for national causes and commitments. Be it uninterrupted operation of electricity turbines of WAPDA and KESC or the supply of staggering quantities of fuel oil to HUBCO and other IPPs, PSO meets the majority of the country’s fuel oil requirements. By ensuring timely supply of petroleum products to the nations defense forces, from the Northern Mountain ranges to the shores of Gawader. PSO makes sure that the nation’s defense is never compromised for want of fuel. PSO’s Aviation stations at all the major airports of the country continues to facilitate domestic and international air travel, its Bunker fuel facilities fill up ocean liners of many a nation while its efforts to provide fuel in the mountains of Saindak have earned wide recognition.


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PSO’s commitment to national development is reflected by its nearly three decades of operation. The nation can be confident the PSO shall continue to honor the commitment in the future too. Ensuring Customer Satisfaction

PSO believes in providing its customers diverse services based upon innovation caring and the progressive vision PSO have for the future. Some 295 new vision outlets for providing highest quality services to the customers have been established all over the country. As a manifestation of its commitment to the adoption of modern technology at its retail outlets PSO has introduces Internet facilities at 150 outlets. Also PSO is providing modern means of communication to its dealers. While Quick Oil Lube Vans provide customers oil change facility at their doorsteps. Some 12 mobile quality-testing units ensure top of the line quality of products at retail outlets with recent expansion in its product line of lubricants. PSO is now in position to serve the requirements of a broader base of customers. Expanding the range of services at its outlets PSO has set up Easy Payment Centers in collaboration with Citibank at selected retail outlets in Karachi. At these centers the customers can pay their utility bills at any time of the day avoiding the hassles of long queues. Meeting New Business Challenges

As the first Oil Company to import HSD PSO has enhanced its handling facilities at Zulfiqarabad Oil Terminal Port Qasim. This new arrangement for HSD handling has not only relieved Karachi from noise and environmental pollution but also reduced the traffic congestion of POL tankers at Keamari. In past few years Moges is being rapidly replaced by Compressed Natural Gas (CNG) as fuel for a variety of vehicles. To cater to the demands of this growing segment 30 PSO stations are now providing this facility while


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40 more CNG stations are stages of developed new lubricant specifically developed for CNG being introduced. The company recently embarked upon a extensive program of restructuring rationalizing its network of retail outlets improving its marketing image through a nation-wide initiative to re-band key retail stations and further increase efficiencies by streamlining its organizational structure. Organizational Culture

Organization culture is a system of shared meaning with in an organization that determines in large degree how employees act.

Importance Of Culture In PSO

According to the opinion of the PSO’s sales officer PSO is a sales oriented company. Strong culture is a symbol of more profit more earning and sense of responsibility. It is also a monument of well-disciplined enterprises in which every organ of that organization is well concerned with the ultimate objective of the organization. As it’s a fundamental truth that every individual from worker to Top manager is aware of his rights privileges responsibilities and outcome of efforts being invested. Six Dimensions Of Culture 1. Innovation And Risk Taking

According to our survey what we have found is that employees are not much encouraged to be innovative and take risks. 2. Attention To Detail

According to our survey employees have given importance. 3. Outcome Orientation

The manager’s focuses on both results or outcomes and the techniques needed to achieve those outcomes.


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4. People Orientation

Management decisions do not take into consideration the effect of outcomes on people within the organization. They have made their employees a central part of their culture. 5. Team Orientation

They emphasize on team orientation i.e. work activities are organized around them. 6. Stability

PSO is maintaining the status in contrast to growth

Planning At PSO

Planning: a process that involves defining the organization objectives or goals and developing an overall strategy for achieving those goals and developing a complete hierarchy of plans to integrate and coordinate activities. Short Term Plan

•

Short- term Investments: investments in unquoted shares all

stated at the lower of cost or break up value. •

Short-term Loans and Finances: the company has short-

term liabilities of Rs.5525 million from various bands at mark-up rates from 33-38 paisa to Rs. 1000/day net of prompt payment rebates. These arrangements are general for a period of 12 months and are receivable subject to payment of repurchase price by specified dates. These facilities are secured by way of charge against hypothecation of company’s stock of petroleum products and trade debts.

Long Term Plan


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Investments: the company follows the “cost methods” of accounting for long term investments. The carrying amount is reduced to recognize a decline other than temporary in the value of investments. Long Term Deposits

Include Rs.15 million which are interest based against dealership for an initial period of 10 years. The rate of interest ranges from 7-13% per annum and are expected to be renewed on maturity. Represent interest free deposits from contractors against the transportation of petroleum products and are refundable on the cancellation of contract. 3.2 Vision and Mission Vision

“To excel in delivering value to customers as an innovative and dynamic energy company that gets to the future first.”

Mission Statement

“We are committed to leadership in energy market through competitive advantage in providing the highest quality petroleum products and services to our customers, based on: •

Professionally trained, high quality, motivated workforce,

working as a team in an environment, which recognizes and rewards performance, innovative and creativity, and provides for personal growth and development. •

Lowest cost operations and assured access to long-term and

cost effective supply sources. •

Sustained growth in earning in real term.

•

Highly ethical, safe, environment friendly and socially

responsible business practices.”


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3.3 Corporate Planning PSO is striving to add value to its business by introducing modern efficient and innovative business practices to boost corporate performance. Benefits of this value will be given to shareholders and the employees of the company. Corporate planning is about competitive advantage; at this most challenging juncture in PSO’s history the focus is on forward thinking of on cutting edge issues. Staffed with professionals having a diverse background in business engineering and computer technology and international experience CP is endeavoring to prepare PSO for the challenges ahead to ensure its sustainable corporate leadership in future based on the best industrial practices. The development of a financial model that resulted in the company’s first in depth study on product wise and business wise profitability as well as the establishment of an effective procedural framework for capital budgeting mark the first year of the corporate planning activity in PSO. This has led to classification of authority and criterion for investment decisions efficient project appraisal based on computer modeling and effective monitoring of the status results of investments undertaken. These systems have been adopted by the company for periodic review of corporate performance through management committee meetings. Contingency Factors In Planning Level On Organization

Outstanding performance of company was recorded by the board of management and noted by the secretary petroleum during his recent visit. It was because employees worked hard delivered efforts and produced results. During the last six months unnecessary expenses had been curtailed to a great extent; operations improved depot losses cut down and cartage fleet upgraded. Degree Of Environmental Uncertainty

PSO was in an intense competition mode. Market conditions in the last six months were very difficult with the decline of consumption of POL


24


products. International oil prices dropping and fixed margins the results were affected. It was amazing that despite of the challenging industrial environment the company not only maintained sound financial health but also was pressing hard with all its major investment plans. The strategic initiative undertaken by PSO is helpful to company to free the challenges impending deregulation.. Organizational Structure & Design

The organizations formal framework by job tasks is divided in groups but is coordinated. The basis on which jobs are grouped in order to accomplish organizational goals is functional departmentalization. 3.4 Brand Management and Communication Department Branding is the reputation and the image of a company, which is conveyed via names logos, acts packaging and word of mouth. Corporate branding used to focus on logo and name but today it has a broader meaning. The need for branding arises when consumers expect more than a good product at a fair price. They seek service experiences that compliment their life styles and brands that align with their personal aspirations. And that’s exactly what company try to convey to target market. VM&C department at PSO follows the following two approaches: 1. Expanding the depth and breath of brand awareness by improving brand recognition of consumers during purchase or consumption settings. 2. Improving the strength favor ability and uniqueness of brand associations making up the brand image. The above goals are achieved primarily through: •

Corporate Advertising

•

Sales Promotion Campaign Institute of Business and Technology

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•

Sponsorships

Customer Service Department

PSO has recently set up a dedicated service department that is major step towards company’s overall objective of becoming a customer-oriented company. Located at the company’s head office in Karachi the CSD is the first point of contact for the customers on day to day concerns and provides centralized customer service across Pakistan Trained and professional staff attends to and solves the customers concerns and complaints quickly and effectively.

Public Affairs/Public Relations Department

(PRD)

The major function of the PRD is to ensure the projection of the company’s image as the country’s premier public sector organization and conscientious citizens. This is achieved by highlighting positive stories about the company in the media. Other functions of the department include event media management speech writing and keeping Managing Director and the company hierarchy informed. The department also tackles press queries and sets up interviews of the Managing Director with the media. It also coordinates with the brand management and other departments in the planning of events press conferences workshops seminars etc. The department is also involved in giving banners and tackling adds requests not related to advertisements campaign. The department personnel are also involved in the preparation of the annual report and writing of articles. Chain Of Command

It is an unbroken line of authority that extends from the upper levels of the organization to the lowest levels and defines who reports to whom.


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As PSO follows traditional objective setting decision are made totally by the top management. The authority is given to the managers to give orders and employees are bound to follow them. It is the responsibility of the employees to perform those duties assigned to them. Unity Of Command

On PSO the unity of command hoes in the following sequence: •

Chairman

•

Managing Director

•

7 General Managers

•

Divisional managers

•

1 sale Executive

•

8-12 Sales officers

Managing Director is answerable to the Chairman. MD has 7 general managers working under him. Every G.M has 8 DMs working under him. Every DM has a Sales executive and under him there are 8-12 sales officers. Centralization

PSO is a highly centralized company i.e. decision-making is concentrated in the upper levels of the organization. The Top management makes the company’s key decisions with little or no input from the lower level employees. PSO is more centralized because the environment is stable company is large and lower level managers are not as capable or experienced at making decisions as upper level managers. Company Analysis Operations

To improve turnaround time for railway tank wagons and reduce transportation costs to GOP, tank wagon filling facility at Pipri Marshaling Yard was commissioned.


27


Company introducing/replacing in phases own tank lorry fleet for supply of products to retail outlets in urban areas. On line computerized management information system established for retrieval of information at up-country depots/head office, complete networking presently in hand. Health & safety policy document prepared & circulated within the organization Environment Policy developed. ISO certification for Blending Plant Korangi and Central Laboratory at Kemari, Karachi, accomplished. Infrastructure Development

Additional pipeline linking OP-3 to the PSO Terminal at Keamri for discharge of deficit cargo. Development and construction of Aviation handling facilities at Sihala Terminal •

Modernization of Chakpirana Depot.

•

Addition of storage at Jag lot Depot.

3.5 PSO’s Physical Resources Transport

PSO Railway Wagons

1120

Tank Lorries under PSO Control

13,400

(Karachi & Upcountry) Blending Plants

PSO Owned

4

Affiliates

5

Contracted

1


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Tando Alam Oil Complex

Tando Alam is located in Hyderabad district of Sindh Province. Hyderabad is the nearest city about 21 KM away from the location. First exploratory well i.e. Tando Alam Well No.1 was drilled and completed in May 1984 as an oil producer brought on regular production in October 1984. Tando Alam Oil Complex comprises of Tando Alam, Lashari, Sono, Pasakhi, Thora, Tando Allah Yar, Buzdar North, and Missan & Daru field. Current production from Tando Alam Oil Complex is 12,000 BPD of oil. BOBI Development Project

BOBI is located in Sanghar District of Sindh Province, situated 85 KM north east of Hyderabad and 25 KM south of Sanghar. The field was discovered by OGDCL in 1989. In order to appraise the field, OGDCL drilled six (06) wells, out of which 05 are completed as producers. The development project of Bobi field includes, drilling of two (02) development wells, installation of surface gathering facilities, oil and gas separation facilities, condensate stabilization unit, LPG extraction plant and gas recycling system at Bobi field. The Project is expected to be on stream by June 2003. Upon completion, the following products are expected to be yielded: Condensate - 2800 BBL/Day LPG - 125 Ton/Day Gas - 10 MMCFD (gas to be re-injected) Kunnar Oil Field Project

The Kunnar Field is located in Hyderabad District of Sindh Province, situated 24 KM south east of Hyderabad. The field development included the installation of surface gathering facilities, oil & gas separation systems,


29


condensate stabilization system, LPG extraction plants and gas recycling system for Kunnar Field. The plant was commissioned in September 2000 and is presently producing 3275 BPD of condensate 15 to 16 M. Tones/day of LPG and residue gas of 2.50 MMSCFD is being reinjected into the reservoir for pressure maintenance. Qadirpur Joint Venture Project

Qadirpur Gas Field, the 3rd largest in the country was discovered in 1990. It is located in the central Indus basin, south of Kandkot and Sui Gas Fields. The Development and production lease area (389 Sq. Km) is crossed by River Indus in East-West direction. Oil and Gas Development Limited (OGDCL), Premier Exploration Pakistan Limited (PEPL), Burmah Oil Netherlands Exploration (BONE) and Pakistan Petroleum Limited (PPL) jointly hold the D&P Lease with the following interests OGDCL (Operator) 75.0%, PEPL 9.5%, BONE (bp) 8.5%, PPL 7.0%. Fourteen wells have been connected through the gas gathering system and put on regular production. Drilling of more wells has been planned, which will entail improved recovery. Qaduroyr Exoabsuib Orihect

Presently the field is supplying 380 385 MMSCFD gas to M/s SNGPL, which include 100 MMSCFD of dehydrated and 50 MMSCFD raw gas. After the Phase-II capacity enhancement, the facility will deliver 400 MMSCFD processed sale gas by mid 2003, in addition to 100 MMSCFD dehydrated and 50 MMSCFD raw gas. Provision has been made in the Capacity Enhancement Scheme for further expansion of facilities to increase annual average treated sales gas from 400 to 500 MMSCFD. 3.6 Social Welfare Activities In addition to exploration and development activities in the Sindh Province, OGDCL is already extending medical care, drinking water, and


30


schooling facilities to the locals. In recent years, Health, Safety, Environment (HSC) has emerged as one of the major themes of corporate governance at PSO. Realizing the importance of healthy and safe work practices, a comprehensive HSE policy has been devised and the HSC manual and procedures updated. According to this policy no new vision outlet can be commissioned before a comprehensive HSE audit. Likewise, HSC audits are being conducted at all installations and depots, followed by necessary corrective action. In order to increase awareness, HSC awareness sessions are frequently organized for all employees throughout the organization. Financial performance for the fiscal year ended June 30, 2003, despite the revenue drop ad a record provision of approx RS 2 billion made for taxes (an increase of approx Rs 800 million) PSO earned an all-time record profit before tax of Rs. 5.1 billion, up by 49% while profit after tax rose to Rs.3.2 billion registering a growth of 42% over prior year period. The profit increase is primarily due to innovative marketing strategies, organizational restructuring, product mix revamping of internal system with improved productivity along with the partial impact of enhanced margins during the last quarter. Accordingly the board of management approved a final dividend comprising 80% cash (Rs. 8/share) and 20% bonus shares for FY-2003. Combined with the earlier two interim cash dividend of Rs. 5 per share the total amounts to Rs.13 per share resulting in the highest-level cash payout of Rs. 1.86 billion to shareholders of the company. In terms of sales PSO ranked 520th among Asia’s 1,00 largest companies in the year 2001, according to a survey conducted by the Asia week


31


4. HR PRACTICES AT PSO 4.1 Human Resource Management What Is Human Resource Management?

Human resource management is staffing an organization with competent, high performing employees who are capable of sustaining their performance level over a long period of time. Importance Of Human Resource Management

HRM is an important strategic tool and it can contribute to the development of a sustainable competitive advantage. It is the most important intermediary body between the employee and the organization that works to develop relations advantageous to both. All activities related to nonmanagement employees are handled by the industrial relations division and that of Management employees are handled by the personnel division of the HRM. Human Resource Management Of

PSO

Alongside the development of its physical facilities, PSO is deeply conscious of the pivotal role that human resources play in the success of an


32


organization. As a mater of fact, human resource development has been identified as an area of key importance. While strengthening the ranks of its work force with quality professionals at various levels of management, the company also undertakes several initiatives for improving productivity and efficiency at all levels of services. Through computer training, various courses, sponsorships of staff for studies at professional institutions and seminars, the company is providing its employees on going opportunities for continuous self-improvement and learning. In recent years, health, safety and environment (HSF) has emerged as one of the major themes of corporate governance at PSO. Understanding the significance of safe and healthy work practices, a comprehensive HSE policy has been devised and the HSE manuals and procedures finalized. According to this policy, no new vision outlet can be commissioned before a comprehensive HSE audit. Likewise HSE audits are being conducted at installations and depots, followed by necessary corrective action. In order to increase awareness, HSE awareness sessions are frequently organized for all employees throughout the organization. As They Strongly Believe That Human Resource is the asset that should be appreciate with the passage of time. Consequently, PSO considers a strong focus on the development of a value added and Worthwhile Investment. 4.2 Recruitment Recruitment is the process of locating identifying and attracting capable applicants. Sources of recruitment for PSO are as follows. • Internal search •

Advertisement

•

Employee referrals

•

Public employment agencies etc.


33


PSO’s Recruitment Process

The purpose of requirement is to induct quality personnel for all the vacant position (the right person for the right job) When there is a vacancy of PSO a large numbers of applications are received. Mainly, through the advertisement in the newspapers or through the referrals of current employees. The employees screen the applicants. Because the recommenders know both the job and the person being recommended they tend to refer applicants who are well qualified for the position. 4.3 Derecruitment De-recruitment is a technique for reducing the labor. According to PSO’s policies if the employee has done something wrong or Hanky Panky then the company uses the option of firing as a mean of de-recruitment. This seldom happens unless someone has broken the rules of the company. Sometimes employees are also transferred. PSO recently used another method of de-recruitment. They used the Golden handshake scheme and voluntary separation schemes. 4.4 Selection Selection is the process of screening job applicants to ensure that most appropriate candidates are hired. In PSO they select an employee on the basis of his qualifications. Different selection devices are used to choose the best suitable candidate for the job. Selection Devices

Number of selection devices is used to accept and reject applications. These are stated below: CV’s :

As all organizations requires a form on which the applicant fills

in his name, address and telephone number and a comprehensive personal history profile detailing the person’s activities, skills and accomplishments.


34


Some relevant biographical data and facts that can be verified are also required. Written Test:

When a candidate applies for a job at PSO he has to give

a written test. It is an intelligence, aptitude and ability test. First IBA used to conduct these tests for PSO. Interview:

Interview is the most important and reliable method of

determining the personal abilities of the applicant by PSO. They get to know about the interpersonal skills of the candidate. Physical examination:

After an applicant has been selected after the

interview, he is physically examined. For jobs with certain requirements, the physical examination has some validity. After the applicant is selected and the management of PSO is sure of their decision that this person is suitable for the job, he has to undergo a training process of one year. 4.5 Orientation Orientation is the introduction of a new employee to the job and the organization. Every new employee that has been hired in PSO is given an orientation to familiarize with the company’s functions, policies, employees and programs. The type of training would be an individual or group basis depending upon the number of participants 4.6 Compensation and Benefits PSO offers competitive starting salaries and bonuses. The individual contribution in reward. Pensions and gratuity the company operates approved and fund pension scheme for both management and non-management employees. The scheme provides pension based on the employees last drawn salaries. Pensions are payable for life. The company also operates un-funded gratuity scheme for all its employees. Medical


35


The company also provides post retirement medical benefits to its employees. PSO’s Medical policies are considered to be the best in the country. Medical is free for the employees and their families. Vaccination program for employees: in recognition of the importance of human resource and its health, PSO organization a ‘vaccination program’ for its employees. PSO inaugurated the program under which the employees were vaccinates against diseases like Cholera, Typhoid, Hepatitis B at the PSO houses dispensary. Provident Fund

The company also operates an approved provident fund scheme for all its employees. Equal contributions are made to the fund by the company and the employees in accordance with fund rules. Loans

Loans are granted for house construction repair or for the purchase of land. Employees can also avail the car loan facility. Rewards

Rewards are given on the basis of performance of the employee on Monthly and weekly basis. These include the monetary rewards and also the Points for promotion. Million Liter Awards

The million-liter award ceremony was held at the PSO house. These awards were given to the dealers who crossed the one million-liter figure in selling the products of the company. the award had been initiated to recognize and encourage to promote the business and services to their customer. Awards were also given to the divisional managers and sales officers showing outstanding performances in their respective field. Hajj Draw-2002


36


The Hajj draw was also held at the PSO house auditorium. Seventeen members were sent to perform Hajj. 4.7 Appraisals Performance evaluation takes place annually for the purpose of annual increments. The appraisal also assists human resource in the career development of an employee.

Policies

Policies are made to define processes to be practiced by management. and the polices are made by the research conducted by HR department keeping in view the needs of the company and employees. Leadership

PSO is a sale and customer oriented company that has the main goal of maximizing the profit. The major interest of the company is to increase the market share, sales, profit and revenues. Majority of the decisions are made and implemented in order to fulfill this goal. For this reason the leadership is also trained according to this goal and more centralized system is adopted by the company. Leadership Style

According to Sales Officer head office Rawalpindi, on the leadership style grid, PSO would score a (9,1) meaning that they implement ‘Produce or Perish’ leadership style. Implementing their leadership styles they maximize their revenues. PSO is a market-oriented company. Employees for them are just a means to an end making profit. Almost all employees are dispensable which leads to low morale and decreased productivity since people feel that they can be laid off any time. They don’t have that much loyalty for the company.


37


4.8 Decesion Making Decision-making is an important aspect of the company, which needs to be thoroughly evaluated before making a final and firm decision. The working of organization depends upon top management; so good and firm decision in the organization will have a direct impact on the working environment of such organizations. The manager is responsible for taking the decision of effected matter keeping in view the after effects. The decisions must be in interests of the organization.

Rationality

The managerial decision-making is rational. Which means that the mangers make consistent, value-maximizing choices within specified constraints. A style or situation in which a manager can make accurate decision and the outcome of every alternative is known. Decision-Making Styles Analytical Style: (Long Run)

As PSO is sales oriented company and it has many competitors like Shell, Caltex etc. So they have to consider more alternatives after making a decision. The managers in this condition have the ability to cope with unique situation. Directive Style

In short run, the decision making are more in directive style i.e. managers made fast and logical decisions. The manager is the focal point in the organization and he is appropriate authority to a problem arise by his observation or reflected by someone else from the organization. 4.9 Motivation Motivation Tools Used By PSO Are As Follows: C-Stores/Business Centers


38


C-stores are 24-hour convenience stores (branded “Shop Stop”) that are a major tool in enhancing the image of the PSO retail outlet. It is one step towards achieving the stop shop to attract motorists. The business centers are a specialized environment where they provide Internet, fax and phone facilities. Photocopying facilities are also available. Further at selected locations they have also provided the Citibank easy payment centers, where one can pay utility bills and credit card payments.

Internet Facilities At Retail Outlets

PSO has provided 300 Internet kiosks that contain branded P.C. and a printer. A further 300 kiosks will be provided by June 30,2002. This is a pioneering effort by PSO that is aimed to supplement the government efforts to spread IT in the country. These Kiosks have been given to the new vision retail outlets regardless weather they have business centers or not. Million Liter Award Distribution Ceremonies

The million liters awards had been initiated to recognize and encourage the cooperation made by dealers to promote the business and service to their customers. Hajj Draw

The Hajj draw 2002 was held at PSO house auditorium in which 17 members were sent perform Hajj. The aim of the draw was to assure the workers to service its members with full dedication. Health Safety And Environment

PSO is maintaining a strong focus on HSE, which is the foremost corporate objective of the company. HSE audits are being conducted at installations and depots, followed by necessary corrective actions. In order to increase HSE training program have been organized for all employees of the organization.


39


Community Welfare

In its constant strive to be a good corporate citizen PSO has contributed to several causes like scholarships fore serving students, donations to CPLC for combating terrorism and donations to environmental institutions. Financial Assistance

Financial assistance is provided to employees Not only they are provided with financial assistance but loans are also granted for house construction. Special Allowances For Minorities

Special allowances are given to members belonging to minorities. Confirmation

After the satisfactory completion of their probation period, the employee is confirmed in his position. 4.10 Controlling The process of monitoring activities that they are being accomplished as planned and correcting any significant deviations. In the controlling process actual performance is compared with the standard performance. At PSO the standard performance is compared with the performance of Shell. And the total revenues, market share, sales and profits are measured. This is done to have a total outlook of both the companies and helps in deciding who is leading and which of the two organizations is in profit, so that incase of any deviations, it can be corrected to improve the profit, sales, revenues and market share. Types Of Control

Market Control uses external market mechanisms such as price, competition and related market share to establish standards used in system.


40


Typically used by organizations where products or services are clearly specified and distinct and who face considerable market place competition. PSO is in direct, cut threat competition with shell. PSO surveys the external; market taking into consideration the progress of Shell, because it is its major competitor. It uses Shell’s progress to compare for markets control.

5. TRAINING AND DEVELOPMENT AT PSO PSO has well defined selection procedures. These procedures include paper and pencil test, an interview with the top manager alone and then the panel interview. The selection process starts with the application form. Which are required to be filled and delivered to PSO before a due date. Then the applicants are required to give a written test; the candidates that clear the written test are further considered for the interview either with a panel or with a respective manager. If a candidate clears this interview he or she is appointed. 5.1 Training Training Policy

Training and development is a continues process and it is designed to bring about a change in the attitude of the employees with respect to the job they are doing, the people around them and techniques and skills which they can use. It is also to make them more conscious of their responsibilities and how to perform them well. Therefore all training is planned and coordinated in a systematic manner by the company. On The Job Training


41


It is well regarded that the best place for effective learning is on the job i.e. the employee learning the job by doing it under instruction by his superior. Since managers are, if not trained instructors the department provides training the job instruction methods through practice of supervision course. During the training the trainees are sent to the different departments of the organization in order to expose and familiarize them to the business environment of the entire organization. The training period for different employees varies according to the nature of the job they likely to handle. The different periods for different trainees are listed below: • Engineering Trainee will take 18 months on training. • MBAs will take 6 months on training. • BBAs Training lasts for 8 to 12 months. • Electrical and Mechanical Technicians will take 8 months on training. During the training the performance appraisal for each trainee is made after each quarterly. After completion of the training a performance review is made and if the performance is satisfactory then the trainee is appointed as permanent employee. Training Employees

In order to keep its employees at par with the technological and business development PSO arranges for the adequate training of its employees. The different modes adopted by PSO include: • Sending employees abroad


42


• Arranging for the training of the employees at home, as and when need arises One such case is the training of employees to use SAP application for data automation. 5.2 SAP SAP is the leading Enterprise Information and Management Package worldwide. Use of this package makes it possible to track and manage, in realtime, sales, production, finance accounting and human resources in an Organization. 5.3 HR Module The HR module enables to effectively manage information about the people in their organization, and to integrate that information with other SAP modules and external systems. From the Organization Management perspective, companies can model a business hierarchy, the relationships of employees to various business units and the reporting structure among employees. The Personnel Administration (PA) sub-module helps employers to track employee master data, work schedules, salary and benefits information. Current Personnel Development (PD) functionality focuses on employees' skills, qualifications and career plans. Finally, the Time Evaluation and Payroll sub-modules process attendance and absences, gross salary and tax calculations, and payments to employees and third-party vendors. The number of companies using SAP R/3's Human Resource (HR) module has increased dramatically in the last few years, with many clients adding HR to their live suite of modules, or even choosing HR as an initial or standalone implementation. What Makes SAP Different?


43


Traditional computer information systems used by many businesses today have been developed to accomplish some specific tasks and provide reports and analysis of events that have already taken place. Examples are accounting general ledger systems. Occasionally, some systems operate in a "real-time" mode that is, have up to date information in them and can be used to actually control events. A typical company has many separate systems to manage different process like production, sales and accounting. Each of these systems has its own databases and seldom passes information to other systems in a timely manner. SAP takes a different approach. There is only one information system and database in an organization, in which all applications access common data. Real events in the business initiate transactions. Accounting is done automatically by events in sales and production. Sales can see when products can be delivered. Production schedules are driven by sales. The whole system is designed to be real-time and not historical. SAP structure embodies what are considered the "best business practices". A company implementing SAP adapts it operations, achieves its efficiencies and power rapidly. The process of adapting procedures to the SAP model involves "Business Process Reengineering" which is a logical analysis of the events and relationships that exist in an enterprise's operations.


44



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These operations consistent with the overall integration of SAP R/3, the HR module shares information with other modules, such as Financial Accounting (FI), Controlling (CO), Production Planning and Business Workflow. The Payroll processes use Accounts Payable functions to print checks, manage payment and bank information, and process payments to tax authorities and other third-party vendors. Payroll results are also posted to General Ledger accounts for use in periodic income and expense reporting. For management accounting, information regarding employment costs can be transferred to Cost Centers with in the CO module. Employees can be assigned to Work Centers, which are used in conjunction with Production Planning. Assigned positions and reporting relationships from PD are used in Business Workflow to route purchase requisitions and other documents for approval. HR works with external systems either through certified interfaces with SAP partner products, or custom developed interfaces to customer defined systems. Functional Modules

R/3's applications are modules. They can be used either alone or combined with other solutions. The integration capability of these applications increases the benefits derived for any company. Human Resources

HR provides solutions planning and managing company's human resources, using integrated applications that cover all personnel management tasks and help simplify and speed the process. • PM (Personnel Management):

PM is a complete solution for personnel

administration, recruitment management, travel management, benefits administration and salary administration.

•


46


OM (Organizational Management):

OM assists in maintaining an

accurate picture of organization's structure, no matter how fast it changes. It is systematic and forward planning tool that considers the final effects of all personnel events thus it's complete solution for personnel cost planning. • PA (Payroll Accounting):

PA addresses payroll functions from a global

point-of-view and gives the capability to centralize payroll processing or decentralize the data based on country or legal entities. • TM (Time Management ):

TM is integrated with payroll accounting,

controlling, production planning, plant maintenance, project system, external services and shift planning. It provides with a variety of standard reports that will assist in tracking and analyzing employee time with completeness and accuracy. • PD (Personnel Development):

PD assists with planning, monitoring,

and analyzing scheduled seminars, training courses, and business events, registration and booking, price determination and invoicing. Logistics

Logistics comprises all processes involved in purchasing, materials management, manufacturing, warehousing, quality management, plant maintenance, service management and sales and distribution. All applications access a shared consistent database, supported by production data management. •

SD (Sales & Distribution):

SD actively supports sales and

distribution activities with outstanding functions for pricing, prompt order processing, and on-time delivery, interactive


47


variant configuration, and a direct interface to profitability analysis and production. •

PP:

(Production

Planning

and

Control):

PP

provides

comprehensive process for all types of manufacturing: from repetitive, make-to-order, and assemble-to-order production, through process, lot and make-to-stock manufacturing, to integrated supply chain management with functions extended MRP || and electronic kanban, plus optional interfaces to PDC, process control systems, CAD and PDM. •

PS (Project System):

PS coordinates and controls all phases of

a project, in direct cooperation with Purchasing and Controlling, from quotation to design and approval, to resource management and cost settlement. •

MM (Materials Management):

MM optimizes all purchasing

processes with workflow-driven processing functions, enables automated

supplier

evaluation,

lowers

procurement

and

warehousing costs with accurate inventory and warehouse management, and integrates invoice verification. •

QM (Quality Management):

QM monitors, captures, and

manages all processes relevant to quality assurance along the entire supply chain, coordinates inspection processing, initiates corrective measures, and integrates laboratory information systems. •

PM (Plant Maintenance):

PM provides planning, control, and

processing of scheduled maintenance, inspection, damagerelated maintenance, and service management to ensure availability of operational systems, including plants and equipment delivered to customers. •

SM (Service Management):

SM provides highly integrated


48


customer service functionality to compete in today's global markets. •

PDM (Product Data Management):

PDM supports in creating and

managing product data throughout the product life cycle.

SAP HR

HR module of SAP is the current need of every big organization which Siemens provide and currently the are implementing in various companies of Pakistan like Pakistan Petroleum Limited (PPL), ICI Pakistan, PSO and even the Pakistan government department like AGPR and other financial institutions are implementing SAP to automate their systems and managing their Human Resource with it by the funding of world bank. The primary goal of SAP HR module is to provide managers and HR professionals to manage the people information effectively and to use in the benefit of both the employer and the employee. The future of SAP's HR module looks promising for both customers and implementers. Internet technologies will provide SAP customers’ new tools to include employees in maintaining their own data, and increase management's ability to quickly report on critical employee information. Developing solutions for companies with extensive expatriate assignments will improve the way businesses manage and pay international employees. These factors, along with emerging rapid implementation tools will make SAP an ever-stronger choice among HR management systems. SAP HR module is an effective tool to handle and accommodate following organizational elements, Organizational Elements


49


• Client • Company code • Personnel area is used exclusively in HR and is unique within a client. Each personnel area must be assigned a company code. • Personnel sub area

Scope Of Pre-Employment Training

The aim of pre-employment training policy of PSO is to provide opportunities of hand-on professional training in real job environment to the prospective employees of the Company. Graduates of various disciplines are inducted for 6 to 12 months on-the-job business administration/technical training. The selected personnel are trained on-the-job under the direct supervision of senior employees (Trainee Father / Mentor) so as to build their competency to the required levels. The training is objectively programmed, guided and monitored through a feedback system towards assessing trainees’ actual performance & potential with regard to the requirements of foreseen vacant positions. The staffing needs of the company are met generally from the pool of trainees who complete their training successfully and are found suitable for the available job opportunities. Procedure

In order to assist in providing a systematic method of training and integrating the trainees in PSO following forms are used:


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Plan For Training

The Trainee Father completes the Training Plan and gives it to the trainee in the first week of joining the company. The trainee father keeps a copy and a second copy is sent to the Human Resources department through the respective Manager. Report Of Feedback

The trainee is required to report on the quarterly trainee feedback form to report about his/her training during each quarter. HR sends this form to the trainee at the end of each quarter. The trainee fills the form and returns directly to HR.

Progress Report

Trainees’ progress report form is sent to the trainee father at the end of each quarter. The trainee father fills the form and returns to HR through the respective Manager. Training Appraisal

Upon completion of training a final appraisal is required by the respective managers to communicate whether to confirm, extend or terminate the training. Employees at PSO are undoubtedly considered their greatest assets, so they place great importance on nurturing their own ‘home grown’ talent by helping people at all levels in the company to develop their skills and capabilities, and to pursue their full potential. Employees with management potential are encouraged to take part in the company’s management learning program, which provides an excellent forum for personal and team development as well as networking and knowledge exchange with peers from other businesses Continuing education is an important part of any career; PSO provide an extensive curriculum of interpersonal, management and technical training. Human Resources/Educational Services is their partner in total employee


51


development. Human Resources can provide the solutions and introduce you to the tools and resources you need to successfully manage your career.

Continuous Learning

• Sales Training • Trainer Consultation • Trainer Certification • Basic Skills Training

Sales Training

Providing customers (internal employees & external customers) with the most effective learning processes is the mission of the Sales Training Team. This curriculum is suited for everyone-- from those who are new to sales to seasoned senior account executives. Trainer Consultation

With proper planning and guidance, participants are assured of receiving the right training, in the right place and at the right time. Trainer Certification

Through Trainer Certification, educating employees can be cost effective, flexible and convenient. Basic Skill Training


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Basic Skills Training provides courses increase their general knowledge and enhance their skills. It includes the customer services on the petrol pump which includes: • Check the meter of the car • Greet the customer • To take keys from the driver 5.4 Development Personnel Development

The company regards employees as its greatest asset. Therefore, it is of particular importance that the right applicant is employed for the job. The correct procedures for engagement and selection must be clearly understood by both Line Management and Human Resources. The company will recruit, train and promote staff on the basis of their ability, according to relevant legislation and company policies and request. Competencies describe what is needed for each employee to perform his or her job successfully regarding the expected knowledge, experience and capabilities. Competency Model

The Competency Model defines the competencies that are required by PSO in various positions as the requirement of a competency varies from one job to another. The form to be used in this connection is Training Needs Analysis. The PSO Competency model forms the basis for assessing the training needs of the whole organization. It is the responsibility of heads of all organizational units to take account of hat specific knowledge and skills the


53


jobs involve, what the individuals already possess, and what gaps in such knowledge

and

skill

levels,

training

can

fill.

Guided

by

business

targets/departmental objectives and evaluating employees on their existing capabilities, with the help of the Training Needs Analysis document, the training needs of each individual are determined. Infrastructure Development

Additional pipeline linking OP-3 to the PSO Terminal at Keamri for discharge of deficit cargo. Development and construction of Aviation handling facilities at Sihala Terminal include: • Modernization of Chakpirana Depot. • Addition of storage at Jag lot Depot. 5.5 Relationship with Society Collaborations With Educational Institutions

PSO Building Technologies is committed to excellence in education. Their comprehensive solutions help employee provide ideal environments for learning, and their guaranteed, performance-based funding options make improvements possible. But they don’t stop there. They sponsor educational programs, award over $1 million in scholarships and provide internships to help students explore career opportunities. Their “Best Total Solution” approach assures a complete and customized solution that meets the needs of each customer. And through Building Education™, they not only meet all of their facility needs …they can help their students succeed. The mission of Building Education™ is to enhance learning by assisting educational institutions in preparing students for successful futures. Through innovative, customized programs, students and schools can share in the Wealth of Siemens’ resources and capitalize on Siemens’ expertise in


54


business and engineering fields. Based on parallel goals of student achievement and workforce development, Building Education™ partnerships are helping both schools and PSO realize greater success. Health Development And Environment Development

At PSO, HSE award is given to those which are considered as the HSE Men of the Month. There is HSE department which conduct the training course at Korangi. Senior Executives HSE trains the staff in: • Firefighting • Incident reporting and investigation • Root cause analysis • Work permit system • Housekeeping inspection • Performance management • Safety talk • Other best practices in HSE 5.6 Social Welfare Activities In addition to exploration and development activities in the Sindh Province, OGDCL is already extending medical care, drinking water, and schooling facilities to the locals.


55


In recent years, Health, Safety, Environment (HSC) has emerged as one of the major themes of corporate governance at PSO. Realizing the importance of healthy and safe work practices, a comprehensive HSE policy has been devised and the HSC manual and procedures updated. According to this policy no new vision outlet can be commissioned before a comprehensive HSE audit. Likewise, HSC audits are being conducted at all installations and depots, followed by necessary corrective action. In order to increase awareness, HSC awareness sessions are frequently organized for all employees throughout the organization. Financial performance for the fiscal year ended June 30, 202, despite the revenue drop ad a record provision of approx RS 2 billion made for taxes (an increase of approx Rs. 800 million) PSO earned an all-time record profit before tax of Rs. 5.1 billion, up by 49% while profit after tax rose to Rs.3.2 billion registering a growth of 42% over prior year period. The profit increase is primarily due to innovative marketing strategies, organizational restructuring, product mix revamping of internal system with improved productivity along with the partial impact of enhanced margins during the last quarter. Accordingly the board of management approved a final dividend comprising 80% cash (Rs. 8/share) and 20% bonus shares for FY-2002. Combined with the earlier two interim cash dividend of Rs. 5 per share the total amounts to Rs.13 per share resulting in the highest-level cash payout of Rs. 1.86 billion to shareholders of the company. Not only that the company has emerged as one of the country largest taxpayers in the corporate sector. PSO’s business operations have helped collect over the years Rs 340 billion in duties and taxes on behalf of the government. In terms of sales PSO ranked 520th among Asia’s 1,00 largest companies in the year 2001, according to a survey conducted by the Asia week.


56


Community Welfare

In its constant strive to be a good corporate citizen PSO has contributed to several causes like scholarships fore serving students, donations to CPLC for combating terrorism and donations to environmental institutions. 5..7 Analysis Of Project The first function of the human resource planning for any company is recruitment and selection. For the long term profitability and success of the company the recruitment policy has to be aligned with the strategic internal growth of the company. The purpose of this work instruction is to set standards guidelines for the recruitments process of permanent, contract and trainees within PSO. Training and development at PSO helps in: • Assist in identifying hiring requirements • Source and identify qualified candidates for vacant positions • Perform initial screening interviews • Refer qualified candidates to the higher manager for final selection • Extend offers of employment to ensure consistency in process • Develop, implement and/or administer employee orientation programs • Provide outplacement services (training etc.) Training And Development


57


Instruction provided to stimulate change. Its focus is short-term and directed solely at furnishing knowledge or skills that employees need to carry out their present work duties efficiently and effectively. Training to encompass change competence as per the vulnerable environment of the refinery requires continuous modification. As compared to the training and development of Shell, PSO training programs are more effective in achieving their corporate level goals. A written document at PSO that out identifies the needs, describes the strategy for addressing those needs and includes: 1. A needs assessment; 2. A plan that states goals and objectives, and methods for achieving them; 3. A statement regarding funding necessary to implement the plan. Training Plans regarding the periodic trainings at regular intervals play a facilitation role for the employees. Sustainability of the training plan is identified by the regularity of different dimension programs. At PSO each department should designate a person to assist in implementing its training and development programs and to serve as contact with Human Resource Department for the coordination of training services. At Shell, the department or the line manager should develop a biennial training plan to include: (even for the regular training programs) a. A training needs assessment; b. An action plan showing goals, objectives, and methods by which the plan can be achieved; and c. Funding needed to implement the plan.


58


6. ANALYSIS OF HR PRACTICES PSO has also taken several initiatives for improving the overall productivity and efficiency of its staff through computer training, in-house courses, sponsorship for studies at professional institutions and seminars. In analyzing the HR practices, we have compared the HR practices of PSO and Shell Pakistan. 6.1 Comparison of HRM Practices at PSO and SHELL Human resource development has been identified as an area of key importance. While strengthening the ranks of its work force with quality professionals at various levels of management, the company also undertakes several initiatives for improving productivity and efficiency at all levels of services. Through computer training, various courses, sponsorships of staff for studies at professional institutions and seminars, the company is providing its employees on going opportunities for continuous self-improvement and learning. In recent years, health, safety and environment (HSF) has emerged as one of the major themes of corporate governance at PSO. At PSO, They Strongly Believe That Human Resource Are the Only Asset That Appreciate With The Passage Of Time. Consequently, PSO Considers A Strong Focus On Their Development A Value Added And Worthwhile Investment. HRM Practices At PSO

• HR Planning • Recruiting • Selection • Training and Development


59


• Compensation • Performance Management • Employee Relations • Company’s performance 6.2 Comparison of HR Practices with SHELL Planning Planning is a process that involves defining the organization objectives or goals and developing an overall strategy for achieving those goals and developing a complete hierarchy of plans to integrate and coordinate activities. Short Term And Long Term Objectives

The basic aims and objectives set by the management of PSO Pakistan as compared to Shell with regard to the human resource management are as follows. • PSO main objective is to hire a work force that that suits the needs of the organization where as at Shell they emphasize more on the encouragement work force through rewards and bonuses. • PSO emphasize on making the hiring and recruiting process transparent and standardize, so that only needed personnel is hired whereas at Shell they maintain the required work force through a system of hiring and retiring. • To take care of the diversity in order to obey social obligations


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of the organization and maintain the harmony among the diverse employees is emphasized by both PSO and Shell. 6.3 Recruitment Comparison Of PSO’s And SHELL Recruitment Process

When there is a vacancy of PSO a large numbers of applications are received. Mainly, through the advertisement in the newspapers or through the referrals of current employees. The employees screen the applicants. Because the recommenders know both the job and the person being recommended they tend to refer applicants who are well qualified for the position. The prefer graduates from NUST, FAST and BAHRIA universities. At Shell the requisition must be signed as per signature mandate. The requisition must reach Human Resources in time to conduct a proper talent search. This may include: • Internal check of database for suitable applications • Advertising within the company • Advertising in suitable newspapers • Advertising in suitable universities Derecruitment Policy

Derecruitment is a technique for reducing the labor. According to PSO’s policies if the employee has done something wrong or Hanky Panky then the company uses the option of firing as a mean of derecruitment. Sometimes employees are also transferred.


61


PSO recently used another method of derecruitment. They used the Golden handshake scheme and voluntary separation schemes. 6.4 Selection Selection is the process of screening job applicants to ensure that most appropriate candidates are hired. In PSO they select an employee on the basis of his qualifications. Different selection devices are used to choose the best suitable candidate for the job. Number of selection devices at PSO is used to accept and reject applications. These are stated below: • CV’s • Written Test • Interview • Physical examination After the applicant is selected and the management of PSO is sure of their decision that this person is suitable for the job, he has to undergo a training process of one year. AT Shell the selection process includes:

Hiring decision Medical Evaluation Realistic job previews Supervisory Interview

Step 5 Step 4 Step 3

Step 2


62


Employee Test

Step 1

6.5 Employee Training Methods and Development When it comes to training and development PSO gives on the job training. They believe that the employee tends to learn a wide variety of jobs and a wider perspective on the organizational activities. 6.6 Compensations and Benefits: PSO offers competitive starting salaries and bonuses. The individual contribution in reward. Pensions and gratuity: the company operates approved and fund pension scheme for both management and non-management employees. The scheme provides pension based on the employees last drawn salaries. Pensions are payable for life. The company also operates un-funded gratuity scheme for all its employees. •

Medical

•

Provident fund

•

Loans

•

Rewards

•

Appraisals

•

Policies

•

Million Liter awards


63


6.7 Performance Management PSO is more oriented toward maximizing revenues. There is more concern for production as compared to concern for employees. The major interest of the company is to increase the market share, sales, profit and revenues. Majority of the decisions are made and implemented in order to fulfill this goal. According to Mr. Raja Faisal, Sales Officer head office Rawalpindi, on the leadership style grid, PSO would score a (9,1) meaning that they implement ‘Produce or Perish’ leadership style. Implementing their leadership styles they maximize their revenues. PSO is a market-oriented company; they have very little concern for people. Employees for them are just a means to an end making profit. Almost all employees are dispensable which leads to low morale and decreased productivity since people feel that they can be laid off any time. They don’t have that much loyalty for the company. 6.8 Employee Relations Employee relations at both PSO and Shell are maintained. In the offices and at the petrol stations employees are provided with clean and effective environment so that the objectives of carrying out the business could be met. When the employee relations are good there is no possibility that your performance level goes down. So at both Shell and PSO the employee relation is quite good. For this the tools are: •

Staff meetings

•

Bulletin boards

•

Suggestion box

•

Procedure for handling complaints


64


6.9 Company’s Performance Global conditions have an immense effect on any large organization. The previous year has experienced some drastic global changes. The attacks on WTC, which the Americans called, the “War of Terror” has taken its toll on all the industries and markets of the world. Most affected has been the aviation industry which is one of the PSO’s major clients. As previously mentioned PSO provides fuel to our national airlines, which operate to and from Pakistan. As the number of people traveling by air has considerably decreased which in turn has decreased the demand of fuel by airlines. This has indeed come as a major blow to PSO. Because of the recent middle-east crisis between Israel and Palestine, which led to a half oil supply from Iraq, the global price of crude oil has increased considerably. When fighting in Afghanistan was at its peak, oil freighters were hesitant of coming towards this side of Arabian Peninsula because of the fear of being hit by a cruise missile fired by fighter jets taking off from naval ships docked there. This incident decreased the amount of oil coming in to Pakistan and is the source of rise in oil prices. PSO was very much affected by this. The demands of fuel especially patrol in Pakistanis rather elastic. 6.10 Future of PSO As Compared with Its Competitors Looking at the overall retail industry prior to 1990 the three OMC, Caltex, Shell (PBS) and PSO were providing similar level of shabby products and services to the consumers because of which neither could they be distinguished nor did the consumer had any choice. They all had unattractive looking service stations with similar Meehan real dispensers and were selling lubes in tins. Three companies in Rickety Cartage Contractors Tank Truck arranged product delivery to their outlets. Then in 1990 Caltex started improving its retail stations, providing electronic,

dispensers

steam

wash

feasibility,

well-illuminated

canopies,

uniformed attendants as well as high quality lubricants. Shell also embarked its


65


retail visual image project in 1994 and started implementing their international RNI design on its retail network in 1997 Caltex launched their new retail image programs to further enhance its retail modernization on new revised lines and in more vibrant colors


66


7. ANALYSIS OF TRAINING AND DEVELOPMENT AT PSO 7.1 Responsibilities Related To Training • Training coordinator at PSO shall provide, within reasonable resources, employee training necessary to assist the agency in achieving its mission and accomplishing its goals. • Departments then should send a copy of their training plan to HR head to be used for the sharing of training information and resources. • On the Job Training assessment and implementation is the responsibility of the department’s training coordinator. They should provide, at a minimum, on-the-job training or work-related instruction that prepares employees to perform their current jobs (includes: instruction necessary to accommodate technological changes, and new employee orientation). • The individual Employee Development Plans for employees are mandatory as a part of the Employee Work Profile at PSO, which should be updated bi-annually. The plan includes personal learning goals, learning steps and resource needs. • Regular professional training is conducted through conferences, conventions, seminars and workshops that are aimed at enhancing and/or increasing the work skills and/or abilities. This kind of training can include any dimension ranging from the regular trainings regarding

safety and environment hazards. Work


67


methodologies, personal skill development and organizational focus. The time that an employee spends at an approved training program during normal work hours shall be considered as part of the employee's normal work hours and shall not be charged to his or her accumulated leave or considered leave without pay. • Training records and maintenance have to be kept by the coordinator where the records should be maintained following the three years after the completion of the training. Training records should include, at a minimum: a) Participant's age, race, and gender; b) Course identification and dates of training; 7.2 Training and Development on Need Assessment • On the Job training • Conference • Development Assignment • In-house • College course • Associations (apprenticeships)


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• Mentoring • Special Designated Courses

7.3 Training Types at PSO In order to main the sustainability of the workforce following many types of trainings are conducted. • New Technology and methods • Personal Skills Development • Organizational Development • Emergency Training • Environment and Safety Trainings • One- and two-day open enrollment workshops • Certification Programs • Project Related Training • Cross Functional Training


69


8. RESEARCH FINDINGS 8.1 The Questionnaire The questionnaire that I formulated consisted of a total of nine questions centering on the technical training and employee skill development methods adapted at PSO to the satisfaction of employees. Amongst the nine questions two of the questions were open-ended questions so that the employee could provide his/ her views and opinions enabling me to get a much better response and gain more information.


70


Question # 1: Are you satisfied with the current training and employee development methods at PSO?

(a) Yes (b)No

Result From PSO

Respondents Percentage

Yes 38 68%

No 18 32%

Interpretation: As it can be observed from the answers to this question majority of the employees in the organization at PSO are satisfied with the current training and employee development methods. It is quite apparent that PSO is a very successful organization and well known when it comes to capable and effective workforce. The answer to this question further shows that the training methods that have been adopted at PSO are to the satisfaction of majority of the employees, that is 68%. However, the 32% of employees that seem dissatisfied cannot be ignored. From the statistics it can be observed that some of the respondents answered in negative to this question. Therefore, PSO should not be


71


completely confident when it comes to its training and employee development procedures. It should hence look into this matter as well. This question shows that even though majority of the workforce at PSO are satisfied, a number of dissatisfied employees still exist. The reason that I asked this question was to determine that whether the management views and employee views actually support each other or contradict each other, when it comes to satisfaction of current training and employee development procedures adopted.


72


Question # 2: Do you believe that significant gains in your productivity have been made as a result of training? (a) Yes (b) No

Result From PSO

Respondents Percentage

Yes 40 71%

No 16 29%

Interpretation: As is apparent here as well that majority of the employees believe that their productivity has increased as a result of the of the training methods adopted at PSO. A large percentage, that is, 71% claim to have experienced productivity gains in their work. During my interview with the Mr. Waqar Ahmed Khan, he also claimed that training at PSO of the employees has resulted in productivity gains. However, 29% of the employees were of the opposite opinion. The believed that no significant gains in productivity had resulted from training. By looking at this figure it is apparent that the views of management and


73


employees do contradict, but majority of the workforce views do coincide with management. This question was asked in order to ascertain whether the employee feels that productivity gains are being made or not. Simply asking the question to the management may have resulted in a much different answer than what has now been discovered.


74


Question # 3: If no, what improvements do you think should be made? Result From PSO

Interpretation: For this question I won’t be using any charts to show the answers of employees. Here an open-ended question was formulated to acquire a wider number of answers and not inhibit the employee to a set of options. The reason for asking this question was to discover the diverse range of opinions that employees at PSO have. This question was also asked to provide leverage to the previous two questions and determine the reasons that employees have. The 29% of employees who believed that no significant gains in productivity had been made and the 32% of the employees that were not satisfied with the training and employee development methods at PSO gave a number of opinions in terms of improvements that should be made. Many of the employees thought that more expedient planning in terms of training procedures and proper management assessment of the training

needs

should

be

adopted.

Employees

wanted

dedicated

professionals to constantly try to determine the needs of training in employees. In my interview with the management, they had claimed that the procedure of training and its planning were very efficient but on seeing the employees answers this suggested otherwise. Similarly, employees also claimed that training and employee development methods and procedures should be continuously updated in order to remain effective in the competing world. In addition it was also suggested that training and employee development methods should focus more on the practical goals of the organization. This was a very strange answer, as usually employees want to


75


develop themselves and their skills so that they have potential for growth. But in this answer employees wanted training to be only job specific and organization specific. Amongst the other answers given employees wanted PSO to send them abroad for training and training and employee development methods should be more focused on financial and strategic planning.


76


Question # 4: How often do you think that training and employee development procedures should be implemented? (a) Whenever necessary (b) Twice a year (c) All the time (d) Other Result From PSO

(a) Whenever (b) Respondents Percentages

necessary 14 25%

year 28 50%

Twice

a (c) All the time (d) Other 14 25%

0 0%

Interpretation: As it can be observed from this question majority of the employees at PSO, that is, 50% believed that training and employee development procedures should be implemented twice a year. Percentages in terms of the answers to, part (a) whenever necessary, and part (c) All the time were the same, being 14% each. Surprisingly majority of the employees wished only to go through such training and employee development procedures only twice a year. On Institute of Business and Technology

77


discovering this, I went and asked some of the employees on why they had chosen this option, the answer was that they did not wish to spend a lot of their time in one year focusing only on training but rather also wanted to be more involved in their work and at times training and employee development methods divert the employee away from this. However there were some employees who wished to go through training and employee development all the time and others who thought that they should go through it only when necessary. The percentage of such employees was an equal 14% each.


78


Question # 5: You acquired training as a result of, (a) Your request for training (b) As a necessary implementation made by management (c) Performance appraisal showed the requirement for training (d) You fulfilled certain criteria on the basis of which training and employee development was given.

Result From PSO

(a) request

Respondents Percentages

Your (b) Necessary (c) for implementatio

training

n

made

6 11%

management 42 75%

Performance

(d) On fulfilling certain criteria

by appraisal 6 11%

2 3%

Interpretation: I asked this question to see, on what basis did majority of the employees get training. As it is evident from the statistics and the figure that 75% of the respondents underwent training because it was a necessary implementation made by the management.


79


Here the answer does coincide with the management answers, that majority of the employees at PSO acquire training as a result of the implementation made by the management. However, the other answers should not be ignored, that is 11% of the employees got training because they had made a request to get training of a specific type. Although at PSO all employees do undergo training, sometimes employees feel the need to get some type of training and employee development method, and for this purpose, they themselves request for the training and if management approves than the employee does undergo the requested training. The other11% of the employees actually underwent training because their performance appraisals showed that they lacked the capabilities and technical skills necessary for the job. For this purpose, that is 11% of employees at PSO were trained because they had to improve their technical skills and abilities. Only 3% of the employees had acquired training as a result of fulfilling certain criteria. Although this does occur in PSO that sometimes on reaching a certain target or working in the organization for a certain period of time an employee will be given training or undergo an employee development course to improve potential as a reward.


80


Question # 6: Which method of training and employee development do you think is the best at PSO and why? Result From PSO

Interpretation: Once again as this is an open-ended question I won’t be presenting the findings in the form of a chart. I kept this question open ended in order to give employees the option of choosing any type of training and employee development from amongst the many forms as well as provide reasons to why the consider such training and development method the best. There were two basic types of trainings that were found the most in the answers. Firstly, many employees believed that orientation training was the best. The reason that they gave for this answer was that it is only in this training that a detailed description of the job, the organization and the responsibilities of the of the employees are elaborated on, and the employee is given a feel for the organization. The second type of training and development method that the employees found the best was the training needs analysis. The reason given for this method was that it is done both with the employees and with the superiors, and hence results in training the helps achieve a desired situation much more quickly and efficiently as possible. Although one point that I noticed here was that, even though many of the employees believed this method to be the best, training needs analysis is not exactly a method of training or employee development rather it is the way in which the need is determined. Amongst the other training and employee development methods mentioned were Health and safety and environment, which is necessary for all employees at all levels to undergo, the reason for this that as given by the


81


employees was that is helps prepare an individual for any sort of emergency situation and how to respond under different emergency situations. Other methods favored by employees were WOW training; telephone courtesy, job rotation (as it increases diversity), in-house trainings (saves time) and technical skills training (helps improve job specific performance).


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Question # 7: The main advantage of training and employee development that you see is, (a) Opportunity for career development (b) Increase in your market value (c) Improved productivity and motivation to work (d) Other

Result From PSO

(a)

(b) Increase in (c)

Opportunity

your

for Respondents Percentages

career value

development 30 54%

4 7%

Improved (d) Other

market productivity

and

motivation to work 20 36%

2 3%

Interpretation: For this question I discovered that majority of the employees at PSO, that is 54% regarded the opportunity for career development as the main advantage of training and employee development, although many employees had ticked on two options together, which were both option (a) opportunity for


83


career development, and option (c) improved productivity and motivation to work. 36% of the respondents believed that improved productivity and motivation to work was more of an advantage. However only a mere 7% regarded increase in the market value as an advantage of training and employee development. This shows that only a few employees are actually focused on developing their careers outside PSO, because it is only this 7% that regard training and employee development to be a benefit in terms of increasing one’s market value and therefore creating a demand for oneself in the market. 3% of the employees gave other answers, such as the benefit gained in the form of increased learning and personal development that of the individual.


84


Question # 8: Once you had received the training, what method of evaluation for the effect of training and its success did management use? (a) Informal discussion (b) Questionnaire (c) Performance appraisal (d) No specific method was used (e) Other

Result From PSO

(a) Informal (b)

(c)

(d)

discussion

Questionnai

Performanc specific

re

e appraisal

method

No (e) Other

Responden

10

26

12

was used 8

0

ts Percentage

18%

46%

22%

14%

0%

s Interpretation: In this question it can be observed that the responses of the employees are very much spread out, although the highest response to the question is 46% for part (b) Questionnaire. Majority of the employees


85


received a questionnaire after training had been administered to evaluate its success and effectiveness. However, many employees claimed to have undergone performance appraisal by the management in order to evaluate the training and effect that it had on the employee’s performance. The percentage of such employees was 22%. 18% of the employees had an informal discussion with the management in order to evaluate the success of training that had been administered. However, 14% of the employees claimed that the management used no specific method of evaluation. This shows that the employees at PSO faced different methods of training evaluation by the management and no standard method was adopted. This can be a major factor in why employees may have been dissatisfied by training because until and unless management does not adopt an expedient and standard method of evaluating the training and development method there is no way that employees satisfaction with it can be judged.


86


Question # 9: Were you given a questionnaire before the training was given to you and then after training as well? (a) Yes, a questionnaire was given only before training (b) Yes, a questionnaire was given only after training (c) A questionnaire was given both before and after training (d) No questionnaire was given

Result From PSO

(a)

Yes,

a (b)

questionnaire

Respondents Percentages

Yes,

a (c)

questionnaire

A (d)

questionnaire

was

given was

given was

only

before only

after both

before after

training

training

and

8 14%

26 46%

training 10 18%

No

questionnaire

given was given

12 21%

Interpretation:


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In this question it can be observed, that employees gave very diverse and different answers, even though this should not be the case. The reason that I have included this question in my questionnaire is to determine whether employees are actually asked about training and to see whether management of PSO wishes to see potential changes in the responses of employees before and after they have received the training. Majority of the employees, that is 46% claimed that a questionnaire was given to them only after undergoing training. This method may not be as effective as giving a questionnaire both before and after training as better judgments can be made. 18% of the employees had received a questionnaire both before and after training but 21% claimed that no questionnaire was given to them. 14% of the respondents claimed that a questionnaire was given only before training. 8.2 Summary of Findings 1

Majority of the employees are satisfied with the existing technical training and employee skill development methods at PSO while only 32% claim to be dissatisfied at PSO.

2

Most employees believe that significant gains in productivity have been made as a result of the training and development programs.

3

In terms of the improvements that employees thought at PSO should be made the major improvement that they suggested was that the training should be more planned.

4

50% of the employees at PSO thought that training should be implemented twice a year. There were no employees that thought that training should not be implemented at all, while .

5

Majority of the employees have acquired training as a necessary implementation made by the management at place.

6

Orientation, training needs analysis and health safety and environment training are considered to be the best by the employees of PSO Institute of Business and Technology

88


7

In terms of the main advantage of technical training and employee skill development that employees see, it is the opportunities for career development, that majority of the employees believe to be the main advantage at the organizations.

8

Questionnaire is the main method of evaluation of training being used by the management of PSO when it comes to actually seeing whether the training was effective or not.


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9. CONCLUSION AND RECOMMENDATIONS 9.1 Conclusion To culminate, a brief review of my findings is portrayed. As it is evident the management of PSO and the employees have tended to give different answers to the same questions. But it also particularly clear that the there are many issues on which both employees and the management answers coincide. From the perspective of the management, they believe that PSO has very effective and up to mark training and employee development methods. This is very true as is quite apparent that PSO is one of the many organizations today in Pakistan that is so well known for its contribution to the development of employees and giving eminence to creating the awareness of such procedures today. There exist many organizations where the importance of the workforce and its satisfaction is still ignored. But PSO has taken immense measures to help train and develop its workforce in all respects and this is one of the main reasons why so many people today want to be a part of it. From the perspective of the employees as well, it can be seen that a major proportion of the employees are satisfied with what PSO are doing with its workforce. It is always impossible to achieve a level of complete perfection and therefore there will always exist certain dissatisfied workers in any organization, saying that the whole workforce is satisfied would be unjust. Similarly majority of the workers are keen on receiving training at least twice a year and on the basis of when it is necessary and required to help improve their own potential, skills and opportunity for career development. The questionnaire given to the employees has immensely helped improve comprehension in terms of how employees think and perceive in reality how they evaluate their organizations in terms of their training ,development and enhancement of procedures and programs being offered time to time. •

Pakistan state oil (PSO) is the largest company of Pakistan not only in the field

of oil marketing but also otherwise. It has been included in Asia’s top 1000 Institute of Business and Technology

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companies and thus is surely a pride for Pakistan. Although up till now it is Govt owned but it is about to be privatized in a month or so. As expected after privatization the company would be further more prosperous and generative in terms of revenues. •

PSO certainly has a competitive advantage over all it’s competitors because of

the vast network of it’s outlets all over Pakistan but at the same time a great deal of responsibility is required by them as they are not only an oil marketing company but they have some responsibilities towards the people of Pakistan. •

Take an example of a PSO outlet in Chitral, while deciding to undertake this

project or not the feasibility report rejects the idea of building it but being a Pakistani socially responsible company if even one public transport bus goes there then they have to build a petrol station over their. •

PSO has been very innovative and successful since it realized the competition

has actually started after SHELL came and acquired the market share from PSO. But after coming up with all those “new vision” outlets, PSO has proved to be never far behind. •

Marketing strategies starting from “Gold card” to………………….. “PSO

LOYALTY CARD” has been amazingly good and can be rated as first class strategies. •

A major problem faced by PSO is the misconception in people’s mind that the

oil used by shell is imported and of better quality, as shell is a foreign company in Pakistan. Although the sources are same but still shell is also aware of this fact and is exploiting it. PSO should do something about it like printing brochures that could explain people about the only sources available in Pakistan, emphasizing upon the fact that no oil is coming to Pakistan from any direct abroad sources. •

Caltex basically has some control over the market because of the lubes it

sells and the profit margin on lubes is much higher than on petrol. But as PSO


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and CASTROL have come together to make the right combination of “Top two together” they can overcome this problem as well. •

PSO has done very well in the financial sector, since its new vision period and

will continue with the pace. Innovations and up to dating of the outlets in accordance with the needs of the changing world is a very important step towards both marketing and financial prosperity. •

The other problem faced by PSO because of the competition is that the land

acquiring at old or new places the bid gets too high that the land acquired becomes too expensive. •

PSO is becoming better day-by-day and after privatization the modifications

and changes they are expected to bring “Sky is the limit”. 9.2 Recommendations After conducting this thorough research I was more clearly able to comprehend the topic and the measures of technical training and employee skill development becoming prevalent today. By looking at the answers by the employees

and

workforce

in

the

questionnaire

given,

a

number

of

recommendations that I feel can be given are as follows; 1

Firstly, I believe that there should be some training programs for employees specifically for dealing with change. In the contemporary world, and with a process of globalization occurring, it is impossible for any employee to be secluded in the workplace. All employees should be willing to adapt to change and not feel threatened by it, as usually is the case. Therefore special training programs should exist that help curtail the fear of change and sow roots of confidence in the employee. This training should help all employees understand the long- and short-term impact of change on their roles and responsibilities in the workplace. As far as I was able to discover no specific program existed for dealing with change.


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2

More emphasis should be given to team development and employees should be made to work in teams more often. PSO should place a higher emphasis on developing teams and creating assignments involving teamwork, although it does so, the extent of teams is still low. As it is apparent that today to remain competitive, an organization needs to have a cooperative workforce that is willing to work collectively to achieve goals, teamwork and team building is therefore very important.

3

With regard to the above recommendation given, I believe that PSO should start team performance appraisals as well. Generally speaking, all organizations not only in Pakistan but also around the world have individual performance appraisals, but very few actually have team performance appraisals. Today more and more organizations are restructuring themselves around teams and so as of this reason it is also right to say that team appraisals should also be used

4

Another recommendation that I would like to give is that the management of PSO should try to make sure that when it is implementing training it should first give out questionnaire before training is given and then after the training is given. This will give the management of PSO a much better idea of whether the training was successful and whether it led to significant gains in productivity and knowledge.

6

In addition, the superiors at PSO, should constantly and on a regular basis take the opinion of employees on how to keep on improving their methods and procedures, because the more employees feel involved the more likely they are going to be satisfied. As I was told that management did keep an open system of communication, greater encouragement still should be given to the employees to give suggestions.


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BIBLIOGRAPHY

Book References Mc GJRW- HILL ,Human resource management ,International 4th Edition, December 2001, Chapters

1.Human Resource Environment, Page # 51 6.Selection And Placement, page # 216 7. Training, page # 248 9. Employee Development, page # 374 Articles http://www.highbeam.com/doc/1G1-18261630.html http://findarticles.com/p/articles/mi_hb092/is_n12_v26/ai_n28665870/ www.jung.com Internet Search www.psocl.com www.google.com Persons Interviewed Waqar Ahmed Khan Sahib General Manager HR KARACHI Yaqoob Suttar Executive Director PSO, KARACHI Magazine PSO


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APPENDIX

Question # 1: Are you satisfied with the current training and employee development methods at PSO? (a) Yes (b) No Question # 2: Do you believe that significant gains in your productivity have been made as a result of training? (a) Yes (b) No Question # 3: If no, what improvements do you think should be made? Question # 4: How often do you think that training and employee development procedures should be implemented? (a) Whenever necessary (b) Twice a year (c) All the time (d) Other Institute of Business and Technology

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Question # 5: You acquired training as a result of, (a) Your request for training (b) As a necessary implementation made by management (c) Performance appraisal showed the requirement for training (d) You fulfilled certain criteria on the basis of which training and employee development was given. Question # 6: Which method of training and employee development do you think is the best at PSO and why? Question # 7: The main advantage of training and employee development that you see is, (a) Opportunity for career development (b) Increase in your market value (c) Improved productivity and motivation to work (d) Other Question # 8: Once you had received the training, what method of evaluation for the effect of training and its success did management use? (a) Informal discussion


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(b) Questionnaire (c) Performance appraisal (d) No specific method was used (e) Other Question # 9: Were you given a questionnaire before the training was given to you and then after training as well? (a) Yes, a questionnaire was given only before training (b) Yes, a questionnaire was given only after training (c) A questionnaire was given both before and after training (d) No questionnaire was given


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HR Process and Impact of Training and Development on Employee’s Performance at PSO

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