Assignment HR Practice

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<p>Restructuring of CAA Pakistan and the Challenges to Implementation of Modern HR Practices</p> <p>By</p> <p>Umair Zafar</p> <p>A project report submitted in part requirement for the M. Sc. In Management</p> <p>Glasgow University School of Business and Management August 2007</p> <p>2</p> <p>Table of Contents1. Introduction 6 2. CAA Pakistan Prior to Restructuring.. 9 2.1 Background 2.2 CAA Organogram 2.3 Problem Areas 3. Restructuring Process16 3.1 Restructuring strategy3.2 Objectives 3.3 Methodology</p> <p>3.4 3.5 3.6 3.7</p> <p>Approach Project Organization Chart The Process Starts Revised Organogram</p> <p>4. Implementation - Problem Areas26 4.1 4.2 4.3 4.4 4.5 Government Rules / Regulations Difficulty in Changing the Mindsets Misconceptions and Myths related to Restructuring Quality of Work Force Resistance to Change Getting People on Board</p> <p>5. Findings. 31 6. Conclusions . 37 7. Recommendations.38 Bibliography. 40 Annexure A to C.42 - 44</p> <p>3</p> <p>SummaryOrganizational change is very much in the climate of Pakistan. A number of Public Sector Organizations have embarked upon restructuring to bring corporate culture through introduction of best HR practices in their setups. Today rightsizing is irresistible because it is firmly planted in business and public sector can no longer remain oblivious of this phenomenon. But on the other hand Public Sector Organizations because of their very structure and prevalent culture of over staffing find it difficult to right size which will result in layoffs which Pakistan can ill-afford since unemployment rate is already high in the country as compared to its neighbours. The paper encompasses an analytical study of the on-going process of Restructuring in Pakistan Civil Aviation Authority a Public Sector Organization, with reference to the challenges being faced in implementation of best HR practices. The research study applied the narrative theory as a conceptual bridge across organizational Change Management to identify the challenges to implementation and suggested measure to meet those challenges to achieve the desired goal. The methodology adopted was printed material (secondary data source) and the telephonic interviews. Study discussed the state of CAA Prior to Restructuring, the Restructuring Process, the Implementation Problem Areas, Findings, Conclusion and Recommendations. The major findings of the study are given in succeeding paras. Adequate preparatory work was done prior to undertaking Restructuring Process and a viable strategic plan was formulated.</p> <p>4</p> <p>The initial phase of Restructuring Process went well. This included a Talent Hunt exercise, a 3 days workshop to reach to a consensus on revised mission, vision, and core values. New organizational structure was also evolved through lengthy discussions It was the Implementation Stage where the problems started surfacing. The main problems were due to lack of communication with employees. Although there was a Communication Strategy but it was implemented late and by that time there were all sorts of misperceptions Restructuring and doubts in employees there minds regarding of Process. Moreover, were problems</p> <p>Government Rules and Regulations, which were a major hurdle in implementation of best HR practices. In-spite of all the problems it is considered that the Restructuring Process of CAA was about 40% success. The process is still continuing and perhaps things will improve. For the first time there is a focus on best HR practices such as HR Training and Development; Succession Planning, Introduction of Benchmarking various functions at airports and new Appraisal System etc. Some of the recommendations are effective communication strategy within and outside the organization, a phased Implementation Plan, and an effort to get Government Rules and Regulations revised which directly impinge upon implementation of modern HR practices in Public Sector Organizations.</p> <p>5</p> <p>AcknowledgementsI am thankful to all those officers and staff of CAA Pakistan who were very forthcoming during telephonic interviews. Without their cooperation and assistance in conveying their candid opinions, this research would not have been possible. In particular I am indebted to the following officers of CAA belonging to middle and top-level management whose contributions were most valuable since they were directly involved in the Restructuring Process right from the conceptual stage to the implementation stage:</p> <p>Umair Zafar</p> <p>6</p> <p>Restructuring of CAA Pakistan and the Challenges to Implementation of Modern HR PracticesIntroductionOrganizations competed to gain competitive advantage through total quality management in the 1970s, through time based management in the 1980s, through efficiency in the 1990s, and through innovation to the 2000s (A fuah, 1998 Kuczmarski, 1996; Gupta, 1993). We are in the 21st century and it is evident that with the free flow of capital due to the GATT and GATS, firms in both manufacturing and services will be faced with more fierce competition. Without continuous and relentless innovation, it would be difficult for any firm to be able to keep their market share in this borderless world. Peter (1997) reiterates the view that the world of business is now in a permanent state of flux where constant innovation is the only strategy for survival for both individual and organizations. Restructuring is an extremely relevant issue to organizations today in that it has become the most prevalent dilemma in recent years. The current tendency of organizations to restructure and ultimately to downsize has a major impact on the organizations themselves, on their surviving and terminated employees, on the government, and on society as a whole. In fact, it is everyones problem and it seems to have become more the rule than the exception today and for the future. As Miller (1993) suggests, many organization are either too small to have a specialist HR function or are unwilling to allocate these functions to a specialists. Therefore, it was important to operationlise the notion of HR practices in a way that was restructuring-friendly.</p> <p>7</p> <p>The current adverse economic climate has been persistent and long-lasting. As a result, many organizations which were operating inefficiently have been driven out of business, and most of those which have survived were forced to restructure in order to streamline their operations and achieve operating cost savings to ensure their continued competitiveness both on the local and global markets. More often than not, this meant downsizing the organization and, in many cases, the downsizing was conducted in multiple phases or may be ongoing. Typically, the concept of restructuring and organizational change is in regard to organization-wide change, as opposed to smaller changes such as adding a new person, modifying a program, etc. Examples of organizationwide change might include a change in mission, restructuring operations, new technologies, mergers, major collaborations, "rightsizing", new programs such as Total Quality Management, re-engineering, etc. Restructuring is an important issue mostly to privatize the public enterprises all over the world. Usually, such organizations want to achieve high efficiencies in order to report attractive profits which would influence the stock market to reflect maximum share value. Research has found that failures occur at other levels as well. It was established that, despite careful planning, most organizations which restructured to achieve the desired cost reductions and effectiveness which were their primary restructuring objectives. Koonce (1991) and Prevost (1992) have attributed this failure to the fact that organizations do not give enough consideration to the people factor when restructuring. New corporate goals are often unclear because little information is given to employees. it is reasonable to speculate that this omission may partly be caused by the fact that human resource issues are often not considered an integral component of the organizations strategic planning process.</p> <p>8</p> <p>Organizational change is very much in the climate of Pakistan. A number of Public Sector Organizations have embarked upon restructuring to bring corporate culture through introduction of best HR practices. Today, rightsizing is irresistible because it is firmly planted in business. Public sector can no longer remain oblivious of this change where most organizations are over-staffed and their performance on productivity is poor. Civil Aviation Authority (CAA) of Pakistan is a public sector autonomous body working under the control of Federal Government of Pakistan through Ministry of Defence. There had been a constant decline in the working of the organization over the years which prompted the Government to look for ways to bring in improvement. Accordingly it was decided in November 2006 to restructure CAA. The paper will encompass the ongoing process of restructuring in CAA Pakistan with reference to the challenges being faced in implementation of best HR practices. This research study will apply the narrative theory as a conceptual bridge across organizational change management and identify the challenges to implementation of HR practices and suggest measures to meet those challenges to achieve the desired results. The study will cover the state of CAA prior to change, the restructuring process, the problem areas and sum up with the findings and recommendations. The scope of this study is limited to CAA Pakistan but to quite an extent the problems of restructuring of CAA will have relevance to other Public Sector organizations to the extent that Government rules and regulations and other problems such as overstaffing, lack of HR practices, bureaucratic attitudes etc are more or less same in all these setups. The topic has been chosen for the reason that for some years to come there will have to be similar organizational changes in other public sector organizations of Pakistan as well. HR being the subject that I intend</p> <p>9</p> <p>pursuing as my career, this study will give me a good insight into the problems and their possible solutions.</p> <p>CAA Pakistan Prior to RestructuringBackground CAA was created on 7th December, 1982 as an autonomous body in the Ministry of Defence, Government of Pakistan. The mission of CAA is to provide for the promotion and regulation of Civil Aviation activities and to develop an infrastructure for safe, efficient, adequate, economical and properly coordinated Civil Air Transport Service in Pakistan. CAA Pakistan manages 42 airports including international (Annexure A) and has a total workforce of over 9000 personnel including about 1400 officers. Apart from this there are temporary/daily wages employees and their number is around 3500. Most of the temporary wages employees are in the lower echelons performing general duties, porter and janitorial services. CAA Ordinance (1982) provides for general direction and administration of the CAA and its affairs shall vest in a Board which may exercise all powers, perform all functions and do all acts and things which may be exercised, performed or done by the authority. CAA Board has further delegated certain powers to the CAA Executive Committee which manages day to day affairs of the Authority. The Committee is headed by Director General CAA having Deputy Director General and three to four senior directors as its members. Pakistan s economy is rapidly growing for the last few years .In the fiscal year 2005 the economy has achieved a GDP growth of 8.4%.Being gateway to Central Asian countries and with low labour cost it has great potential to grow. Also its geographical location puts it at an advantage with regard to aviation industry. But unfortunately CAA has not been able to take</p> <p>10</p> <p>advantage of its strategic location .CAA used to have foreign air lines operating in Pakistan but over the years the number has decreased. For example in the year 1995-96, total aircraft movements from all air ports in Pakistan was 245673; this decreased to 155222 in year 2001-02 and in year 2004-05 was 199830.(CAA Statistics 2006 Annexure B) ). The CAA's Revenue, Aircraft Movement and Passenger Traffic Trends for the years 2001 to 2005 are as under:REVENUE FOR THE YEAR TILL 30th JUNE(Rs. in Million)</p> <p>Description OperationalNon Operational</p> <p>2005 6584 1,663 8,274 26 30 11</p> <p>2004 5,048 1,505 6,553 20 27 2</p> <p>2003 3,971 1,470 5,972 4 5 1</p> <p>2002 3,799 1,453 5,441 (12) (19) 10</p> <p>2001 4,648 1,324 5,232 8 15 (10)</p> <p>Total % Increase Total % Increase Operational % Increase NonOperational9,000 8,000 7,000 6,0005,048 6,584 6,553 8,247</p> <p>5,972 5,441 5,232 4,648 3,971 3,779</p> <p>5,000 4,000 3,000 2,000 1,000 0 2005 2004 2003 20021,663 1,505 1,470 1,453</p> <p>1,324</p> <p>2001</p> <p>Total</p> <p>Operational</p> <p>Non Operational</p> <p>11</p> <p>AIRCRAFT MOVEMENT FOR THE YEAR ENDED 30TH JUNE</p> <p>Description Route/(Over flying)Domestic Landing</p> <p>2005 105,279 47,644 21,925 174,848 17 7 12 13</p> <p>2004 90,031 44,431 19,608 154,070 27 11 15 20</p> <p>2003 70,961 39,886 17,064 127,911 34 2 9 19</p> <p>2002 52,850 39,071 15,727 107,648 (27) (21) (16) (23)</p> <p>2001 72,159 49,293 18,690 140,142 10 (17) (71) (3)</p> <p>International Landing Total % Increase /(Decrease) Route/(Over flying) Domestic Landing International Landing Total</p> <p>Trend of Aircraft Movement as on 30th June</p> <p>120,000105,279</p> <p>100,00090,031</p> <p>80,00070,961</p> <p>72,159</p> <p>60,00047,644 44,431</p> <p>52,850 39,886</p> <p>49,293</p> <p>40,000</p> <p>39,071</p> <p>21,925</p> <p>20,000</p> <p>19,608</p> <p>17,064</p> <p>15,727</p> <p>18,690</p> <p>0 2005 2004 2003 2002 2001</p> <p>Route/(Over flying)</p> <p>Domestic Landing</p> <p>Internatioal Landing</p> <p>12</p> <p>Passengers Movement for the year Ended 30th June</p> <p>Description DomesticInternational</p> <p>2005 3,632,026 3,381,024 7,013,050 16 11 14</p> <p>2004 3,138,066 3,040,744 6,178,810 8 17 12</p> <p>2003 2,892,288 2,600,628 5,492,916 9 7 8</p> <p>2002 2,650,606 2,422,844 5,073,450 (24) (14) (19)</p> <p>2001 3,476,590 2,816,217 6,292,807 (11) 9 (3)</p> <p>Total % Increase / (Decrase) Domestic Internatioal Total</p> <p>Trend of International and Domestic Passenger Movement As On 30th June</p> <p>4,000,0003,632,026</p> <p>3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 0</p> <p>3,381,024 3,138,066 3,040,744 2,892,288 2,600,628 2,650,606 2,422,844</p> <p>3,476,590</p> <p>2,816,217</p> <p>2005</p> <p>2004</p> <p>2003</p> <p>2002</p> <p>2001</p> <p>Domestic</p> <p>International</p> <p>13</p> <p>Going through these statistics one might notice that CAAs revenue and net profit as well as passenger and Air Traffic have shown an increase over the last few years (CAA Annual Report 2005) but considering the potential of growth that CAA has got, these achievements are considered insignificant because there is a lot more that CAA is capable of earning provided the organization is well structured and has a motivated work force. There has been a constant decline in the work environment of CAA which included low morale, poor performance and productivity of employees. This prompted the Federal Government...</p>