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INSTITUTE OF BUSINESS AND TECHNOLOGY
HR Process and Impact of Training and Development on Employee’s Performance at
PSO
Prepared By
Ayesha MirzaBM-25067
Course Code : MKT-606
MBA (Human Resource Management)
FACULTY OFMANAGEMENT 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.
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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.
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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
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HR process and Impact of Training and development on Employee’s Performance at PSO
TABLE OF CONTENTS
ABSTRACT
ACKNOWLEDGEMENT
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 Selection4
2.3 Training and Development6
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 23
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
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4.4 Selection 34
4.5 Orientation 35
4.6 Compensation and Benefits 35
4.7 Appraisals 36
4.8 Decesion Making 37
4.9 Motivation 38
4.10 Controlling 40
5. TRAINING AND DEVELOPMENT AT PSO 41 5.1 Training 41
5.2 SAP 42
5.3 HR Module 42
5.4 Development 52
5.5 Relationship with Society 53
5.6 Social Welfare Activities 54
6. ANALYSIS OF HR PRACTICES 58 6.1 Comparison of HRM Practices at PSO and SHELL 58
6.2 Comparison of HR Practices with SHELL Planning 59
6.3 Recruitment 59
6.4 Selection 60
6.5 Employee Training Methods and Development 61
6.6 Compensations and Benefits: 61
6.7 Performance Management 62
6.8 Employee Relations 63
6.9 Company’s Performance 63
6.10 Future of PSO As Compared with Its Competitors 64
7. ANALYSIS OF TRAINING AND DEVELOPMENT AT PSO 65 7.1 Responsibilities Related To Training 65
7.2 Training and Development on Need Assessment 66
7.3 Training Types at PSO 66
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8. RESEARCH FINDINGS 68 8.1 The Questionnaire 68
8.2 Summary of Findings 86
9. CONCLUSION AND RECOMMENDATIONS 88 9.1 Conclusion 88
9.2 Recommendations 90
BIBLIOGRAPHY 92
APPENDIX 93
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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.
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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 non-
profit, 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:
Record the names of all applicants who submitted
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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
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.
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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)
to bring someone or an organization up to another threshold of performance,
often to perform some job or new role in the future.
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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:
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.
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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 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
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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
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
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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
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
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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
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
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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 non-
monetary terms. Business owners frequently send their people to training
courses that seem right and sound good without knowing what to expect in
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
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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
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
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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 Karachi-
Mehmoodkot 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
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
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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 re-
branding 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
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.
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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 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.
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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
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
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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.
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.
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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
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.
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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.
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
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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
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.
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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.”
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.
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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
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.
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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
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.
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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.
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
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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.
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
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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
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.
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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,
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)
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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
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
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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
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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
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
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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.
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.
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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.
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.
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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
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.
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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
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.
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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.
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.
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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
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.
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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.
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.
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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.
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.
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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
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.
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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
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 real-
time, 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,
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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?
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
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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.
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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.
OM (Organizational Management): OM assists in maintaining an
accurate picture of organization's structure, no matter how fast it
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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
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
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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, damage-
related maintenance, and service management to ensure
availability of operational systems, including plants and
equipment delivered to customers.
SM (Service Management): SM provides highly integrated 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.
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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
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
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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:
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.
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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
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
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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
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
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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
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”
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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
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.
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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.
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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
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.
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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.
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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
Compensation
Performance Management
Employee Relations
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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
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.
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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.
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
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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 Step 5
Medical Evaluation Step 4
Realistic job previews Step 3
Supervisory Interview Step 2
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
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Provident fund
Loans
Rewards
Appraisals
Policies
Million Liter awards
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.
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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
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.
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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
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
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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
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
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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)
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
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Emergency Training
Environment and Safety Trainings
One- and two-day open enrollment workshops
Certification Programs
Project Related Training
Cross Functional Training
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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.
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Question # 1:Question # 1:
Are you satisfied with the current training and employee development
methods at PSO?
(a)Yes
(b)No
Result From PSO
Yes No
Respondents 38 18
Percentage 68% 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
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answered in negative to this question. Therefore, PSO should not be
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.
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Question # 2: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
Yes No
Respondents 40 16
Percentage 71% 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
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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.
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Question # 3: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
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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.
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Question # 4: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
necessary
(b) Twice a
year
(c) All the time (d) Other
Respondents 14 28 14 0
Percentages 25% 50% 25% 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.
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Surprisingly majority of the employees wished only to go through
such training and employee development procedures only twice a year. On
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.
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Question # 5: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) Your
request for
training
(b) Necessary
implementatio
n made by
management
(c)
Performance
appraisal
(d) On fulfilling
certain criteria
Respondents 6 42 6 2
Percentages 11% 75% 11% 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
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75% of the respondents underwent training because it was a necessary
implementation made by the management.
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.
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Question # 6: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
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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: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)
Opportunity
for career
development
(b) Increase in
your market
value
(c) Improved
productivity and
motivation to work
(d) Other
Respondents 30 4 20 2
Percentages 54% 7% 36% 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
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had ticked on two options together, which were both option (a) opportunity for
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.
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Question # 8: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
discussion
(b)
Questionnai
re
(c)
Performanc
e appraisal
(d) No
specific
method
was used
(e) Other
Responden
ts
10 26 12 8 0
Percentage
s
18% 46% 22% 14% 0%
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
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question is 46% for part (b) Questionnaire. Majority of the employees
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.
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Question # 9: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
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
Respondents 8 26 10 12
Percentages 14% 46% 18% 21%
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Interpretation:
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
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environment training are considered to be the best by the
employees of PSO
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
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1000 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
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and the profit margin on lubes is much higher than on petrol. But as PSO 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 SahibGeneral Manager HRKARACHI
Yaqoob SuttarExecutive DirectorPSO, KARACHI
Magazine PSO
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APPENDIX
Question # 1:Question # 1:
Are you satisfied with the current training and employee development methods at
PSO?
(a) Yes
(b) No
Question # 2: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:Question # 3:
If no, what improvements do you think should be made?
Question # 4: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
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Question # 5: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:Question # 6:
Which method of training and employee development do you think is the best at
PSO and why?
Question # 7: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: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: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
95