Karachi electric-supply-company final report

Karachi Electric Supply CompanyCreated by: Aisha Urooj Lashari, Salahuddin Soomro, Arnaib Hanif, Faryal Rehaman and Owais Bhatti

Submitted to : SIR SALMAN AHMED KHAN

12/18/2013

Karachi Electric Supply CompanyDecember 18, 2013

ContentsSubmitted to : SIR SALMAN AHMED KHAN...............................................................................0

Acknowledgment......................................................................................................................2

Introduction..............................................................................................................................3

People related problems..........................................................................................................4

Macro level problems...........................................................................................................4

Change of management....................................................................................................4

Unionization......................................................................................................................4

Micro level problems............................................................................................................6

Cultural differences...........................................................................................................6

Non- skillful Employees.....................................................................................................6

Uncooperative old employees..........................................................................................6

Absenteeism.....................................................................................................................6

Solutions to the problems........................................................................................................7

Rewards and promotion.......................................................................................................7

High level trainings...............................................................................................................7

Favorable working conditions...............................................................................................7

Electronic attendance system...............................................................................................7

Feedback..................................................................................................................................8

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Acknowledgmentpecial thanks to Mr. Adil Murtaza - Assistant Manager HR and PR without whom this report would not have come into existence. Also Mr. Anwer Ali Roomi – Advisor HR and PR who shared his vast knowledge with us. KESC organization has been very co-

operative in sharing their views and providing us with all reliable information. They have proven to be a very enlightening team.

S

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IntroductionKESC has been established for 100 years. It was established even before the creation of Pakistan in 1947. It came into existence on September 13, 1913 under the Indian Companies Act of 1882 and was nationalized in 1952. Before 2004 KESC was a government organization with limited population and limited capacity generators power supply. It was privatized in November 2005 and gradually began to grow when in 2008 Abraj Capital took over. It slowly spread over in all the provinces and new plants were developed. Over the years the backbones of distribution system increased to 1100. KESC is a monopoly and therefore faces no other competition in load shedding or transmission. It focuses on supplying Karachi and other remote areas near to Karachi such as Uthal, Bela, Vindhar, Hub and Gharu. These remote networks prefer KESC over other supplying companies because KESC is nearer to them other than the other supplying companies such as WABDA, HESCO and PESCO, who are the supplying networks for Baluchistan, Quetta etc. This network stretches for 6500km2. It is currently serving 2.2 million customers. KESC provides electricity to industrial, commercial, residential and agricultural areas.

With a staff of 11,600 people KESC is said to be one of Karachi’s largest employers. KESC is listed on all three of Pakistan's stock exchanges: the Karachi Stock Exchange, the Lahore Stock Exchange and the Islamabad Stock Exchange.

Vision

“To help restore Karachi to its rightful position as the City of Lights”

Mission

To generate transmit and distribute electricity for the progress and prosperity of the city and of the country.

To exceed our customer’s expectation with reliable, stable and affordable electricity, with service to match.

To enhance the performance, health, safety and overall wellbeing of our people and to strive to recognize their diversity and skills.

To improve our operational and financial performance, for the benefit of our employees, customers and shareholders.

To generate transmit and distribute electricity for the progress and prosperity of the city and of the country.

To exceed our customer’s expectation with reliable, stable and affordable electricity, with service to match.

To enhance the performance, health, safety and overall wellbeing of our people and to strive to recognize their diversity and skills.

To improve our operational and financial performance, for the benefit of our employees, customers and shareholders.

To make lasting social contribution to the people of Karachi.

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OUR VALUES:

We always seek relevance to our values which include integrity, accountability and the need for continuous improvement. The pursuit of these values creates opportunities for success and the potential to provide our customers with more satisfactory services. These values also lead us to manage K-Electric’s environmental impact in ways that strike the right balance between society’s economic and environmental needs.

K ELECTRIC LEADERSHIP:

TAYYAB TAREEN (CEO)

Mr. Tayyab Tareen was appointed as the new Chief Executive Officer by K-Electric’s Board of Directors on 27th November, 2014.

He has been on the KE board since 2009 and has also served as the Chief Financial officer and Chief Strategy Officer,

Mr. Tareen is a qualified Chartered Accountant from England and Wales.

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Syed moonis Abdullah alvi (CFO)

Syed Moonis Abdullah Alvi is responsible for all financial activities in the organization ranging from financial planning to budgeting, insurance, payroll, taxation, treasury activities and financial reporting

Dale Sinkler (CG&TO)

Dale Sinkler brings over 25 years of experience in the power sector ranging energy sector reforms, development, execution, operations and management across multiple power plants.

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K Electric Sustainability Policies:

K electric sustainability policy revolves around economic value creation, essentially through social and environmental gains across our stakeholder universe. We firmly believe in integrating our corporate philosophy and operational performance to meet the expectations of our stakeholders.

They provide and maintain a clean, healthy and safe operating environment for their employees, customers and the community.

They will build and maintain strong partnerships with communities, customers, governments, media, academic circles and non-governmental organizations – all of whom have a role to play in building a sustainable energy system

They will ensure open and transparent communications with all stakeholders. they will continuously try to enhance our value proposition to our consumers and

adhere to our promised standards of service delivery they will respect the universal declaration of human rights, international labor

organization’s fundamental conventions on core standards and operate as an equal opportunity employer

they shall encourage our business partners to adopt responsible business practices, strong business ethics and the highest standards of an honest code of conduct

They will continue to serve our communities by implementing sustainable community development programmes through public/private partnerships in and around our core areas of operation.

Performance Appraisal system:The performance appraisal system is based on biannual review – Preliminary and Final (June/December) they have ensured that the system is based on an Organization-Wide Transparency Policy. Each appraisal is validate by the HR Committee for each group via group Head’s presentation.

Mode of communication: Emails are a general mode of communication that the KE management uses to interact with all employees. Any general information, development, announcement or issue is communicated through email memos in English and Urdu. The employees can also access the KE management through emails to express their viewpoints and give feedback.

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Facilities for Employees: On early basis K Electric arranges annual dinner for its employees. For entertaining their employees they also arranges picnic for some relaxation from

work and reduce their stress. They encourage their employees to engage themselves in different sports activities

as per their interest.

Benefits provided to full time employees:

• Car & Fuel Allowances as per entitlement (Manager to GH Level)• Mobile Phone & Blackberry Handsets with Allowances• Medical Services• House Accommodation up to Manager Level• Retirement Benefits: Gratuity & Provident Fund.

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People related problems There are two types of problems which KESC is facing. Which are as follows.

1. Macro level problems2. Micro level problems

Although they have somehow coped with macro level problems but they are still facing micro level problems which are people related problems.

Macro level problems There are certain problems within organization which needs high level solutions. These are macro level problems. KESC has dealt with these problems in past and these are still present now. Some of these problems are as follows.

Change of managementWhen KESC became privatized, the change was not in management only but it became service based company from power distribution company. The company opened its customer service centers all over the city to solve the problems of people. They wanted to make power distribution clear and without any disturbance. The main problem to new management was a huge amount of dues which was not paid and their recovery was the main issue for them and they make their strategies by employing new blood in the company who have capabilities to cope with the newly privatized company.

UnionizationWhen the company was privatized, it has 1911 management employees and 15528 were non-management employees. There was a union working in kesc, which protects the rights of employees. The problems were as follows

1. From 17200 employees, the problem was selecting skillful and productive employees in operations and management.

2. Right size and smart size the work force.3. Lower level or non-technical employees should be right sized like gardeners, drivers,

guards, office attendants and bill distributors.

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Though the lower level staff like gardeners, drivers, guards, office attendants and bill distributors is outsourced in many private companies. KESC wanted to make this employees as contractual from regular employees because KESC was facing a huge loss because of these workers. When the right sizing started, the union went on strike and start destroying the property of KESC management and KESC faced a big damage. Many cars and cable car were set on fire and KESC office building was destroyed. It was one of the major problem KESC went through.

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Micro level problemsYou have seen macro level problems which cant be solved by using the knowledge of our course. So we are going to look on those problems which can be solved by our course information. These problems are called micro level problems. We asked the company about the problems which are people related means what problem you are facing related to your employees. So here are some problems which we are able to find from KESC.

Cultural differencesCultural differences in some areas of Karachi are making difficult to employ people in these areas. These areas are baldiya, korangi, gadap, gulshan-e-hadeed. The employees are working in their own areas and don’t want to go faraway places and this unbalanced the work force in some areas. The areas mentioned above are loss making centers because no employee wants to go there and employment in these areas is not up to the mark and productivity suffers.

Non- skillful EmployeesThe second problem is the old and traditional employees. These employees are reluctant to change. They are still working like they were working in government organization. They are not productive to organization.

Uncooperative old employeesThe new management injected new blood to the organization, which was ready to work and become productive employees. But the old bosses were not making them work like they don’t work. This was the problem which management was facing.

AbsenteeismEmployee’s absenteeism was a problem in some areas of Karachi, especially in loss making centers of Karachi.

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Solutions to the problemsAfter listening to all the problems, we suggested some them some solutions. The solutions were based on our knowledge of the course. These are as follows

Rewards and promotionThe employees who are not ready to go far away places for work and don’t want to leave their areas. They should be rewarded to get motivated and their ranks should be raise, like if they are working as a assistant manager, so they should be placed as a manager in that area. This will motivate the employees and they will work harder.

High level trainingsThe employees should be provided with high level of trainings which will enhance their skills and they will become productive and skillful employees. There are some training which should be provided

1. Organization structure and job description2. Performance appraisal system

Favorable working conditions 1. The new employees should be provided with favorable working conditions.2. Their job should be clearly described. 3. They should be encouraged by their bosses4. Timely recognition5. Performance review

Electronic attendance systemThis system already prevails in the organization but not fully functional. It’s mainly limited to head offices and main branches. It should be made available in every branch and office of the city. The employees should be encouraged to work which in turn needs favorable working conditions.

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Feedback

After hearing our suggestions, the manager was more than grateful to us and he liked the suggestions a lot. He said that he would work on the rise in ranks and training session for the employees will be soon arranged. He further said that making electronic system available everywhere need time and resources, but it would be there very soon.

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Education

Karachi electric-supply-company final report