Compensation Structure of Ufone

Compensation Structure
Development
BY: Bilal Ahmed
Documented by: Bilal Ahmed

EXECUTIVE SUMMARY
This project has been undertaken in order to highlight the Human Resource Practices of
“Ufone”. It’s all about YOU its all about “Ufone”, a company very highly spoken of
these days. A company paying more attention to its customer’s delights rather then the
customer’s satisfaction. Ufone is a company starting from scratch and has shown utmost
performance in the last seven years. Ufone owes its success to its employees believing
that providing employees with job satisfaction motivates them to work hard and provide
better results.
Company Introduction
Ufone PTML is a wholly owned subsidiary of PTCL established to operate cellular

telephony. The company commenced its operations, under the brand name of Ufone,
from Islamabad on January 29, 2001
During the year, as a consequence of PTCL’s privatization, 26% of its shares were
acquired by Emirates Telecommunication Corporation (Etisalat). Being part of PTCL, the
management of Ufone has also been handed over to Etisalat. During the year July 2005 to
June 2006, Ufone continued on the path to success. The Company further expanded its
coverage and has added new cities and highways. Ufone has network coverage in more
than 3475 locations and across all major highways of the country.
Ufone currently caters for International Roaming to more than 200 live operators across
121 countries and introduced International roaming facility for Prepaid subscribers in
Saudi Arabia, United Kingdom, United Arab Emirates, Singapore, Portugal, Thailand,
Cyprus, Bangladesh, Uzbekistan, Tunisia and Kuwait with lowest rates, featuring no
security deposit and activation charges. GPRS Roaming facility is available with more
than 100 Live Operators across 80 countries.
Mission Statement
To become the best cellular communication option available in the country for “u”.
Vision Statement
In order to evolve with our customers and to keep pace with your needs, we rejuvenated
and revamped our image by changing our visual identity. At Ufone we understand the
value of words and the need to communicate effectively and efficiently at all levels of

society, which is why our primary focus is on U, our valued customers bring strength to
our company.
With a fresher look than is accepted and appreciated across the board by people of all
ages, we aim to connect with you and provide you state of the art services. No matter
who you are, where you are, what you want to say, how you want to say it or how you
feel, you are our focus. Because at Ufone, it’s all about U,
Services line of Ufone
There are two basic products of Ufone “Ufone Prepaid” and “Ufone Post pay”. Both of
these products are available at their franchise for public.
 Prepaid
 Post paid
COMPANY ANALYSES
Structure of Ufone
When a company wants to compete in innovation, it needs to maximize flexibility.

Flexibility is maximized by aggregating work into larger, holistic pieces that are executed
by teams of higher wages, high skilled workers. Giving the units their own support
systems and decision-making authority to take advantage of local opportunities in
regional or specialized product markets also enhances flexibility.

Corporation
Administ- CEO Finance IT

Engineer- ration & Secretariat Commerci Customer Human
ing Procurem al Care Resource
ent
Access Customer
Networkin Administr Business Care Human Financial IT
g Planning ation Analysis Marketing (MNP Resource Control Corporate
Corporate T&D
Core Quality Human Finance Data ware

Networkin Administr Internal Commerci Assurance Resource Corporate House &
g Planning ation Audit al & Operation Software
Procurem Corporate Retention s Support
ent
Finance Enterprise
Corporate General Governme Customer Legal & Solution
Engineeri Administr nt Corporate Coordinati Taxation &
ng ation Relations Sales on Security
Customer Finance Enterprise

Operation Care Operation Solution
BSS Dealer (Service Perman- &
Sales Centre) ent Security
Operation Customer Finance Mediation

NSS Care Outsour- Treasury & Client
Retail (Franchise ced &
Sales System
) Planning
Customer
Care Finance Network
Site (Corp Accounts Operation
Acquisitio RGM
n Support Services )
Customer System
Sales & Care Administr
Distributi (Billing) ation
on
Credit
Manage-
ment
Call
Centre
Customer
Care
Training

Keeping in view of all these factors the structure of Ufone is designed i.e. the overall
Structure of the Ufone is Divisional (More flexible and innovative). Mainly Ufone has
four regions and within those regions the structure is functional .The decision making
authority is centralized at the top but within the regions it is decentralized i.e. regional
heads have to inform top management before making any decision.
Division of branches geographically (Location)
This is what Ufone looks from the organizational hierarchy point of view. There are eight
different departments each headed by a Project Director. They report directly to the CEO.
There are four BU (Business Unit) each Project Director is responsible for these eight
divisions. BUs are divided geographically into three divisions
 BU North (Peshawar to Jehlum) Islamabad (Head Office)
 BU Central-1 (Gujranwala till Sialkot)
 BU Central-2 (Multan till Rahim Yar Khan)
 BUM South (Sindh and Balochistan)
Departmental Division
In order to give a jump-start to the company, a comprehensive initiation plan has been
made along with aggressive customer acquisition, care and retention strategies. Ufone has
the best integration of eight departments each project director.
 Engineering
 Administration
 Business Analysis
 Marketing & Sales
 Customer Care
 Human Resource
 Finance
 Information Technology

Provision of quality service to the customers is of utmost importance for the progress of
any service-based company. At Ufone the management is mindful of the same and has
been constantly endeavoring to enhance the existing facilities. Therefore operations at
Ufone are all planned and carried out in such a way so as to maximize operational
efficiency, customer satisfaction and employees motivation.
Although it is the subsidiary of the Pakistan Telecom Company Limited (PTCL), Ufone
carries out its operations autonomously under the license of Pakistan Telecom Mobiles
Limited (PTML). The company head office is established in Islamabad (F-7 Markaz),
which serves as the center for all its strategic activities.
Human Resource Department at Ufone
UFONE considers their employees to be the asset of the company, so in order to retain
their employees following practices are followed in the company.
HR PRACTICES
 Recruitment and selection

 Orientation
 Training and development
 Compensation and Benefits
 Performance Appraisal
WORK FORCE
HR at UFONE is divided into the following two major categories

 Permanent Employees (1500-2000 Approximately)
 Outsourced Employees (2000 Approximately)
Permanent employees
HR Permanent employees are further divided into following two categories.

 Operation
 Training and Development
Operational Department

It covers all the areas including hiring recruitment, selection and payroll etc. HR
operation team manages all the employee activities gathers all the information and make
use of it for further processes.
Training and Development
HR team of training and development make a performance evaluation of all the

employees and the see where the gap occurs between the actual performance and the
desired performance. Then training is designed for area which needs to be improved. On
the job and off the job both the trainings are given according to the need of the employee.
Employee Benefit & Compensation
 Training & Development
 Employee Motivation
 Retention of Employees
 Career Planning/ Succession Planning
 Employee Relations/ Communication
 Employee Awards
 Employee Events Management
 Medical & Life Insurance
COMPENSATION AND BENEFITS
Ufone follow the performance base pay structure and pay for their performance and work
output.
Compensation
The total returns which an employee gets against his or her work.
It maybe:
Employee Health Plans

Employee Insurance

Employee Leave
Employee Retirement Income Security Act
Executive Compensation
Maternity & Paternity Benefits
Pension & Retirement Plans
Wages & Salaries
Workplace Programs
Compensation strategies are usually market based and is linked with the performance
with a greater emphasis on variable pay. Salary adjustment is based on the performance,
market movement and internal/ external equity adjustment. Revision of compensation is
based on total pay and monetization of benefits.

Levels of Ufone:
Hierarchy

C.E.O
V.P
G.M
Senior
Manager
Manager
Assistant
Manager
Senior
Executive
Permanent
executive
Outsourced
Executive
M.T
10 Levels
Individual Salary Fixation:

The Ufone seeks the market trend and try to compete with market for individual salary
fixation but they also analyze their own financial positions and budgeting, it also varies
from department to department.
Current Base Pay: (Job Based Structure and competitive)

The Ufone follows the job based structure, and compensate its employees for the work
they have done, for their tasks and duties they performed, their work content, behaviour
and for their responsibilities.
To develop this structure Ufone conducts some surveys, to compete with others in the
same industry.
Work Analysis
Evaluation & control
Market trends
Employee J.D
Surveys
Policy Lines
Total Compensation:
Example:
60% Basic Pay 15-k
30% House Rent 7.5-k
10% Utilities 2.5-k
OPD 2 Gross salaries
Hospitalization Employee siblings, Parents,
Wife / Spouse and
children’s
Provident Fund 50% Employee, 50% Org
Gratuity If work for 10 Months
Bonuses 1.4% Of Gross salary
Incentives Only Sales department
depend upon their
performance.
Assistant Manager Level:

25000 Car allowance + 200 Liter’s petrol / Month

Manager level:
Car + Blackberry
Senior Manager:
Islamabad Club Membership + BMW Car + House + Foreign Tours
Further Ufone has developed some grades for employees.
A H
A is the minimum grade and H is the maximum grade and they compensate their
employees on the basis of their grades.
Grade A 500 minutes + 500 Rs mobile usage. Same like this all other benefits.
After every Two years Ufone give the amount of Rs 6000 to lower level employees if
they want to purchase a new mobile and this limit increases as grade increases. At each
stage the amount is different.
Food Subsidy:
S.E, Exe, M.T so on

Rs 65
Rs 95 Company
A.M and Above

160 RS
Increments:
The increments are totally based on the performance of the employees and their seniority
level.
If the scale is 15000-20000 then the increment is the 20% of the base pay, but if any
employee shows the performance then this may increase up to 35% to 50%.
Managers: Innovative ideas

Silent Warriors
Recognition of The work:
On Jan 29 (anniversary of Ufone).

Employees who is working in Ufone for seven years or more then seven years gets Cash
Rewards, Trophy, badges and other things.
Leave fair assistance

1 year 20 holidays 1 Gross salary
40 leaves 2LFA’s
Permanent Employees:
Number of employees:
Around 1500 – 2000
Minimum scale starts from 15000 – 20000

Maximum C.E.O (Not disclosed by the organization)
UFONE focuses on providing a large number of the compensation and benefits to its
employees in a form of the following categories:
 Minimum wage: The minimum salary for “Drivers” is Rs.7000 for “Tea Boys” it
is Rs.6500, for Administrative Staff like HR, Finance, Marketing, etc it is
Rs.20000 and for Engineering it is Rs.20000 to 25000.
 Medical Allowance: 1 gross salary per year is given to each employee; half is
given in mid of the year and remaining half will be given at the end of the year.
 Health Insurance: Like all other cellular companies Ufone also provides health
insurance policy to its employees.
 Loan Insurance: At Ufone loan insurance policy is also provided to their

employees through banks.
 Transport allowance: Rs 2500 are given to female employees only, if they travel
on local transport.
 House Rent: 10% of the basic salary is given to each senior/ executive level
employee.
 Overtime: All employees are entitle for the overtime more then 130 hours per
month .For overtime UFONE have specific formula that apply on the employees
gross salary, due to which every employee have different per hour overtime rate.
 EOBI: EOBI is contributed as per the standard

 Children Education allowance: 1 gross salary per year
 Provident Fund: All permanent confirmed employees are eligible for

membership of Ufone Employee Provident Fund Scheme. An employee
contributes 8.33% of month basic salary in a year and an equivalent amount is
being contributed by the employer.
 Leaves: 7 Casual and 10 sick leaves are given to each employee at all level.
 Travel Policy: Revised and categorized different levels such as the senior level,
the middle level and the junior level staff.
 Meal deduction Claims: Meal books are to be maintained of each employee who
issues it, their name, employee number, designation, signature and number of
book and date at which it is issued has to be recorded. The reason for maintaining
the record is that the company pays 60% of the expense came over the food while
40% has to be deducted from the employee’s salary.
 Expense Claim: The expense Claims are the expenses which an employee make
on the behalf of the company E.g. fuel used for business travel, overnight stays on
a business tour etc, such claim are made while returning back to the office , after
the whole process the HR pay them back the next month along with their salary.
 Overtime Claim: If an employee has worked for more than the regular time, they
claim for the overtime amount other than their salary which they receive the next
month. Overtime claim have to be approved through HR department.
 Medical Claim: Different medical facilities are provided to employees at

different level of hierarchy, so if any employees make use of this facility they can
claim for the amounts to be return next the month while submitting the hospital
receipt. Their medical clearness is done by the HR department.
 Mobile deduction Claim: Such an expense claims which are made if an

employee has made long duration call for the official purpose and they have
exceeded the limit given to them then they can make a claim by attacking a copy
of mobile bill and if its valid then HR department approved it and pay the
employee their claimed amount along with their monthly salary of the following
month.
 Dispatching of Salary Slips: Vendor prepares the salary slip and dispatch it to
the HR department, further HR head office send it to the regional HR departments

their concerned employees salary slip and they either give their employees
through cash or transfer to their accounts.
Salary Surveys
Collections of salary and market data, it includes average salaries, inflation indicators,
cost of living indicators, salary budget averages. Ufone conducts its own market survey
and match its standards with other telecommunication companies specifically with
Mobilink and telenor.
(Research firms and personally)
Job Evaluation Method
The job evaluation method of Ufone is lined to appraisal system. Whenever the appraisal
report of any employee is generated he is being paid according to his performance. The
job is evaluated on the basis of appraisal reports. If any post is vacant those past
performance on that post is evaluated and the market conditions are observed and then
the job is evaluated. The value for the job is concerned with the performance report. The
value of any job can be increased if the employee on certain post has performed very well
and his appraisal report is very outstanding then according to his performance value of
job is increased and this process is carried out by the HR department of Ufone. Moreover,
the job evaluation is linked with the merit. Any person who is employed on merit and is
performing very well will be given salary on the basis of his performance and merit.
The job evaluation method was not very much good in the past but now it is linked to
appraisal system of Ufone.
The present basic salary structure of Ufone is based on Job description (Tasks and duties
performed).
Job Analysis
Job analysis is systematic exploration of activities within a job. It is a technical procedure

used to define the duties, responsibilities, and accountabilities of job. It is proved that job
analysis is almost first activity of HR department to be done. Because on this, pay
packages, compensations, job descriptions, job specifications, job evaluation etc are
made. So at Ufone experts do job analysis. They construct “Job Analysis form”.

Ufone Job Analysis
Following steps should be taken by the Ufone.
Step1: Obtain Documentary information such as procedure manuals and written

instruction.
Step 2: Ask about more general aspect such as the job purposes, the main activities.
Step 3: Ask the jobholders about the job.
Step 4: Observe the jobholders to see what they actually do.
Information Collected in Job Analysis
Work activities
Worker-oriented activities
Machines, tools, equipment, and work aids used
Job-related tangibles and intangibles
Work performance
Job content
Personal requirements for the job
Why Ufone conducts job analysis
The Ufone conducts the job analysis to get the right person for the right job at the right
time. If the Ufone does not conduct the job analysis then there will be a huge chance of
selecting the wrong person or to reject the right person who is suitable for the job.
Knowing Who Does What
Major duties or activities required

Conditions under which the job is performed
Job analysis procedure of the Ufone
There are mostly following procedure of the Ufone about analysis of a job:
• Direct Observations
• Interviews
How Ufone formulate job description and specification
In Ufone most of the announcements for jobs are being done through newspapers having
wide circulation in the country. Whenever Ufone offers any job it also describes the

responsibilities and duties with in a job to be performed. The HR people after analyzing
any job that has become vacant makes a job description defining clearly what the
jobholder will do and how it will be done. On the whole job description defines
characteristics of job, environmental conditions and responsibilities of the job.
The HR people define the job in such a way that it clearly describes the job and guides
new employees what to do etc. now they are moving towards E-Recruitment also to
ensure best candidates apply for the jobs and professional people are employed in the
Organization.
Job specification
Ufone also has well developed criteria for each job in term of the job specification. In all
the area of the jobs the pre- requisite for the job are defined for example:
Qualification required for a job
Skill required for a job
Experience required for a job
Job Description
Human Resource Division analyzes each job and its required outcomes. Job analysis is
done by analyzing the past experience and emerging trends.
Ufone holds documents about terms, duties responsibilities, and specifications about each
job. In job description Ufone define the following:
Duties of HR manager is to select, hire and train employees
Responsibilities are to update records and processing insuring claims
Task is to complete the job related activities.

JOB DESCRIPTION FORM
To: HR From: Date:
Job Title: Permanent: Temporary:
Department: Grade: Date Required:
Brief Outline of Duties & If Temporary Specify the Period:

Responsibilities:
From: To:
Education & Qualification Req:

Experience Required:
Special Knowledge, Skills, personality, requirements:
If a replacement, complete the following:
Employee to be replaced: Job Title: Date Separated Reason for Separation
If increase in approved staff level, complete the following:

Justification of increase: Is position in Business Plan:
Yes ( ) No ( )
Explain why is not possible to avoid this increase by office re-arrangements?
HR Views Initiated by:
Immediate Supervisor:
Recommended by: Verified by: Approved by:
Department Head General Manager HR&A Chief Executive

PERFORMANCE MANAGEMENT SYSTEM
Objective of the Performance Management:
The basic objective for performance UFONE employees circles around the following:
 To look at Performance system as a means to an end
 Setting an individual’s goal
 Aligning goals across the company
 Ensuring employees get coaching from managers
 Determining merit pay
 Identifying training and development needs
 Providing data for promotion decision
 Input from multiple source on worker performance

The Performance Appraisal Process:
The Performance appraisal system used by UFONE for reviewing the performance status
of its employee starts with identifying specific appraisal goals set by each Group for each
cadre. After this a detail job analysis is done with looking in account the job expectation
and then matching the actual performance with the desired performance. Afterward the
performance is appraised according to the set standards and this appraisal is not done by
the supervisor alone, their major focus is on taking into the account the employee’s
perspective as well. Therefore whenever the appraisal is done employee is fully
participative in the process.
Performance Appraisal Method Use by UFONE
UFONE is using 180-Degree Performance Appraisal Method. Within this method,

managers, peers, customers or colleagues are asked to complete questionnaire on the
employee being assessed. In UFONE, performance of an employee is appraises twice a
year. Once in June while other in December.
In the questionnaire there are five sections and in each section there are five questions
related to the performance of employee. There are total 100 points from which an
employee gets.

Rewards Related to Performance
There is also a reward related to performance of the employees. For “Customer

Facilitation Agents” there 50% pay is based on their performance which is assessing
every moth by their managers. For other employees like in administration, engineering,
finance, marketing, etc their performance is assessed after every six and they get
increased Rs.5000 in their salary as a reward. In each case employee have to show
consistent performance to win reward next time.

Performance appraisal: 360°
Behavior 20%
Results 80%
Total 100%
Total 500 Marks

Best >400
Good >300
Average >250
A bell shaped distribution comes out to show the

performance
Compensation Responsibilities of Ufone HR Department
 Compensation Administration (designing and installing job evaluation program,

pay structure, analyzing jobs and their dollar-worth, maintaining suitable records,
wage and salary surveys of the labor market).
 Health and Safety (health programs, safety programs, Medical facility).
 Employee relations (wages, rates of pay, hours of work, conditions of
employment, negotiation, contract interpretation and administration, grievance
handling, allocation of overtime).
 Benefits and Services (insurance programs, Transportation facility, sick leave pay
plans, loan funds, LFA salary, Yearly bonus programs along with special bonuses
for achieving high targets).
Employees Reaction to the system
As mentioned above that Ufone follow the job based and competitive structure, so this
thing is in the nature of human that to react against any system because by implementing
structure every body in the organization thinks that he or she is doing much and
organization is not treating them well with the comparison of others. But at Ufone as we
observed mostly of the permanent employees are quite satisfied with this system as
compared to the contractual employees. Their reaction towards the system is cooperative
because of their appraisal system; the Ufone performance appraisal system is very

effective after every six months every body knows that what their score is. Ufone is a
performance oriented organization so they compensate their employees on the basis of
their performance so every body know that if they show the results then the organization
will compensate them good if not then they will never expect, This is a good approach for
performance oriented organizations to implement the system like this because of this
system every body interests involves in it. And the Ufone also adopted the Competitive
approach for compensation, because of this system every employee know what the other
organizations are paying for the same job and what they are getting is fair or not.
Some are not satisfied because they think that we are very senior and the organization
should have to compensate us for our seniority not for our work done, (Loyalty factor
involves).
Principal fault lines and some suggestions for improvement
While answering a question the manager of H.R expressed his thoughts that the
employees who are hired by third party and working in organization on contractual basis,
the manager answered “we don’t want them so we are not bound to compensate them
equally in comparison with our permanent employees”.
In our point of view as we see the organization size figures that show there are more then
2000 employees are on contractual basis which are more then the 55% of the overall size
of the organization. And all those employees are not much satisfied because of these
criteria and they are a big part of the organization, they are stressed with their job because
they are getting only salary not benefits or any other compensation tools against their
work.
This thing shows that there is a lack of motivational factor among contractual employees
and cause increase in turnover rate. These things increase the cost of new hiring and
training of new employees. We observed another important point with the prospective of
Human Resource practices that in organization the concept of relational return is not very
satisfactory but this matter a lot in organizations like Ufone.
Third setback is that they have some problem with their payroll; the organization size is
more the 4000 employees but they have only two executives who are working for the pay
roll and on the compensation so there are many troubles to run the payroll accurately and
compensate every one fairly on the basis of their performance, because of work burden.
We think the Ufone should have to focus on the contractual employees and needs to
motivate them by compensating fairly, with communication and make them understand
that what they are getting is fair.
They have to provide them some necessary benefits, bonuses and incentives according to
their J.D.
Ufone should have to start some career development programs to attract and retain most
valuable employees, once if the employee feels that they have some career growth in the
organization they are motivated and loyal to the organization.
HR Department must also forecast for long-term Human Resource needs.
It is also found that no referral bonus was given to contractual employees who refer
competent, skilled and knowledgeable candidate. The HR Department must convince the

higher management to give such bonus which not only motivated the employees but the
organization can in this way get competent, skilled and experienced worker which may
participate in the success of the organization.
Ufone HR Department must clearly communicate its promotion policy to all employees.

Compensation Structure of Ufone

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Compensation Structure of Ufone

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Compensation Structure

BY: Bilal Ahmed

Documented by: Bilal Ahmed

Ufone PTML is a wholly owned subsidiary of PTCL established to operate cellular

Documented by: Bilal Ahmed

When a company wants to compete in innovation, it needs to maximize flexibility.

Documented by: Bilal Ahmed

Administ- CEO Finance IT

Core Quality Human Finance Data ware

Customer Finance Enterprise

Operation Customer Finance Mediation

Documented by: Bilal Ahmed

Division of branches geographically (Location)

 BU North (Peshawar to Jehlum) Islamabad (Head Office)

 BU Central-1 (Gujranwala till Sialkot)

 BU Central-2 (Multan till Rahim Yar Khan)

 BUM South (Sindh and Balochistan)

 Marketing & Sales

Documented by: Bilal Ahmed

Human Resource Department at Ufone

 Recruitment and selection

HR at UFONE is divided into the following two major categories

HR Permanent employees are further divided into following two categories.

Documented by: Bilal Ahmed

Training and Development

HR team of training and development make a performance evaluation of all the

Employee Benefit & Compensation

 Training & Development

 Career Planning/ Succession Planning

 Employee Relations/ Communication

 Employee Events Management

 Medical & Life Insurance

COMPENSATION AND BENEFITS

Employee Health Plans

Documented by: Bilal Ahmed

Documented by: Bilal Ahmed

Documented by: Bilal Ahmed

Individual Salary Fixation:

Documented by: Bilal Ahmed

Current Base Pay: (Job Based Structure and competitive)

Assistant Manager Level:

Documented by: Bilal Ahmed

Further Ufone has developed some grades for employees.

S.E, Exe, M.T so on

A.M and Above

Managers: Innovative ideas

Recognition of The work:

On Jan 29 (anniversary of Ufone).

Documented by: Bilal Ahmed

Leave fair assistance

Minimum scale starts from 15000 – 20000

 Loan Insurance: At Ufone loan insurance policy is also provided to their

 EOBI: EOBI is contributed as per the standard

Documented by: Bilal Ahmed

 Provident Fund: All permanent confirmed employees are eligible for

 Medical Claim: Different medical facilities are provided to employees at

 Mobile deduction Claim: Such an expense claims which are made if an

Documented by: Bilal Ahmed

Job Evaluation Method

Job analysis is systematic exploration of activities within a job. It is a technical procedure

Documented by: Bilal Ahmed

Following steps should be taken by the Ufone.

Step1: Obtain Documentary information such as procedure manuals and written

Step 3: Ask the jobholders about the job.