2011

Pakistan International Airlines

5/4/2011

Human Resource Management

MGT 305 (B)

Project Report

HRM Manual Study and Recommendations

Pakistan International Airlines

(HRM Manual Study, Analysis with Suggestions & Recommendations)
Submitted To

Mr. Shakoor Rizvi

Submission Date

4th May, 2011

Henna Bhatti Muhammad Anam Mahmood Umer Farooq Tayyab Malik Mohsin Jamil 073302 083305 083314 083316 083320
2

Acknowledgements
We first and foremost thank Allah, the most Beneficent and Merciful, who gave us the capacity, strength and comprehension to carry out this project. Warmly thanking our beloved Parents who, through their emancipated love, gave us the courage to achieve this endeavor. Sincere thanks our beloved tutor of Human Resource Management; Mr. Shakoor Rizvi for his commitment to us, and to our fellow classmates and friends who were always there to give us a coherent advice. Finally thanking the exceedingly accommodating administration of Pakistan International Airlines, most notably Mr. Taimoor Malik and Mr. Abdul Rauf of the Finance and HR Departments respectively, for their keen interest in the project and the information and documentation they provided for that.

Preface
This report provides a basic synopsis of a companys Human Resource Manual with elements of the fundamental Human Resource Duties, in this case Pakistan International Airlines. The Human Resource Manual Study in this report covers most of the basic concepts of HRM to create such an account with suggestions and recommendations that guides the reader in understanding certain HR strategies of the organization. The analysis is specifically based on the Pakistani Context, further narrowed down to the Lahore Division.

Table of Contents

1.0. Executive Summary 1.0. Introduction to PIA 2.0. Planning System at PIA 3.0. PIAs Recruitment procedure 4.0. Selection Procedure at PIA 5.0. Orientation at PIA 6.0. Training methods of PIA 7.0. Compensation and Benefits provided at PIA 8.0. Performance Appraisal methods at PIA 9.0. Pay Scales of employees at PIA 10.0. References and Appendices 49 31

6 8 13 18 20 28

38

55 61

Executive Summary
This report is organized on the basis of an assignment in our course of Human Resource Management, which asks for the analysis of a companys Human Resource Manual (HRM) and to provide suggestions to improve that companys policy making regarding its HR duties and responsibilities. The Report starts with a comprehensive introduction to the chosen company, i.e. PIA (Pakistan International Airlines), and continues with the reviews of the basic HR duties and policies of its HR department that includes: Planning Hiring Orientation Training Compensation Performance Appraisal Pay Scales Each function is given an exclusive chapter and provided with suggestions for improvements of the HR Manual at the end. The final part of the report comprises of references and appendices. The appendices include all important documentation (apart from PIAs HR Manual) that proved helpful in our analysis including appraisal form, recruitment form and HR Hierarchy layout.

CHAPTER 1 INTRODUCTION AND PLANNING

Introduction
Brief History: Birth of a nation; An Airline: Air transport has probably never been more important to the development of a new nation than in the case of Pakistan. In June 1946, when Pakistan was still in the offing, Mr. Mohammad Ali Jinnah, the Founder of the upcoming nation, instructed Mr. M.A. Ispahani, a leading industrialist, to set up a national airline, on a priority basis. With his singular vision and foresight, Mr. Jinnah realized that with the formation of the two wings of Pakistan, separated by 1100 miles, a swift and efficient mode of transport was imperative. Despite wars and economic trouble, the carrier survived to grow.

Orient Airways, a privately owned company, with limited capital and resources, could not be expected to grow and expand independently. It was then that the Government of Pakistan decided to form a state-owned airline and invited Orient Airways to merge with it. The outcome of the merger was the birth of a new airline, through PIAC Ordinance 1955 on January 10, 1955.

In addition to transport activities, Orient Airways had established the nucleus of overhaul and maintenance facilities and acquired trained pilots, engineers and technicians, measures which proved to be a great asset for PIA during its teething phase.

PIAs First International Service

The year 1955 also marked the inauguration of the fledgling airline's first scheduled international service - to the glittering, glitzy capital city of London, via Cairo and Rome. PIA's focus was, and continues to be, to serve the Pakistani community at large.

The provision of transportation to expatriates has remained one of the foremost priorities of the national airline. Moreover, PIA earned substantial foreign exchange through international services, which it invested in the purchase of aircraft and spare parts, as fleet expansion was a grave necessity for the airline.

On March 1960, PIA launched its first Boeing 707 jet service on the London-Karachi-Dacca, route which later proved to be very successful. This trail-blazing accomplishment resulted in PIA becoming the first Asian Airline to operate a jet aircraft, setting trends for the future. In 1961, the airline took on the mammoth task of initiating a cross-Atlantic service from Karachi to New York. By this time, PIA had placed orders for more new aircraft, which included Fokker F-27s, Boeing 720Bs and Sikorsky helicopters. Helicopter services in East Pakistan had gained momentum by 1962 and expanded to include Sylhet, Chittagong, Dacca, Comilla and Ishurdi. PIA's helicopter services carried over 70,000 passengers during the first year of operation

Ushering In a New Era of Growth and Development

PIA heralded the nineties by donning a bright new corporate identity. Old-timers may remember the flutter that the earlier green and gold livery had created when it was first introduced in 1974. However, in keeping with the changing times, PIA introduced a smart, sporty 90's look. The familiar PIA green was reinforced with moss green and pale blue stripes were incorporated into the new corporate identity.

The stripes, a universal symbol of sport, highlighted PIA's active participation and sponsorship of a diverse range of national games. PIA's players have always been at the forefront of Pakistani
9

Cricket, Hockey, Squash, Football, Chess, Bridge, Polo and Table-Tennis teams. The nineties also saw the expansion of PIA's massive Hajj and Umrah operations to Pakistan's smaller cities, in addition to the major cities of Islamabad, Peshawar, Lahore, Quetta and Karachi. PIA's growth continues unabated and the airline now operates globally, covering the entire domestic landscape and international destinations spread over 4 continents. In a nutshell, About PIA: PIA, Pakistans flagship national airline has been an air travel pioneer since its inception in 1955. PIA has many firsts to its credits and continues to soar, ever committed to innovation and Rich customer experiences. With a fleet of younger airplanes, a crew dedicated to providing the highest standards of in flight service, and stellar management, PIA is an airline thats going places. It is the 16th largest airline in Asia, opening scheduled services to 73 destinations throughout Asia, The Middle East, North America, Europe, as well as an extensive domestic network linking 24 destinations.

Its main Bases are:

Jinnah International Airport, Karachi Allama Iqbal International Airport, Lahore Islamabad International Airport, Islamabad and Rawalpindi

Vision: To be a world class profitable airline exceeding customer expectation through dedicated employees committed to excellence, On-time performance, innovative products and absolute security.

Corporate Mission:

10

As a symbol of National pride, we aspire to be a choice Airline, operating profitability on modern commercial concepts and capable of competing with the best in the international and Domestic markets.

Mission Statement:

Employee Teams would contribute towards making PIA a Global Airline of Choice: Offering quality customer service and innovative products Participating in global alliances Using state of the art technologies Ensuring cost effective measures in procurement and operations Ensuring adequate returns for all stakeholders Being an Equal opportunity employer Providing a competitive compensation and an congenial working environment Adherence to business ethics and zero tolerance to corruption Linking remote regions of Pakistan Fulfilling our Corporate Social Responsibility (CSR) in all fields

Objectives of PIA:

According to the PIAC Act 1956, following are the main objectives of the PIA Corporation:

11

To provide and further develop safe, efficient, adequate, economical and properly coordinated domestic as well as international airlines.

To operate any air transport service or any flight by aircraft for commercial or other purposes.

To acquire, own, run, manage or participate in the running management of any hotel or any business connected therewith.

To promote any organization outside Pakistan for the purpose of engaging in any activity of a kind which the corporation has power to carry out.

To acquire, hold, or dispose of any property whether movable or immovable or any transport undertaking.

To repair, overhaul, reconstruct, assemble or recondition aircraft vehicle or other machine parts, accessories owned by the corporation or any other person.

Corporate Culture:

PIA is driven by the highest standards of corporate governance and social responsibility. As a public sector organization and a business leader PIA believe in building strong relationships with customers, partners, employees, and the communities in which it operates. PIA practices active corporate citizenship through social services, support for non profit organization, medical services for employees, and promotion of sports and educational initiatives.

PIA has institutionalized the practice of good governance by establishing a Corporate Social Responsibility committee. It provides a platform to evaluate, and recommend bets practices as PIS continues to adhere to its business ethics and stamp out corruption. The CSR is woven into the fabric of daily operations at PIA.

12

PIA is proud of its human resource as they in many ways participate and initiate welfare missions. With a leadership that understands the true meaning of social accountability, PIA has been able to realize its VISION of Social Accountability

Planning
Corporate level Strategy:

According to the PIA management policies and strategies are made by the corporate level employees either related with any department at PIA, The Managing director and Chief Financial officer make the strategies on long term basis and PIAs future.

They identify the companys overall mission, vision and objectives and develop synergies at the corporate level. These strategies are made at the head office, so no single employee is aware of what is being planned or being done unless it has been implemented. They keep these strategies confidential. They are centralized at corporate level.

Business level Strategy:

At this level PIA involves people from the related departments and discusses what kind of strategy is going to be implemented, how to maintain competitive advantage and etc. All Directors, General Managers are involved in developing this levels strategies; hence they are decentralized at this level.
13

Functional Level Strategy:

At this level, all managers from all departments discuss the issues relation to functional business processes. All departments such as Finance, R&D, Marketing, HR, Operations and etc are involved in deciding how the strategies can be implemented efficiently and effectively. Once the higher level strategy or strategic intent is developed, the functional units translate them into discrete action plans which each department or division can implement for the strategy to be successful

Human Resource Department:

Deals With: Administration Personnel and proper recruitment plan Training and Development Security policy procedures Manpower development Proper organization and structure

Administration: Head office is in Karachi and every single operation or decision is done in Karachi. Offices in different cities are dependent on the head office and perform duties as assigned by the head office

Decision Making: All decisions take place at the higher level. CEO, Managing Director makes decisions and all the operations are done at the head office in Karachi. The Employees, Manager in
14

Lahore and Islamabad dont have authority to take decisions on their own. If there is some issue of conflict, they would have to consult the head office and wit for their response. This is Centralized decision making which is never successful in any organization

Recruitment Policy: Various positions in the Corporation shall be filled-in by persons of above average intelligence, appropriate qualifications, integrity and character. A very high standard for jobs at every level shall, therefore, be established and maintained. While presenting the hiring status, number of available vacancies shall be highlighted in front of each category being hired. Induction would be made at entry, middle and senior management level with a user-friendly process to facilitate new entrants. To achieve this objective, a merit base recruitment policy has been formulated in the light of instructions from Federal Government / PIA Board of Directors, the salient features of which are as under:

Induction level Entry level for induction in PIA shall be up to PG-V / VI. However in corporations requirement and non-availability of suitable personnel for promoting/selecting internally, induction in PG-VII and above can also be made:.

QUALIFICATION 1-Matriculation. 2-Intermediate. 3-Graduate. 4-Masters. 5-MBA, MPA &

PAY-GROUP PG-I PG-II PG-III&IV PG-V V&VI

15

Equivalent. VI 6-MBBS 7-B.E/BSC Engineering V

Chapter 34.01.03 No person who is dismissed from the service of the Corporation or any other employer, or convicted of an offence involving moral turpitude shall be eligible for employment in Corporation or to hold any post in the service of the Corporation, excepting dismissal on account of unauthorized absence from duty. Chapter 34.01.04 No person shall be recruited whose age is less than 18 years and more than 40 years at the time of recruitment. Suitable ex-servicemen of the age of 50 years and above may, however, are employed. No person shall be appointed without a medical fitness certificate from the corporations medical fitness officer except for the employment of the disabled persons under the disabled persons Employment and Rehabilitation ordinance 1981

16

CHAPTER 2 RECRUITMENT AND SELECTION

17

Recruitments at PIA
Recruitment is done in Karachi only, none in the Lahore zone. As a whole it is referred to as the Recruitment cell, and there is no other body that recruits for the PIA. Departments are advised to tell the recruitment cell if need arises for hiring more or new employees. A Job specification is submitted and from then on everything is undertaken by the recruitment cell which includes advertising the vacant post both internally and externally, giving an address for sending in applications and once a pool of candidates have been gathered the responsibility is transferred to the panel of interviewers. Job Specifications General Manager Organizational Development (OD) / Deputy General Manager Staff Development shall develop job specifications for each post in consultation with the Department concerned. Job specifications shall not be tailored to suit an individual. Job specifications shall have wider alternates so as to provide a fair opportunity to: o Internal candidates holding equivalent/ comparable qualifications to apply. and o Selection Board to have a wider choice of selection.
18

Where only one candidate has applied against the internal advertisement, the post shall be re-advertised internally with some amendments in job specifications or shall be externally advertised

Recruitment of Cabin Crew: a) Single as well as married females shall be eligible for appointment as Airhostess. b) Maximum age limit for employment shall be 30 years. c) Induction of Cabin Crew shall be carried out twice a year in January and June. d) Employment shall be made on contract for a period of 5 years which maybe renewed with intervention from management. e) Short-listed candidates shall be called for grooming tests, those who qualify shall also be required to write an essay and undergo an audition of English and Urdu communication skills, which shall also be taped. f) Candidates who clear the entire above test shall undergo another external test prepared by any other testing agency (except IBA). g) Candidates who qualify for all the above tests will be called for the final interview before the selection board.

Recruiting Internally: An Ad comprising of the Eligibility criteria for internal candidates is put on display on the local area network (LAN) in the companys computer system for 30 days and anyone wishing to apply can; considering they meet the requirements. The Ad usually comprises of the concerned positions Job specifications as follows:
19

Introduction to job Required qualification Required additional qualification Experience Skills required

Selection procedure
a- Internal candidates presently working who fulfill the above criteria will apply through proper channel to Director (concerned area). General Manager (concerned area) will convene the placement board to determine their suitability for selection to which will be comprised of the following: I) Director (President) II) Director Concerned (Member) III) General Manager (concerned Member) b- The employee once placed on basis of qualification will not have claim of further promotion on the same basis. Further it will be governed by the existing promotion criteria as per rules. c- Seniority will be maintained in accordance with the seniority in the previous Pay Group. d- The selection / placement will not be subject to availability of vacancy. e- Employees not qualifying for their placement will maintain their seniority in their existing pay group of relevant cadre / department without any other benefit in their present pay group. Recruiting External Candidates:
20

An ad comprising of the eligibility criteria is advertised in the most readable newspaper in the country such as JUNG or Dawn, for 30 days.

The Ad usually comprises of the concerned positions Job specifications as follows: Introduction to job Required qualification Required additional qualification Experience Skills required Company Address at the bottom

Selection Procedure for External Candidates In case the number of applications is large, a written test will be conducted to short-list the candidates. a) A Selection Board as specified by the Management shall conduct interviews of all candidates who qualify the written test. b) The senior most people shall preside over the Board. Dy. General Manager- Recruitment & Placement shall function as Member/Secretary.

21

c) While completing the candidates individual assessment report, the Selection Board shall make specific recommendations regarding suitability of the candidates for posting/assigning to various departments of the Corporation.

(Selection Interview procedures on Next Page) Selection; 1st interview The candidate will be interviewed by the people concerned or a special panel which may comprise of: a) Director Recruitment cell b) General Manager or Deputy General Manager c) One of the Concerned Directors A 2nd interview is also conducted After Selection: An offer letter is mailed to the candidate that he/she has been selected. Information in the offer letter includes, pay rates and benefits. It also includes various verifications including Medical check up, background checks, reference checks and etc. The offer must be accepted by the candidate to finalize the selection process.

Probation Period: The probation period varies for both the new internal and the external recruits:
22

In the case of internal recruits the probation period is for up to 3 months In the case of external recruits the probation period is for up to 6 months

Rotation / Job Enrichment Guidelines I. After induction, Management Trainees shall be rotated within different sections / divisions of a department. During this period their transfer to another department / location shall not be encouraged. Rotation and monitoring of management trainees shall be carried-out by HRA & Coordination department during the specified period. II. Horizontal Movement / Redesigning of Management Trainees will be considered on Corporations requirement after two years, in accordance with the applicable rules. Horizontal Movement / Redesigning will be generally understood as the re-assignment of an officer to a different job and will involve a change in his / her job title and job description in the same pay group in other department. III. Management Trainees shall be eligible for first foreign posting after completion of 05 years service which should include service experience at Field Offices. Second foreign posting shall be considered after rendering 03 years from the date of reporting back in Pakistan, as per laid down conditions / procedure. IV. Management Trainees shall be eligible for internal selection against advertised positions subject to meeting prescribed job specifications and other conditions, after two years of service.

23

V.

Any exception to the laid down guidelines and criteria for Induction / Placement of Management Trainee Officers, as stated above, will require approval of the Management.

24

Suggestions: Planning, Recruitment and Selection

Problems: 1) Lack of Coordination There is lack of coordination amongst employees. They are unaware of the future objectives and what will be done next. They just perform the tasks without knowing what happening in the head office.

Suggestion: We suggest the head office should delegate authority to a few regional offices so that employees are better aware of the short term goals that need to be achieved, this can increase coordination amongst the employees.

2) Centralized Culture The Culture is very centralized at PIA and the employees feel disinterested in their jobs or the prosperity of the organization. Also the HR managers have little authority thus they cannot interfere with the strategic decisions of the organization.

Suggestion: There is a need to extend their networks of decision making, and involve employees so that they feel they are part of the organization too and take interest. They need to allow the HR department to delegate authority related to their department. This will allow the HR depart to create high performing work systems by creating core competencies and behaviors in their employees necessary to achieve the organizations goals.

25

3) Weak Human Resources Department In this era a strong and efficient HR department is considered the back bone of any organization. But PIA has a very Weak HR department. They only have limited HR officers who also have limited authority. There is also no implementation of strategic Human resource Management nor can the HR department perform their coordinative or staff functions successfully. Suggestions: they should re-consider their authority to their HR personnel because the heart of all organizations is its employees. If the employees are dissatisfied the organization cannot achieve its goals on time nor function properly. If the HR personnel are allowed to perform their coordinative function they can become the right arm man to the top executive and make decisions that consider the well being of the employees too. The HR personnel can also play the innovator role by giving suggestions on how to better utilize the companys employees (the main issue with PIA).

4) Poor Strategic Decisions The strategies are formulated at the head office and they follow a centralized decision making approach due to which there hasnt been proper implementations of the strategic decisions.

Suggestions: We suggest they improve their strategic Decisions by adopting the decentralized approach.

5) Old HR Manual This maybe due to the centralized decision making, but the HR manual was last updated 10 years ago.

Suggestions: We suggest that the HR department be given authority of the HR manual so they can up date it, keeping in mind the companys strategic objectives. 6) Poor Management
26

The Management at PIA is very poor. Their recruitment policy is not that effective and they tend to be targeting older people with it. The current trend is to hire fresh graduates who have a knack of grasping things easily, adaptability and greater vigor. Suggestions: PIA needs to start advertising in Universities or places where a younger pool of people may be attracted. 7) Lack of Adherence to the Manual Although the Manual clearly states authority to the managers, it is not being exercised. There is a lot of government and political interventions including practices of favoritism. Suggestion: The Hr manual be updated and all employees at all levels should adhere to it. The Hr department needs to be given authority to ensure line managers comply with equal employment laws and occupational safety and are implementing the companys human resource policies and practices. 8) Maximum age for airhostess is being ignored The maximum age for cabin crew air hostess is 30 yrs, it is being ignored and we see many old air hostesses. This shows ignorance of the HR manual. Suggestions: The Hr manual be updated and the age be increased to 35 years or 40.

27

CHAPTER 3 ORIENTATION

28

Employee Orientation

Orientation is the third Human Resource duty to be performed after candidates become employees. While PIAs selected employees are instantly sent on training ventures, orientation at PIA has always been a sort of Formality. Orientation Department, we can go as far as to say, is the weakest link at PIA and its Human Resource Management. Practically no use of any orientation technique is available here. One of our most notable observations, as it has been this teams duty to review PIAs HR Manual; the manual itself does not include a single policy regarding the employee Orientation and/or the techniques that could be undertaken by its HR department to effectively welcome new employees in the organization. To learn more about this tragedy, we turned our attentions to Mr. Abdul Rauf, as we literally could not find a single word on Orientation in PIAs HR Manual. Mr. Rauf enlightened us by telling the fact that the policy review system here at PIA is actually the weakest link in the organization. Unless any policy is reviewed at regular intervals, we may not see anything relating Orientation in any of the coming years. Another fact he highlighted was that PIA never felt a need to orient their new employees especially on the Operational level with their jobs. They felt it to be a time consuming exercise with no solid outcome relating employee performance. Nevertheless, PIA still uses a few techniques under its sleeve to orient its employees, specifically on the Human Resource, Public Relations, Sales and Marketing departments. The technique used for the purpose is a round table conference between the new entrants and a few senior employees at the same job titles as the entrants are. The meeting lasts an hour or so with no handouts, guidebooks, CDs/DVDs given out to encourage the employees to gather more knowledge about the organization and the job they are to perform soon.

29

Suggestions: Employee Orientation

Employee orientation must be expanded to all known departments of PIA. Apart from the unofficial round-table senior-junior staff meetings, the orientation culture must be expanded to more efficient techniques like proper lectures in classroom settings. If classroom method established, the lecturer must use multimedia to efficiently deliver the message, vision and mission statements of PIA to the employees, so they may know the level of respect and honestly they must put in their job performances in the coming future. Handouts, guidebooks, history books or CDs/DVDs containing the same material must be provided to the new entrants so they get to know the culture of PIA. A very active portion must be devoted to PIAs HR Manual relating Employee Orientation and effective policies must be created regarding the matter. Separate Orientation rooms, classrooms of the same kind must be established in all zonal offices so that Orientation must be carried out with as ease and availability of separate area as possible.

30

CHAPTER 4 TRAINING

31

Training at PIA
The next Human Resource function PIA carries out is training and development of its employees. As important Training function in any organization is, it is a little different than the rest here at PIA. Sad thing about the Lahore zonal office is that it does not have a training department. The training office is located at the HQ building in Karachi and the most prominent use of training is towards the pilots.

Lets first look at PIAs training policy: (Chapter 41, PIA HR Manual) An employee, who is selected for training at the expense of the Corporation or under any aided program, shall be required to execute a surety bond to serve the Corporation on return from training for such period as the competent authority may prescribe. An employee, who is sent for second training, during the validity of an existing surety bond, shall be required to execute a fresh surety bond for the second training as prescribed by the competent authority; provided that this requirement may be waived if the unexpired duration of the existing surety bond exceeds the prescribed period of the second surety bond. An employee whose service have been terminated as a result of misconduct during the Bond period shall be liable to pay to the Corporation the total cost of the training according to the Bond which includes salaries, allowances and traveling expenses paid to the employee during the period of training. An employee proceeding on leave without pay for studies and without any financial or other obligation on the part of the Corporation shall also be required to execute a surety bond of such amount and for such period as may be determined by the competent authority.

32

Now lets take a look at some training periods for specific job titles (In Pakistan): Category of Personnel Air Hostess Apprentice Colts Trainee Engineers Apprentice Cooks Aeronautical Cadets Flight Engineers Any Other Category Training Period 12-25 Weeks 3 Years 5 Years 3 Years 3.5 Years 1 Year 1-3 Months

Our focus here is the Any Other Category, because that is where most of the staff belonging to HRM, marketing, finance, sales, cargo etc. falls into, and the manual suggests that the staff is either trained a minimum of one month to maximum of three months. A plus-point found in one of the HR Training policies is that the training is not just carried out in Pakistan but also abroad. PIA recruits pilots and operational staff from foreign countries too, that adds to its efficient training methods. Lets look at another Training policy for Cadets and Trainee Engineers: The cost of training (Bond Amount) to be recovered from Trainee Engineer & Aeronautical Cadets on account of abandoning of training or termination of services because of misconduct shall be as follows:

1.0 2.0

Trainee Engineer Cadet

Rs. 125000 Rs. 500000

33

A certain concessional training element is also present at PIA. The policy matter is the concession in fees to dependent children of employees. And for that a certain eligibility criteria and an admission form is also available. Following is a sample Admission form for the purpose mentioned above:

APPLICATION FORM FOR ADMISSION OF DEPENDENT CHILDREN OF EMPLOYEES (SERVING / RETIRED / DECEASED) IN PIA TRAINING CENTRE Principal PTC COURSE TITLE________________________________________ My dependent son / daughter is willing to attend above mentioned course in PTC. You are requested to consider his / her admission at applicable rebated fee. SIGNATURE____________________ (Employee / widow) PARTICULARS OF DEPENDENT SON/DAUGHTER NAME: ____________________________________________________________________ QUALIFICATION: __________________________________________________________ DATE OF BIRTH: ___________________________________________________________ C.N.I.C / REG. NO:___________________________________________________________ PIA FAMILY CARD NO:______________________________________________________ RESIDENTIAL ADDRESS: ___________________________________________________ ____________________________________________________ CONTACT NO:______________________________________________________________ PARTICULARS OF EMPLOYEE (SERVING / RETIRED / DECEASED) NAME:___________________________________________ P.NO:___________________ DESIGNATION______________________ SECTION/ DEPTT:______________________ DATE OF APPOINTMENT/RETIREMENT/DEATH_______________________________ RESIDENTIAL ADDRESS____________________________________________________ __________________________________________CONTACT NO: ___________________ VERIFICATION BY HR MANAGER / STATION HEAD CERTIFIED THAT MR. / MISS _____________________________________IS DEPENDANT SON / DAUGHTER OF MR. / MRS._____________________________________ P.NO.______________________ DESIGNATION _______________________________ WHO IS A SERVING / RETIRED / DECEASED EMPLOYEE OF THE CORPORATION, AS PER OUR RECORD. _________________________________ HR MANAGER / STATION HEAD DOCUMENTS REQUIRED ATTESTED COPY OF MATRIC / INTERMEDIAT CERTIFICATE. ATTESTED COPIES OF C.N.I.C & FAMILY CARD. ATTESTED COPY OF PAY SLIP / RETIREMENT BOOK. THREE RECENT PHOTOGRAPHS (Size- 1x 1).

34

Now we go down to the basics of training at PIA. The training methods that are most high-flying in PIA, according to the Senior HR Manager, Mr. Abdul Rauf, are: Apprenticeship Training On-Job-Training Lecture-based Training

Lets refer to the terms first:

Apprenticeship Training: o A structured process by which people become skilled workers through a combination of classroom instruction and On-Job-Training

On-Job-Training: o Training a person to learn a job while working on it

Lecture-based Training: o Training employees about the job in a classroom setting with an instructor providing lectures and assignments

Apprenticeship Training Usage Apprenticeship training is used to train any PIA employee from PIA pilots to PIA operational staff. The operational staff is limited to HR, financial and marketing departments only for this sort of training methods as PIA tells that those fields require more attention than others. Pilots, cadets and engineers are trained under extreme supervision and vigilance while they work on their assigned posts simultaneously, plus are given regular lectures explaining comprehensively the job duties they must perform. The same routine goes for the operational staff of the departments mentioned above.

35

On-Job-Training: OJT is a Marketing and Human Resource department only that falls down to more paper-work jobs rather than the practical ones as are trained in the Apprenticeship training.

Lecture-based Training: Lecture-based training is brief in time period and requires a classroom setting in the zonal offices, which are currently not present in Lahore division. The classroom training areas are present in Karachi, Quetta and Rawalpindi zonal offices. This training method is used to train almost all kinds of employees in the Operational departments of PIA including marketing, public relations, sales, and cargo.

The lecturers are permanent and visiting faculty members of PIA and this sort of training lasts from three weeks to three months.

36

(Suggestions on Next Page)

Suggestions: Training Policies and Methods

While the HR manual of PIA is keen on explaining the financial side of all trainings performed in PIA, it must also mention the types of training methods used for what specific type of job title.

A training department must be established in the Lahore zonal office for the purposes of Apprenticeship Training and Lecture-based training.

Increment in the training tenure of Flight Engineers from one year to two years. And reduction of training tenure of Apprentice Cooks from three years to two years.

Increment in the training tenures of training abroad programs of job titles with Service Bonds of 5-7 years from two weeks to 40 days.

A certain complaint put forward by Mr. Abdul Rauf was the extreme lack of crossdepartmental job knowledge the employees lack here at PIA. It must be made communicative with the help of Lecture-based training.

Online training methods must be introduced at PIA to reduce training time tenures for Lecture-based trainings.

All above information must be included in the HR manual of PIA once commenced.

37

CHAPTER 5 COMPENSATION AND BENEFITS

38

Compensation and Benefits One of the most prominent duties of Human Resource Management is to compensate an organizations employees and to provide them with sufficient benefits. Providing employees with compensations and benefits makes an employee realize his or her importance towards the organization and vice versa. And in that case, PIA has been very effective in providing its employees with wholesome benefits relating: Leaves Medical facilities Ticketing Salaries and Pensions Perquisites Allowances Transportation and more

Lets look at the fields where an employee is provided an allowance: (Chapter 14, PIA HRM)

o Compensatory Allowance o To meet personal expenditure in special circumstances o Conveyance Allowance o For attending duty at normal place of work or carrying out duties in lieu of free transportation by PIA o Daily Allowance o To cover daily expenses o Foreign Allowance
39

o For a Pakistani resident employee transferred permanently to a foreign country o Travelling Allowance o To cover the travelling expense in interest of PIA carried out by an employee Now reviewing some of the incentives provided by PIA to its employees: (Chapter 17)

Incentives for Staff in the Flight Kitchen:

Management has introduced an Incentive Scheme for the staff working in Flight Kitchen. The Management shall maintain complaints and discrepancies record of each shift, at the end of the month results will be computed and the winner shift shall be awarded. A cash award by the General Manager (Food Services) will be granted. A photograph of the shift may be published in the TOP FLIGHT. The present cash award will be Rs. 250.00 for the winner shift. Bonuses to employees: (Eligibility)

The Corporation may sanction bonus depending upon the yearly profit, etc. The bonus shall be paid on the basis of basic pay of the employee in the respective pay groups as on 30th June as detailed below: Employee on the pay roll of PIA on 30th June with at least one year service in that financial year. Employee with less than one year but more than 90 days of continuous service on 30th June in that financial year, on prorate basis. Ex-employees, who were in the employment of the Corporation in the financial year for a continuous period of at least 90 days and have resigned, retired, or removed from the services of the Corporation, on prorate basis.

40

The employees on contract in the regular pay scale of the Corporation shall also be entitled to payment of bonus. However, employees on contract who are not in the regular pay scale shall not be entitled to payment of bonus.

PIAC employees, on deputation/secondment/l long leave without pay, which are on pay roll for 90 days or more in a financial year on prorate basis. All officers up to the level of Directors, Cockpit Crew and Cadets shall be paid bonus, as per rates fixed form time to time, subject to clearance of Government of Pakistan.

The Employee Reward and Recognition Program: The objective of this program is to recognize and reward any extra ordinary contribution and effort that an employee makes, in addition to his/her normal job responsibilities. This program is meant to highlight outstanding performance, promote extra effort/ customer service and to let employees know that their efforts are being recognized at senior level. The names and photographs of employees whose efforts are recognized under this program will be published in the newsletter PIA Vision. Four initiatives geared towards keeping an energized and vibrant organizational environment are being introduced: Chairmans Award Managements Award Going an Extra Mile Reward Service with a Smile Award

Pensions in PIA The policies relating pension are as under: (Chapter 18, PIA HRM) The Pakistan international Airlines Corporation Employees and Cockpit Crew Pension Fund constituted and established under Section 58 to the Income Tax Act, 1922 by separate deeds of trust, shall be governed by the rules and regulations separately framed for this purpose.
41

On retirement, including retirement on account of medical unfitness or resignation from service, an employee shall be entitled to receive such pension or gratuity, as may be prescribed by the rules and regulations framed for this purpose.

In the event of the death of an employee, whether before or after retirement, his nominee / legal heir shall be entitled to receive such pension, or gratuity, or both, as may be prescribed under the rules and regulations framed for this purpose.

Female Cabin Crew shall be allowed pension on early retirement from service on attaining the age of 35 years or more and completing minimum 10 years continuous service.

While the methods for calculation of pension funds and relevant structures of pension calculation based on the time period of service provided is given in the HR manual of PIA, on aspect relating the topic found out by our interview was the level of discrimination imposed when pension funds are proposed.

The pension system of PIA faces discrimination in the following way: (From the Interview) The pension amounts of an officer earning a salary of, say, Rs. 20,000 working in the HR or Finance department of PIA is more from that of the pension amount of an officer working in Public Relations, Marketing or Cargo department earning the same salary amount. This discrimination has been prominent since the beginning of the 2000s decade.

Increments at PIA Now, a look at the Increments system at PIA:

42

In an incremental pay group, the annual increment shall accrue on the first day of January each year in respect of those employees who were appointed between the first day of October and 31' day of March and on the first day of July each year in respect of those employees who were appointed between the first day of April and the 301" day of September.

Increment in respect of an employee may be withheld on disciplinary ground, or if he fails to qualify in any test, examination, check or proficiency check, or if he fails to observe any laid down operational rule, regulation, instruction or procedure in connection with the performance of his duties.

The date of annual increment remains the same even in the cases of promotions, selections or redesignations of employees. On demotion of an employee the anniversary date of his increment shall not be changed. If an employee completes his incremental year while in the lower grade, he shall be entitled to his increment in that grade. Annual increment of an employee may be with- held by the Competent Authority for a period not exceeding one year provided that the employee concerned has been found guilty of misconduct after conducting enquiry proceedings in accordance with the procedure laid down in PIA Disciplinary Rules. Provided further, that such an inquiry shall not be necessary where the Competent Authority so decides to impose the penalty.

On a brief account, following policies are functional at PIA regarding Increments: Advance increments on employment Grant of Annual Increment payment after long leave without pay Annual increments of retiring employees

Leave Benefits (Chapter 21, PIA HRM)

43

Leave shall be admissible to all permanent / contractual employees in the service of the corporation.

Types of Leaves applicable at PIA:

Casual Leave (10 Days) Sick Leave (12 Days) Privilege leave (30 Days > 1-10 years of service, 35 Days > More than 10 years) Foreign Earned Leave (15 Days in abroad before coming to Pakistan annually) Leave Preparatory to Retirement Accident Leave (3 Months on certain conditions, Chapter 18) Quarantine Leave (For Managers only, 30 Days) Maternity Leave (90 Days with full pay) Leave without Pay (6 months during service) Days Off (For working on holidays)

Employees shall be deemed to have completed a years service notwithstanding any interruption in service on account of sickness, accident, authorized leave and intermittent periods of involuntary unemployment not exceeding 30 days.

Leave shall be calculated on the basis of calendar year. Leave shall be applied for, expressed and sanctioned in terms of days. Weekly Offs or holidays shall not be prefixed or suffixed to any type of leave except with the prior permission of the Competent Authority. When so allowed, these will not be counted as part of the leave.

44

We have provided a leave application form at PIA in the following page:

LEAVE APPLICATION PRIVILEGE SICK SPECIAL WITHOUT PAY DAYS OFF NAME: STAFF No: DESIGNATION DEPTT/LOCATION LEAVE REQUESTED: APPROVAL: From__________ to ___________Total Days__________ Recommended Reason ________________________________________ Not Recommended, (Reasons) ______________________________________________ _________________________________ ADDRESSES: _________________________________ (I) Local: - _____________________________________ (II) Permanent: - ________________________________ (Immediate In charge) Date (III) While on leave:-______________________________ Approved Not Approved

Signature_____________ Date_______ __________________ _________________ Title ____________________________ LEAVE ADVICE-PERSONNEL COPY Ref: Date:________________ Mr./Miss/Mrs.______________________________________________________P/_______________ O ____________________________has been granted _______________days leave, as follows: PL (Current) - From_____________ to ___________ Total ___________ days PL (Foreign Earned) - From_____________ to ___________ Total ___________ days LPR - From_____________ to ___________ Total ___________ days OFF - From_____________ to ___________ Total ___________ days SICK LEAVE - From_____________ to ___________ Total ___________ days SPECIAL SICK LEAVE - From_____________ to ___________ Total ___________ days ACCIDENT LEAVE - From_____________ to ___________ Total ___________ days

45

L.W.P. - From_____________ to ___________ Total ___________ days Leave period salary may be paid in advance subject to attendance/clearance. His/her rejoining date is_____________________________

______________________________________ HR Manager / HR Officer

The Medical facilities at PIA (Chapter 24, PIA HRM)

PIA employee shall receive medical coverage from PIA Doctors, Hospitals, Laboratories, Clinics, and Establishments or from outside Specialists, Hospitals, Establishments according to the approved arrangements made by PIA Medical Division. The extent of the facilities is laid down here-in-after. Any additional treatment shall be the individuals own responsibility.

An employee, his family and dependent parents shall be eligible to such in-door and out-door medical facilities only as sanctioned from time to time by the Corporation.

The Corporation shall not be committed to an unlimited medical expenditure on employees. The Corporation further reserves its right to take any decision in such cases where it is felt that the individual is a financial drain on the medical budget. Each case, where heavy expenditure is expected to be incurred, shall be reviewed by the appropriate Medical Board.

Medical facilities both for self and family shall not be admissible on the following grounds:

On resignation before completion of minimum of 25 years of service / 55 years of age. In such cases where the Corporation specifically withholds availability of the facility for reason(s) to be recorded. During continuous period of leave without pay in excess of 120 days.
46

On compulsory retirement from Service. On Dismissal / Removal from Service.

Employees working on contract basis in regular pay scales, against permanent vacancies and allotted Staff Nos. shall be provided medical facilities or allowance as per rules of the Corporation / provision of their service contracts. Contractual employees hired on consolidated salaries shall either be entitled for medical facility for self, spouse and three dependent children or medical allowance at the specified rate, as per PIA rules. Their parents shall not be entitled to medical facility.

Trainees of other Airlines, PIA guests and PIA Trainees including airhostesses shall be entitled to free out-door medical treatment for self only. Hospitalization and specialized treatment shall not be admissible.

General Managers, Directors and equivalents shall receive medical facilities at the Air Crew Medical Centre including their family members.

Reimbursements are also applicable on certain conditions, especially: Heart Attacks Bleeding Accidents Unconsciousness or similar medical ailments

Medical facilities and Reimbursements are also available for employees working abroad also applicable for their families on the rules mentioned above.

For Perquisites, Please check Chapter 28, Article 28.04.02 and onwards for pre-designed tables regarding the topic.

47

Ticketing service to an employee of pay scale of V to onwards is also provided to him/her, along with his/her parents to destinations like Saudi Arabia, Malaysia, Australia and more.

(Suggestions on Next Page)

Suggestions: Compensations and Benefits

Lower the Bonus pay scale from V to IV. Effective policy making for the removal of discriminative pension plans. Increment of Foreign Leave Days from 15 to 20 for a service period of 190 days. Addition of medical facilities to parents of Trainees. Quarantine Leave applicable to all employees at all pay grades Increment of Grade IV employees on the Ticketing Facility to at least Saudi Arab.

48

CHAPTER 6 PERFORMANCE APPRAISAL

49

Performance Appraisal at PIA (Chapter 7, PIA HRM)

Performance management at PIA has always been crucial and strict even when policies like Orientation are never even included the HR Manual of the company. Performance management includes effective methods of performance appraisals that are discussed below:

Performance Appraisal Reporting PERFORMANCE APPRAISAL FORM is the most important single document in respect of an employee and is an index of efficiency of the employee in the Corporation. It provides, to the Management, a permanent record of the periodical assessment of an employees performance, personality, character, leadership and professional ability. It also indicates employees potential for development and suitability for future utilization. Understanding of Reporting System writing of reports is an onerous and non-too- pleasant a duty, particularly when it turns out to be unfavorable to individual employees. In such cases, rather than out crying the system or the reporting officer, employees must learn to accept adverse criticism is a constructive sprit for correction. A good report has to be deserved and earned through hard and solid work. The Preparation of Performance Appraisal reports are an important and responsible duty. The manner in which these reports are written will be taken into account in judging the qualities of the reporting officer. The opinions which are expressed should represent the result of careful consideration; justify the assessment of his subordinates made by him.
50

Counseling the employee is a continuous process. The Reporting Officers must point out to the employees concerned their failing and weakness as soon as these come to notice and not wait until their annual evaluation reports are raised. They should be advised and guided to eradicate their shortcomings to improve their efficiency. They should normally be given adequate time to show improvement before they are adversely report upon. If the defect is so serious that a really adverse may result, it is advisable to administer a written advice to the employee concerned, before a special report is raised.

It is most essential that the reports must truly and accurately describe all the good, bad strong and weak points of the employees reported upon. It must be entirely free from all form of bias, prejudice and distortion.

The interest of Corporation must always come first while reporting. Main consideration when evaluating an employee is his value to the Corporation. Often it is in the interest of the individual which is uppermost in the minds of the reporting Officers. This is unhealthy and wrong. While we must do our best for them and their career, the interest of Corporation must come first at all times.

It must be borne in mind that the reports should deal with what has happened during the period actually covered by the report; and not with the past periods, which should have been covered, in previous reports.

The Reporting Officers must be as objectives and circumspect as humanly possible. They should be clear, direct, not evasive and ambiguous in their remarks. They should avoid exaggeration and gross understatements.

51

The Reporting Officers are to keep in mind that, while assessing as employee, the later is too compared only with employee of same Pay Group and experience in his specific field of specify.

Appeal to Review Employees disagreement on the basis of his initial performance assessment grade/rating will NOT automatically qualify him /her for any Performance Appraisal Review. The Performance Appraisal Review Board may take place on the specific instructions of the higher management. However, an employee, if aggrieved with assessment grading /ratings is required to submit an appeal with date, narrating specific reasons for their disagreement with substantial evidence in support. The employees application must be forwarded/endorsed by, not less than, the concerned General Manager or Director can be submitted in the concerned HR unit. The departmental HR Units will consolidate such appeals, which may be used in future as per managements direction. The applications without the above said endorsements, narrating personal requests for performance appraisal review will NOT be entertained at all.

The Review Board Category of Employee Staff of Pay Group I-IV Staff of Pay Group V-VIII Staff of Pay Group IX, X, GMs Director The Review Board GM, Senior Reporting Officer Dept Head, GM, Managing Director Chairman, MD, Concerned Dept MD Chairman

(Performance Appraisal Completion Form on Next Page)

52

INSTRUCTIONS FOR COMPLETION OF PERFORMANCE APPRAISAL FORM 1) Part-A: - Pertains to Competencies (Skill & abilities) that needs to be in employee for performance of Job. Every competency carries a weight-age shown in column as Wt.. This weight shows its relative importance as compared to other competencies. The Score A is calculated after multiplying the Score with the respective Weight-age. All the Competencies must be rated in case of an Officer (PG-V above) and only applicable competencies shall be rated in case of Staff (PG-I - IV). The Use of computer for Official Work should be used only where applicable.

2) Part-B: - Pertains to Objectives / goals that should be accomplished by an employee with in the time for which PAR form is filled. 3) Part-C: It gives final grading / score of an individual employee. 4) Remaining parts of the PAR form are self explanatory.

53

(The Appendix Contains the Performance Appraisal Form used in PIA) (Nature of the Performance Appraisal Method: The Graphic Rating Scale Method)

Suggestions: Performance Appraisal Reporting

Along with a very comprehensive Graphic Rating form for performance appraisals, PIA should also use the Electronic Performance Monitoring technique for all the work performed on computers using their Local Area Network.

Uses of critical judgments for appraising performance as The Graphic Rating Scales are very clear in the interpretation they pose.

Introduction of a new performance appraising system apart from the Graphic Rating Scale Method to add to the accuracy of any employees appraisal.

Preferred Performance Appraisal method addition in the system: Alternate Ranking Method.

54

CHAPTER 7 PAY SCALES

55

Pay Scales: (Chapter 28, PIA HRM) The pay scale or grade system at PIA is very efficient even when the policies regarding them are not as regularly updated as required. The PIA pay scale system follows a Pay Group System to effectively divide the employees into their respective pay groups according to their working status and/or rank at the organization. Pay scales, allowances and perquisites of all employees are determined by the PIA Board of Directors. Following is the determination of Special allowances of the employees working at the Chairman/MD secretariat: Special Allowance shall be granted for payment in lieu of over-time, meal allowance and taxi charges.

Categories
Special Assistants / General Managers Managers in PG VII to IX Assistant Managers in PG VII/VIII Officers in PG V / VI Staff in PG-III / IV Staff in PG-I / II Secretary to Chairman / Managing Director Protocol Officers & Asst. Protocol Officers Drivers attached with Chairman / MD Security Guard/Other Staff at the residence of Chairman / Managing Director, PIAC.

Rs. / P.M.
7,500 3,000 2,700 2,250 1,800 1,350 3,000 3,000 3,000 900

56

Perquisites at PIA: (Policies of 2003-4)

Category

Perquisites (Discontinued)

Director - Car Maintenance Flight Operations - Entertainment Allowance (Accountable) - Books & Magazines - Servant Pay - Driver Pay - Fuel Chief Plot/ - Car Maintenance Equivalent - Entertainment Allowance (Accountable) - Books & Magazines - Servant Pay - Driver Pay - Fuel Ex-Office G.M./ - Fuel Equipment Chief - Books & Magazines

Executive Allowance (Rs./month) 42,960/-

14,744/-

6,510/-

The Pay Groups The Pay groups are divided into 10 groups each for a different member in PIAs Human Resource Hierarchy. They are from I to X. Lets have a look at them:

57

Initial Basic Pay of Officers in Pay Group I to IV (ii):

Pay Group I II II (i) III III (i) III (ii) IV IV (i) IV (ii)

Pay for Admin Category 5190 5730 6750 6615 7860 11326 8120 10140 12450

Pay for Technical Category 7202 7961 9315 9204 10895 15559 11405 14135 17240

Initial Pay of Officers in Pay Group V to X (ii)

Employee Category Officers

Assistant Managers Managers Deputy General Managers General Managers

Pay Group V V (i) V (i) VI VI (i) VI (ii) VII VII (i) VII (ii) VIII VIII (i) VIII (i) IX IX (i) IX (ii) X X (i) X (ii)

Initial Basic Pay (Rs./Month) 12745 14900 17296 14100 17296 19755 16083 19443 21956 18475 21223 24659 22135 25570 28582 46575 50867 54410

Pays of Top Executives:

58

Category of Employee Director

Pay Group SPL-I SPL-II

Initial Basic Pay 65600 70995

Initial Basic Pay of Pilots; Class I (Less than 05 Years) II (5 years Less than 10 years) III (10 years Less than 15 years) IV (15 years Less than 20 years) V (20 years Less than 25 years) VI (25 years Less than 30 years) VII (30 years and above) Initial Basic Pay (Rs./Month) 21,791/28,094/37,477/46,112/53,763/64,824/73,530/-

Suggestions: Pay Scales

To update pay scale policies on yearly basis. To create a harmonized pay scale system in the HR manual with policies from one single year.

Include the Increment and Pay Fixation system policies along with the Pay Scale policies in a single copy.

Review the Gap in pay scales seen in Pay Groups IX and X.

59

Inclusion of Deputy GMs in Perquisites system.

60

CHAPTER 8 REFERENCES AND APPENDICES

References
Textbooks: Human Resource Management, Gary Dessler Websites PIA Human Resource Manual PIA.com Google.com

61

Wikipedia.org Scribd.com

(Appendix A on Next Page)

62