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Internship Report

Industrial Relationship Department,


Packages Limited
Submitted To:
Industrial Relationship (IR) Department

Submitted By:
Khalil Ur Rahman

Internee, IR

ACKNOWLEDGEMENT

First of all I would acknowledge ALLAH ALMIGHTY whose blessings are always
there to guide me and lead me towards successes and accomplishments in
life.
Before starting my report I would like to thanks the officials and management
of Packages Limited, who provided me a wonderful opportunity of learning in
such a big organization. I would also acknowledge the support and guidance
that my supervisors provided me throughout my internship period.
I would like to express my sincere gratitude to, Mr. Akram (IR Manager), and
Mr. Imran Ellahi (Assistant Manager) who provided me opportunity to work in
the practical environment and His constant encouragement, sincere advice,
suggestion and import ant discussion to valuable accomplish of my training
program. Without their guidance, I would never be able to gain the
confidence and precision in my work. I would also like to pay my gratitude to
all the people, without whose input this report could not have been
completed. And, of course, I am most indebted to my parents without their
support, encouragement and prayers this work would have never been
possible.

EXECUTIVE SUMMARY:

This Internship report will be describing the industry profile of Packages Ltd,
that in which industry they are in and how that industry is working. This
summary also comprises of Packages Ltd.s company profile describing all
the information of the company that what it is about what it does, where it
functions and how well it is going. The report also shows the way the
business process happen in the Packages Ltd. What are the different
departments in Packages Ltd.? And how they work with each other. The
SWOT Analysis will tell the strengths of company which get laden due to
some weakness. As we are in Pakistan there are many threats to a business,
hence Packages capitalizes on the opportunities to defeat all the threats to
make everything go their way. Hence its a comprehensive view of the
strengths overcoming the weaknesses and the threats minimized by using
the opportunities.
Atlas but not least, the report tells the problems that company faces. And
how can they solve them, as no business can work wonders without finding
gaps and helping themselves to attain and maintain a better position in the
industry. Hence the report mentions many tiny problems which need
attention in order to further best in the industry.

INTRODUCTION OF PACKAGES LIMITED

Established in 1956 as a joint venture between the Ali Group of Pakistan and
Akerlund and Rausing of Sweden, Packages Limited provides premium
packaging solutions for exceptional value to individuals and businesses in
the most efficient, profitable and sustainable way. We offer a complete range
of packaging solutions including offset printed cartons and flexible packaging
materials to individuals and businesses world-wide. Our clientele includes
illustrious names such as Unilever and Pakistan Tobacco Company, who have
been our customers for over 50 years. We employ over 1500 people and had
sales of over US $ 141 million in 2013.
Listed on all three stock exchanges in Pakistan, Packages Limited has
maintained a long-time credit rating of AA. Our joint ventures and business
alliances with some of the world's biggest names reflect our forward-looking

strategy of continuously improving customer value through improvements in


productivity.
Packages has always been at the forefront of new developments in
packaging research and has pioneered several innovations, including the use
of wheat straw as a raw material for paper and board manufacture.
Packages is an economically significant company.

OVER THE YEAR

Packages Limited was established in 1956 as a joint venture between the Ali Group
of Pakistan and Akerlund & Rausing of Sweden to convert paper and paperboard
into packaging for the consumer industry.

Over the years, Packages has continued to enhance its facilities to meet
the
growing
demand
of
packaging
products.
In 1968, with IFC participation, Packages integrated upstream by
establishing a Pulp and Paper Mill with a capacity of 24,000tons per year
based on waste paper and agricultural by-products i.e. wheat straw and river
grass. With growing demand the capacity was increased periodically and in
January 2003, total capacity was nearly 100,000 tons per year.
In 1981, Packages modified a paper machine to produce
response to growing awareness and demand for hygienic
tissues. The Rose Petal brand name was launched with facial
later expanded to include toilet paper, kitchen roll, and

tissue paper in
and disposable
tissues and was
table napkins.

In 1986, the Company established a flexible packaging unit to cater to the


increasing demand from consumers for sophisticated packaging used
primarily
in
the
food
industry.
In 1993, a joint venture agreement was signed with Mitsubishi Corporation
of Japan for the manufacture of Polypropylene films at the Industrial Estate in
Hatter, KPK. This project, Tri-Pack Films Limited, commenced production in
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June 1995 with equity participation by Packages Limited, Mitsubishi


Corporation, and Altawfeek Company for Investment Funds, Saudi Arabia and
general public. Packages Limited owns 33% of Tri-Pack Films Limited equity.
In July, 1994, Coates Lorilleux Pakistan Limited (currently DIC Pakistan
Limited), in which Packages Limited has 55% ownership, commenced
production
and
sale
of
printing
inks.
During the same year, the Company initiated the capacity expansion of its
Paper and Board Mill to 65,000 tons per year and conversion capacity to
56,000 tons per year. At the same time, the Company also upgraded the
quality of Packages products and substantially improved pollution control to
meet the World Bank environmental guidelines. The said expansion was
completed
in
1998
at
a
cost
of
PKR
2.7
billion.
In 1996, Packages entered into a joint venture agreement with Print care
(Ceylon) Limited for the production of flexible packaging materials in Sri
Lanka. The project Packages Lanka (Private) Limited, in which Packages
Limited
has79%
ownership,
commenced
production
in
1998.
During 1999-2000, Packages successfully completed the expansion of the
flexible packaging line by installing a new rotogravure printing machine and
enhancing the carton line by putting up a new Lemanic rotogravure inline
printing and cutting creasing machine. In addition, a new 8 color Flexo
graphic printing machine was also installed in the flexible packaging line in
2001.
Packages commenced production of corrugated boxes from its plant in
Karachi
in
2002.
In 2005, the Company embarked upon its Paper & Board expansion plan at
a new site 'Bulleh Shah Paper Mills'(currently Bulleh Shah Packaging (Private)
Limited), almost tripling its capacity from 100,000 tons per annum to
300,000tons per annum. Capacity expansion at Bulleh Shah Paper Mills was
completed in two phases. In the first phase, Brown Board Machine PM-6
along-with high yield straw pulping & OCC plants and its back processes such
as 11 MW Power House, Gas Turbine and Primary Effluent Treatment Plant
were capitalized and commercial operations were commenced during the
year 2007. Second phase comprising of Writing and Printing Paper Machine
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PM-7, De-inking Pulp Plant, 41MW Power House, Steam Turbine and
Secondary Effluent Treatment Plant was completed in the year 2009.
In 2008, the Company embarked upon capacity expansion in its tissue
division through installation of a new tissue paper manufacturing machine
PM-9 with production capacity of 33,000 tons per annum. With this capacity
expansion, the Company is now in a position to take benefit from export
potential of tissue products in the international market, particularly the
Middle
East.

During 2011, a lamination machine was installed in the flexible department


at a cost of PKR 96 million. This is Pakistan first high speed solvent-less
automatic lamination machine. It has turret winders for automatic reel and a
capacity
of
450
meters
per
minute.
The rebuild project of Paper Machine PM-6, installed at Bulleh Shah Paper
Mills, was completed in the second quarter of 2011 leading to capacity
expansion of 30,000 tons. The machine started commercial operations with
enhanced capability of producing high value added liquid packaging and
bleached
board.
Moreover, the Corrugator Machine in Kasur Plant was upgraded in 2011 to
improve efficiency, reliability, enhance capacity and reduce waste. This
upgrade
activity
resulted
in
increased
capacity
of
14%.
In 2012, to enable continuous growth and technical development in the
Paper & Paperboard segment, Packages signed a 50/50 Joint Venture
agreement with StoraEnso OYJ Group of Finland in its 100% wholly owned
subsidiary, Bulleh Shah Packaging (Private) Limited. The Joint Venture
included Paper & Paperboard and Corrugated business operations at
Kasurand Karachi and involved initial equity participation by Stora Enso OYJ
Group of 35% by way of subscription of right shares with a commitment to
increase
the
shareholding
to
50%
at
a
later
stage.
In the same year, Packages also invested in a New Rotogravure Machine for
its Flexible Packaging Business with a total estimated project cost of PKR 326
million as part of the Company's efforts to remain abreast of improved
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technological

developments

in

the

Packaging

business.

The Joint Venture Agreement with Stora Enso OYJ Group, signed in 2012, was
implemented in 2013 and Packages completed the transfer of assets and
related obligations of Paper & Paperboard and Corrugated business
operations to Bulleh Shah Packaging (Private) Limited along with cash equity
injection. Packages now holds 65% equity in Bulleh Shah Packaging (Private)
Limited. The joint venture partner, StoraEnso OYJ Group, is actively involved
in providing technical expertise to further enhance the Paper &Paperboard
and Corrugated business operations.

CORPORATE STRUCTURE

Packages Limited has two main manufacturing divisions:


The Packaging Division, provides multi-dimensional and multi product
packaging solutions to clients that are involved in manufacturing
consumer product across industries.
The Consumer Products Division, which manufactures off-the-shelf
branded consumer products

Packages Lanka is a joint venture between Packages Limited and the Print
Care Group of Sri Lanka, and DIC Pakistan a joint venture between Packages
Limited and Dainippon Ink and Chemicals, Inc. of Japan.
Packages Lanka is a joint venture between Packages Limited and the Print
Care Group of Sri Lanka, and DIC Pakistan a joint venture between Packages
Limited and Dainippon Ink and Chemicals, Inc. of Japan.

10

ORGANOGRAM

11

Commercial Manag

Marketing Manager
Store Manager
I.R Manager

12

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VISION
Position ourselves to be a regional player of quality packaging and consumer
products. Improve on contemporary measures including cost, quality,
service, speed of delivery and mobilization. Keep investing in technology,
systems and human resource to effectively meet the challenges every new
dawn brings. Develop relationships with all our stakeholders based on
sustainable cooperation, upholding ethical values, which the shareholders,
management and employees represent and continuously strive for.

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MISSION STATEMENT

To be a leader in the markets we serve by providing quality products


and superior service to our customers, while learning from their
feedback

to

set

even

higher

standards

for

our

products.

To be a Company that continuously enhances its superior technological


competence to provide innovative solutions to customer needs.
To be a Company that attracts and retains outstanding people by
creating a culture that fosters openness, innovation, promotes
individual

growth,

rewards

initiative

and

performance.

To be a Company which combines its people, technology, management


systems and market opportunities to achieve profitable growth while
providing

fair

returns

to

its

investors.

To be a Company that endeavors to set the highest standards in


corporate ethics in serving the society.

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CORE VALUES

Underlying everything we do and everything we believe in is a set of


core values. These guide us to deal with every aspect of any issue
we might encounter in our personal and professional lives. These
values help us grow inside & outside, personally and as an
organization.

Good Governance
We are committed to running our business successfully and efficiently,
providing long-term benefits to our employees and shareholders, and
enriching the lives of those whom we serve by fulfilling our corporate
responsibility to the best of our ability. We expect excellence from all
processes, whether they relate to policy formation and accounting
procedures or product development and customer service.

Work Environment
We are committed to running our business successfully and efficiently,
providing long-term benefits to our employees and shareholders, and
enriching the lives of those whom we serve by fulfilling our corporate
responsibility to the best of our ability. We expect excellence from all
processes, whether they relate to policy formation and accounting
procedures or product development and customer service.

Good Governance
Our policies and core values are aimed towards creating an informal yet
stimulating team-oriented work environment with a culture of sharing and
open communication. We cherish the diversity of viewpoint of every
individual; we realizes this encourages innovation and develops character. All
employees have the right to a stress and injury free work environment. We
ensure our employee health and safety by providing various in-house
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facilities such as a gym and making sure that all staff understand and uphold
our safety policy.
All our employees are permitted and encouraged to afford time and attention
to personal concerns.

Our People
The success of any organization is largely dependent on the people working
for it. Each member of our team is considered equally important and
provided constant training, motivation and guidance. We possess a
dedicated staff of the highest caliber committed to making our business a
success. We ensure that every employee has the opportunity for maximum
professional development. To achieve this goal, we seek to provide
challenging work prospects for all employees. Each person is compensated
and rewarded for his or her performance and hard work on a strict merit
basis.

Conservation
We expect and encourage our employees to actively participate in
community service and to take care of the environment entrusted to us as
citizens sharing the earth resources.

Customer Satisfaction
We are customer-driven; we go the extra mile to make sure our clients
expectations are met and exceeded on every issue. We partner with leading
companies to arm ourselves with the latest technology and provide
customers with innovative solutions in the most cost-effective manner
available.

Ethical behavior
We make it clear that being a sincere, honest and decent human being takes
precedence over everything else. In the Packages family, there is an allround respect for elders, tolerance for equals and affection for youngsters.
Managers are expected to lead from the front, train junior colleagues through
delegation, resolve conflicts quickly, be visible at all times and act as role
models for others.

WHISTLEBLOWING POLICY
We are committed to high standards of ethical, moral and legal business
conduct. In line with our commitment to open communication, this policy

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aims to provide an avenue for employees to raise concerns and reassurance


that they will be protected from reprisals or victimization for whistleblowing.
This whistleblowing policy is intended to protect the staff if they raise
concerns such as:
incorrect financial reporting
unlawful activity;
activities that are not in line with Packages policy, including the Code
of Conduct; or.
activities which otherwise amount to serious improper conduct

We make sure that all our processes and methods


conform to the highest ideals of professional
behavior. Our organizational structure is straightforward
and
need-based;
accountability
is
transparent, consistent and both horizontal and
vertical.

BOARD OF DIRECTORS & MANAGEMENT COMMITTEES

Our people are our greatest asset. We seek and retain people who feel there
is no compromising on excellence, and a corporate culture in which our
family can grow and thrive. Heading our multi-talented team is our
leadership of experienced senior management. Together, we know how to

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EXECUTIVE COMMITTEE

Syed Hyder Ali - Chairman


Rizwan Ghani- Member

combine our skills and knowledge to deliver state-of-the-art solutions to our


customers.
BOARD OF DIRECTORS
Towfiq Habib Chinoy
(Non-Executive Director)

Syed Aslam Mehdi


Rizwan Ghani
Josef Meinrad Mueller
Tariq Iqbal Khan
ADVISOR

Syed Babar Ali

Syed Hyder Ali


(Chief Executive & MD)

Shamim Ahmad Khan


Muhammad Aurangzeb
Syed Shahid Ali
Veli-Jussi Olavi Potka

COMPANY SECRETARY
Adi J. Cawasji

AUDIT COMMITTEE

Tariq Iqbal Khan - Chairman


(Non-Executive Director)

Shamim Ahmed Khan


(Non-Executive Director)

Syed Shahid Ali - Member


(Non-Executive Director)

Syed Aslam Mehdi - Member


(Director & General Manager)

Muhammad Aurangzeb
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SYSTEM & TECH. COMMITTEE

Rizwan Ghani - Chairman


(ExecutiveDirector)
Director)
(Independent
KKhurram Raza Bakhtayari - Member
Adi J. Cawasji - Secretary
(Chief Financial Officer)
Suleman Javed - Member
(Manager ERP)

HUMAN RESOURCE AND REMUNERATION (HR&R) COMMITTEE

Towfiq Habib Chinoy - Chairman


(Non-Executive Director)
Tariq Iqbal Khan - Member
(Non-Executive Director)
Shamim Ahmad Khan - Member
(Non-Executive Director)
Syed Hyder Ali - Member
(Executive Director)
Syed Aslam Mehdi - Member
(Executive Director)
Kaifee Siddiqui- Secretary
(Head of Human Resource)

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BUSINESS ALLIANCES

One of the best ways for a business to leverage its products and increase
growth is through association. Our business alliances help us manage our
business more effectively, as well as helping us and our partners develop
and diversify our interests. Customers also benefit from the increased
knowledge base, as we transform our market awareness and shared
technology into innovative and cost effective solutions for customers.
Our community efforts reflect our corporate culture by building strength and
value through mutual assistance and good will.

Subsidiaries, Joint Venture, Associates


DIC Pakistan Limited.
Packages Lanka (Private) Limited.
Packages Construction (Private) Limited.
Anemone Holdings Limited.
Bulleh Shah Packaging (Private) Limited.
IGI Insurance Limited.
Tri-pack Films Limited.
IGI Investment Bank Limited.
IGl Life Insurance Ltd.
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DIC Pakistan Ltd.


Established in 1994, a joint venture between Packages Limited and
Dainippon Ink and Chemicals Asia Pacific Singapore Pvt. Limited. Dainippon
Inks and Chemicals is one of the largest printing ink manufacturing groups

worldwide. Number of employees: 167. Non-listed public limited Company.


Website: www.dic.com.pk

Packages Lanka Pvt. Ltd.

Packages Lanka (Private) Limited is based near Colombo, Sri Lanka. It is a


joint venture between Packages Limited and Print care (Ceylon) Limited of Sri
Lanka. This project was set up in 1998 for the manufacture of flexible
packaging material. Packages Limited owns 79% of this company. The
number of employees of the company is 142.

Packages Mall
Packages Construction (Private) Limited is a wholly-owned subsidiary of the
Packages Limited. Packages Construction is undertaking the development of
enclosed high quality shopping mall with food court, cinemas and retail
outlets - Ground + 2 floors at the land available at Packages' site at Lahore.
The built up area is 1.2 million Sq. Ft. The design and layout of the mall is
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based on inputs from international retail consultants and space shall be


leased out and managed by a professional property management team.
Total number of employees: 30.

IGI Insurance Ltd.


IGI was established in 1953. It had a gross premium of PKR
2.14 billion in 2014. Number of employees are 122. It
acquired the insurance business of Pakistan branch of Royal
& Sun Alliance Insurance Plc in year 2004 and a global
network partner of Royal & Sun Alliance Insurance Plc. In
April 2014 with the acquisition of MetLife Alico Pakistan, IGI Insurance
Limited has entered into Life insurance sector under the banner of IGI Life
Insurance Limited.
Website: www.igiinsurance.com.pk

Tri-pack Films Ltd.


Tri-Pack manufactures Bi-axially Oriented Polypropylene
film (BOPP) with an annual capacity of 82,300 Tones. TriPack sales in 2014 were PKR 15.74 billion. The number of
employees of the company is 436. Packages Limited has
33.3% ownership in the company while Mitsubishi
Corporation of Japan holds 25% shares. The Company has production
facilities in Port Qasim (near Karachi) and Hattar (Khyber Pakhtunkhwa). It is
a listed Public Limited Company.
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Website: www.tripack.com.pk

IGl Investment Bank Ltd.


Established in 1990, IGI Investment Bank is licensed to
carry out investment finance and leasing operations as a
Non-Banking Finance Company. In addition, it also offers
corporate finance and advisory equity brokerage, portfolio
management and mutual funds advisory services. It is a
listed Public Limited Company.
Website: www.igiinvestmentbank.com.pk

IGl Life Insurance Ltd.


With the acquisition of MetLife Alico Pakistan in April 2014,
IGI Insurance Limited entered into Life insurance under the
banner of IGI Life Insurance Limited. IGI Life had gross
premium of PKR 2.5 billion in 2014. Total number of
employees: 123. It is a listed Public Limited Company.
Website: www.igilife.com.pk

Flexible Packages Convertors


Flexible Packages Convertors (Pty) Ltd ("FPC") is a highly
specialized print and packaging operation, manufacturing
technically advanced mono-layer and co-extruded flexible
packaging material to meet the exacting specifications of
its extensive blue-chip client base. Packages Limited has
entered into a JV with the previous owners and holds 55% shareholding in
the new set up. The company is setup in South Africa.
Established in 1998, the business provides high quality printing augmenting
its finished product, thus offering a unique combination of both print and
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manufacture within a lucrative niche industry. The company's core focus is


vested in flexible packaging used in the FMCG sector. Standard offerings
include sheeted, tubular, and center-folded and bag shaped products. The
company owns a 50% shareholding in Plastic Extrusions (Pty) Ltd
(1967/008117/07), who in turn holds the patent for a highly lucrative sugar
liner patent that is used extensively by customers such as Illovo, Royal Swazi
Sugar and TSB.

Upcoming Project - Joint venture with OMYA


In the Board of Director's meeting held on April 22, 2015, Packages Limited
announced to start a joint venture (JV) with Omya Group of Switzerland.
Omya is a leading global producer of industrial minerals - mainly fillers and
pigments derived from calcium carbonate and dolomite - and a worldwide
distributor of specialty chemicals. The JV will set up a production facility in
Kasur to supply a range of high quality ground calcium carbonate products
specifically tailored to meet local and regional markets.

PRODUCTS OF PACKAGES LIMITED


Packages products are divided into four units.

BUSINESS UNIT - FOLDING CARTONS (FC)


The Folding Cartons (FC) production unit is as old as the Company itself
representing the culture and history of Packages Limited. It all started with
simple offset printing, cutting and creasing machines in 1957. Later, the
business grew and the Company set up a board mill for producing different
types of white boards which were then printed and converted through the
offset department. A professional sales and operations team was
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instrumental in making this department a success and business expanded


over the years.
Packaging material is being supplied to tobacco, food, soap and detergents,
pharmaceutical, match and shoe industry. New hardware was added at
regular intervals to maintain and enhance the competitive edge. Back end
investments were made to improve the speed, turnaround time and quality
of the finished packaging.

TECHNICAL EXPERTISE
Computer-to-plate, laser cutting, creasing die making system and support
hardware was added and upgraded to maintain the competitive edge.
Another synergetic business that evolved and grew over the years is paper
cups both for drinking and ice cream. A full-fledged department in the
business unit equipped with European best cup making machines convert
our own food grade cardboard, polycoated in-house, printed and cut creased
into different shapes and sizes of paper cups. Another unique and
environment friendly activity of this department is 100% re-cycling of the
planned and process waste of board, i.e. the basic raw material.
Keeping up with the growing demand of specialized and high quality tobacco
packaging, two new roto gravure printing machines with cutting, creasing
and embossing facilities have been added. Both the offset and rotogravure
lines have an annual conversion board capacity of 30,000 tons. Business Unit
Folding Cartons with a strong back integration, state of the art hardware, and
in-house press facilities, dedicated, qualified and professional trained
manpower is geared to provide high volumes, consistent quality and value
addition at a competitive price.

INDUSTRIES
Food and Beverages
Soap / Detergent
Pharmaceuticals
Match
Electronics
Shoe
Tobacco
Paper Cup

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BUSINESS UNIT - CONSUMER PRODUCTS


We provide a range of Tissue paper products to serve and support the need
of disposable cleaning. Our aim is to provide convenience for a hygienic
lifestyle by innovating products that contribute to diverting dirt and germs
away from you, give you daily confidence and keep you at your best. We
have been delivering our brand promise of uncompromised quality for almost
30 years and continue to lead the tissue category by offering premium tissue
products in several diverse categories.

TISSUE PRODUCTS
Facial Tissue
Tissue Roll
Kitchen Roll
Rose Petal Hi-jeen Hand Towel
Rose Petal Pocket Packs
Rose Petal Party Products
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Wet Tissues

AWAY FROM HOME PRODUCTS


We also have a leading market share in the away-from-home business: we
supply custom-printed boxes, table napkins, coasters and paper cups to
institutions such as hotels, fast food chains, restaurants, businesses and the
airline industry.

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INCONTINENCE PRODUCTS
We Market TENA Adult Diapers locally under a licensed agreement with SCA,
Sweden. SCA is the worldwide leader in the management of incontinence.
Providing products and services for individuals and healthcare services in
over 100 countries. TENA Adult Diaper promises unmatched quality in the
areas of leakage protection, comfortable fit, outstanding dryness, excellent
retention and odor control.

MECHANICAL FABRICATION & ROLL COVERS


Formed in the year 1957, the department has been providing services in
Packages to all the business units. Starting from the Paper and Board mill to
the Tissue line, we have been providing services for each of our top quality
products. Catering to the exceedingly growing rubberizing need, an in-house
fully equipped rubberizing facility came into being. After successfully fulfilling
all the technical requirements of the business units in Packages, we took a
leap forward and introduced our services to the market as well.
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INDUSTRIES
Agriculture
Textile
Food & Beverages
Paper & Board
Printing (Roto, Offset & Flexo)
Inks Oils & Chemicals
Leather & Sports
HVAC
Pharmaceutical

Paper and Bored:

Packages Limited has been producing high quality paper and board since
1965 using environment friendly manufacturing processes. They specialize in
making a variety of duplex boards and paper. Their products are tested for
high performance in terms of strength, stiffness and gloss. From coffee cups
to books we read, from Tetra Pak juice containers to huge shipping
containers, paper and board products touch our lives in a thousand ways
every day.

Paper:

Paper quality and weight is determined by the clients specific requirements


and Packages ensures this is carried out to the exact specifications provided.
Some of the paper produced by Packages Limited includes:
High gloss writing paper
Special poster paper/ machine glazed
Liner for shipping cartons
Wood-free writing/ printing paper

Board:

Packages Limited manufactures several types of boards. Food Board, a basic


raw material in liquid food packaging, is being manufactured since 1979 for
Tetra Pak Pakistan Limited. This material is used for making aseptic
packaging for milk, cream, oil, fruit juices and other perishable food items.
Some of the board products of Packages Limited include:
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Liquid packing board


Food grade board
Duplex board/chipboard
Bleached board/liner board
Cardboard/ tobacco board

Flexible Business Unit:


With improved barrier properties and lower cost compared to rigid
packaging, flexible packaging is steadily gaining importance in the packaging
industry. The flexible line makes high quality packaging films and laminates,
and offers other specialized services such as rotogravure printing and sleevemaking.
Flexible packaging combines different plastic films, aluminium foil and paper
to produce laminates of two or more layers for providing layered protection
against moisture, gases and odours. Used where colourful package design
and preserving product quality are important, such as in the food and
pharmaceutical industries, flexographic printing offers economy with quality.
Some of the products where the flexible packaging is used are as follows.

Soap
Tobacco
Tea
Food
Diary Ice-Cream
Milk powder
Confectionery
Shampoo
Pesticide
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Pharmaceutical

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OVERVIEW OF THE INDUSTRIAL RELATION DEPARTMENT


HR and IR are interlinked with one another; they are considering the
backbone of the organization. The success of an organization is dependent
upon a successful personnel department. The prime objective of this
department is to manage and utilize the human resources in a profitable
manner.

Hierarchy of IR Department

INDUSTRIAL
RELATIONSHIP

LAW

ESTABLISH

COMPENSATIO

INCENTIVE

TIME
MANAGEME

WELFARE

SALARY

WAGES
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Establishment Wing:
Mr. Abdul Gaffar ( Assistant Personnel Officer Establishment)
Mr. Waqas Khan ( Assistant Personnel Officer Establishment)
It is the important wing of the department and is performing important
functions. It keeps the records of the employees. It plays an important role
between the employee and management.
After test and interview file is passed to this section. Employee personal file
is kept by this section right from their hiring till end of their service.
The file is consisting of the test which employee gives for the job,
appointment letter, personal information, medical fitness report, copies of
educational documentation and joining letter. The file documents keep on
increasing and updating like transfers, allowances, termination, resignations,
increments and many more.
All the information of employee is entering into the system, the software
they are using is SAP than software allocates the employee number.
Identity cards are prepared for all the employees either permanent, contract
or temporary.
Internee card are also prepared by this section.
If an employee is absent for ten days or more than ten days without leave
then he is issued a letter of charge which follow in the different category
an absence report is delivered than a letter of charge so after that an inquiry
is conducted against that member after the result of that he may be
terminated or dismissed or a warning letter will be issued. The employee is
given the 4 warnings against its absent.

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Incentive Wing:
Mr. Tariq Saeed (Personnel Officer)
Mr. Shafqat Ali (Establishment Assistant)

Incentives are for those labors working in production or unit, it is calculated


when the given target overdoes from the target assigned to them.
Manufacturing units record the targets on the production card.
Specific
incentive formula is set for calculation. The formula is:

Production * 100 /Base Rate * Running


time -100

At this wing work is done in different steps which are:

Cards are arranged date vise.


Than they are arranged shifts vise i.e. (1st, 2nd, 3rd).
Next step arranged machine number vise.
Batch cards are attached with the cards on which date, dept. Code,
and shift have to be mention.
Last but not the least, on batch card the each shift data has to be
mentioning the total number of cards in the shift and total
production.
The data is entered into SAP.
Data is entered into two period of month i.e. first period is from 1 st
to 15th and second period is from 16th to end of month.
Each employee incentives cards are prepared.

35

Statements of production of worker are


departments after 15 days for the verification.

sending

to

their

Salaries and Wages Wing:


Muhammad Raiz Adil {Personnel Officer Establishment, Bulleh Shah
Packages (Monthly Staff)}
Younas Mehmood {Personnel Officer Establishment, Packages Ltd
Lahore (Monthly Staff)}
Athar Hussain {Establishment Assistant, Packages Ltd Lahore
(Hourly Staff)}
By using the system the performance of the labor force is easily evaluated.
As the pay of an employee is directly proportional to the time worked, it
enhances the motivational level of employees. It is the largest wing of the
department and is performing important functions. It keeps the records of
the employees, calculates the wages and salaries, for employees. The record
keeping is very scientifically organized. There are two types of employees in
Packages.

Employees Working On Monthly Basis.


Employees Working On Hourly Basis.

Employees working on hourly are X1 and on salary are X2, X3, and X4.
X1
A, B, C, D (WORKERS)
P, P2, P3

X2
1 To 5 (WORKERS)
JE, JE1 (EXECTUIVES)
E, E1,E2,E3

X3
M
M1
M2

X4
M3
M4
GM, MD

TECHNICAL
TE, TE.1,TE.2,TE.3,TE.4,TE.5,
TE.6,TE.7,
PROCESS SPECIALIST
S1, S2, S3
36

Temporary Workers:
Workers on hourly basis get their wages through a card that contains the
starting time of work and ending time. The work is noted through punching
machine. The total working hours of employees are calculated and payments
are made to them.

Monthly Staff:
A gate pass is issued to the employees if they go out of the factory for any
personal/official work. They submit the gate pass to gate office; than a gate
pass is sent to the time office so over there data is enter into the system. A
gate passes are set into three classes i.e. are short leaves, officials and
overtime. If the gate pass time exceeds 8 hours, a leave is deducted from
the employee record of that employee who is paid on monthly bases. On
daily basis gate passes are checked and enter in system.
Employees are given different types of leaves which have different codes, so
a code helps when the data is transferred to the system. Daily the data is
enter into the system, the section is using the SAP and Time Wizard
softwares. The following are the leaves which company is offering to their
employees.
Leaves
Annual leave
Casual leave
Medical leave
Special leave
Rest
Tour
Leave w/o pay
Social security leave
Absence
Medical leave full
Medical leave half
Special leave 25% Gross
Special leave 50% Gross

Code
0100
0200
0300
0400
0500
0600
0700
0800
0900
1000
1001
2000
2001
37

Special leave 100% Gross


Compensatory leave

2002
5000

When all three leaves (annual, casual and medical) of the employee will be
nil, if he want medical leave then he will be given the special leave 25%,
50% or 100%. If the employee who is on contract does not inform about his
leaves then he will be consider absent and his salary would be stopped. All
types of leaves are checked before running the salary of employee.

Clearance Certificate:
Is also issued by this section when the employee service is over, he got
terminated or he resigned and transfers to the accounts office after the
completion of procedure. Basically this document required the clearance of
dues or documents from following departments:

Welfare department
Fair price shop
Gate office
Telephone department
Store
Electrical
Workshop

Final Settlement:
It is also prepared by this section. When employee is retired from the job he
is paid the salary of next three months. All the allowance are also paid like
house rent, conveyance and many more except the telephone allowances.
The total numbers of annual leaves left are also paid to the employee by
calculating through this formula i.e.

Gross Salary /Total days of month *Annual


leaves left
38

Pay Slips:
Before transferring the salary to employee accounts pay slip is deliver to
each employee on which all the detail is mention that how much they have
earn and what are their deductions and the quota of leaves they utilized and
left are also mention.
For monthly workers no. of days they worked and for hourly workers no. of
hours they worked are mention.
The both section is performing different work on daily, weekly, monthly and
yearly basis.

Daily:
On daily basis they are performing the following work like:

Posting leaves and short leaves on daily basis.


Posting the compensatory leaves record.
Maintain the correction of attendance.
Filing the paper of employees in their files.
Arrears adjustments back dated leaves short leaves absent over time
night shifts.
Final settlements and clearance certificates of the employee of
packages and Bulleh Shah are issued.
Edit checking of the employees leaves posted.
Checking the mails some of employee send online their leaves, Only
for Bulleh Shah.
Encashment of advance leaves.

Weekly:

Sending the absent report of the employees to their department.


Doing amendment in checking the leaves.
Maintain the personal file of employee.
Doing the adjustments of shift either morning, evening or night.
Checking the absent continue of employee.

Monthly:
Rest and tours of employee are checked.
Absent reports are sent.
Over time of employees are checked.
39

Data of fair price shop is checked.


Preparing the salary pay slip of employees, printing it and sending to
the employee.
Pay slip filing of employee.
Running the salary of employee.
Printing the pay slip of that employee who is not having their accounts
because they are hired new so they are given cash payment.

Yearly:

Checking leave quota.


An increment slips filing.
Consolidated leaves balance are checked for contract employee.
Leaves balance closing.
Leaves balance opening.

PLANNING TOOLS AND TECHNIQUES


THE RESEARCH DEVELOPMENT AND CONTROL DEPARTMENT
Planning ahead is what keeps Packages Limited on top of its game. The research,
development and control department assists in this section of the planning process at
Packages Limited. If the industry wants to grow not just survive, then it should take
care of its Research and Development Department. Development in Packaging
material is a continuous process. New materials, films, fibers, chemicals, adhesives
and coating always are researched and developed. As Packages Limited wants to
retain clients, stay out of court and improve profits, so it gives much consideration on
quality of the product. To keep up with new demands, Packages Limited has a
Research, Development and Control Department. This department works in close
collaboration with Production and Marketing departments. This department has well
equipped laboratories and pilot machines, which are used to test various chemical raw
materials and machines. It enables Packages Limited to provide better quality and
latest packaging to the consumer industry, enabling it to introduce new product lines
an develop new materials. The Research, Development and Control Department have
three major areas for its activities:

40

RESEARCH:
This section is directly responsible to the Production Manager about his research. In
Research, work is done with on the idea, experiment is divided into parts and on each
part attention is focused and conclusions or suggestions are given. Packages Limited
tries to get as many information and technology which is possible and beneficial to the
organization. All such information is collected for research. Some time they receive
reports of customers problems and complaints from Marketing Department and advice
to them through the same channels.

DEVELOPMENT:
Development is a continuous process in any organization. A lot of development is the
result of feasibility studies, study of new production methods and new products.
Packages Limited has a Paper & Board Mill, so it uses largest number of chemicals. The
Environment Protection Agency has some standards for reducing pollution. The R &D
and Control Department developed new way of reducing pollution and always tries to
meet EPA standards.

CONTROL:
Packages Limited R&D & Control Department divides term CONTROL into two areas:
Quality is synonymous with Packages limited. Every package made by Packages
Limited guarantees the use of quality materials and processing. This is all due to the
strict quality Control Standards, observed at every stage of the production, from raw
materials to dispatch Department. This department makes stringent requirements on
quality control, which help in working consistently towards attaining better results for
customers. To ensure constant quality and improvement this department managed by
qualified scientists. Quality Control section has satellite laboratory in every
department, which constantly monitor and report. There is on the spot checking and
corrective treatment is given to the operators. If the percentage of defective material

41

goes above the permissible limit, the supervisor and machine operator is given a
signal to take corrective action.

In Process Control, the process of production is carefully monitored. Samples from


every department, e.g. Pulp Section, Beater House etc. are taken to quality control
department and tested for standard. R&D & Control Department is divided into
different sections for copying different types of problems. The sections are:
Rubber Section
Physical Paper & Polly Packing Section
Pulp Section
Chemical Section
Development Section
Microbiology Section
Library

CONTINGENCY PLANNING
There is always a need for a backup plan in case of sudden changes in any factor. In
our visit to the factory of Packages limited we talked to the Logistics Manager, Finished
Goods and this is what we found out about the contingency planning in the logistics
department.

42

LOGISTICS DEPARTMENT
Each department of Packages Limited operates under its own rules and regulations
and has control over the planning of their own departments. The logistics department
is basically responsible for transferring the goods from the factory to the customers. At
times the transportation is unavailable due to the drivers not being present or the
vehicle not in a position, in such cases the logistics have back up vehicles ready to
ensure that the products reach the customers on time.

ORGANIZING
The organizing of each department is done separately as each department is
responsible for their own unit. The division of work in Packages Limited is done by
allocating the right human and financial resources to the right department. Being an
organization of as high a stature, there are departments to cover all aspects of the
business. From production, planning, marketing to human resource departments as
well as Industrial Relations, Logistics, Legal and procurement. The specific design
elements of the formal structure of the organization chart depend upon the
departmental technology in Packages and vary from department to department.

ORGANIZATIONAL STRUCTURE
FORMALIZATION
Formalization is high in departments with routine technology like sales and production.
People carry out their specialized tasks that are governed by formal rules, whereas in
Research and development, strategic planning, and human resource and development
departments, structure is less formal. These departments have o perform activities
with a lot of variety so lesser number of formal procedure is followed.

STANDARDIZATION

Uniformity in work activities varies from department to department. As mentioned


above, Departments like R&D, Marketing and HR&D have routine plus non-routine
activities to perform but in operations departments, there is more of the same work
to be done by the employees, hence most of the tasks to be performed are standardized.

43

ISO 9000 certification also indicates that the manufacturing procedures adopted by
the organization are standardized. Initially due to the size of the operations, it was
decided to seek individual certifications for each product line, instead of
organization as a whole but by the year 2000, the whole organization was certified
under ISO9001.Packages was the 6th organization in Pakistan to have ISO
certification. To maintain the standardized quality, Packages, to the date has 57
Quality Improvement Teams (QIT) working in the various departments of the
company on the Japanese Principle of Continuous improvement, called Kaizen.
This edge of standardized procedures makes Packages leading Printing and
Packaging Company of Pakistan.

SPECIALIZATION

Each employee in Packages has specified task to perform. For these tasks, people in
each department are specialized and have to perform only the related activities.
For example a Production Engineer has to supervise people like Shift in charges and
lower staff supervisors and has to ensure efficient working of the machines.
Similarly all employees in other departments have to manage their own work and
allied activities. IT and Manufacturing departments of the organizations are epically
equipped with highly specialized personnel, hence ensuring quality management
and products. So it can be rightly said that the specialization in the organization is
extensive

CENTRALIZATION
The decision making in the organization is rested mostly with the manager of each
department. For corporate decisions, top management is involved. But for day to day
decisions, General Managers, Finance, Commercial executives, Technical mangers and
supervisory staff take decisions as per requirement and urgency. Hence the
concentration of power is at top and Middle management levels therefore a moderate
level of Centralization is there.

DECENTRALIZATION
The departments where work is in routine such as production and sales, decision
making authority lies with management. Whereas in Research and development,
human resource and development departments the power is delegated to employees
and decision making authority is granted to employees.
44

SPAN OF CONTROL
Span of control also varies from department to department depending upon the
departmental technology, since in production departments span of control is wide and
HRD department span of control is very narrow.

COMMUNICATION AND COORDINATION


Communication and coordination is also very high in Packages Limited within and
among the departments. In R&D and HR&D departments communication is horizontal
(and is normally in the form of face-to-face direct contact, telephone calls and
meetings) because they perform a wide range of tasks. And it is vertical in production
and sales departments as task variety is low here and is in form of formal memos and
written reports.

HUMAN RESOURCE PLANNING PROCESS


Human Resource is perhaps the most essential resource for any organization.
Regardless of the advancement in technology the need for human resource can never
be denied. Even the most complex machineries need at least that one push to the
button to make it work; and for that human resource is necessary. To not only keep the
employees happy and motivated but also to keep them committed to their job,
Packages Limited offers numerous different benefits to its employees. The Packages
Limited has given many benefits to its employees. A number of facilities are provided
by Packages Limited for the training and welfare of its employees. Few projects are
also working in this context.

LEADING
LEADERSHIP
The leadership of any organization reflects the smooth performance, increased sales
and overall success of the organization. If the leaders are compassionate about their
45

job and responsibilities to achieve the goals and objectives of the organization to the
best of their ability then their leadership is valued and appreciated.

LEADERSHIP STYLES
The styles of leadership in Packages limited can be observed from the various tiers of
leadership each department practices. The hierarchy of authority can shed some light
on the leadership styles practiced in numerous different departments.

HIERARCHY OF AUTHORITY

The hierarchy of the organization is somewhat tall but the Top Management is now
trying to reduce the tiers in the vertical structure. At present, there are several levels
in the hierarchy. Span of control in the organization varies from department to
department. It ranges from narrow to moderate. Accountability is transparent,
perpetual and both vertical and horizontal.

Hierarchy of Production Department

46

Production
Manager

Production
Engineer
(3)

Planning
Engineer
(1)

Staff
Incharges
(4)

Supervisor
s (12)

Workers
(70)

HIERARCHY OF REASEARCH AND DEVELOPMENT

47

Manager
R&D

Incharge
Quality
Control

Incharge
Chemical
Lab

Incharge
Pulp Lab

Incharge
Rubber

Engineer

Lab
Technicians

Supervisor

Supervisor

Technician

Workers

Supervisor

Research
Engineer
R&D Cell

Lab
Assistants

48

CONTROLLING

TYPES OF CONTROL
Each department of Packages Limited works under its own management and has its
own finances and management to control. The company uses the System Application
Procedure (SAP) system to organize, control and communicate within the department
and outside each department. This system software enables all of the departments to
coordinate with one another in a computerized system. All of the data about the
production, the orders, inventory, customers, logistics and all the details are entered
into the system. The managers and other personnel have their own system log in that
gives them the access to the information in the system. Each person has their own
level of clearance to the system depending upon the job requirement.

FEEDBACK CONTROL
There are two areas where Packages Limited adopts the feedback control in order to
better the management of their organization.

Customer Feedback

Staff Feedback

Customer Feedback
Packages Limited inquires about their products and services from their clients in order
to measure their satisfaction and to find out about any improvement required in their
management and efficiency. Most of the customer base of Packages limited has been
loyal for years and therefore quality is not something to compromise over. When each
new contract is entered or each delivery is made any issues faced by the customers
are informed to the subsequent department immediately to rectify the problem.

49

Staff Feedback
Through the use of the System Application Procedure (SAP) system throughout
packages the managers can easily communicate and coordinate with one another and
the feedback of each department is recorded within the system. This way any changes
that need to be made can be acted upon accordingly.

EMPLOYEE DISCIPLINE SYSTEM


There are numerous different ways to keep a check and control on the employees and
their performances. Packages Limited ensures that employees are rightly motivated
and work hard to achieve success.

Performance Appraisal- Rewards System


At packages it is the responsibility of HR&D department to develop a questionnaire
and distribute among the employees at the beginning of each year. Employees are
asked to set their individual and team performance goals or next year. At the end of
the year, employees actual performance is evaluated and compared with the set
objective. These are then analyzed to how much extent employees have been able to
meet their self-maintained goals about their performance. Eventually according to this
evaluation, employees are rewarded, either in the shape of bonuses or promotions.

FINANCIAL CONTROL
Financial control in any organization can be adopted by reviewing and analyzing the
financial statements of the organization. The cost, profits, expenses and revenues can
all be evaluated and kept under check with the help of financial statements and also
allocating the budget.

Budgets
In Packages, managers use budgets to plan for future and to reduce uncertainty about
the availability of human and material resources to perform departmental tasks. The
operating budgets are used to set the financial targets for a specific period for each
50

department in Packages Limited. Managers also use budgets to allocate the resources
to each departments to perform and attain objectives and operating goals of the
organization.

DEPARTMENTS
In the company, there are various productions, service, support divisions and
their respective sub-departments, which are as follows:

Finance Department:
Packages Limited has established its own Finance Department on
professional basis. Packages Limited has different financial managers who
are responsible for the financial aspects of the Packages Limited. This
department plays a key role in organizations performance. Finance
department is responsible to maintains accounts of all departments within
the organization. For solving the complex and difficult problems

Marketing Department:
Like all other departments the Marketing Department of Packages Limited
shows a good performance. The marketing department plays a key role in
the operations of the organization. The marketing manager is responsible for
all the marketing operations in all three offices in Lahore, Karachi &
Islamabad. The marketing department of Packages Limited is responsible for
sale of industrial & consumer products. Packages Limited has divided into the
51

three regions i.e., Lahore, Karachi & Islamabad. Each is assisted by the Area
Marketing Manager who is second in line of authority under the Marketing
Manager. Each region is responsible for the sale of its area. All area
marketing managers are assisted by a team consisting of Regional Sales
Manager, Senior Sales Officers, Sales officers and sales supervisor. There are
two Regional Sales Managers under the area marketing manager. Then there
are senior sales officers and sales officers. The Deputy General Manager who
is among the Board of Directors of Packages Limited is often consulted by the
Marketing Manager for important managerial decisions concerning Marketing
Department. The Area Manager advice is especially taken while developing,
launching and pricing of new products or amending the prices of existing
products and so on.

Production Department:
The role of production department in a manufacturing concern is very
important. In Packages the production department is also an important one.
The goods for the customers are manufactured according to the desired
standards in this department. This department is responsible to plan and
organize the allocation of jobs to various machines in a waythat their
maximum capacity is utilized and that the delivery is given to the customer
by stipulated date. The head of the production department is the production
manager. The planning department also assists the department. The working
procedures are based on week basis i.e. the total no of weeks in a year. The
Production Manager looks after the production while the Planning Manager
supervises the planning section.

Planning Department:
We know that if we want to increase our efficiency, we should plan with
excellence. Planning department is one of the most important departments
in an organization. Its main functions are to plan huge operations. In
Packages the planning department is also playing an important role. The
Planning Manager controls the department. The two main functions of the
Planning Department are following:
Link between marketing dept. And production dept.
Optimizing the available capacity
52

Research & Development Department:


If the industry wants to grow not just survive, then it should take care of its
Research and Development Department. World is changing day by day.
Development in Packaging material is a continuous process. New materials,
films, fibers, chemicals, adhesives and coating always are researched and
developed. As Packages Limited wants to retain clients, stay out of court and
improve profits, so it gives much consideration on quality of the product. To
keep up with new demands, Packages Limited has a Research, Development
and Control Department. This department works in close collaboration with
Production and Marketing departments. This department has well equipped
laboratories and pilot machines, which are used to test various chemical raw
materials and machines. It enables Packages Limited to provide better
quality and latest packaging to the consumer industry, enabling it to
introduce new product lines an develop new materials. The Research,
Development and Control Department has three major areas for its activities:
Research
Development
Control

Quality control Department:


This department examines the quality of products producing by Production
Department. They make tests about the quality of printing, gram mage of
paper or board and compare them with customer specifications and prepare
reports about results.

Art Department:
Packages limited have an art department in which qualified, efficient and
talented artists and designers are working. The artists and designers in the
department are very creative and for most of the time are involved in
designing the new packages. Art department gives attention to the advice of
the marketing and of the customer.

53

Human Resource Department:


Human resource department is another one of the most important
departments in an organization. The success of an organization is dependent
upon
a
successful
personnel
department.
All
the
progressive
organization give a great attention and importance to their personal
department. The prime objective of this department is to manage and utilize
the human resources in a fruitful manner. It is obvious that if the employees
are good then the pre-determined objectives can be easily achieved with
efficiency and effectiveness. This department deals with the selection of
employees and their working performance. The most important objective of
any human resource department is how to improve the performance of
employees at work.
The function performed by human resource department is:
Recruitment & Selection of Employees.
Training and Development of Employees.

Planning Work for the Employees.

Performance Evaluation and Appraisals.

Keeping Attendance Record

Keeping Employees Record in the Organization.

Cutting and creating Department:


Cutting is the process which gives the carton its shape. For each new product
a cutting die is prepared from drawings. This department is equipped with
latest cutting and creasing machines having a great efficiency along with
accuracy.

Lamination Department:
This department has two machines which laminates the paper on single side
or double side. This lamination process is started after printing, as the
customer requirements.

54

Dispatch Department:
This department dispatches the goods produced by Production Department
to the respective clients. The motivation of this departments workers is
enhanced due to the incentive scheme.

Technical Department:
This department is responsible for the repair and maintenance of machines
and construction of building and roads in the factory. There are 130
employees in this department. It works in two shifts. In case of emergency
third shift is carried out. It provides the necessary spare parts and machinery
to different departments. Technical Department is responsible for making
tools and spare parts. Some time it works for other industries. It normally
accepts the orders of Roll Grinders. These orders are accepted only on cash
basis.

Camera Department:
Camera Department is to color separation from the mechanical by using
cameras. Earlier this whole process was done by manually but recently
Packages Limited ha bought a sophisticated fully computerized color
scanner. Then with the help of scanners and manually, it is found out that
how much quantity of each color is required in the design. The
department has increased its efficiency and quality of films. In the Camera
Section, there are four colors use to get the negatives: Magenta, Yellow,
Cyan, and Black. The number of negatives is subject to the number of
colors used.

Corrugated Department:
For large scale packaging, Packages Limited has been manufacturing
Corrugated Carton since 1971. These cartons produced in different sizes,
are used for transporting consumer products from manufacturer to retail
outlets. The share of Corrugated Department in Packages Limited total sales
is almost 20%, which is second after the Off-set department. Corrugated
cartons are of great value for the export of fresh fruits, garments and shoes a
55

wide variety of gum tapes for sealing corrugated cartons are also
manufactured

Industrial Relations Department:


Already discuss before

Medical Unit:
Packages Dispensary, 23-Gulber-III, Lahore

TRAINING AND DEVELOPMENT OF EMPLOYEES

How do we develop our strengths? Through learning. People develop the


most when they are able to identify and cultivate their individual strengths
and are provided with the right support and encouragement to do so. This
philosophy lies at the core of our training and development programs.
We have an institutionalized in-house training function, reflecting our
commitment to building a workforce culture where all employees have
access to personal and professional growth opportunities. Staff at all levels is
encouraged to participate in these development programs. In-house training
courses and workshops are regularly organized: some recent topics included
Communication Skills, Time Management, Leadership, Language
Improvement, Productivity Enhancement and Development Course for
Supervisors.
We send approximately 60 to 70 employees abroad annually for training
purposes, while over 300 persons are trained locally every year.

56

Adult education classes are held regularly for the workers' benefit.

EXTENDING THE LEARNING CURVE


Packages has entered into partnerships with both local and foreign training
institutions.
The Harvard Business School of Harvard University offers some world
renowned training programs for senior managers, such as AMP (Advanced
Management Program) and ISMP (International Senior Management
Program). Participation in these programs is a complete management
development experience, and Packages has provided nearly a dozen senior
managers the opportunity of sharing their knowledge and expertise with
senior business executives at these programs.
Packages has also been sending its technical delegates to various industrial
fairs and exhibitions, such as Paper World, DRUPA, IPEX etc. held regularly in
different countries.

LOCAL ASSOCIATION
Packages has entered into partnerships with both local and foreign training
institutions.
Packages makes full use of training facilities provided by reputed local
institutions such as LUMS (Lahore University of Management Sciences),
Pakistan Institute of Management (PIM), and Management Association of
Pakistan (MAP). Recently, Packages entered into a learning partnership with
LUMS and jointly developed a unique in-house training program called
Diploma in Business Management (DBM). The program comprises 13
modules on traditional management such as HR, production, finance, and
contemporary trends such as customer service, and lasts from 15 to 18
months. This program represents the first partnership of its kind in Pakistan
between an educational institution and a business enterprise.
These training opportunities also send an important message to all aspirants
in the company - that personal growth is only possible through professional
development.

57

COMPENSATION AND BENEFITS POLICIES

Your job is an important part of your life, and to do it well, you need an
appropriate environment for your mind as well as your body. We like to make
sure that you do: our corporate culture emphasizes people, and the need to
satisfy their potential.
The attractiveness of any company's corporate environment can be gauged
by the employees it hires and retains. An impressive 42% of our employees
have been with us for more than 10 years, and almost 26% for more than 20.
This is just one of the reasons why you would consider Packages as a
prospective employer.
Another is the technical excellence of our employees. 33% of our employees
working as technical personnel have a bachelors or advanced degree. We
take pride in the diversity of our staff, with chartered accountants, MBAs,
engineers and even qualified lawyers on board.
For us, the resources running Packages are not the machines, but the people.
We do not seek employees. We seek people who will think, feel, express
themselves, learn, teach, and grow with us. Their growth is the company's
growth. That's how personal it is, for us. We have designed an impressive
range of facilities and services to free our people from worries and allow
them personal and professional freedom. These are just a few of the benefits
we provide for employee welfare:
Bonus - A cash bonus is paid annually to all employees.
Conveyance Allowance - This is also paid to all employees.
Employees are also offered the option of buying vehicles at reduced
prices.

58

House Rent Allowance - This is paid to all employees as a hefty


percentage of their basic salaries.
Employees' Old Age Benefit Scheme - The Company contributes a
percentage of workers' wages towards this government scheme, which
ensures a reasonable pension on retirement.
Subsidized Food - The Company has extensive cafeteria facilities
which serve breakfast, lunch and dinner to all employees at highly
subsidized rates.
Employees' Children Education - The Company pays an education
cess to the government to ensure free education up to high school
level of at least one child of each employee, subject to rules and
regulations.

Problem Development/Area of Concern:


The area of concern in Flexible Business Unit of Packages is related to Human
resource
department.
This
business
unit
is
experiencing
high
attrition/turnover rate, and Packages is unable to retain its employees in
particular the Trainee Engineers.
As I have been an intern at Packages Limited, I observed that motivation
amongst employees is low, I often found the employees overburdened, at
times not interested in work and applying for other jobs. This built up my
interest in human resource management of Packages and while deciding my
research topic, I conducted various interviews with the HR Personnel of
Packages Limited and from there I learnt about this problem. At that time
(initial stages) the HR department was confused over this issue, even though
they had taken notice of it but they were still not able to figure out the
primary cause behind it. The major damage it was doing to the company was
that it made the company like a training institute in which employees were
getting trained and were leaving and joining the competitor firms right after
their training period. This had become a tradition of Packages but now the
HR department was taking notice of it as perhaps now they very well realize
that loss of human capital can harm the company in the long-run, even
though in the short-run everything looks bright.

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Although the fact that trainee engineers' leaving frequently was not
highlighted by the company itself, but I got lucky to observe the
department's working for a few hours and get a better know how about the
working condition of the department. While interviewing the Flexible Unit
employees I discovered that it's not the labor class which is into leave the
company that frequently but the Engineers who are leaving rapidly.
On knowing this fact, I conducted several interviews with the present trainee
engineers and held telephonic conversation with trainees who left the
company in the past one year and gathered useful information to form the
basis of my research which will be discussed later in the study.

Objectives of the Study:


To help the company in addressing the issue of high turnover rate amongst
engineers in Flexible Business Unit
To identify the primary reasons behind high attrition rate of Engineers in
Flexible Business Unit at Packages limited
To assess if monetary benefits will play any role in decreasing the attrition
rate
To assess if fringe benefits will play any role in decreasing the attrition rate
To find out what are the engineers' expectations from the job and what they
are actually experiencing

Managerial and Academic value of research:


The managerial value of this research can be that first of all it can be used by
Packages Limited to address the turnover problem in Flexible Business Unit
and avoid spreading this problem to other business units. Various issues of
the trainees will be addressed in this research so the company can take
instant corrective measures. This research can also be used by managers in
other companies who are experiencing similar problem of high attrition rate.
On an academic basis this research can be used by students who plan to
investigate attrition issue in any company and can be a credible source and
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reference for further study in research. Secondly with time and further
research in study, we might bring in new innovative schemes that can
resolve turnover problem in companies. Moreover this research will be based
on various other worldwide researches carried out on employee turnover
problem, so it will also sum up those researches.

Literature Review:
The issue of employee turnover all over the world has been widely discussed
in the empirical literature. Researchers have reported various reasons for
why employees leave an organization. This section summarizes some of the
research studies that have been done on employee turnover and is arranged
in an ascending order according to the year it was done in.
Employee turnover is a much studied research topic. There is a vast amount
of literature available on the causes of employee turnover dating back to the
industrial revolution. Researchers have developed multivariate models to
study various factors contributing to it and have empirically tested them to
find out the major reasons behind it. Price (1977) in his research defined
turnover as the cessation of membership in an organization by an individual
and their movement out of an organization.
Allen & Meyer (1990) investigated the nature of the link between turnover
and the three components of attitudinal commitment: affective commitment
refers to employees' emotional attachment to, identification with and
involvement in the organization; continuance commitment refers to
commitment base on costs that employees associate with leaving the
organization; and normative commitment refers to employees' feelings of
obligation to remain with the organization. Put simply, employees with strong
affective commitment stay with an organization because they want, those
with strong continuance commitment stay because they need to, and those
with strong normative commitment stay because they feel they ought to.
Allen and Meyer's study indicated that all three components of commitment
were a negative indicator of turnover. In general, most research has found
affective commitment to be the most decisive variable linked to turnover.
Griffeth (2000) re-examined various personal characteristics that may be
linked to turnover. They concluded that there were no differences between
the quit rates of men and women. They also cited evidence that gender
moderates the age-turnover relationship (i.e. women are more likely to
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remain in their job the older they get, than do men). They also found no link
between intelligence and turnover, and none between race and turnover.
Hence there is little evidence of a person's gender being linked to turnover.
Griffeth also noted that noted pay and pay-related variables have a modest
effect on turnover. Their analysis also included studies that examined the
relationship between pay, a person's performance and turnover. They
concluded that when high performers are insufficiently rewarded, they leave.
Tang T. L. P., Kim J. W. & Tang D. S. H (2000), examined the relationship
between attitudes towards money, intrinsic job satisfaction and voluntary
turnover. One of the main findings of this study is that voluntary turnover is
high among employees who value money (high money ethic endorsement),
regardless of their intrinsic job satisfaction. However, those who do not value
money highly but who have also have low intrinsic job satisfaction tended to
have the lowest actual turnover. Furthermore, employees with high intrinsic
job satisfaction and who put a low value on money also had significantly
higher turnover than this second group. The researchers also found that
placing a high value of money predicted actual turnover but that withdrawal
cognitions (i.e. thinking about leaving) did not.
Elangovan (2001) examined that the notion of job satisfaction and
organizational commitment being causally related has not been incorporated
in most turnover models. His study indicated there were strong causal links
between stress and satisfaction (higher stress leads to lower satisfaction)
and between satisfaction and commitment (lower satisfaction leads to lower
commitment). He further noted a reciprocal relationship between
commitment and turnover intentions (lower commitment leads to greater
intentions to quit, which in turn further lowers commitment). In summary,
only commitment directly affected turnover intentions.
Abdul Rahman, S. M. M. Raza Naqvi and M. Ismail Ramay (2008) studied the
issue of turnover in IT firms of Pakistan in detail because they have seen a
high turnover during the past few years. The study revolves around three
variables including job satisfaction, organizational commitment and
perceived alternative opportunities. The study revealed that both job
satisfaction and organizational commitment had negative effect on turnover,
whereas perceived alternative job opportunities had a positive correlation
with intention of turnover. The study suggested that managers need to
increase job satisfaction to increase loyalty of the employees with the firm.
Martin C. (2003) in his paper "'Explaining labor turnover: Empirical evidence
from UK establishments", detected a complex relationship between turnover
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and training. He suggested that establishments that enhance the skills of


existing workers have lower turnover rates. However, turnover is higher
when workers are trained to be multi-skilled, which may imply that this type
of training enhances the prospects of workers to find work elsewhere. The
literature on the link between lower turnover and training has found that offthe-job training is associated with higher turnover presumably because this
type of training imparts more general skills.

Research Question:

"Identifying the reasons behind high attrition


rate amongst the employees of Flexible
Business Unit at Packages Limited"
Explanation:
Once it was clearly indicated that this department is experiencing a high
turnover rate, I formed my research question as identifying the reasons
behind this high attrition rate. The literature review helped me indicating
various causes that may be related to this high attrition rate. I took into
account various articles that were indicating somewhat the same issues that
I observed from the initial interviews, for instance controllable and
uncontrollable factors investigated by Naresh Khatri (1999), pay satisfaction,
career opportunities, expectation-reality match studied by Meenakshi
Gupta(2000), intrinsic job satisfaction and attitude towards money examined
by Tang (2000), organizational commitment and perceived alternative
opportunities studied by Abdul Rehman and M.Ismail Ramay (2008). From
these I picked out the hottest issues prevailing at Packages Flexible Business
Unit. The research previously done on this HR issue highlighted various
determinants of this problem in various cases, and so that I don't miss out on
the major ones, I made a list of the sub questions that will be a guideline for
the whole research. The issues like monetary benefits, non-monetary
benefits, working environment, job satisfaction are addressed in these subquestions and they will be a part of the focus group as well as the
questionnaire to get a better feedback on all of these.

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Sub Questions:
Are there any internal factors related to this high attrition level?
Is the attrition prevailing because of low monetary benefits?
Is the turnover increasing because of the work environment of this
department?
Will fringe benefits play any role to reduce the level of turnover?
What are the employee's expectations with the job in this department and
how they can be fulfilled so the turnover can be reduced?

Research Methodology:
To get the answers for my research questions, this is how I went about the
research:
Firstly, I collected data from the internet regarding the employee turnover
issues all around the world, this helped me forming the background of the
research and I came to know about various reasons why employees leave an
organization. I read various articles and researches done by various authors
to get an idea about the reasons that have been identified till now by the
researches on this very important issue. Secondary data was collected from
various websites including Jstore and various other online research resources
that will appear in the references at the end.
The literature review helped me in gathering all such causes but at the same
time I never remained stuck to them, I was always aware of the fact that
there can be more to it, perhaps there might be some issues which were
never previously addressed that can emerge in my research.
Then I had an in-depth interview with the HR Assistant Manager Miss Fatima
Mehmood to identify what she feels about this problem. From there I
collected some factual information and got an idea about issues prevailing in
the department. Even though she was not so sure about the reasons behind
the turnover issue but was concerned over this issue.
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Then I carried out a focus group with 3 trainees and 3 engineers to get an
open idea about their problems and got a better know-how about why their
colleagues left the organization. I also conducted telephonic interviews with
some of the engineers who recently left the department.
Sample Size: From these unstructured interviews, I made a structured
questionnaire entailing various questions about the work related issues,
monetary benefits, motivation, job satisfaction etc. I floated the
questionnaire to all the trainees, engineers and the managers of the Flexible
business unit and got it filled by 30 respondents in total.
From the filled questionnaire I tabulated the data and analyzed the research
results and came up with various interesting findings which will be of great
interest to the company in general and the HR department in particular.

Findings of the in-depth Interview:

Policy of not firing employees


Frequent job shifts from one department to another
High turnover amongst trainees
Highest attrition in Flexible business unit
Trainee Engineers leaving frequently (2 out every 5 joining in leave the firm)
Basic pay of Rs.25000
Authoritative jobs
Family like working environment
Health and safety at work considered
Source: (Interview with Fatima Mehmood, Assistant HR Manager)

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Findings of the Focus Group

Intention to stay
Care for Employees rights
Exposure of other departments
Fringe Benefits
Health and Safety at work

Intention to leave:
Overload of work
Late sittings
No time management
No technical work for engineers
No application of the studied degree
Low salary
Calls from office even after going home
Stuck in packaging field
(Source: Focus Group with 6 Engineers of Flexible Business Unit at Packages
Limited)

Independent Variables:
Pay Satisfaction

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Work Load
Fringe benefits
Outside Career Opportunity
Job satisfaction

Dependent Variable:
Intention to leave

DATA TABULATION AND ANALYSIS


Analysis:
The results to this question reveal that a very high percentage of the employees in the
survey are working at Packages for less than 1 year i.e. 53%, as most of them were
trainee engineers. This in itself is an alarming situation that a smaller percentage 47%
fall under the category of more than one year, which indicates that the level of loyalty
amongst the employees might be low or Packages is into injecting more fresh blood in
the company. None of the workers fall under the category of 7 or more than 7 years
working, which means that Packages might be missing out on experienced individuals.

Analysis:
This question was particularly investigates if all the employees of flexible department
were there from the start or has there been rotation amongst them. It revealed that
Flexible business unit has more freshies in it as 67 percent of respondents fell under the
category of less than 1 year, which means a few of them are recently shifted to the flex
department, hence more trainees in this department. Again none of respondent fell in
the category of 7 or more than 7 years working, and a very small 30 percent above 1
year.

Analysis:
This question produced a mixed response, but the weight fell towards the positive side.
It indicated that respondents are satisfied working at Packages limited. Although 26
percent fell in the negative category but majority were satisfied working at Packages
Limited, which can be taken as a positive sign for the company as a whole.

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Analysis:
The result to this question further clarified the issue, a heavy majority responded that
they are not satisfied working at Flexible Business Unit, now this can be a cause of
concern, where at one point majority indicated that they are satisfied working at
packages limited, on the other hand the majority was dissatisfied working at flexible
business unit of the same company, which indicates that something is certainly wrong
with the department's working.

Analysis:
When asked about the monetary benefits importance, that 87% considered it either
very important or important and only 13% considered it somewhat important but none
of the respondent went for not important or not at all important. This can be very
beneficial for the HR department as they can motivate the employees with monetary
benefits which are considered important by them.

Analysis:
When questioned on non-monetary benefits, it produced a mixed result. But again the
majority 58% fell under the band from very important to somewhat important, whereas
42% didn't consider it important. This indicates that while choosing between monetary
benefits and fringe benefits, the company should give more weight to monetary
benefits.

Analysis:
After getting a clasp of the weights attached with monetary and fringe benefits, the
respondents were questioned ons the level of satisfaction with the monetary benefits of
their current job which produced interesting results. Although majority of the
respondents attached a high weight to monetary benefits but the level of satisfaction
with the monetary benefits of Flexible business unit is low, as 60% were either
dissatisfied or very dissatisfied with the monetary benefits. This is a major cause of
concern when respondents attach a high weightage with monetary benefits.

Analysis:
When questioned about the fringe benefits of Flexible business unit, the percentage of
dissatisfaction was lower than that of monetary benefits, but still the weight age fell
towards dissatisfaction. 60% were not satisfied or not at all satisfied with the nonmonetary benefits. But this might not be a major problem as importance attached to
fringe benefits by the respondents is low.

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Analysis:
When asked about the workload at Flexible unit of Packages 87% of the respondents
considered it as a heavy workload. This can also be referred to the focus group findings
where the respondents complained about late sittings and remaining in touch with office
work even after office time. This issue certainly needs attention of the HR department
as well as the management of flex department.

Analysis:
This question was asked to judge upon the job satisfaction associated with the
respondents current job at flexible business unit, the results showed that 75% of the
respondents disagree or strongly disagree with the statement which means the job is
not up to their expectation and they are also not satisfied with their current job.
Throughout the business education, we study the importance of job satisfaction, if it's
low then the motivation will also be low and employees are likely to leave, so the issue
of job satisfaction should be addressed immediately.

Analysis:
This question was asked to measure the 'Intention to leave' of the employee which
showed positive results, majority of the respondents have an intention to leave as 86%
of respondents agree to the statement that they think about quitting their job and only
14% disagree to the statement, which is a dangerous sign for the department and the
company as a whole.

Analysis:
When asked about opportunity of finding a better job, the response was
mixed, 40% considered it likely to find a job and 60% considered it not likely,
which means a heavy percentage fell towards the 'Not Likely' category. This
can be attributed to two factors, either to the economic conditions of
Pakistan and referring to the focus group where respondents said 'Stuck in
packaging field' whereas Packages is the largest packaging company in
Pakistan, so they might not be able to find a better job than the current job.

Analysis:
100% of the respondents were males. And 93% fall in the age bracket of 2130, which means a very high percentage is youth, who have an urge to earn
more and more, hence if not loyal and satisfied with their job, they are likely
to leave. Hence corrective actions are instantly required.
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OVERALL ANALYSIS AND FINDINGS


In this section I will be taking into account all the findings of the research and
will be analyzing how they intermingle. Starting off with the final in-depth
interview with Miss Fatima Mehmood where she highlighted the facts like
Rs.25000 basic salary, taking into account the inflation rate prevailing in
Pakistan, the salary in itself is not sufficient enough for a graduate to meet
the basic needs and for this very reason this issue was highlighted not only
in the focus group but also in the tabulation of the questionnaire where more
than 70% respondents were not satisfied with the monetary benefits.
It was also indicated by the study that health and safety at work is not an
issue behind the high turnover rate, as Miss Fatima said that family like
environment exists at Packages, but she didn't highlight that there are late
sittings in this environment because of which employees are really feduped
and on reaching home they tend to receive calls from office which can be
really annoying and even at late night they have to keep a check on the
production, therefore they won't be living a very peaceful family life and the
balance between work and family life will surely be disturbed. This could be a
major reason why 2 out of every 5 trainees leave the firm within 1 year,
because they might not see a bright peaceful future with the firm in
particular this department.
It was also highlighted that the company doesn't have a policy of firing
employees until and unless there is a serious issue, that was also indicated in
the questionnaire, as there was difference between the percentages of
respondents working at Packages and working in flexible business unit,
hence there may be frequent shifts which may be harmful for the company in
the long-run as they might not get the team work out of the departments.
Another issue that was addressed in the focus group was that there was not
much of a technical work for engineers and the application of the studied
degree is also less, hence there was also a gap between expectation and
reality of the job, which needs to be filled to decrease the intention to leave
of the employees.
The research produced another interesting finding where mostly employees
felt satisfied working at Packages limited in general but when asked about
Flexible business unit in particular the response turned out to be negative
and a heavy majority said that they are dissatisfied working in this
department, so the label of Packages does matter.
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Although as much as 60% are dissatisfied with the fringe benefits, but the
importance attached to the fringe benefits is less compared to that of
monetary benefits so the company should also give more weight to
monetary benefits as 42% respondents didn't consider it important.
A majority of the respondents i.e. 60% took a negative view regarding an
outside career opportunity, which means they are pessimistic in finding a
better job but at the same time they are not very satisfied with their current
job, not only that the company has to think about these 60% but more
importantly they have to think about the remaining 40% who are of the view
that they can find a better job in the time to come.
My research also supported and negated various studies done on this topic
before, for instance it supported the study done by Naresh Khatri (1999)
which concluded that employee turnover is prevalent more due to poor
management than bad attitude of employees, this was very much seen in
the case of Flexible business unit of Packages Limited.
It supported Elangovan (2001) research who found out that there are strong
causal links between stress and satisfaction, so was the case in Flexible
business unit where heavy workload was leading to lower job satisfaction
and high intention to leave.
My study also supported Tang & Kim's (2000) research as they investigated
that voluntary turnover is high among employees who value money
regardless of their intrinsic job satisfaction, employees at Packages also
valued money and were dissatisfied because of lower monetary benefits
offered by the company.
It the same time my research negated Change E. (1999) study which proved
that role of career commitment was stronger in predicting turnover and when
individuals are committed to an organization they are less willing to leave,
but in case of Packages where although employees were satisfied working
with the company but not satisfied working in a particular department i.e.
flexible business unit, hence my study doesn't support his findings.
My research also negated Meenakshi Gupta (2000) research results which
showed that turnover perception and outside career opportunity were major
independent factors responsible for intention to stay in a company, but this
was not the case in Packages, as respondents didn't consider outside career
opportunity as a major factor behind their intention to leave the department.
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To sum it up, all this explains that a very important element of the company
i.e. the Human Capital, which can be considered as the major strength of
Packages Limited is not very much satisfied with their jobs at Flexible
Business Unit, it presents an alarming situation as the loss might seem little
at present but can turn out to be a major disaster if the department keeps on
loosing employees at this pace.

RECOMMENDATIONS:
During my internship in your reputed organization I observed that following
changes may be lead your department to the better internal environment
Having analyzed the policies and procedures, I inferred some
recommendations which are as following:
First of all, the human resource management has not assumed its
mature shape in true sense of the word. The activities are limited only
to payroll and record keeping. While HRD department has limited roles
and responsibilities which should be enhanced.
Career ladder for each employee should be well defined.
Steps should be taken to improve the network system which gets too
slow due to uneven networking. Server gets more strikes at one time
which create hindrances in the smooth work flow of organization.
Training need assessment methods should be applied for the accuracy
and precision of such a large workforce.
Provision of computer to each person working in incentive and
establishment sections.
Proper filing and storing cabinets for incentive section.
Detention of payment for one week in case leaves are not sent in time.

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Department names should be written on the entrances of every


department
As the era of IT; it is being suggested that paper work should be reduce
and maximum work should be done online, which leads to integrity and
efficiency.
Record room
should be
maintained
through
the
support of
proper software, different software are available in market or can be
design on order.
For maintaining and evaluating the progress a monthly meeting of I.R
staff should be held with in-charge of department.

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