1

Final Report

Of

Human Resource Management

2
Group Members

3
 Acknowledgement
We are really grateful because we managed to complete our Pakistan Tobacco Company
(PTC) assignment within time given by our lecturer Mr. Salman Ali Khan. The assignment
cannot be completed without effort and corporation from our group members. We also sincerely
thank our lecturer of Human Resource Management, Mr. Salman Ali Khan for the guideness
and encouragement in finishing this assignment and also for teaching us in this course.

4
Dedication
This report is dedicated to our parents who educated us and enabled for this level.

5
 Company

Pakistan Tobacco Company (PTC)

6
Pakistan Tobacco Company: PTC
Introduction

Pakistan Tobacco Company Limited was incorporated in 1947 immediately after independence,
when it took over the business of the Imperial Tobacco Company of British India which had
been operational in the South Asia since 1905. Pakistan Tobacco Company is part of the British
American Tobacco Group, one of the world's most international business groups, with brands
sold in 180 markets around the world. It is located in Jhelum, and Nowshera Pakistan.

History

From being just a single factory operation to a company which is involved in every aspect
of cigarette production, from tobacco cultivation to packaging we have evolved and grown
with Pakistan. However, what is significant about these sixty-two years is the effort that PTC has
demonstrated in the development of the country. By being instrumental in the campaign for
modern agricultural and industrial practices, we have helped in the development and progress of
the agricultural & industrial sector in the country. Pakistan Tobacco Company Ltd. is one of the
largest tax contributors in the private sector in Pakistan. During 2015 Pakistan Tobacco
Company Ltd. contributed over Rs. 86 billion, an increase of Rs. 12.8 billion, 17% vs. SPLY to
Government revenues in the form of Excise Duty, Sales Tax, Income Tax & Custom duties. This
amounts to over Rs. 268 million per working day. Over one million people are economically
dependent on the industry in Pakistan.

Brands of PTC

Pakistan Tobacco Company invests in trying to understand the consumers’ preferences and
ensures that adult smokers make informed choices about different brands available in the market.
We have put in particular effort in promoting two of our Global Drive Brands, Dunhill and Pall
Mall; and two of our great value for money brands, John Player Gold Leaf and Gold Flake.

(1) Dunhill
(2) Benson & Hedges
(3) John Player Gold Leaf
(4) Capstan by Pall Mall
(5) Gold Flake
(6) Embassy

7
 SWOT analysis of PTC

This SWOT Analysis of PTC Inc. provides a strategic report of businesses and operations of the
company. The SWOT analysis shows strengths, weaknesses, opportunities and threats. This
SWOT analysis of PTC Inc. can provide a competitive advantage.

Strengths

-existing distribution and sales networks

-domestic market

-reduced labor costs

-Monetary assistance provided

-experienced business units

-skilled workforce

Weaknesses

High investments in research and development.

Opportunities

Global markets.

Threats

Technological problems.

Business Trends
Profitability
Outlook
Markets
The industry shows a growth rate of about 6%.

Industry specific SWOT analysis (Relevance/Importance)

8
What happens in the underlying industry? Factors and trends affecting the overall industry and
their implications for this business:

Strengths
We see high industry growth rates. (59% 19%)
The market size is adequate. (41% 18%)

Weaknesses
Cost and income structure could be critical. (17% 32%).

Opportunities
Global markets are available.

New trade agreements between countries are possible. (39%, 37%)

Threats
Economic barriers can be seen. (34%, 41%)

Mission statement of PTC

Transform PTC with speed, flexibility and enterprising spirit of an innovative, consumer focused
company.

Vision statement of PTC

First choice for every one.

HR function of PTC
Four functions of HR are following:

(1) Recruitment
Recruitment is a searching for and obtains potential job candidates
in sufficient number and quality, to enable the organization to select the most
appropriate people to fill its job needs. First of all there is a requisition from a department
for a post which if approved by t h e H R D , i t i s a d v e r t i s e d w i t h f u l l j o b
d e s c r i p t i o n a n d s p e c i f i c a t i o n i n t h e l e a d i n g newspapers (it is also
checked if the post can be filled from within or alternate solutions are figured out in
order to save hiring, training and other expenses). Thereafter, when a pool of
applicants comes up by the due date, the recruitment process comes to an end. In PTC,
employees from grade A–01 to A–10 are hired by Human Resource
Departmentw h e r e a s B u s i n e s s S u p p o r t O f f i c e r s B S O ’ s ( g r a d e A
30 to A33) positions arerecommended by the HRD at the F
a c t o r y t o t h e H e a d O f f i c e . T h e r e c r u i t m e n t o f Members of
Management MOM’s (grade A–34 to A–37) is the responsibility of Head

9
 Office where recruitment sources such as recruitment agencies, campus
campaigns and employees’ databanks are identified to attract world class candidates
for the openings in the company.
In PTC when a job vacancy arises, the following steps are taken
i n t h e p r o c e s s o f recruitment:
1. Recruitment Advertising (Internally or Externally)
2. Internal Vs. External Recruitment
3. Compilation of Applications / CV

There are two methods of recruitment

(1) Internal recruitment
(2) External recruitment

Internal recruitment
Commonly for position above the entry level the acceptable source of applicants may be
within the organization itself. To find qualified applicants within its own organization is
called internal recruitment. In internal recruitment is through “job posting and bidding”.
This process consists of job vacancy notice on bulletin board.

External recruitment
External recruitment is another method which is commonly user m
e t h o d . T o f i n d qualified applicants without its own organization is called external
recruitment. There are many sources (universities, colleges, and other government,
private sectors) from which we can attract required employees.

(2) Training & Development

An employee is trained in accordance with the needs of the concerned
department. The HRD specifies needs of training and arranges courses,
which can be carried out in the country or abroad also. The annual report of the
employee includes the courses he/she has received. The courses include office
management, communications, etc. Other thing is the employee development. The
difference between the employee training and development is that, that training is
present oriented activity while development is future oriented. Employee
development helps the employees and enables them to the future challenges and
performs the activities in the coming future.

There are three phases of training and development.

(1) Assessment phase.

(2) Training design and implement.

(3) Evaluation

Types of training:

10
 Following are types of training:

Orientation
Orientation is alwa ysonl y gives to new emplo yees which are selected b
y e x t e r n a l recruitment process. In this we give the information of all departments,
such as head office, regions, areas, factories and from where raw material comes.

Technical Skills Training:

Technical skills mean that the technique and other information which needs a workers to w o r k
with a machine, what difficulties may comes in this process and how he
w o r k efficiently.

Management Development Training

In management training you conduct a training program to managers to enhance
their s k i l l s s u c h a s c o m m u n i c a t i o n , c o o r d i n a t i o n a n d a w a r
e t h e m t h e n e w w o r k i n g experiences

Overall Training.
Training is a planned effort by a company to facilitate employees learning of job-related
competencies. These competencies include knowledge, skills or behaviors that are critical for the
successful job performance. At PTC there is a continuous assessment of the technical
and managerial skills for the further enhancement of these skills formal training programs
are offered at all levels. The employees are provided with opportunities to put these skills into
practice, in preparation f o r t h e m o v e t o a m a n a g e r i a l r o l e . T r a i n i n g i s v i e w e d
a t P T C a s a w a y o f c r e a t i n g intellectual capital. Employees are expected to acquire new
skills and knowledge, apply t h e m o n j o b a n d s h a r e t h i s i n f o r m a t i o n w i t h o t h e r
employees.

Selection
Selection of candidates follow after the recruitment procedure is completed. Thus
the selection under take to consider those candidates who applied for respective
job and decides which one should be given the appointment. Selection process typically
consists of the following steps.

*Advertising
First the post is advertised in the leading newspapers, and interested candidates are askedto send
their CV’s.

11
*Compiling the application forms
The application received after advertisements are compiled.

Initial screening interview

The different applications are checked and the applicants who qualify the
requirements are selected.

Employment test
Then there is a written test of the candidates who are selected and they
h a v e t o g o through a proper written test.

Assessment test
After the written test there is an assessment test. In which leadership qualities, teamwork,
individual burden handlings are checked.

Comprehensive interview
Those candidates who are selected in assessment test are
s u p p o s e d t o h a v e comprehensive interview. In the comprehensive interview business
questions are asked.

Background investigation
In This section the organiz ation checks the backgroundof the emplo yee,
i n w h i c h previous organizations, contacts, work experiences etc are checked.

Conditional offers.
The employer gives different packages to the new employee. In which salary,
working hours etc are decided.

Medical and physical test.

The employee has to give a medical and physical test. In this section the
organizations want to assure that they are medically and physically fit.

Final interview.
After doing all the tests the employee has to give a final interview in which
timings, branch office are decided.

The permanent job offers.

12
In this stage of selection process the employee is been given a permanent job offer. In first
step they attract the people who are willing and having ability for that job. They
attract the people with advertisement in newspaper; go to different recognized
institute and the database or pool of application, which an organization has received already.
After screening from those applications here screening criteria are (education level, experience,
skills, etc). In next step they grade those applicants according to their education
level, experience, skills, university, etc. From third step they differentiate selected applicants
into two groups. From third step the selection criteria is different.

(4) Performance Appraisal

Performance appraisal at PTC is used to evaluate the job performance of employees.
HR department use the information gathered through performance appraisal to
evaluate the success of recruitment, selection, orientation, placement, training and
other activates. Formal appraisals are needed to help managers with placement, pay and other
decisions. This kind of formal appraisal in PTC for Business Support Officer is
called Steps or Success through Performance Evaluation the method used for managers is
called Pacer the Performance Appraisal for Career Enhancement. The appraisal forms are
rated by the mangers or concerned authorities on the basis
of C o r e S k i l l s a n d F u n c t i o n a l / T e c h n i c a l S k i l l s . T h e c o m p a r i s o n o f t h e a
c t u a l l e v e l o f competency and the expected competency level which is also
defined as meeting the success criteria gives a true picture of where these
employeestands.Thestrengthand w e a k n e s s e s a r e a n a l y z e d a n d a c c o r d i n g
t o t h a t a t r a i n i n g p r o g r a m i s a r r a n g e d t o overcome the problems. In PTC a
standard measure is a Success Criteria that reflect the behaviors needed to embrace to meet the
future demands.

Compensation
PTC considers its employees not just as a cost but as a resource in which the
company has invested from which it expects valuable returns. Pay policies and programs are
one of the most important human resource tools for encouraging desired employee
behaviors. The advantage of paying above the market average is the ability
to attract and retain thetop talent available, which can translate into highly effective and
productive work force.

Extra Pay for Overtime

If a worker works for more than nine hours in any day or for more than 48 hours
in any week in a non-seasonal or seasonal factory he shall be entitled in respect of
overtime worked to pay at the rate of twice of his ordinary pay.

Promotions

13
In order to retain employees and keep them motivated, the
e m p l o y e e s h a v i n g g o o d performance can be promoted to the next higher post. There are
two bases for promotion in PTC - the suitability and Seniority. Suitability means the
suitability of the person inters of his performance on the job and seniority means the time he
has passed in PTC.There are certain jobs to which eligible persons are directly promoted and do
not require any further training. But certain jobs require special training for a
particular period. So when a person is to be promoted to these jobs they are provided with
specified training. There is an annual assessment form, which is used to grade employees. It
depends upon the work performance, quality of work, cooperation, versatility, general
knowledge, and punctuality and attendance of a worker. Line managers do their
assessments, their immediate bosses . That is from January to D e c e m b e r h a v i n g
r e m a r k s o f u n i t m a n a g e r , s i g n o f i n c h a r g e o f d e p a r t m e n t m a r k s according
to percentage point system. In production upgrading is easy, group operator to machine
controller.A8-A9-A10 while training promotion. A1-A6- takes nine months. A8-A9- takes
eighteen months.

Employee’s motivation
PTC provides the following benefits to its employees to keep them motivated, confident,up-to-
date and to make them better citizens of the community:
•
Free Computer Courses
•
Dastakari Center
•
Farewell
•
Housing Schemes
•
Factory Mosque
•
Sports Activities
•
Traveling Facilities
•
Uniform and Smoking Allowance
•
Burial Expenses
•
Retirement Party
•
Blood Donation Camp

Employee’s benefits and motivation

People join organizations for better living better and prosperous life. They expect
somem o n e t a r y a n d n o n m o n e t a r y b e n e f i t s i n r e t u r n f o r t h e s e r v i

14
c e s t h e y g i v e t o t h e organization.In PTC, there are mainly three levels of employees
working in different departments; one level is workers from grade A–1 to A–10. The second
level may be classified as BusinessS u p p o r t O f f i c e r s f r o m g r a d e A –
3 0 t o A – 3 3 a n d t h e t h i r d l e v e l i s M e m b e r s o f Management
from grade A–34 to A–37. HRD at PTC deals in the benefits available to blue–collar
workers (level 1) working in different departments.
Monetary benefits available to these workers may be classified as

Wages and Salary;

Incentives;

Fringe Benefits; and

Bonus.

Wages and Salary

PTC employs more than 1000 permanent workers in its Akola Khattak Factory.
Outof t h e s e w o r k e r s , 9 0 9 a r e d i r e c t l y r e l a t e d w i t h p r o d u c t i o n w h
e r e a s 1 3 1 u n i o n i z e d employees are working Leaf Areas in seasonal capacity. The
wages of workers in PTC are determined through salary reviews, job surveys and
through collecti ve bargaining. In PTC, the minimum wage for a general
g r a d e A – 1 worker is at least Rs.7, 000 per month. This also makes PTC as a preferred
employer.

Incentives
In PTC, a Group Incentive Scheme called Special Incentive Allowance
( S I A ) i s i n operation. Special incentives are given to all permanent workers in
order to keep them motivated and to achieve the targets and organizational objectives. The
Special Incentive Scheme in PTC is the result of restructuring that took place in 2001in which
about 1000 employees were separated from PTC through Voluntary Separation Scheme VSS and
Special Separation Scheme SSS. When those workers were separated, their workload was
shared by the remaining workforce. This scheme is provide to the remaining
workforce in different ratios. Departments where more people were affected receive
higher rate of SIA compared to those departments which were either not affected or affected
slightly.

Fringe Benefits
PTC being a progressive multinational provides many fringe ben efits to its
employees. The fringe benefits available to workers of PTC are explained as under:

15
Pension
In PTC on attainment of 58 years of age for men and 55 years
f o r w o m e n o r o f completing fifteen years insurable service, one gets eligible
for retirement. But he is given another option as well. If he wants to continue his job, he is
awarded 3 extensions (Each extension each year) for 3 years more.\

*Old Age Grant

Old Age Grant is payable in lump -sum at the rate of 50% of the average wages of
uninsurable worker for his completed years of service.

*Group Insurance
Under this scheme all the employees are insured with ALICO Insurance Company
and also with EFU Insurance Company. Under the former scheme the whole premium is
paid b y t h e c o m p a n y o n b e h a l f o f t h e w o r k e r s . T h e w o r k e r s ’ h e i r s a r e
e n t i t l e d t o r e c e i v e Rs.20, 000 at the time of worker’s death while he was on the company’s
roll. The second i n s u r a n c e p l a n E F U i s o p t i o n a l . I n c a s e o f E F U , 7 5 % o f
t h e p r e m i u m i s p a i d b y t h e company on behalf of the worker while the rest of
25% is contributed by the worker. Under this scheme the workers are insured against
Rs.400, 000/.

*Long Term Service Awards

Workers who have continued to maintain their commitment to the organization
for long period of time are given long service awards. Eligibility for this award
is completion of 25 years of service. The employees eligible for this reward are given
Rs.12000/- each as their reward for their loyalty with PTC. A special party is arranged for this
purpose.

*Hajj Scheme
Each year PTCsendssevenworkers to Mecca forpilgrimage (Hajj). Six of
thesem e m b e r s a r e f r o m A k o r a K h a t t a k F a c t o r y a n d o n e i s f r o m
L e a f A r e a . F i n a n c i a l Assistance of Rs.110, 000 is given to each employee who
proceeds on Hajj

*Scholarships
Each year Workers’ Welfare Board grants scholarships to academically talented children of
workers. These scholarships are provided to 24 students on merit basis. Maximum of Rs.400 are
granted to post matriculate students and Rs.500 to post intermediate students.

Personal opinion
According to our personal opinion PTC has a very systematic approach to
recruitment. The most important thing as far as recruitment is concerned they
recruit qualified and quality personnel. The example can be that for MOM’s
they recruit only those students who are graduates from good institutions i.e. IBA,

16
LUMS, GIK, NUST etc. As far as training and development is concerned PTC has
a very good training and development programs.PTC recruits both internally and
externally, but as the skill available internally is nonsufficient, so they have to
recruit externally. And if a situation comes in which skill is available both
internally and externally they will defiantly go for internal recruitment. T h e
reason behind this is that because the internal emplo ye e won’t be new to
t h e organization and he will be aware of the culture of the organization. Their training and
development programs are fully sponsored by the organization. For E x a m p l e :
Mian Hameed (HR officer) the person we interviewed wa s sent to get
HR Diplom a from NUS T and he wasfull ysponsored b y the company, whic
h i n c l u d e s traveling, accommodation, fee, food etc. For training and development PTC
reviews the performance of the employee every year and according to that they judge who
should be set for training. It is also observed in PTC that employees can ask management to send
them for training if they feel that it is necessary. In reaction the management reviews
that problem and decides whether he/she should be sent or not.

17
18