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Gentlemen, we have an appreciated business history of more than half a century, and the Shumaila Naz is PhD
business world around us is changing day by day. To survive in this cut-throat competition, Scholar at the
we must discard our traditional approach and update ourselves in line with the best Department of
contemporary management practices to gain sustainable competitive advantage. It is Management Science
and Engineering, Jiangsu
imperative to ascertain a digital HR system for managing our human capital and hence
University, Zhenjiang,
optimize the performance of our executives and managers to meet the intensifying
China. Shabnam Khan is
demands of today’s technology era. This would be a disruptive change with respect to our
Assistant Professor at the
legacy system, but we have to decide whether we are ready to change or face the Department of
consequences of complacency with our traditional operating system. Management Science,
On 30 June 2010, Mr M. Saigol (Director Operations) Pak Elektron Ltd (PEL) held a meeting Superior Group of
Colleges, Lahore,
with the top officials of PEL to discuss the HR consultant’s evaluation report about the
Pakistan.
company. He was convinced that the twenty-first century’s business environment moved
towards the survival of the fittest. He was making a comparison of the traditional
administrative management style and formal manual HR system being followed in the
company versus a centrally monitored and controlled intelligent digital HR system while
benchmarking with the contemporary international practices of emerging markets.
However, he was concerned about how to manage and deploy this disruptive change
companywide. “Would it be worthwhile? Is it the right time or can we defer the decision to
some later point in time? How to bring about or settle this huge organizational
transformation?”
DOI 10.1108/EEMCS-10-2014-0251 VOL. 8 NO. 1 2018, pp. 1-23, © Emerald Publishing Limited, ISSN 2045-0621 EMERALD EMERGING MARKETS CASE STUDIES PAGE 1
1. Power division: Since 1956, the company had manufactured a great number of
transformers, energy meters, switchgears, kiosks, compact stations and shunt
capacitor banks. PEL continually contributed towards the advancement and
development of the engineering sector in Pakistan. The PEL Power division was one of
the major electrical equipment suppliers for utility and industry.
2. Appliances division: The company ventured into the home appliances market in 1981
as one of the leading manufacturers of refrigerators, air conditioners, deep freezers
and similar products. Their products received a great response from the local market,
which encouraged the company to multiply its production in the subsequent years.
Today, PEL had become a preferred choice for household items. Its products were not
only in great demand in the local market but the company had also started exporting
its appliances overseas.
In 2010, the manufacturing units of PEL were situated at two facilities in Lahore, Pakistan
with an area of 1,033200 sq ft at 14-km Ferozepur road Lahore and 614,252 sq ft at 34-km
Ferozepur road Lahore. PEL also had the privilege of getting its equipment approved and
certified from well-reputed international accreditation bodies including, ISO 9,001:2008
(Quality Management System Certification), ISO 14,001: 2004 (Environmental Management
System Certification), OHSAS 18,001: 2007 (Health & Safety Management System
Certification), CE Mark (Product Certification) (http://pel.com.pk/index.php/about-us/). The
CE Mark for power products enabled PEL to export their products to the European Union
and other developed countries. PEL had made various agreements/collaborations with
recognized brands to achieve tremendous growth and manufacture high-quality products
(Exhibit 1) (http://pel.com.pk). Despite the economic recession at both micro and macro
levels and the rapid shortfall in electrical energy resources in the country, the annual
turnover of the company had been growing consistently at a cumulative average growth
rate of more than 18 per cent annually for the past 12 years. The company’s business had
grown substantially from PKR 3.16 billion in 2001-2002 to PKR 20.29 billion in 2012
(Exhibit 2). PEL was successful in attaining a high market share in both the Appliances and
Power division (Exhibit 3). PEL had a large dealer network throughout Pakistan with more
than 1,600 dealers spread across the country.
PEL received the 4th Health and Environmental National Excellence Award 2008 for
effective Health, Safety & Environmental performance. The award was offered by “Help
International Welfare Trust, Pakistan” in collaboration with the Corporate Social
Responsibility Association of Pakistan (ACCA-WWF PERA, 2008). In 2009, PEL received
the 4th CSR National Excellence Award and the 6th Annual Environmental Excellence
Award. In 2010, it was awarded the 5th CSR National Excellence Award (Annual report of
PEL, 2013). Engineer day, consisting of 500 members, was celebrated by the institution of
engineers as a way of recognizing the importance of engineers’ contribution to society. At
this occasion, the company was awarded for its excellent contribution to the power industry
(Hamara Pel, 2016).
The company began with 250 employees in 1956, and this increased to more than 5,500
employees in 2012. Since 1956, PEL had adopted a functional organizational structure.
When it ventured into the home appliances market in 1981, PEL redesigned its
organizational structure into a divisional structure (Exhibit 4). The present PEL workforce
could be classified into three broad categories:
Non-executive grades ⫽ 4,000 approx
Executive grades ⫽ 1,200 approx
Managerial grades ⫽ 250 approx
Total strength ⫽ 5,500 approx
Implementation of HRIS
An extensive companywide training program was designed for all employees to get
them accustomed to the new software based modules so that they could learn to
perform their activities online. It took around eight months to incorporate all employees
in training incurring direct and indirect costs such as design & development costs,
resource person cost, material cost, infrastructure cost and employees opportunity
cost. All the records related to employee annual competency review, the training needs,
training undertaken, education, skills and experience were maintained by HR. The
records of training needs identified through online annual performance appraisals were
maintained online in PMDP system or in hard copy, (if conducted manually), as
appropriate. The records of trainings conducted by employees were also maintained in
Employee Training Management System (ETMS). An employee might place any
document, certificate pertaining to his work experience or training, in his personal file,
kept in HR department and acquired on his own. In this revolutionary period, all HR
activities were conducted through HRIS which produced following benefits at PEL. This
new system helped HR professionals in knowledge management, operationalize the
information and retrieved knowledge could be used by the employees for decision
making. Through this digitization, HR and IT worked together to leverage technology.
HRIS provided administrative and operational efficiency in compiling HR data (Satav,
2016). Due to the digital system, HR department worked in a paperless environment
with the help of information technology and all of their working data and records were
centrally hosted in digital form at company data servers. Hence all information and
associated reports were merely a click away. Every employee was issued a unique
password protected login to the central server and access to information was granted
based upon the user’s position, job role and responsibilities. Moreover, all attendance,
factory in / out and leave records were also maintained online, accessible through
employee and authorized by supervisor logins. HRIS was helpful in all HR activities,
saved time and overhead costs by applying task mechanization and process
automation and replace the human intervention of HR specialists (Tansley et al., 2001),
and it was user-friendly too. HRIS was used for automation of payroll and remuneration
activities, and to track equal employment opportunity data consequently, it was
supportive in gaining competitive and strategic edge and taking some initiatives. For
instance, an annual internships program was designed to generate potential pool of
eligible candidates for future hiring. University students, who were in their final year/
semester of professional degrees, were given four weeks period internship offers
during summer vacations or semester breaks on a stipend. During internship tenure,
candidates were evaluated for their competences and commitments. High performer
The employees had mixed and divergent views over this new system. The employees who
had been part of both the legacy and new systems viewed it differently. Mr Ejaz Ali (Dy.
Manager Switchgear) opinioned that:
The new system has made my life easier by making all required information pertaining to myself
and my subordinates available online at all times without requesting any other person or
department as we use to do in the past.
On the other hand, Mr Imtiaz Atif (Manager Prod.) had his own views and considered it as
bittersweet that:
The new HR system keeps the employees busy year round frivolously. Now we have to do the
whole performance monitoring and recording process repeatedly and it has added to the
workload of the supervisors.
Similarly, Mr Shahid Adnan (Manager DTR Design) believed that it was much easier
earlier to sign multiple paper forms in one go as we used to do in the old system. We
are now bound to have access to a company IT network linked computer for each and
every trivial activity.
Mr M. Saigol (Director Operations) Pak Elektron Ltd. (PEL) was apprehensive of this
disturbing situation. He thought that we had invested 85 million rupees to make new
management system efficient and resolve employee complaints on priority. But now even
after providing extensive training, the employees were not taking it seriously and little
transfer of training was observed. On 30 June 2010, he called an urgent and crucial
meeting with senior management and presented his serious concerns regarding the
current dilemma. He felt annoyed and bewildered with the present working environment
and the employee behaviours and attitudes. He hired a third party HR consultant to submit
a comprehensive report detailing why PEL were unable to attain positive endorsement from
employees and could not realize the optimal benefits of the new digital system. Within three
months, after conducting company-wide attitude surveys, an initial draft report was
prepared. The HR consultant assumed that PEL had been facing resistance to change from
employees. He observed that people still preferred the manual system over the digital
system. Not all employees were properly acquainted with HRIS, and there was little transfer
of training. He found that ambiguity prevailed over the realistic objectives of the new
system. Supervisors were more dissatisfied and complained about the digital system. In
fact, the new system challenged the operating structure and policies of all the HR linked
departments. During interviews, employees displayed grievances to the consultant about
the stressful working environment and insufficient management commitment and support.
Keywords: They were irritated because one’s performance was dependent on others’ performance as
Organizational behaviour, departments were interdependent after digitization. The HR consultant further required
Technology transfer,
some time to submit a final report and solution.
HRM,
Training and development, If you were the HR consultant what suggestion would you give to the Director of Operations
Digital HR system, on how to improve the implementation of the digital system and solve employee related
Employee resistance issues. Should he discard the digital HR system?
Annual report of Pak Elektron Limited (PEL) (2013), p. 7, available at: http://121.52.153.178:8080/xmlui/
bitstream/handle/123456789/13925/04-Annual-Report-2013PEL.pdf?sequence⫽1&isAllowed⫽y
Ezzahra, K.F., Mohamed, R., Omar, T. and Mohamed, T. (2014), “Training for effective skills in SMEs
in Morocco”, Procedia-Social and Behavioral Sciences, Vol. 116, pp. 2926-2930.
Hamara Pel (2016), “Official bi-Annual magazine, 5th ed.”, available at: http://pel.com.pk/wp-content/
uploads/2016/04/Humara-PEL-Magazine-PDF-31-March-2016.pdf
Murphy, J.J. (1983), “Reappraising MBO”, Leadership & Organization Development Journal, Vol. 4
No. 4, pp. 22-27.
Posthumus, J., Bozer, G. and Santora, J.C. (2016), “Implicit assumptions in high potentials
recruitment”, European Journal of Training and Development, Vol. 40 No. 6, pp. 430-445.
Sablok, G., Stanton, P., Bartram, T., Burgess, J. and Boyle, B. (2017), “Human resource development
practices, managers and multinational enterprises in Australia: thinking globally, acting locally”,
Education ⫹ Training, Vol. 59 No. 5, doi: 10.1108/ET-02-2016-0023
Satav, M.R. (2016), “Human resources management and technology”, IOSR Journal of Computer
Engineering (IOSR-JCE), Vol. 1, pp. 55-57.
Tansley, C., Newell, S. and Williams, H. (2001), “Effecting HRM-style practices through an integrated
human resource information system”, Personnel Review, Vol. 30 No. 3 pp. 351-371
Further reading
Oxford Economics (2012), “The digital transformation of people management”, pp. 1-14.
Figure E1
Figure E2
Figure E3
Figure E4
Exhibit 5. HR hierarchy
Figure E5