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Pak-Arab Refinery Ltd

Specialization: Human Resource Management

Presented to:
Chairman Department of Business Administration

Submitted by:

Mailing Address: Flat # 001, Iqbal Block 4 PARCO Housing

Complex, Mahmood Kot, Qasba Gujrat, district Muzaffargarh.



(Department of Business Administration)


Khalid Mehmood Anjum

Bismillahi-r rahmani-r rahim

"In the name of God, most Gracious, most Compassionate".

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Today faced with increased rivalry among the major competitors, it is mandatory for an

organization to engage in

human resource

practices, primarily to maintain its existence in competitive environment and secondary to gain competitive advantage over its competitors. One could argue that it is virtually impossible for organizations to function effectively without human resource practices. The human resource practices not only improve the corporate value but also channelize the energy of the people working there. In most of the contemporary Khalid Mehmood Anjum






financial position, substantial growths are not achieved practices. due to poor human resource

All praise and glory is to almighty Allah Who has given hope and courage to me for hard work in life.

I would like to thank all of the staff members department of the & human specially resource Senior

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devoted me their valued time in spite PG.# of their hectic schedule which has increased my scholastic vision and given me 1
2 3

practical know how of HRD.

And I would especially like to thanks

7 Manager Human Resources (Mrs. Sharon

Dias), Chief Human Resource Officer (Mr. Rizwan Idris) and Senior me Management chance
11 9

executives with PARCO.




14 increase my knowledge about working


Khalid Mehmood Anjum Roll # Registration #




42 43


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45 47

Title Page Preface Acknowledgement List of contents Abstract

49 49 50 50 55 56

1) 2) 3)

Objectives of the studying the organization Introduction to the organization Overview of the organization Organizational structure

59 60 63 64 65


Organization structure of the HRD Department

65 69


Human Resource management process in the organization

69 69


Human Resources Planning (HRP) and Forecasting HRP Process Forecasting HR requirements Methods to forecast HR needs

70 70 70

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Employee Recruitment and selection Sources of candidates: a) Internal Sources b) External Sources Employment selection process


Training and Development Training Needs Assessment Employee Development



Performance Management Setting performance standards and expectations How performance reports are written
71 71 72 73


Employee Compensation and benefits Types of compensation and benefits

76 76 83 86 88 90 93 94 7


Organizational career management Employee job changes o Job changes within the organization Promotion Transfer Demotion o Separations

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Layoff Termination Resignation Retirement 6) 7) Labour Management Relations SWOT Analysis Strengths Weaknesses Opperortunities Threats 8) 9) 10) 11) 12) Weakness of the Organization (main) Conclusions Recommendations Refrence & Soource used Annexures / Appendices

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Mid-Country Refinery Ministry of Petroleum and Natural Resources The Emirate of Abu Dhabi ABU DHABI Petroleum Investment Osterreichische Mineralol Verwaltung Technical Service and Support Agreement International Petroleum Investment Company National Environment Quality Standards Occupational Safety And Health Act. Health Safety and Environment Personnel and Administration Joint Installation of Marketing Companies Mahmood KotFaisalabadMachike Keamari to Mahmood Kot Pumping Station Terminal Station Emergency Response Team Distributed Control System White Oil Pipeline Operations and Maintenance Fire Alarm Panel Term Finance Certificates Liquefied Petroleum Gas High Speed Diesel Light Diesel Oil De-hydro Desulphurization Motor Gasoline High Octane Blending Component Barrels Per Stream Day Systems Applications Procedures

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The objective of this report is to focus those activities that take place in the Administration and Management sections on regular basis and all those areas that are included in the domain of this section. It is also meant for finding the weaknesses and shortcomings and then giving the suggestions for improvement. The main emphasis of this report was to develop a clear understanding of the organization i.e. PARCO, especially its human resources department and administration department, which is a branch of Human Resources Development and in which I worked as an internee. The report covers all the practices Resources going on in the personnel and and administration department particularly in Human Management, Administration Management services sections along with the history of PARCO, its structure, its management style and roles performed by the managers, and finally the last chapter provides the concluding words like SWOT analysis, recommendations and conclusion. This report contains my subjective feelings and perceptions that may differ with any other internee or Khalid Mehmood Anjum









Recommendations and Conclusion constitute my own opinions.

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It is a integral part of my course of MBA and mandatory. The main emphasis of this report was to develop a clear understanding of the organization i.e. PARCO, especially its human resource dept. Development and in which I worked as an internee. The report covers all the practices going on in the particularly in Human Resources Management, along with the history of PARCO, its structure, its management style and roles performed by the managers, and finally the last chapter provides the concluding conclusion. In the report the objective was to focus those activities that take place in the human resource management on regular basis and all those areas that are included in the domain of this section. This report contains my subjective feelings and perceptions that may differ with any other internee or with the management of PARCO, so all the recommendations and conclusion constitute my own opinions. words like CRITICAL analysis, recommendations and

Why I selected PARCO for Internship:

There are the following reasons that impelled me to carryout my internship with PARCO: I am already working and living in the MCR Housing Complex so it was easier for me to understand the working environment, the culture of the

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refinery, to cope with the thoughts of the people, to understand and manage the local culture, external forces and demographic effects and their consequences. Being an employee personal interest is important in selection of PARCO for internship and made me aggressive to apply for internship and I got an opportunity to work for eight weeks in HR section at MCR. PARCO is the joint venture between Abu Dhabi and Pakistan and technical support will be provided by the Austrian company named OMV and well maintained pipeline system through out the country attract me and provide me better opportunity to relate the theoretical knowledge with practical work. PARCOS MCR is the largest refinery currently operating in the Pakistan, and accounts for approximately 40% of total refined oil production in the country and working under the Ministry of petroleum and natural resources with broader policies, mission, and clearly defined vision. For these reason I have selected the MCR for internship. PARCO currently in 2005 achieved the certification of ISO 9001(QMS), 14001(EMS) & 18001(OSHAS). PARCO was assigned AAA Credit Rating in 1997-98. As a result of continued financial growth of the Company has got a unique achievement among the entire Public and Private Sector companies of the Country, which compelled me to work with management that made enable PARCO to achieve record performance. The history of PARCO and the huge size of its operations also made this a suitable choice for me over other institutions that were available for the internship program.

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Incorporated in Pakistan in May 1974, as a Public Limited Company, Pak Arab Refinery Limited (PARCO) is a 60:40 joint venture between the Governments of Pakistan (GOP) and Abu Dhabi, having paid up capital of Rs.12 billion and total equity of Rs.36 billion. Since the commencement of commercial operations 24 years ago, the company has expanded a phenomenal 53 times, achieving an asset base approaching Rs.100 billion PARCO, as an energy company, is a key player in the countrys strategic oil supply and its logistics. With the synergy of a comprehensive and expanding oil pipeline network, integrated with a significant and modern refining capability. The company has emerged as the strategic fuel supplier to the country. PARCOs competitive advantages through the integration of pipeline operation, strategic storage, leading edge refining and a significant role in the refining of petroleum products, have enabled it to achieve a unique position in the energy supply chain. Brief History of the Organization: History of any organization shows the chronological development status, but history of PARCO is very much interesting as it has many phases before coming into its actual shape. i.e. from Refinery to Pipe Line then Refinery.

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Initially in 1974 PARCO recognizes its growing role and responsibility as a Pipeline transporter, then made the strategy for Refiner and Marketer in the vitally important energy sector of the country and encourages and expects its employees to strive for excellence in all their endeavors by focusing on the following four productivity related areas: As initially this project was approved for refinery but it was changed to pipe line and refinery project came into existence later on.


PARCO has adopted a modular growth strategy in which the investments are staggered and Project implementation is synchronized in such a manner that completion of one Project marks the beginning of the new Project. This strategy has the following distinct advantages towards continuously extending PARCO's contribution to the economic development of the country:

The following account gives a true insight into PARCO's story of success, its trail of roots and its up-coming aspirations. 1981: Commissioning of Karachi-Mahmood Kot crude-cum-product pipeline system. 1990: Additional 50,000 tons of Storage facility at Korangi and direct discharge of ships into PARCO network to ease pressure on Keamari Oil Piers (DKF). 1992: Introduction of flow improving technology to increase pipeline installed capacity of 2.9 to 4.0 million tons/annum. 1994: Completion of Bhubak and Fazilpur Pumping stations, further raising the pumping capacity by 50%. 1995: System UP-gradation / Modernization: Telecom & SCADA, Revamping, Intelligent Pigging & Pipeline Rehabilitation. 1997: Completion & Commissioning of 360 kilometres Pipeline Expension Project from Mahmood Kot to Sheikupura near Lahore via Faisalabad. March 1998 to September 2000: Started construction of Mid Country Refinery (MCR) and its completion.

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2000-2001: Commissioning of PARCO Mid Country Refinery (MCR) with a 4.5 MT/annum capacity. 2002-2003: Launching of Marketing Operations of PEARL in partnership with SHV & OMV and incorporation of a Joint Venture Co. with TOTAL Fina Elf for development of retail outlets.

2002-2005: 781 KM White Oil Pipeline at a cost of US $ 480 million commissioned in November 04, with Commercial operations commencing in March, 2005.

In March, 2009: Recently PARCO started a project i.e. DHDS (Sulphur hydro treating desulpharization Unit) that will be provide the sulphur free gasoline product. This project will complete with in two years in 2011.

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PARCO has four Divisions:

Corporate affair Marketing Pipeline Refining

PARCO is presently engaged in the transportation of petroleum product on behalf of oil marketing companies OMCs from Karachi to Mahmood Kot near Multan and to Faisalabad and Machike near Lahore through its 1,228 kms. Pipeline. PARCOs pipeline system includes a network of highly sophisticated telecommunication facilities and a comprehensive supervisory control and data acquisition system.

Initially, PARCOs pipeline network was functioning up to Mahmood Kot near Multan, a distance of 864 kms. Its operating on the basis of two pumping stations at Karachi and Shikarpur with an annual pumping capacity of 2.9 million tons. Two additional intermediary pumping stations commissioned in 1994 at Bubak (Sindh) and at Fazilpur (Punjab) increased 18 Khalid Mehmood Anjum

the pumping capacity to 4.5 million tons per annum. Later, with further technological upgrading of the system the pumping capacity was increased to 6 million tons. This additional capacity is a major step towards meeting the increasing requirements of petroleum products in the central and northern areas of the country, which account for over 60% of the countrys demand of petroleum products. This increased capacity will also come in extremely handy for transporting 4.5 million tons of Crude and 1.5 million tons per year of products through the existing pipelines. This timely initiative by PARCO will relieve a lot of pressure on road movement.

In June 1997, PARCO completed its 364 Kms. MFM pipeline extension project and extended its operations to Faisalabad and Machike. The project design allows for further expansion of the pipeline from Faisalabad to Kharian besides Sahiwal and from Mahmood Kot to Peshawar.

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Mr. Syed Naveed Qamar Mr. Mohamad Al Mehairi Mr. M. Rasheed Jung Mr. Mehmood Akhter Mr. G.A. Sabri

Chairman Vice Chairman Managing Director Director Director Mr. Hidayatulla Khan Director Director Director Director Director

Khaishghi Mr. Nawab Hasan Ali Khan Mr. Mohamed Mahmoud Al Khaja Mr. Ahmed Ghalib Al Muhairi Mr. Jeffrey Rinker

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Corporate Office
Corporate Headquarters, Korangi Creek Road, Karachi- 75190, Pakistan.

Islamabad Office
House No. 2-B, Nazimuddin Road, F-8/1, Islamabad. Pakistan.

Refinery Office
Qasba Gujrat, Mahmood Kot, Distt. Muzaffargarh, Pakistan.

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PARCOs pipeline system consists of 7 pumping stations namely:

PS-1 Korangi PS-3 Shikarpur PS-5 Mahmood Kot PS-2 Bubak PS-4 Fazilpur PS-6 Kot Bahadur Shah

PS-7 Faisalabad (Not operational yet)

Also, there are four terminal stations namely:

TS-1 Keamari TS-3 Faisalabad TS-2 Mahmood Kot TS-4 Machike

PARCO delivers the products at Mahmood Kot through a further pipeline connection of 4.5 kms to the Joint Oil Marketing Companies facilities called JIMCO. All PARCO terminals and pumping stations have been designed according to the latest international standards and laid out in a standardized fashion for ease of operation. PARCO across the country installations have been adjudged to be comparable to the best available in the international oil industry.

The refinery was on stream by September 2000, which placed PARCO in a unique position, with an additional capability to exploit the future trends of the oil industry in Pakistan.

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refineries is as follows.

Crude Processing Percentage S.No. Name of Refinery Capacity % M. tons 1 2 3 4 5 6 PARCO NRL PRL ARL DHODAK BOSICOR
Crude oil Processing share of Refineries

4,500,000 2,710,500 2,133,705 1,711,200 101,182 1,485,550 12,642,137

35.6 21.4 16.9 13.5 0.8 11.8 100


BOSICOR 11.8% DHODAK 0.8% ARL 13.5% PARCO 35.6%

PRL 16.9% NRL 21.4%

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The PARCO Mid Country Refinery commissioned in September 2000 at Mahmood Kot, comprises a grass root Refinery Complex of main Process Units, treatment and recovery units and full range of Offsite /Utilities System. It also includes a new residential colony that provides housing and other amenities.

The Refinery design capacity is 100,000 BPSD of Arabian Light or Upper Zakum/ Murban Crude oil (4.5 million tons per annum), which is being transported to the Refinery site by PARCOs. Keamari to Mahmood Kot (KMK) pipeline system from Karachi.

Location Project Cost Main Supply & Construction

Qasba Gujrat / Mahmood Kot US Rs 886 million JGC & Marubeni Corp. Japan

Contractors Completion Period First time Crude oil put in Pipeline First time Crude oil received at August 25, 2000 Refinery First Product out and Commissioning September 04, 2000 Formal Commissioning February 2001 36 months August 03, 2000

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The major cost involved in any organization is in the shape of construction cost. The total cost of the refinery is around USRs886 million of this colossal amount, USRs50 million have been spent on environmental protection measures and Rs. 28 million have been spent on buildings and civil works, including the housing complex hospital, school, refinery buildings, approach roads etc.

Capacity is the minimum rate of output for a facility The Refinery complex includes 11 onsite units process units besides numerous off site / utilities units and other permanent facilities with 51 tanks to store the Crude oil, intermediate feeds stocks and finished products.

PARCOS mid-country Refinery will have a refining capacity of 100,000 barrels per day or 4.5 million tons per annum making it the largest in the country.

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Unit code 100 110 200 300 284 130 801 802 411 810 820

Unit Crude distillation Vacuum distillation Naptha Hydrotreater CCR Platformer Diesel max Visbreaker Kerosene merox LPG merox Gas concentration

BPSD 100,000 42,800 25,650 16,350 22,450 15,560 20,000 4,500 Liquid: 22050 Gas: 11.242 (MMSCFD) F.G.: 7.721 (MMSCFD)

Aminetreating (RNH2) SWS: 9,963 Sulfur recovery 115 MTPD

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At 100% - Refinery Capacity Case - 1 Arabian Light = 4.5 Million tons/year PRODUCTS LPG Mogas/ HOBC Kerosene/Jet Fuel 1 (JP-1) 100% Case - 2 Upper Zakum=


70% Murban = 30% M. Tons /Year 145,000 169,000 469,000 / 201,000 465,000 / 200,000 637,000 654,000 30

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High Speed Diesel Oil (HSD)/ 1,358,000 1,537,000

Light Diesel Oil (LDO) Furnace Oil 1,546,000 1,241,000 Sulfur 25,000 24,000 Note: Design operating days per year = 330








P &A

Khalid Mehmood Anjum FINANCE



Chairman PARCO

Managing Director PARCO (MD)

Deputy Managing Director

Deputy Managing Director

(DMD) Refinery


Deputy Managing Director (DMD)

General Manager (refinery) ] Manger Department

Manger Department

Chief Section

Group/Section Head

Senior Engineer /Executive

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Positional Hierarchy at PARCO

Managing director Deputy Managing director

General Manager

Deputy General Manager


Chief Accountant/Engineer/Management Executive

Senior Accountant/Engineer/Management Executive

Grade I Accountant/Engineer/Management Executive

Grade II Accountant/Engineer/Management Executive

Grade III

Accountant/Engineer/Management Executive


Accountant/Engineer/Management Executive

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At PARCO, Human resource department is working to integrate to choose a quality of its people in every sphere of its actual strength of its employees. The effective Human resource planning helps in mitigating the unforeseen market forces.

The main task of human resource department is to evaluates and assess and make a long run effective human resource strategy to meet the new challenging with diversifying the globalization all over the world in time .so as to make the right choice, in selection of people, which can be used to devise the most effective choose the right person for right place. The purpose of this is to achieve the target to quality of work and increase the over all efficiency and productivity in the field of human resource managing in better form in systematic and sustain able way .while maximizing the quality of work life through human resource . While Main activities performed by human resource department are as follows
Parco Human resource Department

Manpower Recruitment Planning

Performance Management

Training and Staff Relations Development

Management Information

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Manpower Planning PARCO manpower planning enables a department to project its short to long term needs on the basis of its departmental plans so that it can adjust its manpower requirements to meet changing priorities. The more changing of environment in the department is in, the more department needs manpower planning to show:

the number of recruits required in a specified timeframe and the availability of talent

early indications of potential recruitment or retention difficulties surpluses or deficiencies in certain ranks or grades

Availability of suitable qualified and experienced successors

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PARCO Human resource department takes steps to employ staff, it should work out the type of staff it needs in terms of grade and rank, and the time scale in which the staff are required. The general principles underpinning recruitment within the employee that recruitment should:

use procedures which are clearly understood by candidates and which are open to public scrutiny;

be fair, giving candidates who meet the stipulated minimum requirements equal opportunity for selection; and

Select candidates on the basis of merit and ability.

Recruitment of overseas officers is undertaken only when no or insufficient local candidates are available.

PARCO Hiring Policy:

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PARCO have a clear policy to the recruitment and selection of employees. The overall requirement of the jobs and qualification of the individuals are the determining factors in the selection and placement of employees .The company however, endeavours to bring about and maintain , as far as possible , a fair balance among candidates from various provinces . The policy of the company is to develop and promote its employees from within the organization when ever possible. Where there is an absence of qualified personnel within the organization, the company recruits from external sources. Recruitments and promotions are carried out to fill vacancies of the basis of the approved organogram. SELECTION PROCESS 1- Reception and employment office 2- Preliminary interview 3- Application blanks 4- Selection tests 5- Employment interview 6- Offer letter

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7- Medical examination letter

8- Final medical clearance letter

9- Appointment letter 10- Joining letter CONDITIONS 1-Employment Age: Those who have completed the 18 year age and not exceeded the age of 60, which is our normal retirement age ,are eligible for hiring 2-Re-employment A person terminated from Parco on charges of indiscipline , misconduct or unsatisfactory performance shall not be re-employed .

3- References:

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It is a condition of employment that all successful applicants for any position in Parco authorize reference checks with previous employers when an offer employment is made .Any offer is subject to satisfactory references 4- Pre-employment Medical Check-up: Selected candidates must under go a pre employment medical examination with a physician selected by the company .Any offer is subject to a satisfactory medical report. 5- Probationary Periods: All new employees are employed on an initial probationary periods as indicated in their letter of Appointment .After probationary periods completion management informed in writing of either a) His confirmation b) The extension of his probationary periods
c) The termination of his employment

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Performance Management
Performance management is a very important Human Resource Management function. Its objective is to improve overall productivity and effectiveness by maximizing individual performance and potential. Performance management is concerned with

improving individual and collective performance; communicating management's expectations to supervisors and staff;






supervisors and staff;

assisting staff to enhance their career prospects through recognizing and rewarding effective performance;

identifying and resolving cases of underperformance; and providing important links to other Human Resource

Management functions, such as training

Training and Development

PARCO Human resource Departments manage their own training function and have varying levels of responsibility to do this effectively. Management

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formulates departmental training policies and draws up training and development plans to support departmental missions, objectives and values.

Managers identify competencies and training needs, implement training activities and provide coaching and supervision to ensure staff development occurs.

Staff takes responsibility to make the most of the opportunities provided to maximize their potential.

Staff Relations
In Parco the purpose of staff relations is to ensure effective communication between management and staff, to secure maximum cooperation from staff, and to motivate staff to give their best by ensuring that they feel fairly treated, understand the overall direction and values of the employees and those of their departments, and how decisions that affect them have been reached. The principles that govern staff relations are that, where possible:

management should communicate regularly and openly with staff;

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staff should be consulted on matters that affect them; problems and disputes should be resolved through discussion and consultation;









International Labor Organization conventions; and

Management should devise and encourage activities that contribute to staff's well being.

The department is headed by the manager Human resource. It has following sections

1- Manpower Planning and Recruitment 2- Performance Management And Staff Relations Training and Development & information system
Each section is headed by Chief Management Executive followed by Senior Management Executive.


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Manpower Planning and Recruitment


Training and Development & information system Performance Management and Staff CHEIF Relations MANAGMEN









Human Resources Planning (HRP) and Forecasting

Human resource is also some time called manpower planning

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and other word that is called employment planning. In simple word human resource planning is a process for determining and assuring that the organization will have an adequate number of qualified person , available at the proper time , performing job which meet the need of enterprise and satisfaction for the individual involved . Human resource planning is an ongoing process. It is not static .It involves many interrelated activities. Further human resource planning requires detailed analysis of the present and the future to ensure the organization has the right number of people available who posses the right kinds of skills to perform the jobs required by the enterprise when the work is needed. Job analysis is the foundation for forecasting the need of human resource as well as for plans for such activities as training, transfer and promotion. which provide

Job evaluation and compensation; Before jobs can be ranked in term of their overall worth to an organization or compared with jobs in other firms for purposes of surveys. It is important to understand what the jobs require job description and

specification provide such understanding to those who must

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make job evaluation and compensation decisions. Recruitment: It is very important for human resource planning to company recruiter needs is full knowledge of the job Selection: Any method used to select or promote applicants must be based on a keen ,meaningful forecast of job performance . An understanding of just what a worker is

expected to do on the job is reflected in job related interviews or test questions is necessary for a meaning full cast Placement: In many cases, applicants are first selected and then placed in one of possible job. When there is a picture of the needs of a job and abilities of the workers to fulfil those needs selection decisions will be accurate and worker will be placed in jobs where they will be placed in jobs where they will be the most productive.

Orientation , training , and development . Performance appraisal Career path planning Labour relation Engineering design and methods improvement Job design

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Safety Job classification system HRP Process Although HRP mean different things to different people, general agreement exists on its ultimate objective-namely, the most effective use of scares talent in the interests of worker and the organization. Thus we may define HRP broadly as an effort to anticipate future business and environment demands on an orginisation, and to provide qualified people to fulfil that business and satisfy those demands. This general view suggests several specific, interrelated activities that together constitute an HRP system. They include: A talent inventory to assess current human resources (skill, abilities, and potential) and to analyze how they are currently being used.

A human resource forecast to predict future HR requirements (the number of workers needed. the number of expected to be available based on labour market characteristics, the skill mix required, internal versus external labour supply).

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Action plans to enlarge the pool of people qualified to fill the projected vacancies through such actions as






promotion, development and compensation. Control and evolution to provide feedback on the overall effectiveness of the human resource planning system by monitoring the degree of attainment of HR objectives.
Issues analysis Business needs External factors Internal supply analysis Forecasting requirements Staffing levels Staffing mix (qualitative) Action plans Staffing authorisations Recruitment Promotion and transfer Organizational changes training and development Compensation and benefits Labour relations

Management implications Organisation and job design Available/projected net requirement

Forecasting HR requirements
The human resource forecast is determination of the demand of people and the appropriate types and skills for given period in the in the future such as one and three and five years. The forecast also requires the preparation of an estimate of the supply of people who will be available for the selected periods.

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The supply is composed of two parts. The first part the estimate of number and types of employees presently on the payroll who will be avail able on the end of the chosen periods. The second part of the supply is that portion which must be recruited extremely. These figures for the planning periods are obtained by the subtracting the internally manpower from the projected demand. If the figures are positive, people will have to hired if negative, if negative people may eventually have to be laid off .The demand forecast is derived from the information generated in step-1 Goals and plans of the organization of the human planning process describe earlier. Step-1 should provide the human resource planners which data on such factor of projected volumes of sales, units be produced, number of client to serviced new facilities to be constructed, new departments to be created and so on

Methods to forecast HR needs

Normally must use variety of techniques to project future personnel needs. We will describe four major categories of forecast techniques These are under 1-Judgement and experience

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2-Budgetary planning Work standard data 4- Key productive factor


1-judgement and experience:

This category includes estimate made by people are very familiar with he products, processes and job and the business. It is appropriate for relatively short term for cost of, say up to two years. Supervisors and managers of the various units of the business make estimate the future manpower need by judgmentally converting information on short-term future

business activity. The Delphi techniques is a systematic way of obtaining and refining judgment by a group of experts it was originally developed.

Employee Recruitment and selection:

The employment process begins with a perceived need to obtain a person perform some job . Commonly a manager submit a written request to the HR department stating that he wishes to will a given position The position should be define in term of its jobs description and job specification. This process should be integrated with the human resource plan of the

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organization. Recruitment involves identifying the sources of potential employees, informing people of jobs opening and attracting applicants who have the requisite qualification to perform the jobs. People may be recruited either with in organization or from out side the organization, the job requirements as expressed in job description and job specification identify the kinds of people to be recruited

Human plan

resource Identification

need for people Requirement internal and external

Job Requirements

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job description and specifications


Pool of candidates Selection comparison with job requirements interview, via test Rejected candidate

background checks Accepting candidate Job placement, Sources of candidates: Recruitment is the development

orientation training,

and maintenance of adequate probationary status manpower resource. It involves the creation of a pool of available labour from which the organization can draw when it needs additional employees. One convenient way of classifying the source of supply is to divide the source in to categories. Thus a particular job vacancy side sources. Thus a particular job vacancy occur, it can be filled by transferring or promoting an other employed from within the company to that post. If there is to be a net addition to the size of the work force then, of course someone will have to be employed from the out side of the organization

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open market work force place. c) Internal Sources: If management wishes to fill vacancies by choosing from among present

employees it may utilized any of three procedures 1-Informal search 2-Skill inventory 3-Job posting External Sources: Depending upon management policy , the type of jobs involve, and the nature of labour market management have options available for obtaining people from outside the organization 1- Employment agencies 2- Unsolicited applicants 3- Labour unions 4- School, colleges and universities 5- Advertisement 6- Employee referrals


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Hiring employees supervisory

and are

promoting among the

the most


possible of all and

important properly



conducting reference checks are more efficient uses of time than dealing with the consequences of poor personnel selection. The key to a successful selection process is good planning. Planning helps you to learn the necessary information about each applicant while at the same time avoiding potential legal pitfalls of the process. The following guidelines will help you develop a sound and defensible selection process. DEFINING THE JOB AND THE IDEAL APPLICANT PROFILE: Identify the most important aspects of the job (i.e., skills, knowledge and abilities). Use the job description as the primary basis. Then, using these aspects, develop a profile of the type of employee who would best fit the job. This should be done in terms of skills/knowledge/abilities required, previous experience, compatibility with the job, and the kinds of personality traits desired (e.g. aggressiveness, a desire to work with people, creativity, willingness to work as part of a team, ability to work independently). As a part of the profile, consider the job parameters (e.g. amount of overtime required, pay level, work hours, necessity for travel,

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opportunity for promotion, available benefits, limits on when vacation may be taken, etc.). DEVELOPING THE INTERVIEW OUTLINE: The process of filling most positions involves a review team or search committee. Efforts should be made to use a team or committee with a diverse membership. categories graduate ideal Where (faculty, assistants, necessary, associates, etc.) to unit heads should staff, consider adding individuals from other units or job classified provide adequate select

diversity (e.g. by gender, race, etc.). Based on the applicant profile developed will earlier, help interview questions, which determine

whether an applicant fits this profile. The questions must be based on objective criteria and all must be job-related. Develop an appropriate number of questions, depending on the amount of time allotted for the interview. Generally you will want to cover education and experience, goals, work habits, working conditions and relevant technical knowledge. If your interview process is to include any in-house "test" (e.g., typing), note that the test MUST be an actual sample of duties involved in the position. Once your interview bounds". outline is developed, review it with emphasis on looking for areas, which might be "out of

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SELECTING APPLICANTS FOR INTERVIEW: For most Civil Service positions, applicants must have the appropriate test score when they apply for an advertised position. The top applicants package for all positions must be reviewed to ensure that the applicant meets the established qualification requirements. For Civil Service positions, these are stated on the job specification sheet. For academic positions, they are stated on the Position Vacancy Announcement. Applicants qualification immediately. who However, don't their meet should be records the stated be requirements eliminated should

retained because they will be reported as part of the applicant pool but with a notation that they were not qualified. When an unusually high number of applicants respond to an announcement, it is not necessary to interview them all. However, in order to make an initial "cut," objective criteria, which relates to the stated qualification requirements must be used. THE INTERVIEW ITSELF: Begin the interview by trying to put the applicant at ease.

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Outline the structure of the interview, explain the organization and give a general description of the job (or provide a copy of the job description). Discuss the job parameters. Applicant should have enough job. Explain to the applicant that he may take some notes to record the most valuable information. Begin questioning. When your questioning is completed, make sure that you have the necessary references. Allow the applicant to ask questions. Explain to the applicant how and when a decision will be communicated to him/her. End the interview on a positive note. You want all applicants to leave with positive feelings about the organization, interview. AFTER THE INTERVIEW: Add details to your notes while the information is still fresh. Compare your information to the ideal applicant profile. Always check references. Most references are checked by telephone, although inperson and written references are common. Sources of references include the immediate supervisor, past regardless of the outcome of the information to make a preliminary determination as to whether he/she is interested in

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employers, coworkers, clientele, or peers. (Be sure you have the applicant's express approval to contact the present employer). Develop questions for the reference check in the same manner used to develop questions for the interview. Often you will want to hold a second interview for the applicants who appear to have the most potential after the first interview. Structure it in a manner similar to the first interview, but ask questions which fill in gaps in your information. Make your decision by comparing applicants to your ideal applicant profile. Communicate your decision to the selected applicant as well as to those who are not selected. (Do so only after you are authorized to make an offer and it has been accepted!) If an applicant who was not selected asks you for an explanation, explain that you selected the applicant who best fits the job. Don't discuss shortcomings of applicants who were not selected. You are not required to give specific reasons to an applicant who was not selected. LEGAL RESTRICTIONS: These generally prohibit discrimination on the basis of race, color, sex, religion, national origin, age or handicap. The attached "Acceptable PreEmployment Inquiries," outlines the specific kinds of inquiries, which are acceptable and unacceptable.

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DOs and DON'Ts" provides general information on avoiding legal problems in the interview process. All interviewers should be thoroughly familiar with this material. REPORTING REQUIREMENTS: When it's time to process appointment documents for the applicant selected, you will be asked to provide a list of all applicants including their race, ethnic origin and sex. However, since you can not ask for this information during the interview process, you must rely on your observations. In those unusual situations where you are uncertain as to the race or sex of an applicant, you should feel free to state "unk nown."

Training and Development

The objective of training and development is to enable employees to acquire the knowledge, skills, abilities and attitudes necessary to enable them to improve their performance. Staff training and development should focus on the department's objectives and goals and staff's competencies in achieving them. A strategic approach has the following characteristics:

Commitment to training and developing people;


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Linking training and development to departmental goals and objectives;

Skilled training personnel; Regular evaluation; A continuous learning culture; Joint responsibility between managers and staff for identifying and meeting training needs; and

A variety of training and development methods for different

circumstances and learning styles.

Training Needs Assessment

There are several techniques that can be utilized individually or in combination with each other. More than one tool should be considered to get a better view of the big picture, however, which tools are used should be left up to company.

1. Meet with management. Since most supervisors are involved with the planning of projects and the future of the company, they know what will be needed. They should be able to communicate where their employees

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current abilities lie and what is needed to get them to the next level for the 2. Meet with employees. Discuss what struggles they may be facing from day-to-day and what would make their job easier and more efficient. Remember to keep them focused on what they need rather than what they want. 3. Conduct surveys. Surveys are beneficial because many people can be polled in a short period of time. Additionally, surveys provide employees with the opportunity to confess a need on paper that they may be too embarrassed to admit needing in a face-to-face meeting. new projects.

Surveys should take the form of a questionnaire and can include close-ended or open-ended questions, or a series of both. Closeended questions require the respondent stay within certain perimeters set by the person who created the survey. Being that the answers are limited, tabulating the data is simple. Open-ended questions allow an employee to provide more feedback and introduce new ideas that may not have been considered initially, although tallying the results may be more difficult. A good option during the creation of a survey would be to include a combination of both close-

4. Conduct focus groups.

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Focus groups allow for small group interaction, allowing the assessor to uncover details about their target audience. Brainstorming is encouraged allowing for an exchange of new ideas and a revelation of what training may be needed. They should be at least ninety minutes long to initially break the ice and for participants to become comfortable enough to express their thoughts. Depending on time limits, focus groups can be held once or repeatedly.

5. Review company goals and mission statement. A brief review of the companys past and where they are headed for the future may reveal valuable information for training. A comparison should be made of what employees are currently doing and what will be expected of them as the company continues to grow and change. Several basic Needs Assessment techniques include:

Direct observation Questionnaires Consultation with persons in key positions, and/or with specific knowledge

Review of relevant literature Interviews Focus groups


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Tests Records & report studies Work samples

Employee Development The organization may highlight need s and opportunities for growth and development of the person. Growth may be accomplished by self-study formal training courses, or job related activities, such as special broadening assignments and job rotation .It should be clear that training and development of employees and managers strengthen the organization as well as aid individual.

Performance management objective is to improve overall productivity & effectiveness by maximizing individual performance and potential. It is a very important Human Resource Management function. Performance management is concerned with:

Improving individual and collective performance. Communicating management's expectations to supervisors and staff.

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Improving communication between senior management, supervisors and staff. Assisting staff to enhance their career prospects through recognizing and rewarding effective performance. Identifying and resolving cases of low performance. Providing important links to other Human Resource Management functions, such as training. PARCO's Performance Management System: PARCOs Performance Management Process has been developed to achieve a number of important objectives. Attract, retain and motivate highquality management employees who are critical to the overall achievement of PARCOs mission, vision and goals PARCOs Performance Management Program has been developed to achieve a number of important objectives. Specifically, it has been designed to: 1. Refocus the performance assessment as a management process designed to achieve PARCOs strategic goals, drive necessary organizational change, and directly link each employees performance goals and behaviors to PARCOs strategic goals. 2. Establish clear and measurable performance goals and against which accountability will be established and performance assessments will be conducted. 3. Define a common set of behavioral expectations that are linked to the achievement of PARCOs values and support the achievement of strategic goals. 4. Attract, retain and motivate high-quality management employees who are critical to the overall achievement of PARCOs mission, vision and goals.

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Reward superior individual and/or team performance measured by organizational results, the demonstration of desired behaviors, and the achievement of personal/team goals.


Be clearly and consistently communicated to all management employees

Source: PARCO policy Manual Volume II

Everyone Has a Role to Play in PARCO Supervisors and employees share joint accountability for making sure three steps of the performance management process (PLAN, COACH, and REVIEW) are carried out each year.
First is the PLAN component, where supervisors and employees work together to set SMART (Specific, Measurable, Attainable, Relevant, and Time-based) goals for the year ahead, identify appropriate behavioral competency levels to be observed, and identify developmental activities that should take place. During the performance cycle, supervisors should COACH management employees. Activities include keeping track of progress being made; ensuring development plans are being implemented, holding a mid-year review meeting, and working to ensure any obstacles to achievement are addressed. In the REVIEW process, employees and their supervisors jointly discuss the year's performance, with reference to the Performance Log, and identify

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ways in which performance can be improved in the months and years ahead. The overall review of an employee's performance during the performance cycle enables a determination to be made about performancebased pay recognition.

Competencies (How Work Is Done)

A competency is "an underlying characteristic of an individual that causes or predicts effective and/or superior performance in a job or situation." Think of a competency as a skill or behavior that a superior performer uses to perform a task exceptionally well.

Source: PARCOs policy manual Volium II

To establish an optimal program and then formalize the process become more of a challenge because of the complexities of human beings and the wide variety of expectations that everyone executives, managers, supervisors, employees, brings to the workplace. The performance appraisal process, called the performance appraisal system, is the term frequently used for an organizations formal efforts to evaluate individual performance. The most frequent use of performance appraisal is evaluating performance for merit pay increase granted or withheld. Any 66 Khalid Mehmood Anjum

performance appraisal process is complex and requires a lot of support from many well-placed individuals throughout the organization to succeed. It includes the following steps that must be performed when establishing a new performance appraisal system. Provide written periodic appraisals of job performance at least once a year. Set performance standards that lead to accurate job performance evaluation. Encourage employee participation in the development of performance standards. Advise employees of these standards before the appraisal period commences. Use appraisal results as a basis for developing, rewarding, assigning, promoting, demoting, retaining, or removing employees Purposes of Traditional Performance Appraisals: Performance appraisal for evaluation using the traditional approach has served the following purposes: Evaluations of relative contributions made by individuals in achieving higher level organization goals. Reward decisions, including merit increases, promotions and other rewards. Ascertaining and diagnosing training and development decisions. Promotion, separation and transfer decisions. Feedback to the employee regarding how the organization viewed the employee's performance. Criteria for evaluating the effectiveness of selection and placement decisions, including the relevance of the information used in the decisions within the organization. Criteria for evaluating the success of training and development decisions. Information upon which work scheduling plans, budgeting and Human Resources planning can be used. Two serious flaws in the traditional approach to performance appraisal exist. The flaws are:

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Performance appraisal is usually tied to the employees salary review. Dealing with salary generally overwhelmed and blocked creative, meaningful or comprehensive consideration of performance goals.

Organizational performance appraisal is typically primarily concerned with the past rather than being forward looking through the use of setting objectives or goals.

Performance Appraisal System in PARCO: In the month of April, performance reports are sent to all the divisional heads down the line to the Managers of all departments. The managers then sent these reports to the respective immediate supervisors of all the employees. They are supposed to fill the performance appraisal form accordingly and sent back to the HRD. The report is consists of the many aspects of the individual with reference to his/her performance. For example, effectiveness of the job, his understanding of the job, efficiency, confidentiality of the assignments, etc. etc. Point-wise, allocation of marks is given to the each category mentioned above, and then finally sent to the Divisional Head. HRD Department prepares the salary revision, promotion letters on the basis of the assessment of each incumbent. Performances of employees are reviewed once in a year. Salary increases are not automatic are not granted slowly on the basis of completing a fix period of service.

Compensation strategies support the delivery of short and long-term business objectives by encouraging desired behaviours of the organization. Compensation is a powerful tool that can give a company a distinct competitive edge when it is aligned to an effective business strategy. Given below are some ever changing trends in compensation which are likely to force companies to adopt a more proactive approach in this area. Responsibility/accountability given earlier in career with implications for reward and risk taking.

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Responsibility/accountability given earlier in career with implications for reward and risk taking. Flatter organization structures with greater differentiation/overlap in salary bands. Less hierarchical structure with less differentiation in visible perquisites. Bonuses and incentives linked to performance. Cleaner salary structures with less perquisites.

PARCOs Compensation Philosophy: When determining compensations, prevailing rates in other comparable industries are also taken into account through periodic salary surveys. PARCO pays salaries are competitive and performance oriented. Pays ranges are determined after a systematic and comprehensive job evaluation in which each job is evaluated on the basis of skills, efforts, responsibilities and working conditions.

The company endeavours to maintain a balanced programme of employee benefits aiming to supplement employees own efforts to provide economic protection for themselves and their families in the event of retirement, physical disability or death. To this end, following benefit programmes have been offered: a) b) c) d) e) Provident Fund Pension Gratuity Death & Disability Plan Medical Assistance A. Provident Fund: An employee is eligible to become a member of the Provident Fund from the first day of the month following the month in which he is confirmed in service.

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Employees contribution to the Fund is matched by the Company. Both subscriptions from employee & the companys contribution are held with a Trust and the entire sum together with profit is paid back to the employee upon separation from service. B. Pension: The company has a Pension Scheme. A minimum of ten years continuous service and must have attained the age of 45 years, may apply for early retirement. The amount payable as pension is computable by an independent Actuary engaged by the company. C. Gratuity: The company maintains a registered Gratuity Fund. The benefits of gratuity are available to all regular and permanent employees, who have completed five years continuous service with the company. D. Death & Disability Benefits: Upon death or disablement of an eligible employee, whether the death or disablement occurs as a result of accident or otherwise, including death or accident occurring during air, sea, rail or road travel, whether on or off the job, or during authorized leave. However, no death or disablement benefits are payable in the following circumstances: Death or disablement through suicidal attempt. Intoxication under the influence of drugs or alcoholic drinks. Unauthorized use of operation of companys tools, machines transport, etc.

E. Medical Assistance:
All regular and permanent employees and their eligible dependents are entitled to the medical benefits. Dependents, including one wife or husband, unmarried sons up to the age of 21 years and unmarried daughters. Provided such dependents do not have income of their own from employment, business trading, farming,

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investment or any other source and are residing with the employee. Where as father & mother are entertained as 60:40 ratio (60% medical expense is borne by employee and 40% will be paid by the company). If an employee wishes to avail medical facilities for his eligible dependents, they would be required to undergo such medical examinations, at the employees expense, as would be prescribed by the companys Senior Medical Officer (as per company policy). If Wife / Husband, Father & mother already had some disease then for that Disease Company will not pay any compensation. Medical Officer (Doctors): The company provides the medical treatment facilities by appointed medical

officers at each of its stations, who is available for employees and their eligible dependents for free consultations, first aid and dispensary level / stabilizing treatment during Company prescribed duty hours or during emergency in off hours. Medicines: The cost of any medicines prescribed by the doctor will be paid by the Company. This will include all the necessary curative and preventive medicines, antibiotics, injections and inoculations other than those vitamins and drugs which are mainly for health maintenance purpose taken over an extended period.

Hospitalization: Employees and their eligible dependents are provided, upon recommendation of the Company doctor, hospitalization and surgery in the companys selected hospitals, which covers medicines, laboratory tests, Doctor/Surgeons fees, operation cost, anesthesia, blood transfusion and room charges, as per entitlement, which may be ascertained from HR Department. The charges for food, telephone or any other thing during hospitalization are not borne by the company.

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Upcountry Medical Allowance: Regular employee whose eligible dependents are neither residing with him at permanent places or postings nor at a place where Company medical facility is available are allowed to claim medical costs of such dependents up to certain fixed amounts and in accordance with procedures notified from time to time. Retired Employees: Pensioners shall be entitled to the same medical benefits as are available to the MPT employees belonging to the same salary grade as the pensioners at the time of their retirement. These benefits shall be available to themselves and their spouses for as long as they are in receipt of pension under the companys Supervisory staff pension fund.

Career planning is important because consequences of career success or failure are closely linked to an individuals self esteem and identity as well as to career and life satisfaction. Ultimately, it is top managements responsibility to develop and implement a cost effective career planning program. The programme must fit the nature of the business, its competitive employment practices and current organizational structure.

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The PARCO management believes that there is only one thing constant over time and that is change and they know how to manage it. Consequently they are on the look out for breakthrough in knowledge and cutting edge technologies. They embrace them and make them readily available for all within the company. As man power is becoming the global issue. Arab and Western Countries are inviting new immigrants as work force. Keeping in view PARCO management in this regard not imposes any restriction on an employee and thinks that is the right of an employee that he can change the job at any time to secure his future and to support his family. PARCO employee can resign by giving one month notice otherwise one month salary is deducted as per company policy.

From the organizations point of view of career change there are four broad types of internal moves i.e. (up), (down), (over) and (out). These moves correspond to: Promotions/Move Over (Up), Demotions (Down), Transfers (Over) and Separations / Lay off / Retirements / Resignations (Out).

Promoted / Moved over employees usually assume greater responsibility and authority in return for higher pay, benefits and privileges. Psychologically, promotions help satisfy employees, needs for security, belonging and personal growth. Promotions are important decisions that should receive the same careful attention as any other employment decision. Parco promotes its employees on merit system on every year on the basis if their appraisals.

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It is a part of job because some time due to fill the vacancy or for punishment of employees or some time employees better career growth planning organization, higher management of the organization takes the decisions to transfers their employees to other departments or locations.

Before considering a performance related demotion or high level of crucial mistake managers are reminded to peruse any counselling or remedial action which may improve the employee performance. Demotion has implications to both the employee and company and advice from Human resource should be obtained prior discussing the action with the employee. Normally demotion cases involving poor performance of the employee continuous.

The term Separation used for the organization to increase the turn over ratio or employee left to the organization due to different reasons.

PARCO have stated situation no lay off policy because it is a growing organization in oil sector.

01 0 03 04 05

The company may terminate the contract forth with specifying reasons giving as stated in the confirmation letter by intimating one month notice. Company also have the right to give one month salary and terminate the services with out prior notice (with immediate effect). As stated in a policy, services of any employees shall be terminated immediately if he is found to have:

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Indulged in willful insubordination or instigation. Indulged in theft, fraud, mistreatment or other dishonest acts in connection with PARCO property or property of any PARCO employee. Taken or given illegal gifts. A record of habitual absence from work. Indulged in drunk or riotous behavior at work or possession of any intoxicant or drugs. Indulged in gambling or company properly. An employee guilty of misconduct may be warned, fined, suspended, demoted or discharged depending on the companys discretion.

In PARCO employee may terminate the contract of employment by giving written notice in accordance with the time in his individual contract or if the contract is silent in accordance with the notice period. A resigned employee who fails to report for work during the entire notice period will be considered unauthorized leave and will not be paid in any uncorked days. If early released by the Group Manager the employee will pay for any uncork balance of notice period. Resigned employees are not eligible to take annual leaves during their notice period.

All employees will retire on their 60th birthday as per birth dates establish at the time of their recruitment by birth certificate. Changes will not be made to the date of birth after recruitment. The company will allow in special cases beyond their 60th birthday up to maximum five year from the advice medical officer and approval the Managing Director of PARCO. However, employees who have completed ten years continuous service and attained the age of 45 years may apply for early retirement. All the benefits of retirements as mentioned above in the Gratuity etc. are the same for the both the cases.

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The relation between managements and labors in PARCO is the is the good example of labor management relations, in this way the PARCO management always take care the grievances of the labors. Management first emphasizes on Workers labor Union to allow the issues and disputes to be discussed across the table rather then fighting them out before the third party. This happens in the collective bargaining through technique par excellence of resolving frequently divergent and conflicting interests of the employers and the employees. A number of mechanisms also developed to facilitate the resolution of any disputes Trade Union:

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It means any combination of workers formed primarily for the purpose of defending interests and rights of the workers in any industry or establishment. Collective bargaining: The process of collective bargaining culminated on reaching an agreement which is a written statement of revised service conditions and is legally enforceable. In PARCO uses the technique par excellence of resolving frequently divergent and conflicting interests of the employers and the employees. It means negotiations between union(s) on the one hand and the employer or group of employers on the other, for the purposes of regulations of terms and conditions of employment and for the improvement of wage levels. It tends to remove any ambiguities, which might have cropped up over the period of last agreement and redefines the relationships with the labor union. Explanation of the Collective Bargaining in PARCO: It is the process where workers organize collectively & bargain with employers regarding workplace & by which management & unions establish terms & conditions of employment. It is described as collective because workers are involved in it as group & are represented by individuals chosen for that purpose. It is bargaining because it involves give & take for reaching to some suitable collective agreement. Collective Bargaining takes place where workers are collectively organized in trade union which negotiates on their behalf with a management which recognizes the union's right to represent their members. It is based on understanding that there are differing & often conflicting interests to be reconciled between the workforce as wage earners & the employer as shareholder/owner. The workers shall without distinction whatsoever have the right to form and subject to the constitution or rules of a trade union, join any trade union of their choice within the establishment or industry they are employed in, provided that workers shall not be entitled to be a member of more than one trade union at any time. Fig: 6.1

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Source: PARCO Policy Manual Volume II

Styles of Bargaining: PARCO enjoys very good working relations with its employees union. The union is called as PARCO WORKERS UNIONS, an officially registered Industry wise Trade Union with National Industrial Relations Commission (NIRC). industrial and economical relationship with its workers union. PARCO recognize Unions rights and respects it. On the other hand union also understands the growing discomfort in the prevailing employment conditions in the country. They are working as partners and on both side a win-win philosophical approach can be seen in the agreements. No strikes or layoff have taken place in PARCO in the history of the company. This is a proof that the relationships in both parties are strong and flexible in demands. It is the intention and purpose of the PARCO to ensure sound and mutually beneficial

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SWOT Analysis
The overall evaluation of a companys strengths, weaknesses, opportunities and threats is called SWOT analysis.


Internal environment of PARCO has the following strengths and weaknesses.

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INTERNATIONAL RECOGNITION: PARCO can rightly be considered as a national organization with an international image. PARCO may be the only Pakistani company apart from a few others that enjoy a worldwide recognition for their excellent work methods. The most recent example of this international recognition is the loan extended to PARCO by the development bank of the EU and the coupon swapping involving NBP and City Bank that makes the two respectively responsible for PARCO domestic and international debt.

LARGEST REFINERY IN PAKISTAN: PARCO has the largest refinery in Pakistan and the 4th largest in Asia. The production schedule of refineries in Pakistan over the last few years will make it more evident. Apart from being the most technically advanced refinery PARCO has production capabilities that cannot be matched by other refineries in Pakistan.

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TECHNICAL ADVANCEMENTS: PARCO is one of the most technically advanced organizations in Pakistan today whether it is the refinery or the pipeline its operations are advance and highly automated. Usually regulated by a central command. The organization has its own communication system both in terms of data transport and sonic communications powered by companies like ALCATEL and ORACLE.








PLANNING: Another strength of PARCO is the highly trained and skilled work force that it has. The people operating the technical and management sides of this huge organization are experts of their fields and constantly try to add value to the already extensively value adding operations at PARCO.

DETAILED FUTURE HR PLANNING: PARCO is an organization that is always ahead of its time and environment. The leadership of PARCO is aware of the fact that real power lies in continuous improvement and with this philosophy to guide them they have chalked out a road map

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for PARCO no matter what the success they get form a project that is completed today from the vary moment of its completion the

Parconians as they call them selves are on the task of completing the next.

PRODUCT QUALITY: The value adding philosophy at PARCO also directs them to produce those products that end up adding value not only to

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the customers but also to the company itself. The products produced at PARCO are of high quality due to this fact PARCO was chosen by the allied war command in Afghanistan to supply jet and standard fuel to the coalition forces involved in the war their. A living example of PARCOs international recognition of its high quality products.

MANY FACES ONE ORGANIZATION: PARCO can also be credited for being the only oil sector company to act as an importer of crude oil, producer of refined oil, whole seller of refined oil, exporter of refined oil, retailer of refined oil and a marketer of petrochemicals and lubricants. This is due to the diversified nature and flexibility of PARCO that it can be stationed in all of these compartments. This provides PARCO with a unique ability of growth and value addition.

FINANCIAL POWER: The company was established with a seed money of Rs. 540 million and in the last 25 years has expanded a phenomenal 34 times and achieved an equity base of over Rs.18 billion and an asset base exceeding Rs.90 billion or just over US$ 1.5 billion in current dollar terms. The latest results are just another element in a

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long chain of good financial results that PARCO has produced over the years of its operation.

DYNAMIC AND RESPONSIVE ORGANIZATION: At PARCO a shortened response time to problem identification, solution, actions and results has given it the competitive edge necessary for survival in a deregulated competitive environment.

PURSUIT OF EXCELLENCE: PARCO management knows that their long-term survival can only be assured by continuously adapting to change and excelling in every activity of business. This distinction can only be achieved by a professional outlook and active acquisition of knowledge. PARCO promotes this by reading, listening, discussing, observing, thinking, sharing and continuous investment in human resources.

SIMPLICITY: At PARCO its a belief that complex theories are really founded on simple thoughts and unless something is explained in

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simple terms its not understood. The systems and procedures at PARCO originate and culminate at the floor where the work is done; they are made by all are used by all. SUSTAINABLE GROWTH: The people at PARCO have realized the pitfalls of artificial and opportunistic growth. Their growth is founded on their inherent strengths acquired through consistent and high standard performance, which they plan to continue at a steady pace.

RELATIONSHIP WITH CUSTOMERS: According to the business philosophy that PARCO follows customers are not limited to entities and individuals that buy from them. They include in this category their suppliers, associates and the nation, who are being affected by their individual and collective actions. They know the value of reliable service and assure that they deliver it.

CHANGE MANAGEMENT: The PARCO management that there is only one thing constant over time and that is change and they know how to manage it. Consequently they are on the look out for breakthrough in

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knowledge and cutting edge technologies. They embrace them and make them readily available for all within the company. PIPELINE OPERATIONS AND WOPP: Another strength that makes this strength portfolio for PARCO more interesting is PAPCO or Pak-Arab Pipeline Company that is another name for PARCO when dealing with its pipeline operations as explained in the start of the report the pipeline that PARCO manages is the only one of its kind in Pakistan and now with the inclusion of White Oil Pipeline the swing has nurtured towards PARCO more because this means that PARCO can now freely transport refined and crude oil and can extend its operations all over the country with relative ease.





Another Strength is the Technological Advancement and Huge Infrastructure that prevails in PARCO. The working of the whole organization is highly automated in all respects of its operation whether its communications or routine office work. Latest inclusions are FAS or Financial Accounting System from ORACLE that has made possible

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the integration of finance sections at all PARCO offices with the CHQ in Karachi. WEAKNESSES: UNUSED CAPACITY: The refinery at Mahmood Kot is the largest in Pakistan and the 4th largest in Asia. But in operates on 70-80% of its capacity because of the domestic demand, which does not meet the full potential of the refinery. This idle capacity is a value loss to the company new markets should be found and whole of the capacity must be used to attain economy of scale.

HIGH COST OF PRODUCTION: Due to the large extent of its operations the cost of operating and producing in PARCO is very high as compared to other large scale industry but as the time passes the influx of CNG in automobiles and power stations will cause the demand for HOBC, kerosene and motor spirit to fall that will result in less profitability and the high costs of operation will then really start to hurt.


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This weakness is inherent in all refinery structures that their production flow is not a flexible one you cannot produce more diesel if its demand is more if you dont have the required crude. The only way is to correctly forecast the market demand for the times ahead but even that can be faulty as deviational trends can affect demand adversely at any time. Than, it would not be possible for a refinery to change its production with the change in the demand of the market. The same happened when PARCO had to export 90-RON HOBC because it was not demanded in the domestic market.

NON-AGGRESSIVE MARKETING & COMMERCIAL EFFORTS: Although the marketing efforts being made by PARCO are commendable but looking at the size of the company and its resources it can be said that they lack an aggressive and dynamic marketing strategy that can help them penetrate the domestic lubes and petrochemicals market with ease and allow them to dominate it comprehensively. But one feels that the Marketing & Commercial policy of PARCO could be more aggressive in the sense that it should not alienate its current customers such as PSO, SHELL etc.




The external environment of PARCO offers it the following Opportunities and Threats.

OPPORTUNITIES: In March 2009,DHDS Project: DHDS (Diesel Hydro Desulphurization) unit project started for the treatment of sulphur free diesel that enable the environment will guard against the effects of smoke in the atmosphere and secure a healthier future for coming generations. PIPELINE EXPANSION: As explained in the introductory phase of the report the pipeline network that PARCO has is the only one of its kind in Pakistan the network is huge and is currently under expansion. Apart from it a new network is being developed that will transport only refined oil from Mid Country Refinery to the facilities all around Pakistan this will release the pressure on the existing system but will

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also give PARCO a competitive edge over all of its competitors in Pakistan.

EXPANDING DOMESTIC MARKET: The growth prospect in the domestic market is also an important opportunity for PARCO especially when it comes to HSD and LSD the domestic market is rapidly expanding because the use of diesel engines that are in trucks, power engines or motors for industrial or agricultural use is increasing. It will depend on PARCO to capitalize on this market trend and to use its extensive pipeline to capture the relevant market.

TOTAL-PARCO VENTURE: A "TOTAL-PARCO Pakistan Ltd." Joint Venture Company has been formed to market 25% of MCR production, through retail outlets, which are currently in the development stage. It provides a unique opportunity for PARCO to excel in the field of petroleum retailing using its superior products and the TOTAL brand name. WOPP (White Oil Pipeline):

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Apart from the existing pipeline PARCO is currently establishing a new pipeline that will transport only refine oil form the Mid Country Refinery to other facilities it will relieve the pressure on the existing system and will provide PARCO with the desired level of product maneuverability that it requires to make the product readily available at all virtual depots and terminal stations.

LUBRICANTS MARKET: Currently the lubricants market in Pakistan is dominated by either small dealer that sell non branded or non famous brand lubricants or by Oil Marketing Companies that use their own brand name to sell the lubricants in the market PARCO has an opportunity to capitalize in this area either under the banner of TOTAL or using the brand name PEARL which its currently doing.

INTERNATIONAL EXPORT OPPORTUNITIES: Although due to the existence of high-tech refineries n Saudi Arabia, UAE and Qatar the export opportunities for Pakistani companies are very few but with its superior quality product PARCO can capture the emerging market in Central Asia and SAARC

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countries that will not only increase recognition abroad and profits but will also allow an window of opportunity for PARCO in the face of expected low demand of gasoline in Pakistan.


SMUGGLED IRANIAN PETROL/DIESEL: Smuggled Iranian Petrol/Diesel presents a threat to PARCO the Iranian oil much more cheaper as compared to PARCO oil and will no doubt cut the market for PARCO oil especially in areas such as Balochistan that are the heart land of Pakistani transport truckers PARCOs most important target market. Which has become ever more important due to CNG conversions of gasoline run cars. The recent border situation with Afghanistan has made the border less porous for the smugglers but more needs to be done to prevent this act that destroys the legitimate right of a company

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to sell its goods in a market after passing the necessary tax and regulatory hurdles.

WTO IMPLICATIONS: One might think that WTO will not pose any danger to an organization like PARCO because of the strategic mode of industry that it is a part of but this assumption is wrong with the implementation of the Uruguay accord of 1999 the restrictions imposed by the Government one any foreign goods including oil will have to be removed due to the free trade deal. This will cause an influx of Qatari and Iranian oil that will be damaging to PARCO and other refineries due to the economies of scale that the latter posses.

CNG PHENOMENON: Since the start of CNG operations in Pakistan in 1997 the market for gasoline and HOBC has taken a fall and the current lifting of duties by the government of CNG kits has alarmed the oil producers, as this will cause more and more cars to be converted to CNG in the near future. Apart from this the Power Plants that operated on Kerosene oil now are shifting to CNG as is cheaper and causes less damage to the plant these developments are a threat

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to PARCO future sales of HOBC and Motor spirit both of which have been the main profit delivering extensively demanded products in the past.

RISING OIL PRICES AND THE MIDDLE EAST CONDITION: The oil industry all around the world is involved in the same way with international political developments as the steel industry used to be in the 1800s. The price of oil in DOW-JONES Industrial Index reached 45$ per barrel on August 11, 2004 the highest since the 1974 Arab-Israeli war. This will cause the prices to increase worldwide and there is no indication by OPEC to increase production. The situation in Iraq will also further deteriorate the situation causing demand to exceed supply as forecasted by the International Institute for Energy Research. PARCO has to monitor these developments closely to determine their future strategy.

Location of MCR:

MCR is situated at Qasba Gujrat which is 75 km away from Multan to Kot Adu road. As residents of PARCO (MCR) are facing problem of medical & education facilities. The have to travel to Multan for patient special check ups and same way for higher education have to shift their children to some big city.

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Dependent for the Benefits & Improvements:

There is a lot of frustration found between employees because of the PARCO management is totally dependent on Board of Directors approval for revision of benefits and some time it take long time and some time not approved the increments and benefits of the employees or in limited. Training and Development:

At PARCO there is no independent setup of Training and Development. It is lying under the umbrella of Admin, while administration dependent on the control of the corporate office at Karachi, so policies and approval are required from Head office. This process is slow and some time dates of training passed away. Some time they hire the specific trainer for the specific purpose who charges the lot of amount for the training so this may cause the extra burden on the organizations financial position. Policies Imposed by Government:

Policies of Government are changing day by day regarding oil sectors refinery profit margins are becoming less. As well as the PARCO management does not implemented the increases of the packages or increment which periodically government increases in the form of the high inflation rate over the country. Setup at Mid Country Refinery:

Administration Department which is established here at PARCO is directly reporting to GM (CA) but it looks as it totally dependent on Corporate Head Quarter office. They are not independent in any of the decisions rather all policies and decisions are defined/finalized by Human Resources from Corporate Head Quarter. It takes long time for persons sitting there to acknowledge the problems of persons working at MCR. Multiple Setups at PARCO: Existing pipe line, 95

PARCO is running with three types of setups under one roof.

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As pipe line set up was established in 1974 and policies defined by that time initially, were implemented at MCR as such, which was wrong. Both pipe line systems are entirely different from refinery setup, but initially Human Resources at Corporate Head Quarter did not acknowledge it. Managing Directors Office:

In same way the office of the Chief Executive is established at Corporate Head Quarter which is situated at Karachi.

Now coming up towards some concluding words, in short, one can say that Human resource Department is meant to facilitate and support in all matters related to service of employees right from their induction in the company to their last day in service and even beyond. This department is also responsible for maintenance of service records of employees. Transfers postings, maintenance of seniority, handling grievances, etc. the importance of the Human resource can be narrated by the fact that developments in human behaviour and psyche during beginning of last century have forced business enterprises world wide for sole searching and introspection in human resource management. Today there is no company in the world, big or

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small, which can do without an HR set up. It is men who thinks and works for quality difference from place to place.

Given the creativity, enthusiasm, commitment and dedication of PARCO professionals, their continually improving skills due to their on the job exposure and practical experience, PARCO can really spur in its field. Another dimension important to mention here is the role of CHQ that is continuously pouring its share in strengthening of PARCO. All those who get an opportunity to excel their abilities there improve their innate abilities and can work better than before.

The following suggestions can be put forward that can allow PARCO to capitalize on its strengths and opportunities and to tackle its weaknesses and threats.

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1) Using its level of international recognition PARCO should open new windows of opportunities relating to export of its premium products. 2) PARCO should maintain the level of technical superiority and advancement over its competitions to reach appoint in the long run that will allow its strong Human Resource Planning. 3) PARCO should keep on training its already highly trained work force as its the human capital that makes the physical capital to work training and development in human resource department. 4) PARCO should keep detailed plans of the future so that it will give its workers a sense of directions and achievements to increase the productivity of their employee with god favorable HR Policies. 5) PARCO should also strengthen the already strong ability to react to changes in the business environment, as now its a market as well as a production entity. 6) PARCO should try to maintain the high credit rating that it has it will give a confidence to prospect investor when the company decides to launch its shares on the open market.

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7) PARCO should also develop a dynamic and responsive attitude towards it internal and external environment so as to predict and counter changes instead of being alarmed by them. 8) PARCO should further improve its already high standards of performance and safety that will result in better Human resource management. 9) PARCO should reduce the level of office paper work as its trying to do by automating the office functions as far as possible. 10) PARCO should also try to develop a strong team based management system that will result in better and efficient functioning of all of its systems at all levels. 11) PARCO should, as referred above try to increase the prospect of export so as to use its full capacity and attain maximum profit. 12) PARCO should try to reduce its high cost of production and should try to attain the economy of scale that is required to compete in the open trade scenario. 13) PARCO should also try to intensify its marketing efforts and should try to develop an aggressive and dynamic marketing strategy that will make it possible for it to attain the desired level of recognition and sales.

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14) PARCO should try to further strengthen the PARCO-TOTAL venture as this is the single most important project when it comes to either logistics, operations and marketing all of which PARCO can deliver due to its extensive structure. 15) PARCO should try to lobby support in the government to prevent smuggling of foreign oil and lubricants into Pakistan. 16) PARCO should try to adjust its operations in advance of the arrival of the WTO regime so that it doesnt suffer a reality shock. 17) Finally the management at PARCO should not fear the advent of CNG as a product killer but as a new prospect of investment and growth.

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Reference Used:
For references consulted:

PARCO Personnel Policies Volume I PARCO Personnel Policies Volume II Working with Pak-Arab Refinery Limited, Employees Guide to Personnel Policies and Procedures.

Sources Used:

Section Head of Human Resources (H.R) Manager Administration (Administration)

Senior Management Executive (Administration) (Personnel) 101

Senior Management Executive Khalid Mehmood Anjum

Management Executive-I (Industrial Relations) Management Executive-I (Training & Development)

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Annexure - I

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Annexure -II

PARCO Organizational Structure

Chairman PARCO Managing Director PARCO (MD)

Deputy Managing Director
(DMD Operations)

Deputy Managing Director

(DMD Finance & CA)

General Manager (Refinery)

Manger Department

Manger Department

Chief Section

Group/Section Head

Senior Engineer /Executive

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PARCO Divisional Structure

Annexure -III
Managing Director

Deputy Managing Director General Manager


General Manager Corporate

Deputy General Manager



Manage Managers r

Section Head
Human Resource

Chief Accountant/Engineer/Mana gement Executive


Senior Accountant/Engineer/Manag ement Executive

Group Heads I.R, Medical MCR

Grade I
Accountant/Engineer/Man agement Executive

Grade II
Accountant/Engine er/Management

Executive Grade III

Accountant/Enginee r/Management

Executive Assistant
Accountant/Engineer/ Management Executive 105

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Annexure - IV

Annexure - V
Organizational Structure of the

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Human Resources Management Department

General Manager Corporate

Manager HRD

Section Head Industrial Relations

Section Head Human Resources Group Head Organizational Development Group Head Medical Services (CMO)

Group Head Recruitment

Group Head Shared Services

Performance Management

Training & Development

Job Evaluation

Policy & Procedures

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Performance Management System in PARCO

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Annexure VII

Performance Log (STAR EVIDENCE)

Name Title Review Period P. No. Location Supervisor

The STAR approach (Situation, Task, Action, and Result) is a useful way to document performance for both employees and supervisors. Supervisors are recommended to maintain this form for each of their employees, and employees are encouraged to maintain this form for their own performance. Individual activities pertaining to Performance Goals and Behavioral Competencies achievement may be recorded as evidence throughout the performance cycle and referred to during the mid-year and final appraisal reviews.


Situation/Task (Outline the setting in which performance/be havior was observed, i.e. Who was involved? What task, target or assignment needed to be done?)

Action (Describe the specific approach or actions taken or not taken)

Result (Describe or quantity the outcome of the actions, i.e. What was the impact/affect? What was the learning?)

STAR for which Performance Goal or Behavioral Competency? Is it +/indicator?

Sign. of Employee: __________________

Sign. of Supervisor: _________________

Annexure - VIII

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