Recruitment, Selection and Performance Management at Philip

Executive Summary

The increasing trend of globalization in the past two decades has moved companies outside their domestic operation into the international markets. This dramatic change in international businesses require dynamic workforce, as such, challenge managers, face complex issues of managing people to gain or sustain a competitive advantage. Some of key issues need heed. There will be more human resource activities involved in international operations than that in the domestic context. A broader perspective is required to manage people not only from home countries, but also from host countries and even from the third countries.

Philip Morris USA is one of the core operating companies of Philip Morris Companies Inc., the world's largest producer of consumer-packaged goods with annual revenues of over $80.4 billion.  Philip Morris USA is a fortune 500 company, produces and markets some of the worlds’ most recognized and best selling brands in 76 domestic USA markets.

PTC is a subsidiary of British American tobacco (BAT) group, which is the second largest international tobacco group and has its business in 180 countries all over the world. BAT holds 94% shares in PTC. Pakistan Tobacco Company was the first multinational to set up its business in 1947 in Pakistan. It took over business from Imperial Tobacco Company that was operating since 1929.

The study is limited to comparison of HR practices of Philip Morris USA with PTC in general and Recruitment, Selection and Performance Management in particular. A detailed analysis of the HR practices of both the companies has been conducted by the group to highlight the salient features of the HR policies practiced by both the organizations.

Chapter 1

Philip Morris:

History & Background:

The history of what is now a global company can be traced back to Philip Morris's 1854 opening of a single shop on London's Bond Street, selling tobacco and ready-made cigarettes.

On Mr. Morris's death, the business was taken over by his wife Margaret and his brother Leopold. In 1881 the company went public, Leopold Morris joining Joseph Grunebaum to establish Philip Morris & Company and Grunebaum, Ltd. This partnership was dissolved in 1885 and the company became known as Philip Morris & Co., Ltd.

The company finally left the founding family's control in 1894, when it was taken over by William Curtis Thomson and his family. Under Thomson, the company was appointed tobacconist to King Edward VII and, in 1902, was incorporated in New York, by Gustav Eckmeyer. Ownership was split 50-50 between the British parent and American partners. Eckmeyer had been sole agent for Philip Morris in the US since 1872, importing and selling English-made cigarettes.

1919 was a crucial year for the company. It saw the introduction of the Philip Morris coronet logo, the acquisition of the Philip Morris Company in the US by a new firm owned by American stockholders, and its incorporation in Virginia under the name of Philip Morris & Co., Ltd., Inc. By the end of the next decade, the company had begun to manufacture cigarettes in its factory in Richmond, Virginia; in 1924, what was to become its most famous brand, Marlboro, was introduced.

By the mid-1950s the company had become a part of American culture and soon after launched Philip Morris International to manufacture and market its products around the world.

Philip Morris USA is one of the core operating companies of Philip Morris Companies Inc., the world's largest producer of consumer-packaged goods with annual revenues of over $80.4 billion.  Philip Morris USA is a fortune 500 company, produces and markets some of the worlds’ most recognized and best selling brands in 76 domestic USA markets.

In 1964 Philip Morris dedicated the first building of the Operations Center in Richmond, Virginia.  In 1967, Philip Morris reorganized its corporate structure to create Philip Morris Inc. and three operating companies: Philip Morris Domestic; Philip Morris International; and Philip Morris Industrial.

The same year, Joseph F. Cullman, 3rd, was appointed as chairman and CEO of Philip Morris Inc.

In 1968, Philip Morris Domestic name was changed to Philip Morris U.S.A. Philip Morris Inc. operating revenues topped $1 billion in the same year. In 1969, Philip Morris Inc. acquired 53% of Milwaukee-based Miller Brewing Company from W.R. Grace & Co. By 1970, Philip Morris Inc. acquired the remaining 47% of Miller that it did not own from De Rance Foundation in Milwaukee.

By 1972 their revenues topped $ 2 billion. In 1973 the new Philip Morris Richmond Manufacturing Center made its first cigarettes. During the same year Miller Brewing Company generated record sales for the year and moves to the No. 5 spot from No. 7 among U.S. brewers.

In 1974, Philip Morris U.S.A. Operations Center was dedicated in Richmond, Virginia. Miller moved into third place among U.S. brewers, with a record year for sales and the largest annual barrelage increase ever achieved in the beer industry.

Philip Morris exceeded $4 billion in revenues. The company's share of the U.S. cigarette market increased to 25.1%; the international tobacco company's share increases to 5.1%.

In 1983, Philip Morris U.S.A. gained market share for the 21st consecutive year, to reach 34.4%. In 1985 Philip Morris Cos. acquired General Foods Corp. for $5.6 billion, the largest non-oil acquisition in U.S. history. Philip Morris Cos. acquired Kraft for $12.9 billion, setting a new record for the largest non-oil acquisition in U.S. history.

Philip Morris revenues reach nearly $32 billion; net earnings top $2.3 billion. By 1992, operating companies’ income topped $5 billion at PM USA. In 1995, Geoffrey C. Bible becomes chairman and CEO of Philip Morris Cos.

Philip Morris Incorporated ("PM Inc."), which conducts business under the trade name "Philip Morris U.S.A.," is engaged in the manufacture and sale of cigarettes. PM Inc. is the largest cigarette company in the United States. Philip Morris International Inc. ("Philip Morris International" or "PMI") is a holding company whose subsidiaries and affiliates and their licensees are engaged primarily in the manufacture and sale of tobacco products (mainly cigarettes) internationally. Philip Morris had a 50% share in the domestic cigarette market, with close to 60% of the higher-priced premium brands, over 20% of the discount market, and approximately 14% of the international cigarette market that year.

Phillip Morris at Present:

PM Inc. owns and operates six tobacco manufacturing and processing facilities -- four in the Richmond, Virginia area, one recently closed cigarette manufacturing plant in Louisville, Kentucky, and one in Cabarrus County, North Carolina. Subsidiaries and affiliates of Philip Morris International own lease or have an interest in 57 cigarette or component manufacturing facilities in 31 countries outside the United States, including cigarette manufacturing facilities in Bergen Op Zoom, the Netherlands and in Berlin, Germany.  In addition to Marlboro, the largest-selling domestic brand, Philip Morris manufactures Virginia Slims, Parliament, Merit, Benson & Hedges, Basic, and Cambridge cigarettes. Marlboro, the principal cigarette brand of these companies, has been the world's largest-selling cigarette brand since 1972.

Mission of Philip Morris USA:

Our goal is to be the most responsible, effective and respected developer, manufacturer and marketer of consumer products, especially products intended for adults. Our core business is manufacturing and marketing the best quality tobacco products to adults who choose to use them.

Philip Morris claim that,

“We will support our mission by proactively engaging with our stakeholders to enhance our ability to act in a way that is consistent with society's expectations of a responsible company.”

Philip Morris believe that they would be successful in achieving their goals by:

Engaging with their Business Partners -- Establishing and maintaining productive relationships with their business partners, including farmers, suppliers, distributors and retailers, and advocate financially and socially responsible actions as part of those relationships.

Playing an Active Role in Community Development -- Enhancing and supporting the communities where they work and do business to help improve the quality of life.

Providing Shareholders Return -- Providing returns to the shareholder, to maximize their return on investment

Values:

Philip Morris believes in operating with integrity, trust and respect, both as individuals and as a company. They conduct themselves within both the spirit and the letter of the law, regulations, agreement and policies that govern them. They are honest with one another and with their stakeholders, fully disclosing all appropriate information, and not just which supports their point of view. They have the courage to do what is right.

They demonstrate a passion to succeed in every aspect of their business. They bring optimism, initiative and dedication to their work displaying confidence in their ability to succeed. They continually raise their expectations for what is possible and encourage constructive dissatisfaction with the results. They apply learning to the future using both their successes and their disappointments as stepping-stones to continued success.

They believe in executing with quality, by understanding and responding to the adult consumers’ preferences. They plan collaboratively to ensure consistent and achievable goals. They execute by saying what they will do, doing what they say and documenting the results. They establish clear accountabilities and strive to produce superior results for the shareholders.

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They believe in driving creativity into everything they do, resulting in innovation and continuous improvement for the adult consumers and their business processes. They encourage to think about things differently and to think about bringing vigorous challenge to everything they do. They build and develop ideas through collaborative leadership and by fully utilizing the unique talents within the company. PM USA are receptive to new ideas and applaud those who dare to think differently.

They believe in sharing with others, unleashing the tremendous resources of their people as a force for good into the communities in which they live and work. They foster an environment where people can contribute their time, energy and commitment to their families, their neighbors, their colleagues and their communities. They share ideas, opinions and expertise openly and unselfishly both within the company as well as with those whom they interact in business dealings, in the true spirit of collaboration. They promote personal and professional pride and growth. As a company PM USA acknowledge and embrace their role as a responsible involved citizen and community leader.

Overview of Human Resource Practices:

Human Resource in Philip Morris USA aims to attract, develop and retain the most talented people around the world. The purpose of HR is to help shape the culture of this dynamic business, creating an environment that emphasizes and rewards performance, whilst supporting learning and development.

The success of Philip Morris comes from their strong HR policies. The key strength comes from the diverse array of talented people at Philip Morris U.S.A. Employees range from world-class engineers and researchers to highly trained manufacturing specialists to experts in sales, marketing, finance, communications and human resources. Company has enjoyed a low turnover of employees, including their unionized plant specialists, many of whom have spent their entire careers working for PM USA and whose diverse abilities have helped PM USA remain competitive and successful.

Philip Morris strives to fulfill investor and other stakeholders’ needs including their customers, employees and the communities in which they operate. Philip Morris Company focuses on hiring the best people, producing the highest quality products, committing to continued improvement and execution of objectives with excellence, combined with a history of corporate philanthropy and giving back to the communities where they live and work to help them grow and prosper.

Philip Morris has established a Philip Morris Employee Community Fund (PMECF) in response to their employees' desire to be more actively involved in the communities where they live and work.

The PMECF, created in 2000, is a nonprofit organization that is managed and administered by Philip Morris employees in Cabarrus County, North Carolina and Richmond, Virginia. One hundred percent of every employee dollar contributed to the Fund goes directly to support local nonprofit organizations.

The importance placed on human resource functions can be made clear by the following quote by Hamish Maxwell, Former Chairman and CEO of Philip Morris:

“Philip Morris is a results-oriented and a people sensitive company. Our senior human resource executive report to me, is a member of the Corporate Planning Committee, and is actively involved in setting the strategic direction of the business. With the size and complexity of the company increased as a result of the recent acquisition of Kraft, strategic planning has and must continue to take the impact of people management issues into account. I expect that this role will strengthen.”

Societal Objectives:

Legal Compliance:

Philip Morris recognizes that they manufacture and market a product that is addictive and causes serious diseases, and that there is intense scrutiny of what they do and of the way they do it.

This commitment to societal responsibility is not intended to distract from the fact that Philip Morris is a tobacco company. Rather, it's what their employees, shareholders, regulators, customers and society at large expect from them - particularly from a tobacco company. And it follows logically from their core values that Philip Morris:

·         Listen to society's concerns about their products, seek common ground with their critics and implement real solutions

·         Acknowledge and embrace their role as a responsible citizen and an active member of the community

·         Are open and transparent with the stakeholders and society as a whole

·         Act with integrity, respect, trust and collaborative spirit

·         Follow the spirit and the letter of the laws, regulations and policies governing their business

These values guide not only the day-to-day operations of the company, but also the way they do business and interact with the world outside their offices, both locally and globally.

Benefits:

Philip Morris USA is known for the extensive benefits it provides to its workers.

Money magazine rates Philip Morris as #1 in benefits for the second consecutive year.

•           Annual bonus opportunity

•           Company vehicle

•           Highly competitive benefits package including: medical, dental, vision and life insurance, retirement plan, educational refund assistance, paid vacation days, family and work life balance benefits and profit sharing plan.

The Philip Morris USA work/life initiatives are focused on dependent (child/elder) care support and employee services. While no set of company-wide programs could address the full range of individual situations existing throughout the organization, the following portfolio of work/life related programs is available:

Consultation and referral information is provided for:

• Everyday residence issues (remodeling, repairs, house-sitting, etc.).
• Legal matters.
• Financial issues.
• Education and schooling.
• Parent and child care.
• Resources for seniors and elder-care issues.
• Disability and accessibility.
• Emergency dependent-care reimbursement.
• Adoption assistance.

Additional employee benefits may include:

• Flextime around core hours.
• Paid time off for dependent care.
• Educational refund plan.
• Scholarship program.
• Medical, dental and vision benefits plans.
• Group life insurance.
• Student and parent loan program.
• Fitness center.
• Group discounts on: car, home, long-term care, pet insurance, home security, auto services and purchasing, mortgage and home equity loans, and legal services.
• Health services.
• Lunch n' Learn educational seminars.
• Accommodations for nursing mothers.
• Company store.
• Credit union.
• Employee Assistance Program (EAP)
• Cultural program discounts.
• Multiple services customized to needs at each location (on-site package shipping, film developing, prescription delivery, dry cleaning, take-home meals, ATM machines, hair salon, shoeshine facilities, and more services, depending on location).

Union Management Relations:

The relation between management and union is very conducive. The company is managed under a unique union management partnership agreement, which gives workers a voice in all planning and operating decisions. The President of union participates in all decisions.

PM USA was known for its low employee turnover. However, they had a large number of layoffs in the early 90s. As a result of increased layoffs the number of lawsuits on the company greatly increased. To minimize the cost of expensive litigation, Alternative Dispute Resolution was introduced. As part of corporate policy Philip Morris provides aggrieved employees with up to $3500 in financial assistance to help them prepare their case. This was done to assure the employees that their rights were respected and that they got fair hearings in the process.

 Philip Morris has worked to diminish the boundaries between union and management.

Organizational Objectives:

Employee Training and Development:

Training and development opportunities at PM have played a significant role in spreading the word in the general media in order to build its image as an employer that develops and rewards its people. Training and development opportunities have also had a major impact on potential applicants by providing them directly with job specific information on the excellent training, learning and development opportunities being offered by PM.

The absolute commitment to excellence and growth is reflected in the way PM do business, in their dynamic work environments, and in the following principles that guide their approach to employee development. Philip Morris USA:

• Utilize job assignments to drive both business and employee growth;
• Develop their people based on company-wide standards;
• Know their people, their capabilities and aspirations;
• Provide development on a career-long, company-wide basis;
• Provide feedback and rewards to reinforce performance and development; and
• Hold managers accountable for the vitality, diversity and depth of their workforce.

These principles - a component of their business strategy - form the foundation of their people development efforts, which are designed to serve the changing needs of their employees throughout their entire careers. The result is an organization of talented, engaged and committed employees who rank among the world's top business professionals.

A mission and a set of core values guide Philip Morris USA, including a passion to succeed. PM USA believes in developing the leadership potential of their employees, providing them with opportunities for training, development and advancement. Philip Morris believes in providing and supporting training, and expanding employees' work experience on an ongoing basis. PM USA uses a vestibule-training program so that training can be imparted to employees without disrupting normal operations.

For training programs, the organization continually broadens their employees' knowledge and skills through hands-on experience and by promoting many forms of training such as, classroom instructions, lectures, presentations, case study analysis, etc. Employees from various functions are sent to different training sessions throughout the year.

Compensation:

PM USA employees enjoy competitive salaries and a generous package of benefits that has been named #1 by Money magazine in 1999, 2000 and 2001. Attractive salaries are one of the key strengths of Philip Morris USA.

“The areas where we feel we are particularly strong are our career development programs, our competitive salaries and benefits, and the challenging working environment we provide.”

                                                                                                (Senior Vice President HR)

Philip Morris USA offers a competitive base salary commensurate with experience and educational background. Philip Morris USA aims to provide market competitive rewards to their employees through a structure, which addresses the needs for flexibility, personalization, empowerment and commitment. The key components of this philosophy are:

• Total compensation approach
• Pay for performance
• Annual performance and salary reviews

PM USA rewards employees for good performance, skills and competence development and for overall company success. These rewards come in a variety of ways, including regular salary, various kinds of incentives, bonuses, career advancement opportunities and other kinds of benefits mentioned earlier.

The compensation plan includes

· Annual Incentive Awards

· Long Term Performance Awards

· Stock Options

· Stock Appreciation Rights

Recruitment and Selection at Philip Morris USA:

Philip Morris USA recruits around the world. It actively participates in university recruitment fairs, independently run recruitment events, and specialist events such as IT job fairs.

It runs Want Ads that attract potential employees, these ads describe the job its benefits and the organization in detail to the potential applicants. Job openings are also posted on the Internet. Having an online presence has presented an opportunity to attract talented applicants providing PM USA with a large pool of applicants to choose from.

PM USA intends to be the employer of choice, both in attracting new high caliber recruits, and in retaining their existing people. To do this, it offers an employment package that is attractive and meets the diverse requirements of the talented people that it needs to ensure Philip Morris continued success.

Selection Procedure:

An organization is only as strong as the people who make it up, so at Philip Morris decisions about whom to select and whom to reject for organizational membership are critical to the company’s ability to derive competitive advantage through its human resource.

The qualities that Philip Morris USA looks for in employment candidates are:

·         Leadership, and a willingness to take responsibility

·         Problem-solving and decision-making ability

·         Creativity and innovation

·         Strong oral and written communication skills

·         Broad, cross-functional business knowledge

·         Technical and organizational ability

·         Honesty, integrity, trustworthiness and dependability

·         Team players

·         Self-motivated and action-oriented people

·         People who are flexible, able to adapt to change

·         People with a passion for winning

As PM is an organization driven by people, applicants go through a rigorous procedure of selection.

Psychological and Personality Tests:

At PM USA different types of psychological tests are adopted for selection at different levels like Watson-Glaser Critical Thinking Appraisal, Minnesota Multiphasic Personality inventory is used for selection of executives. Myers Briggs Type Indicator is used to determine personality components.

The Panel Interview:

At PM USA HRM specialists use the panel interview method in which three to five interviewers take turn in asking questions and make their observations. The panel interview has higher validity as compares to traditional one-to-one interviews because of multiple inputs, greater acceptance of the decision and shorter decision time.

Performance Management:

To ensure that employee efforts are match with the strategic objectives of the organization. PM USA places great emphasis on performance management of employees.

When hiring new employees, jobs are carefully assessed so that the organizational expectations are clearly communicated to the employees. Job analysis is carried out via questionnaires. Workers at all levels including shop floor employees to managers are made fully aware of their job requirements.

To implement the corporate goals, the company commits resources, institutes appropriate management systems, accountabilities, monitoring processes and regular reviews to assure progress against the set objectives and to establish mechanisms for problem identification and remediation where appropriate.

Many employees face the difficult challenge of managing their job responsibilities while handling a wide range of personal obligations. The Philip Morris Company recognizes this and has developed five simple principles to guide them in their work/life efforts:

• Hold open and continual communication between employees and their supervisors.
• Implement practical solutions locally while developing flexibility to match the needs of their employees and their businesses.
• Conduct regular on-going reviews of the work/life programs to reflect the changes in employee and business needs.
• As the search for best work/life solutions for their people goes on, business needs remains a top priority for the organization
• Make optimal use of their size and scope so they can make quality services available to as many employees as possible.

Employees are given elaborate, regular feedback to help develop in their careers and personal life.

Philip Morris USA uses state of the art applications for performance management, “Mercury Interactive Enterprise Testing and Application Performance Management System”. This application is being used in Philip Morris for performance management of employees.

Competencies Online:

PM USA carries out 360-degree appraisals of all employees using a multi-point perspective to create a comprehensive internal and external view of the employees. Competencies Online solicits feedback from team members, subordinates and managers to produce a complete external perspective on the employee. This data is then graphically plotted against the employee's own estimate of his or her performance and interrelationship with others to highlight significant differences or "Gaps" between how the employee rates him or her self and how others rate the employee.

The performance appraisal system at Philip Morris USA is dynamic as the employees are fully aware of where they are going, how they are getting there and when they get there.

Chapter 2

Pakistan Tobacco Company

British American Tobacco:

British American Tobacco is the world’s most international tobacco company with an impressive market position in Latin America and a robust position in all the other regions including America pacific, Asia-Pacific, Europe and Africa and Middle East (AME). For 100 years, British American Tobacco has been building an international reputation for producing high quality tobacco products to meet the diverse preferences of consumers. Leading edge manufacturing BAT focuses on quality and excellent distribution capabilities enabling consistently to deliver premium products in 180 markets.

Vision:

“To achieve leadership of the global tobacco industry in both a quantitative and qualitative sense.”

BAT has 15% of the global market and is the second largest international tobacco company and the market leader outside the US. For BAT leadership is about being recognized as a high quality business with excellent people and products and being seen as a benchmark company.

Introduction to PTC:

Pakistan Tobacco Company was the first multinational to set up its business in 1947 in Pakistan. It took over business from Imperial Tobacco Company that was operating since 1929. Pilot production plant was set up in a warehouse near Karachi port with a monthly production of 30 million cigarettes, which by 2002, is over 2 billion cigarettes per month. The rapid expansion in the cigarette market over the years led to the establishment of our state of the art manufacturing facilities in Jehlum and Akora Khattak.

PTC is a subsidiary of British American tobacco (BAT) group, which is the second largest international tobacco group and has its business in 180 countries all over the world. BAT holds 94% shares in PTC.

PTC produces high quality tobacco products to meet the diverse preferences of its consumers, works in all area of the business “from seed to smoke”. The company’s principal activities are manufacturing and selling of cigarettes and edible oils (Sundrop).

Pakistan Tobacco Company has come a long way from being just a single factory operation to a company, which is involved in every aspect of cigarette production, from tobacco cultivation to packaging but what is really significant about these fifty-five years is the tremendous effort that Pakistan Tobacco Company has played in the development of the country. By spear heading the campaign for modern agriculture and industrial practices, they have been instrumental in the development and progress of the agriculture and industrial sector in the country.

PTC has been leader in innovative marketing campaigns, which brought a whole new competitive edge to Pakistan’s business world. Over the last half –century PTC have been supporting and giving donations to various causes of national interest educating growers in the latest techniques and technology in agriculture, forestation and sponsorship of sports.

Through these fifty-five years, PTC continual investment in people, brands, technology innovation and the communities in which it operates has borne fruit in the form of transforming into a company strong enough to go through thick and thin with the country.

PTC believes in its people as most important asset of business.

“Our people are the heart of our business and these world class people work as a team to meet challenges in an ever changing environment .We believe in open and honest communication and this belief has harnessed an open and transparent culture within the company”.

Milestones:

PTC has come a long way from being just a single factory with restricted operations .The role it has played in the economic development is commendable. From the spearheading of modern machinery and industrial practices to incorporating the global standards within the structure of the company, PTC has contributed a lot in both monetary and non-monetary terms.

• It became the first company in Pakistan, which was awarded class A as part of the international total business excellence programme MRPII audited by the international consultants.
• Further more both the factories and the leaf areas were awarded ISO 9001 and 1400 certification proving the world-class standards of the company.
• The SA8000 is the largest feather in the cap awarded to the company for the best employee practices, which include issues of child labor, health and safety, freedom of association and right to collective bargaining, discrimination, disciplinary practices, working hour’s compensation and management systems.

Vision of PTC:

“First Choice For Everyone”

• Regaining volume and value leadership by positioning viable brands in all relevant segments.
• Driving world-class standards in products processes and service through passionate, skilled and confident people.
• Striving to meet stakeholders’ expectations.
• Create an open, empowered and fun loving culture.
• Becoming the preferred consultants on industry issues.

Mission Statement:

The mission statement of PTC

“Transform PTC to perform with the speed, flexibility and enterprising spirit of an innovative, consumer focused company”

“Together we will be the best in everything we do”

Motto of PTC:

Dare to be different --Dare to dream --Dare to try --Dare to fail --Dare to succeed

HR Mission Statement at PTC:

To lead the organization in enhancing its human capital and creating a winning environment where everyone enjoys contributing to the best of one’s ability.

PTC will achieve this by:

·         Inspiring and motivating its people.

·         Developing its people to strive for higher standards.

·         Driving an open minded and enterprising corporate culture where people through leadership at all levels dare to dream, dare to try, dare to fail and dare to succeed.

·         Attracting and recruiting the best talent fulfilling customer’s expectations.

Human Resource Strategies:

Human resource department will continue its effort towards nurturing a winning corporate culture and building organizational capabilities by ensuring that its people at all levels are both able and willing to perform at consistently exceptional levels. At PTC the people have been empowered to a large degree by minimizing out dated rules /regulations and plan to further eliminate the bureaucratic barriers to capitalize on their ingenuity and talent .The top team continue to play its role in providing the guidance and support to people at all levels. The HR (people’s) function ensures that it leads the transformational change by nurturing a climate, which would help in converting the huge potential at disposal of the company into world-class performance.

 The active and effective role played by HR in people development at different levels organizational, departmental and individual is considered in PTC to be one of the most critical factor leading to the development of a winning corporate culture. The effort continues to be directed towards developing the skills of the shop floor employees, improving competencies of Business Support Officers (BSOs), and enhancing the leadership qualities of managers.

Plan for People Development:

·         Continue to nurture strong, open minded and caring leadership at all levels with an enterprising spirit of “Dare to dream… Dare to try to try…dare to fail …and dare to succeed”.

·         Ensure to develop people at all levels, both in terms of skills to undertake challenging assignments and the “will” to take greater responsibilities.

·         People at all level take charge for their development and constantly look for opportunities to enhance their knowledge, skill and leadership attributes.

·         Ensure that PTC becomes a learning organization where knowledge management becomes an established way of developing people.

·         As far as possible, match the individual aspiration with the organizational needs to encourage personal fulfillment.

·         Ensure transparency in career management to encourage and recognize talent as well as performance.

·         Prepare and develop the line managers to take ownership of the “HR Tools” e.g., developing people, more active involvement in career management (CDM), Sharing of learning (HR Intranet).

·         To enhance the employability of employees for keeping them motivated and secured.

·         Integration of training activities throughout the company

·         Become a 1^st choice employer in a growing environment where talents supply will fall short of demand.

1. Career Management:

Strengthen the Career Development Management (CDM) process to bring more transparency and commitment to career management and development plans and as far as possible will match the aspiration and capabilities of individuals with the needs of the business with a view to ensure personal fulfillment. Pushing down the involvement of line managers so that they manage careers with the advice and tools provided by HR.

CDM feed back to be shared with the individuals without holding any bars. This would bring more authenticity to the process where career moves will take place as far as possible in a planned way.

2. Embed Coaching And Mentoring Culture:

Create an environment where people development is one of the key drivers for success. Develop emotional and professional maturity of managers to enable them to demonstrate inspiring leadership traits. Training inputs on leadership, emotional intelligence and lateral thinking. Top team to act as role model and encourage people below to demonstrate and inculcate coaching culture for coaching. Emphasizing to people that through coaching others will also develop themselves. Incorporate people development in principal accountabilities of each jobholder. Top team gives more focus to the mentoring process of selected managers.

3. Developing Business Managers:

To reduce silo thinking and develop “Business Managers” they create more awareness and appreciation about how various functions contribute to the overall objectives of the company. This will support efforts for enabling people to understand the impact of their role on other functions and overall business.

T&D will provide a platform to get one/two day’s courses organized each year. e.g.

·         CORA Appreciation

·         Leaf Appreciation

·         Language of finance for non-finance managers

·         Winning through consumer focus

·         HR processes

·         Product knowledge

·         Management Development Courses etc

1. Cross-functional moves

2. Cross-functional project teams.

4. Re-Engineering the Human Capital (Attitudinal Change):

Focus on individual to inspire them and provide them with tools to pursue personal excellence without getting bogged down through self-imposed limitation in thinking and actions. Supporting people to learn from mistakes in pursuit of business excellence. Encourage people to think differently.

5. Performance Appraisal and Development Activities:

Encourage managers to read “Accelerating Growth” on the intranet to self learn the new process. Drive to transfer the ownership for learning and development to individuals –no spoon-feeding .train managers on “Self Service” .top team to fully subscribe to the philosophy and encourage the managers to use the new tool as a “Business Tool” instead of “HR Tool”.

6. Learning And Knowledge Management:

To nurture an environment where all people are allowed and encouraged to develop themselves and give willingly their very best without fear. Provide the necessary platform to develop and inspire individuals and teams to share rapidly and effectively their knowledge /success and failure to enhance team potential and competence. Develop a system for knowledge management and resource allocation in the form of personnel to facilitate. Learning resource center to cater for the self-learning opportunities e.g., e-based training.

7. Reduce Emphasis On Training Only Approach:

Create an understanding that “Training Only “would not be sufficient to develop people and that other development opportunities should be identified and agreed by the individuals and line managers e.g.,

·         On the job development

·         Special projects

·         Short-term assignments

·         Short-term attachments with other functions/sections

·         Cross –functional projects / teams etc.

8. Benchmarking:

Conducted benchmarking of Training & Development activities with other multinationals within Pakistan and with other regional companies.

9. Attracting the Best Talent:

To recruit management trainees in Marketing, Finance, IT and HR, PTC mainly rely on MBA’s graduating from local institutions, barring a few students returning home after qualifying from foreign universities.

Well-managed internship program will help to “catch them young” rather than waiting for the graduating students up to the last moment. Involvement with the students joining the professional institutions starting first year they join.

10. Retaining Talent:

PTC aim to be the most attractive employer in local job market, this is done through,

·         Annual survey of job market (comparative companies) to remain competitive.

·         Expanding the base of comparator companies.

·         Ingenuity in use of Merit Matrix, giving more freedom to the line managers when reviewing the salaries of their teams

·         Raising bar by moving up from the 75^th percentile for specialist jobs.

·         Further, improve the concept of performance-linked bonus.

Keep reviewing organization structure, on need basis, for right sizing. Constant review of role profiles through job evaluations. A flexible approach in designing the remuneration package for the new generation managers who are more interested in higher take home pay rather the retirement plans. Instant recognition of outstanding performance /contributions towards productivity improvements

11. Alignment with the Global Reward Strategy:

Salary increment for those with “A” rating is 17% higher than those with “C” ratings whilst no salary increment was granted to those with “D” ratings.still planning to widen the gap between excellent, satisfactory and weak performers to appropriately incentives high performance .The incentive schemes and incentive objective have been clearly communicated to all individuals and weekly progress report is also communicated to all concerned.

12. People and Team Processes:

Building morale of people and creating a winning culture continues to be the foremost objective where ordinary people can achieve the extra-ordinary by performing willingly to the best of their abilities. The cross culture team continues its efforts towards integrating the various cultural element of the organization. Some of the activities that would further cement efforts in the plan to achieve excellence through a highly integrated and fully committed team include:

·         Re-engineering of communication process across the organization.

·         Enhancing the literacy standard of work force.

·         Involving the families of workers in various cultural activities.

·         Engaging business partners in the overall organizational activities.

13. Industrial Relations (IR):

IR is given special importance by increasingly involving unions and employees to sustain the environment of trust, empowerment and mutual respect. Continuous education and visit to other BAT companies and multinational in Pakistan further broaden vision to support initiatives for change and inculcate entrepreneurial spirit. PTC has demonstrated Fair &Firm deal on issues and principles to ensure good working environment and business partnership with unions.

Different HR Practices at PTC:

These are few of the HR practices that I have learned at PTC from my resource person.

·         Recruitment process

·         Performance appraisal

·         Training

·         Compensation

·         Discipline

Recruitment Process and performance appraisal at PTC are discussed further on:

Training:

Training is a planned effort by a company to facilitate employees learning of job-related competencies. These competencies include knowledge, skills or behaviors that are critical for the successful job performance.

At PTC, there is a continuous assessment of the technical and managerial skills. For the further enhancement of these skills formal training programmes are offered at all levels. The employees are provided with opportunities to put these skills into practice, in preparation for the move to a managerial role. Training is viewed at PTC as a way of creating intellectual capital. Employees are expected to acquire new skills and knowledge, apply them on job and share this information with other employees. The training is cross-functional for sharing of skills. The training programmes also include International Seminars.

Attitudinal Programs:

·         NLP

·         Caring Leadership

·         Emotional Intelligence

In-house Courses:

·         Leadership

·         Influencing

·         Creative Problem Solving

A new initiative has been taken which covers all employees is the course “lets lead change from inside out” in which employees are taught how to react to environmental and technological changes and how to cope with the situation.

WOW:

WOW “Winning In Our World” is a workshop held every week to bring employees, distributors, suppliers, and farmers together where they interact in a harmonious environment. The challenge of WOW is “Nurturing a winning culture that drives to achieve the extraordinary by performing to the best of abilities”.

Objectives of WOW:

·         Know

·         Understanding

·         Believe

·         Act

Elements of WOW:

Achievement

Achievement encompasses Vision, Map and Consumer focus

Commitment:

Commitment encompasses Confidence, Standard and Drive

Trust:

Trust encompasses Teamwork, Support and Belonging

Rating System:

·         The rating system is against competencies.

·         Demonstrate a low skill /knowledge level in most of the core priority areas for the job. Highly intensive or re-education regarding approach is required.

·         Demonstrates some effective skills /knowledge in the competencies areas for the job but there are some important core skill gap to be developed.

·         Demonstrate effective skills/knowledge in the majority of the core priority areas for the job. Has attained standard expected of target group given the constraints of the environment and job role. There are still some areas to be developed.

·         Is extremely effective in all skills/ knowledge areas required in the job. Is performing at the highest standards expected in the role.

Compensation:

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

Extra Pay for Overtime:

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

Discipline:

It is the company policy to ensure that the required standards of performance and conduct are maintained. The disciplinary procedure is intended only as a statement of Company policy and management guidelines. It does not form part of the contract of employment or otherwise have contractual effect.

Chapter 3

Recruitment and Selection at PTC:

In PTC, the activity to fill a vacancy or a new job starts with the requirement communicated by the respective managers to the HR department. The HR department then looks for the possibilities of internal and external recruitment.

Internal Recruitment:

In PTC, internal recruitment is done for the managers of the higher grade and directors. When a position is vacant, the HR department views the past performance of the people working at lower levels than the vacant position and chooses the right person who is promoted to that position.

At the director level, the internal recruitment process is from PTC or from any other subsidiary of BAT. The decision of recruiting a director from a subsidiary of BAT is not in the hands of the HR department of PTC or any of the PTC executives. The directors are allocated from the Asian office of BAT.

External Recruitment:

For external recruitment in PTC, the line managers are required to make a requisition form for the job in which they have to mention their need taking in account the budget for establishment and salaries for the position of Management, Business Support Officers and Workers. Role profile for the specified job is also prepared matching up the requirement and the grade of the job. Training period is also specified on the requisition form. This Process is given a total of 7 days.

The requisition form alongwith the role profile is sent by the line manager to the functional director for his approval and then forwarded to HR Manager. The HR manager confirms the availability of budgets required for establishment, salaries and cost of advertisement for the job. After all this, the requisition form alongwith the job profile and the budget forecast is sent to the HR Director for his final approval. This process if required to be done in 2 days time.

After approval from the HR director the HR manager and the line manager work hand in hand to prepare job and person specifications for advertising or giving to the head hunters. They are given a total of three days time to do that.

The sources that PTC uses to attract applicants are by

·         Inviting applications through advertisement

·         Key campuses

·         Recommendations from the head hunters

·         Applications obtained from the data bank of PTC where direct applications are received from time to time.

This process is given a total of 5 days.

PTC is also indulged in the marketing of their company as being a good employer by the process which they call the “Campus Marketing Campaign”. The objective of PTC by doing this is to attract the best graduates and MBAs by increasing awareness about PTC and BAT and to establish the company's brand name as the leading employer. For this, they have selected some key universities which they target for the Campus Marketing Campaign.

The universities targeted for attracting business students and engineers are:

IBA Karachi, LUMS Lahore, NIMS Rawalpindi., UET Lahore, UET Peshawar, GIKI Topi, NUST Rawalpindi

The universities targeted for attracting masters in tobacco leaf growing are:

·         Agriculture University Faisalabad

·         Agriculture University Peshawar                  

Graduate Recruitment teams are made which have the responsibility of recruiting new personnel to PTC. These teams are also responsible for the Campus Marketing Campaigns. Each team has a leader and the HR managers are responsible to provide administrative support to the recruitment team leaders and are HR managers themselves are the members of these teams.

For business schools, the recruitment team leader is a grade 36 manager from Marketing or Finance department. For UET Lahore and NUST, Factory Manager of the Jhelum factory is made the team leader and for UET Peshawar the Factory Manager of Akora Khattak Factory is made the team leader. In the same way for GIK Topi, the IT Manager, for Agriculture University Faisalabad, the Crop Manager and for Agriculture University Peshawar the Leaf Manager are made the recruitment team leaders respectively.

A two year marketing plan for each campus is made in which different strategies are formulated to attract different target audiences. PTC has different marketing plans for the

·         Faculty

·         Student Organizations

·         Prospective MBAs

The marketing plan covers the following activities

·         Company and career presentation

·         Internships

·         Sponsorship Student events

·         Campus Advertising in magazines, journals and graduate directory to establish PTC and BAT employer brand name

·         Organizing Lectures and Training Programs

·         Direct mail shots

·         Awards

After a substantial amount of applications have been received, the line and the HR managers again work together for a total of 10 days to shortlist the applications. This is done by carefully going through all the application and by giving weightage point to the following criteria

·         Quality of early schooling

·         Grade obtained

·         Extra Curricular activities

·         Overseas travel and education

·         Age

·         Target University

·         Relevant experience

Call up letters are then issued to the short listed candidates along with blank application forms by the HR Department. Date, time and venue for the preliminary interview is advised and candidates are asked to bring along completed application forms. A two member panel of HR and line management carries out competency based interviews focusing on functional skills and managerial and supervisory skills. This process is again given a total of 10 days.

After the preliminary interview is cleared people applying for different jobs are tested in different ways. In case of management, Assessment Centers are organized for recruitment. Assessment material is provided by BAT which is composed of case studies followed by discussions among the applicants. The following management competencies are assessed by a panel of cross functional assessors:

·         Communication skills

·         Resource management

·         Rational decision making

·         Influencing

·         Creative thinking

·         Business development

The HR department is responsible for overall administration of the assessment centre including training of the assessors.

In case of Business Support Officers selection tests are designed to assess functional, intelligence, writing and numerical ability. The line and HR managers prepare the test papers. AH4 test is currently being used to assess basic intelligence, language and numeric ability.

PTC makes sure that the candidates reporting for test from out side the city are reimbursed air, train or bus fares.

In case of workers, written aptitude and mechanical comprehension tests are administered by HR in conjunction with line managers. Management focuses to finish all this in 15 days.

After  all the tests, the candidates are again short-listed for the final interviews. The short-listing of the candidates is based on their performance on the secondary stage of the recruitment and selection procedure. Date and time for the final interview is fixed with the selection board and call up letters are sent to the candidates.

Candidates reporting for the final interview from out side the city are reimbursed air, train or bus fares where considered appropriate. The final interviews take a total of 7 days.

The candidates selected after the final interview are referred to PTC’s nominated doctor for medical examination. The doctor sends his medical report directly to HR department. Candidates declared medically fit are made an offer. The HR department provides details of remuneration package and terms and conditions of service. The HR department also prepares appointment letter, service agreement and finalizes other documentation for service record.

Chapter 4

Managing Performance at PTC:

Performance management has three parts: Defining the performance, measuring or appraising performance, and finally feedback for the performance.

Purpose of Performance Management System in PTC:

Performance Management system of any company is to check whether the employee performance is aligned with strategic goals. PTC claims to be value leaders in the cigarettes market and future goal is to transform PTC to perform with speed flexibility and enterprising spirit of being an innovative, consumer focused company.

Furthermore, the employees who perform well are given opportunities to further develop themselves. Normally the weak points are pin pointed so that the employees can improve themselves.

Performance Management in PTC:

At PTC, the process of performance management starts by defining performance. Performance cannot be defined without a clear knowledge of the job that is to be performed by the employees. At the managerial level, it is very difficult to define performance of the employees keeping in view their quantitative aspects. Due to large variety of managerial jobs at PTC, the performance of managers is analyzed on a qualitative measure.

At PTC, jobs are analyzed after every two years or when ever there is a need of job analysis and performance is defined. After that, this definition of performance is communicated to all the employees and it is made sure that they work on these measures as they are also appraised on the same measures.

After performance has been defined, all the required behaviors for the managers are studied in detail and some indicators are developed which are necessary to judge whether the employee is performing good or bad. The indicators that are in favor of the required performance are called “Positive Indicators” and the indicators against it are called “Contra Indicators.”

Given below are the behaviors with their required performance, their positive and contra indicators for managers PTC:

1. Managing work

Manages own work in the most efficient and effective way

• Plans and prioritizes own work, breaking down the task.

• Uses available resources effectively (own time, systems, finances, people, information)

• Prepares well has everything at hand.

• Has an organized approach to work.

At a supervisory level:

• Delegates tasks effectively

• Coaches subordinate(s) to achieve tasks

Positive Indicators                                                     Contra Indicators

2. Analyzing and understanding

Understands own role, responsibilities, tasks and solves problems.

•  Seeks clarification by probing, questioning and challenging

•  Anticipates and thinks around problems / issues

•  Recognizes own limitations and other resources - knows when help is needed.

•  Considers and evaluates all options - is able to weigh things up

•  Makes sound judgments and decisions.

•  Is able to be discreet and maintain confidentiality.

            Positive Indicators                                         Contra Indicator

3. Processing work:

Processes and produces work to meet all the deadlines.

•  Follows appropriate procedures in a methodical and systematic way.

•  Seeks appropriate approvals and authority

•  Maintains routine tasks and systems - filing, info systems, diaries, etc...

•  Monitors and reviews own tasks, makes appropriate checks

•  Is accurate and pays attention to detail.

            Positive Indicators                                         Contra Indicators

4. Adaptability:

Is flexible and responds positively to changes.

• Accepts changes enthusiastically

• Is willing to learn/change

• Is open to new / other ideas

• Is able to perform under pressure

Positive Indicators                                                     Contra Indicators

5. Initiative:

Uses initiative and seeks improvement

• Is curious and inquisitive

• Generates ideas

• Develops and makes improvements

• Learns from experience

• Is able to work with minimum supervision / direction

Positive Indicators                                                      Contra Indicators

6. Relationships:

Has good working relationships with others, both within and outside the organization.

• Builds informal working relationships
• Co-operates with others, is a team player
• Understands and is sensitive to the needs of other people
• Persuades and negotiates - is able to gain commitment
• Confronts problems and is assertive when necessary
• At supervisory level:
•  Is able to supervise and motivate others

Positive Indicators                                                      Contra Indicators

7. Communication:

Communicates confidently and clearly with others

• Is clear and concise in communication

• Effectively communicates own needs

• Liaises and consults with others

• Is able to communicate effectively in writing

Positive Indicators                                         Contra Indicators

8. Commitment:

Displays commitment and self-motivation

• Completes and finishes tasks, not giving up

• Is conscientious and takes pride in their work

• Works to high standards

• Is reliable and consistent - not letting others down

Positive Indicators                                                     Contra Indicators

Disciplinary Procedure for Managers:

It is the company's policy to ensure that the required standards of performance and conduct are maintained. In some cases it will be necessary to take formal disciplinary action, which could range from a verbal warning to dismissal, and it is the company's policy to implement effective and equitable arrangements for handling such matters to ensure fair treatment of all employees.

The Disciplinary Procedure is intended only as a statement of company policy and management guidelines. It does not form part of the contract of employment or otherwise have contractual effect.

There are four stages to the Procedure for permanent employees. The company reserves the right to initiate the Procedure at any stage, or to jump stages, depending on the seriousness of the conduct/performance.

Employees may be accompanied at disciplinary meetings or at any appeal, if they wish, by a fellow work colleague, provided that their attendance is reasonably practicable. It is the employee's responsibility to secure the attendance of such a colleague, and the colleague has the right to decline to attend. Employees are not entitled to be accompanied by an individual not employed by PTC.

Employees will normally receive advance notification of disciplinary meetings and will be told of the action which could result.

At each stage of the Procedure, the employee will be informed of the nature of the complaint against him/her and shall have an opportunity to state his/her case before a decision is taken.

No disciplinary action will be taken against an employee until the matter has been fully investigated and the manager involved in taking the action has considered any explanation given by the employee.

Disciplinary action at stages 1 and 2 of the procedure may be taken by the employee's immediate manager. Disciplinary action at stages 3 and 4 of the procedure may only be taken by the Head of Department or a manager of equal or higher organizational level.

The Human Resources Department is the reference point on questions of consistency or interpretation of the Disciplinary Policy and Procedure and must always be involved prior to dismissal action.

The Head of Department should maintain direct control of all disciplinary records. A copy of all records must be placed on the employee's personal file in the Human Resources Department. All warnings will remain upon the employee's personal file indefinitely, but will normally be disregarded for disciplinary purposes after the following periods:

• Stage 1 - Verbal warning:                    03 months

·         Stage 2 - Written warning:                   06 months

• Stage 3 - Final written warning:          12 months
• Stage 4 - Dismissal

These time periods may however be extended in appropriate circumstances taking into account the nature of the offence.

The time period will commence from the date of the letter/memorandum confirming the warning, even though any specified time for improvement has expired.

Required Performance for Workers at PTC:

At PTC, workers are mainly judged on their skills and the roles that they need to exhibit during a job. As most of the jobs at the worker level are repetitive, that management has a clear analysis of the job and the expected outcomes. So at the worker level, a simple grading criteria is maintained and workers are appraised according to that criteria.

Given below is the rating system to judge the performance of the workers against the core job areas.

Rating System Against the Core Job Areas:

List of Misconduct for the workers:

The following acts come under the category of misconduct by the workers:

i.                    Willful insubordination or disobedience, whether alone or in combination with others, to any lawful and reasonable order of a supervisor.

ii.                  Theft, fraud, or dishonesty in connection with the employers business or property.

iii.                Willful damage to or loss of employers’ goods or property.

iv.                Taking or giving bribes or any illegal gratification.

v.                  Habitual absence without leave or absence without leave for more than 10 days.

vi.                Habitual late attendance.

vii.              Habitual breach of any law applicable to the establishment.

viii.            Riotous or disorderly behavior during the working hours at the establishment or any act subversive of discipline

ix.                Striking work or inciting others to strike in contravention of the provisions of any law, or rule having the force of law.

x.                  Going slow.

Performance Appraisal:

Reviewing performance and taking positive steps to develop employees further is a key function of management and is a major component in ensuring the success of the company through effective employee performance.

A review is about ensuring people know what levels of performance are expected of them and then taking action to ensure they are trained and developed to perform effectively.

Performance Review at PTC:

At PTC a review is intended to be an open and frank discussion between an employee and their Team Leader/Manager. Generally there are two elements: first is the element in which discussion takes place over the strengths and areas which need to be developed as displayed by the job holder over the past 12 months. The performance is of course judged comparing the performance against the core indicators of Job. The second element is concerned with discussing the training needs/inputs activities that are considered to be appropriate to help the jobholder overcome some of development areas discussed in the review and also those activities that are deemed appropriate to build upon their current strengths.

o   Competences:

At PTC, effective performance is considered necessary if the worker is deemed to be working at optimum effectiveness. The initial discussions on strengths and development areas provide a ‘benchmark’ on how the worker is performing at the moment against the competences. Only by carrying out this exercise is it possible to plan what training needs/inputs are necessary to help them develop further.

o   Will to Work:

PTC considers a person, an enthusiast who works at his own with initiative and resultantly inculcates a sense of ownership in him, which is always considered a basic facet for an individual performance. Despite the expertise in his area of work, company does not expect optimum effectiveness from a person without his will to work. Willingness is an efficient/effective response of an individual towards his work, which could not be achieved without interest and initiative. Will to work is basically related to “attitudes” of an individual towards work and his relationship with peers, colleagues including seniors. Someone who removes faults of the machine at his own without waiting for instruction is considered to be an individual with positive attitude. The one who awaits call/order of his seniors or colleagues looking for excuses is considered an individual with not very good attitude and is not a willing worker.

o   Using the Behaviors to Aid Assessment:

The reviewer uses the behaviors identified in the competences as a guide to measure the job holder’s actual behavior. The final grade given will be derived from the balanced view of the reviewer after taking into consideration whether the jobholder behaves more or less like the behaviors expressed in the competences. The assessment is based upon evidence of skills and behavior relevant to each competence and evaluation is made against an ‘ideal standard’. These are only indicators so if one feels that company does not take account of a specific behavior he has observed it is acceptable to grade accordingly as long as one is confident to justify it.

o   Allocating the Grades:

Allocating grades to indicate the level of performance/competence of jobholders is probably one of the most important aspects of the review process. All reviewers have a duty to ensure that the grades allocated are as objective, accurate and fair. The areas in which, the worker requires most development and his will to work should be addressed first in the sheet, so that the grades should support this view.

The reviewer should have an idea of the grades he will award prior to the interview using the behaviors and the rating system to measure actual behavior against.

Sources of Performance Appraisal:

At PTC the primary sources of performance appraisal are the managers and secondary sources are employees themselves. Though the peers also give their opinion but it usually does not have any weightage unless a conflict arises between the manager and the employee.

Feedback:

Workers at PTC are informed of their performance and given the opportunity to express their opinion over their own level of performance against each competence. This serves the following two main purposes:

·         It enables the reviewer to redefine whether the initial assessment was correct, as circumstances may exist that the reviewer is unaware of.

·         By asking the worker what he sees to be his own strengths and development areas often help to reduce negative responses and makes planning training needs/inputs activities easier if the person is able to express for himself the areas in which he feels he can improve.

Following the review the final grades are allocated and the issues/points that were discussed at the review are included in the sheet. When the sheet is complete, at the first instance it is sent to the immediate manager who if required adds his comments, and then it is sent to Employee Relations Department.

All jobholders are entitled to have a copy of their sheets if they so wish and this is encouraged to ensure that the system is perceived as being ‘Open and Fair’.

Performance Measurement System at PTC—Strengths:

Though the management claims that their Performance Measures are congruent to strategies, reliable and acceptable but they emphasized that the main strengths of their systems are the validity and specificity.

Validity:

The performance measurement systems used at PTC are valid. As stated by the management, the core job areas extensively. They are not only aligned with the company’s strategic objectives but are also free from deficiency. Contamination is acceptable as a few things extra from the actual job requirements are expected.

Specificity:

The performance measure used at PTC has a very high specificity because it guides the employees as to where they lack and how can they improve.

Chapter 5

Analysis:

Philip Morris USA is “Fortune 500” company. It is one of the leading tobacco products organizations in the US market. It has been rated Number 1 in the tobacco industry for three consecutive years. PM USA was one of the 50 employers selected for outstanding contributions to the economic growth of USA.

PTC is a subsidiary of BAT group and is one of the largest multinationals operating in Pakistan. PTC’s continual investment in people, brands, technology, innovation, and the communities in which it operates has transformed the company into one of the best organizations in Pakistan.

It is important to keep in to consideration the environments in which these two companies are operating. PM USA has a large production capacity as compared to PTC. PM USA has plants spread all over the USA whereas PTC has only two production facilities in Pakistan.

The US and Pakistani market vary in sophistication and number of consumers. The consumer market in USA is very huge representing a large number of cultures as compared to Pakistan. Other than that, the consumer preferences of the US market are in no way comparable to those of the Pakistani consumers. This is mainly because of the vast cultural differences between the two countries. Cultural differences across the two countries have an impact on the usage of the product. However,  the consumption of cigarettes in Pakistan is relatively higher than that in USA keeping in view that fact that the USA is a country spread over a vast area whereas Pakistan is not and the population of USA is double that of Pakistan.  The culture of a country is displayed in the organizations operating in that country and so, PTC and PM USA exhibit cultures which are not comparable to each other.

Comparison of Human Resource Practices:

Another facet of this study is that organizations working in the US environment have to abide by stringent laws in each and every respect of the organizations working. Whereas in Pakistan, there is no strict legal adherence for organizational practices and so companies form shortcuts along their way and can influence the governmental policies for their own gains. PM USA is fully aware of these legal implications and ensures that the organization complies with the legal requirements.

In contrast to PM, PTC does not have to bear heavy litigation charges due to the absence of rigorous legal monitoring on the organization’s working.

The relation between the management and unions at PM USA is congruous and there is an atmosphere of mutual trust. The management ensures that due regard is given to the interest of the union.

In the past, the management of PTC faced a lot of resistance from the union which led to high employ turnover and lack of productivity. There was a divergence of interests of the management and that of the union. In late 90s, PTC realized the importance of the role played by the union for growth of the organization and worked hard to build compatibility between the union and the management. Presently, PTC is known for its exemplary union-management relations and it serves as a benchmark for the other organizations. This transition to harmonious relationship has led to higher levels of productivity for PTC.

Training and development of employees is a key feature at PM USA. Every employee of the organization has equal opportunities for training and development programs. The organization places emphasis on training and development of its employees for not only training them for their job related tasks but also for the development of future opportunities.

Although training is given due focus at PTC, the organization needs to enhance opportunities for development of its employees. Training programs focus primarily on jobs rather than on development of employees. Development programs should be implemented to help employees manage their careers.

The benefits system of PM USA is one of the best and is known all over the USA to attract employees towards it. These benefits extend to a wide range of facilities provided by the company to retain its human resource which the company thinks is its biggest assets. One of the best features of the employee benefits is the consultation services provided to all the employees in all walks of life. These not only motivate the employees to work hard but also serves as a means to retain valuable personnel and develop their careers at PM USA.

If we compare the benefits system of PTC with other Pakistani organization, then it is worth mentioning that it is one of the best. PTC also makes sure that their employees get the best for their abilities while working in PTC. When compared with the benefits system of PM USA, it falls short in a lot of categories but here, one thing should be kept in mind is that it is difficult to compare them as the labor supply in the US and Pakistan differ. The per capita income of the Pakistanis is very little and PTC is still one of the best employers in Pakistan by giving very little benefits as compared to PM USA.

PM USA employees enjoy competitive salaries and so, the organization has been named #1 by Money magazine in 1999, 2000 and 2001. Attractive salaries are one of the key strengths of Philip Morris USA. The employees of the company get compensated for what they are and what they do for the organization. PM USA is one of the market leaders in compensating its employees in the tobacco industry and with this attracts new talent everyday. This pay-leader strategy of PM USA has contributed a lot towards the success of the company.

At PTC, pay policies and programs are used as an important human resource tools for encouraging desired employee behaviors. The company’s compensation is above the market average and by doing this it tries to attract new talent and motivate its employees to fulfill the strategic goals of the company. PTC maintains the point that the advantage of paying above the market average is the ability to attract and retain the top talent available, which can translate into highly effective and productive work force.

PM USA is the US subsidiary of PM International but it recruits employees from all over the world. The main reason for doing this is to attract new talent wherever it is available in the world. For doing this, the company is engaged in a lot of programs such as university recruitment fairs, independently run recruitment events, and specialist events such as IT job fairs. The recruitment procedure at PM USA is well defined and is aligned with the strategic goal of the organization resulting in attracting the best of the talents towards it.

The recruitment procedure of PTC is also well defined and is aligned with the strategic goal of company. PTC is also engaged in different programs around the country to market its image as the top employer. The difference between PTC and PM USA is that PM USA recruits all over the world where as PTC only recruits in Pakistan. There are some foreigners working in PTC but they are only high level managers or directors which have been transferred to PTC by BAT.

PM USA places great emphasis on performance management of employees. Frequent job analysis is carried through out the company at all levels. Job requirements are established and employees at all are made fully aware of their job requirements. The company then commits resources, institutes appropriate management systems, accountabilities, monitoring processes and regular reviews to assure progress against the set objectives. The performance management system at PM USA is used not only to make sure that the employees are working to achieve the strategic goals of the company but also to give feedback to the employees about their performance and give them chances to improve on the areas where they lack.

Performance appraisal at PTC is used to evaluate the job performance of employees. HR department uses the information gathered through performance appraisal to evaluate the success of recruitment, selection, orientation, placement, training and other activities. Formal appraisals are needed to help managers with placement, pay and other decisions. The appraisal system of PTC is one of the best in Pakistan and it also serves as a benchmark for other Pakistani Organizations.

References:

“Human Resource Management”, 8^th Edition, John M. Ivancorvich

“Managing Human Resource”, 12^th Edition, Bohlander, Snell, Sherman

“Readings in Human Resource Management”, Noe, Hollenbeck, Gerhart, Wright

“Human Resources and Personnel Management”, 5^th Edition, Werther, Davis

“Human Resource Management”, Raymond J. Stone

“Compensation Decision Making”, 3^rd Edition, Bergmann, Scarpello, Hills

“Human Resource Management Gaining a Competitive Advantage”, 3^rd Edition, Noe, Hollenbeck, Gerhart, Wright

www.philipmorris.com

www.philipmorrisusa.com

www.vault.com

www.fortune.com

www.nytimes.com

www.economist.com

www.hoovers.com