FINAL PROJECT OF COMPENSATION MANAGEMENT

PACKAGES LIMITEDHuman Resource Management

Submitted to: Sir Amir Riaz

Submitted by: Muhammad Muneeb-Ur-Rehman Mubasshar Ul hassan Umair saeed Nassar Abbas

(Department of Management sciences)

COMSATS INSTITUTE OF INFORMATION AND TECHNALOGY

Introduction to the Organization

ackages Limited was established in 1956  as a joint venture between the Ali

Group of Pakistan and Akerlund & Rausing of Sweden to convert paper and

paperboard into packaging for the consumer industry.

PPackages is the only packaging facility in Pakistan offering a complete range of

packaging solutions including offset printed cartons, shipping containers and flexible

packaging materials to individuals and businesses world-wide. Its clientele includes

illustrious names such as Unilever and Pakistan Tobacco Company, who have been its

customers for over 50 years. Packages employ over 3000 people and had sales of over

US $ 100 million in 2004.

A package has always been at the forefront of new developments in packaging

research and has pioneered several innovations, including the use of wheat straw as a

raw material for paper and board manufacture. Its on-site paper and board mill,

established in 1968, has constantly increased its production capacity. A new plant with

even greater capabilities is planned for the near future.

Brief History

Over the years, Packages has continued to enhance its facilities to meet the growing

demand of packaging products.

Since 1982, Packages Limited has had a joint venture with Tetra Pak

International in Tetra Pak Pakistan Limited to manufacture paperboard for liquid food

packaging and to market Tetra Pak packaging equipment.

Packages commissioned its own paper mill with a production capacity of 24,000 tones

in 1968. The mill produces paper and paperboard based on waste paper and

agricultural by-products like wheat straw and river grass. With growing demand the

capacity was increased periodically and in 2003 was nearly 100,000 tones per year.

In 1993, a joint venture agreement was signed with Mitsubishi Corporation of

Japan for the manufacture of Polypropylene films at the Industrial Estate in Hattar,

NWFP. This project, called Tri-Pack Films Limited, commenced production in 1995 with

equity participation by Packages Limited, Mitsubishi Corporation, Altawfeek Company

for Investment Funds, Saudi Arabia and the public. Packages Limited owns 33% of Tri-

Pack Films Limited's equity.

In 1994, Coates Lorilleux Pakistan Limited, in which Packages limited has

55% ownership, commenced production and sale of printing inks.

In 1996, a joint venture agreement was signed with Printcare (Ceylon) Limited

for the production of flexible packaging materials in Sri Lanka. Packages Lanka

(Private) Limited commenced production in 1998. Packages Limited now owns 79% of

this company.

Packages Limited has also started producing corrugated boxes from its plant in Karachi

from 2002.

In 1999-2000, Packages Limited successfully completed the expansion of the

flexible packaging line by installing a new rotogravure printing machine and expanded

the carton line by adding a new Lemanic rotogravure inline printing and cutting creasing

machine. A new 8-color Flexographic printing machine was also installed in the Flexible

Business Unit in 2001.

In 2003, Packages entered into an agreement with Vimpex of Austria to provide

management and technical assistance to help in the operation, production optimization

and capacity expansion of a paperboard mill in Syria. A team from Packages is currently

providing these services and is close to optimizing mill production.

The Bulleh Shah Project: Packages is planning to relocate its paper manufacturing

facilities from the existing location, which has limited capacity for expansion, to a new

site 54 km from the present one. This will enable us to radically increase our paper and

paperboard production from 100,000 to 300,000 tones per year. The packaging

operation shall continue concurrently at the Lahore site.

Industrial Relations Department (IR)Industrial Relations Department (IR)

iR department is also called Personnel Department since its different sections

perform most of the HR activities.

IR department consists of the following sections which perform different tasks

regarding factory workers as well as employees of other grades:

1. Time Office & Establishment

2. Legal Cell

3. Labor Welfare

4. Canteen/Mess

All these sections are interlinked and work in collaboration with each other like a

team to perform their duties efficiently and effectively. They are doing their best to

improve individual as well as department’s productivity.

Structure of IR Department

Labour

Welfare officers Labour Welfare officers

IR ManagerIR Manager

Assistant Manager (Welfare)Assistant Manager

(Welfare)Personnel Officer (Law)

Personnel Officer (Law)

Personnel officers(Payroll Section)Personnel officers

(Payroll Section)

Personnel officers (Incentive Section)Personnel officers

(Incentive Section)

Junior legal officerJunior legal officer

Per. SecretaryPer. Secretary

Personnel officers (Time Office & Establishment

Personnel officers (Time Office & Establishment

Assistant Manager (Compensation &

Establishment)

Assistant Manager (Compensation &

Establishment)

Functions of IR Department

Recruitment and selection (I to V)

Maintaining and updating Personnel record

Monitoring Payroll Process

Monitoring Attendance record

Planning work for Employees

Training and Development

Conducting Performance Evaluation and Appraisals

Handling legal aspects

Labor Welfare

Keeping record of JDs of all employees

Compensation Management

Maintaining Management Labor Relations

Maintaining Discipline

Supervising and handling all issues related to internee

Job Analysisob analysis a detailed study of a particular job, the tools and equipment needed

to do it, and its relation to other jobs in an organization. The analysis should also

provide the information needed to say how the job should best be done and the

qualifications, experience, or aptitudes of the person best suited to doing it. Data is

usually collected by questioning those already doing or supervising the job and is

subjected to various forms of interpretation by a job analyst. Accurate job analysis is

crucial to effective job evaluation, employee evaluation, and personnel selection.

J

Job analysis methods

Methods of collecting job analysis information include:

OBSERVATION METHODS

Methods of observation include direct observation, work methods analysis, critical

incident technique.

Direct observation

Direct Observation is a method of job analysis to observe and record behavior /

events / activities / tasks / duties while something is happening.

Work methods analysis

Work methods analysis is used to describe manual and repetitive production

jobs, such as factory or assembly-line jobs. Work methods analysis includes time

and motion study and micro-motion analysis.

Critical incident technique (CIT model)

Critical incident technique is a method of job analysis used to identify work

behaviors that classify in good and poor performance.

INTERVIEW METHOD

Interview method is a useful tool of job analysis to ask questions to both

incumbents and supervisors in either an individual or a group setting. Interview includes

structured Interviews, unstructured interview, and open-ended questions.

QUESTIONNAIRE METHODS

Questionnaire methods include techniques as follows:

Position Analysis Questionnaire (PAQ model)

PAQ model is a questionnaire technique of job analysis. It is a structured

instrument of job analysis to measure job characteristics and relate them to

human characteristics.

Functional job analysis (FJA model)

FJA model is another technique of job analysis.

Work Profiling System (WPS model)

WPS model is a questionnaire technique of job analysis, is a computer-

administered system for job analysis.

Job Descriptionob description, or job profile, is an official document which states detailed

specifications of duties to be performed, responsibilities, and working conditions

and indicates what is expected of a job holder. A job specification is a profile of

the human characteristics needed for the job, such as education, training, skills,

experience, and physical and mental abilities.

J

Employee Compensation and BenefitsEmployee Compensation and Benefits

ompensation means all forms of financial returns and tangible services and

benefits which employees receive as part of an employment relationship.

Organization has well established compensation program. For company, the

resources running Packages are not machines, but the people. It does not seek

employees but seek people who will think, feel, express themselves, learn, teach, and

grow with it. Their growth is the company's growth. Packages Ltd has designed an

impressive range of facilities and services to free its people from worries and allow them

personal and professional freedom.

C

Pay PackagesPay packages are mostly determined on the basis of performance, qualification, and

annual confidential report received from the department head. Pay packages are not

common for each department but it differs from one department to another.

Compensation packages are mostly designed by the top management according to

company policy affected.

Mode of payment

On monthly basis

Employees working in the offices/ security/transport and those performing supervisory

nature of jobs on the process are paid on monthly basis.

On hourly basis

All the employees working on the process and Departments ancillary thereto and not

performing supervisory jobs are paid on hourly basis. Their wages are calculated on the

basis of 8 hours daily for 26 working days.

These are just a few of the benefits Packages provide for employee welfare:

RemunerationThe Remuneration includes:

Basic Pay

Basic salary is an amount which is paid to an employee in accordance with the

grade in which he / she is placed.

Conveyance Allowance

This is also paid to all employees. Employees are also offered the option of

buying vehicles at reduced prices.

House Rent Allowance

All the employees are entitled to this allowance @60% of the basic salary.

Cost of living Allowance

As per law employees are entitled to Cost of living allowance

Recreation Allowance

All the employees up to junior executive Grade are paid on a sliding scale,

statutory special allowance up to maximum of Rs 800 as per law.

Utility Allowance

All the employees in V-grade and above shall be paid a utility allowance

according to their respective grade.

Special Allowance

All executives grade II and above are entitled to a special allowance as per their

respective grade.

Benefits in shape of Allowances

Supervisory Allowance

All the employees having supervisory nature of job and are in grade IV, V and JE

are entitled to supervisory allowance as stipulated in the grades.

Night Shift Allowance

All the employees up to junior executive grade are allowed night shift allowance

while performing night shift duty.

Recreation Allowance

All the employees up to JE are allowed Transport Fair Assistance for recreational

trip every year.

Shoe Allowance

Production employees up to JE and office employees up to Grade-V are allowed

shoe allowance which is paid in the month of July every year. Workers of the technical

division are provided safety shoes where the nature of duties so demand.

Cash Handing Allowance

All the employees making cash disbursement in the factory are allowed Cash

Handling Allowance.

Employment Benefits

Bonus

A cash bonus is paid annually to all employees subject to the profitability of the

Company at the end of its financial year i.e. 31st December.

Provident Fund

On confirmation, the permanent employee becomes the member of Packages

Employee Contributory Provident Fund and contributes 10% of the basic pay plus cost

of living allowance earned by him in a respective month and an equal amount is

accredited to the name of the employee by the Company. An employee is entitled to

take loans on refundable and non-refundable basis from his provident Fund.

Worker’s participation fund

All the employees covered under the worker’s Profit Participation Act are paid

some %age of the profit as specified there under.

Telephone facility

In order to ensure that key executives are available in case of emergency, the

Company encourages them to have telephone at their residence for which they are

allowed part re-imbursement of their telephone bills.

Cycle facility

All permanent employees up to grade- V can get cycles in easy installment.

Motorcycle loan facility

All permanent employees up to JE are eligible to take loan from this scheme in

seniority basis. The company arranges for the loan from the Bank which is re-paid in

monthly installments along with the interest thereon.

Service Award

On the completion of 20 years, 25 and 30 years service, Company gives gifts as

a token of its appreciation of continued association and loyalty of employee with

management.

Annual Increment

Annual increase in remuneration of an employee is made in the 1st of April every

year. This increase is subject, however to the performance of the individual during the

preceding period. In case, if an employee improves his qualification in line with his

duties, he is allowed and increment in his regular grade.

Leave entitlement

Annual leave

Casual leave

Medical leave

Hajj leave

Compensatory leave

Benefits in Shape of Incentives

Attendance allowance

All the employees up to JE grade are given attendance allowance as specified in

the Rules provided they have not:-

Reported late for duty by 15 minutes for more than 3 days in a month

Availed more than 3 casual leaves

Availed leave without pay or social security leave:

Absented for any day in a month

Production incentive

The management has set up a production incentive scheme for various

machines or jobs as the case may be. To motivate employees for higher production a

certain base rate i.e. minimum required production, for a machine/ job, for a specified

period, has been fixed.

Retirement Benefits

Social Security

The most important function of company is to give medical facility through social

security. Every worker with pay scale 5000/- or 177/- per day wages is entitled to the

social security. A form is issued which, after various counter signs results into issuing

social security card to the worker and he/she gets benefit of free medical facility.

Company pays 7% of their wages/ salary as contribution to the social security institution

which provides medical coverage to employees and their direct dependants and

compensation in case of total/ partial, temporary/ permanent disablement or death

arising out of course of employment.

Employees' Old Age Benefit Scheme

The Company contributes a percentage of workers' wages towards this

government scheme, which ensures a reasonable pension on retirement.

Management Staff Pension Fund

All the employees up to JE and above are eligible to become on confirmation, the

member of Management Staff Pension Fund. For the purpose, he or she has to submit

application form for it. On becoming a member, the employee shall be called upon to

contribute 4% of his basic salary towards the fund every month. The Management shall

also contribute an amount which is determined by the Actuary.

In case of death 50% of pension is given to widow and 20% to children (each)

under age of 21.

Ex-gratia

It is the amount which is paid, as per the following schedule, at the time of

retirement or death of employee.

a. Less than five years service nil

b. 5 years service to less than 7 ½ years service 1 month

c. 7 ½ years service to less than 10 years service 11/2 months

d. 10 years service and above 3 months

e. In case of death 3 months

Gratuity

It is paid to the employee/ heirs in case of retirement, termination, resignation or

death. It is paid provided an employee has completed 10 years continuous service with

the company. But it is not paid on dismissal of the employee.

Personal Services and Family-Friendly Benefits

Loan Facility

Employees are facilitated with the opportunity of loan that they can get from their

provident fund.

Excursion

Employees up to JE grade are given a reasonable allowance to assist them in

undertaking a recreational trip.

Sports & family Mela

The management strongly believes in the maxim “a healthy body has a healthy

mind. “It has facilities for practically all the sports and tournament is held every year and

the winners as well as the losers are given handsome prizes. In the same spirit,

management arranges a family Mela for the families of workers. The prizes for the

annual sports are distributed in a gala function which is arranged for this very reason.

Uniforms

All workers except those working in office are given uniforms along with foot

wears. Uniforms are washed in the factory.

Adult Education Program

In order to give illiterate person a chance to read and write the company runs one

year Adult Education Program. All the expenses are borne by the company.

Educational Scholarships

In order to assist the employees to meet educational expenses of their children,

management give them scholarships.

Employees' Children Education

The Company pays an education access to the government to ensure free

education up to high school level of at least one child of each employee, subject to rules

and regulations.

Insurance Benefits

Group Insurance

All the confirmed employees are insured under the Group Term Insurance Policy

by the Company. Under this Group Insurance Policy, an employee is entitled to

compensation from the State Life Insurance Company in case of death and disablement

as stipulated under the Policy.

Medical Allowance

The employees who don’t want to avail medical facility from Gulberg dispensary

of Packages Limited can apply for medical allowance. Once he adopts the allowance he

/ she can change it after the date of 1 year.

Welfare Amenities

Employee contributory welfare fund

The company establishes a welfare fund wherein all the permanent employees

are eligible to become member. All members are required to contribute a nominal

amount towards the fund and the company contributes an equal amount.

Subsidized Food

The Company has extensive cafeteria facilities which serve breakfast, lunch and

dinner to all employees at highly subsidized rates.

Fair Price Shop

The company is maintaining Fair Price Shop wherefrom employees up to

supervisory level can purchase commodities of day-today use. It is operated on no profit

no loss basis.

Hajj Facility

Every year 6 from non- management staff and 2 from management staff are chosen through balloting to perform Hajj on Company’s expenses

Executive Staff Minimum Gross Salary P/M

S.no Grade Gross Pay1 Grd.E1 34,405.00 2 Grd.EII 28,055.00 3 Grd.EIII 19,430.00 4 Grd.J.E 15,139.00

Monthly Paid Staff Minimum Gross Salary P/M

S.no Grade Gross Pay1 Grd.V 11,948.00 2 Grd.IV 9,375.00 3 Grd.III 9,095.00 4 Grd.II 8,959.00 5 Grd.I 8,799.00

Hourly Paid Staff Minimum Gross Salary P/M

S.no Grade Gross Pay1 Grd.PIII 9,922.39 2 Grd.PII 9,506.39 3 Grd.P 9,306.71 4 Grd.A 9,200.22 5 Grd.B 9,150.30 6 Grd.C 9,100.38 7 Grd.D 8,920.66 8 Grd.G 8,804.18

Grade Minimum Salary

Midpoint Salary

MaximumSalary

1 7,500 10,000 12,500

2 9,500 12,000 14,500

3 11,500 14,000 16,500

4 14,000 17,000 20,000