Khalid Mehmood Anjum Internship Report MBA UOL

MBA INTERNSHIP REPORT

Pak-Arab Refinery LtdSpecialization: Human Resource Management

Presented to:Chairman Department of Business Administration

Submitted by:

Name: KHALID MEHMOOD ANJUM

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

Complex, Mahmood Kot, Qasba Gujrat,

district Muzaffargarh.

Contact#: 0301-7906205

(Department of Business Administration)THE UNIVERSITY OF LAHORE- LAHORE

Khalid Mehmood Anjum 1

Bismillahi-r rahmani-r rahim

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


Today faced with increased rivalry among the

major competitors, it is mandatory for an

organization to engage in human resource

practices, primarily to maintain its existence in

competitive environment and secondary to

gain competitive advantage over its

competitors. One could argue that it is virtually

impossible for organizations to function

effectively without human resource practices.

The human resource practices not only improve

the corporate value but also channelize the

energy of the people working there. In most of


the contemporary organizations, regardless of

the strong financial position, substantial

growths are not achieved due to poor human

resource practices.

All praise and glory is to almighty Allah

Who has given hope and courage to me

for hard work in life.

I would like to thank all of the staff

members of the human resource

department & specially Senior


Management executives who have

devoted me their valued time in spite of

their hectic schedule which has

increased my scholastic vision and given

me practical know how of HRD.

And I would especially like to thanks

Manager Human Resources (Mrs. Sharon

Dias), Chief Human Resource Officer (Mr.

Rizwan Idris) and Senior Management

executives who gave me chance to

increase my knowledge about working

with PARCO.

Khalid Mehmood Anjum

Roll # Registration #

TABLE OF CONTENTS


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DESCRIPTION

Title Page

Preface

Acknowledgement

List of contents

Abstract

1) Objectives of the studying the organization

2) Introduction to the organization

3) Overview of the organization

Organizational structure

4) Organization structure of the HRD Department

5) Human Resource management process in the organization

5.1 Human Resources Planning (HRP) and Forecasting

HRP Process

Forecasting HR requirements

Methods to forecast HR needs


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5.2 Employee Recruitment and selection

Sources of candidates:

a) Internal Sources

b) External Sources

Employment selection process

5.3 Training and Development

Training Needs Assessment

Employee Development

5.4 Performance Management

Setting performance standards and expectations

How performance reports are written

5.5 Employee Compensation and benefits

Types of compensation and benefits

5.6 Organizational career management

Employee job changes

o Job changes within the organization

Promotion

Transfer

Demotion

o Separations


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90

93

94

Layoff

Termination

Resignation

Retirement

6) Labour Management Relations

7) SWOT Analysis

▪ Strengths

▪ Weaknesses

▪ Opperortunities

▪ Threats

8) Weakness of the Organization (main)

9) Conclusions

10) Recommendations

11) Refrence & Soource used

12) Annexures / Appendices


Words AbbreviationsMCR Mid-Country Refinery

MPNR Ministry of Petroleum and Natural Resources

EAB The Emirate of Abu Dhabi

ADPI ABU DHABI Petroleum Investment

OMV Osterreichische Mineralol Verwaltung

TSSA Technical Service and Support Agreement

IPIC International Petroleum Investment Company

NEQS National Environment Quality Standards

OSHA Occupational Safety And Health Act.

HSE Health Safety and Environment

P&A Personnel and Administration

JIMCO Joint Installation of Marketing Companies

MFM Mahmood Kot–Faisalabad–Machike

KMK Keamari to Mahmood Kot

PS Pumping Station

TS Terminal Station

ERT Emergency Response Team

DCS Distributed Control System

WOP White Oil Pipeline

O & M Operations and Maintenance

FAP Fire Alarm Panel

TFC Term Finance Certificates

LPG Liquefied Petroleum Gas

HSD High Speed Diesel

LDO Light Diesel Oil

DHDS De-hydro Desulphurization

MOGAS Motor Gasoline

HOBC High Octane Blending Component

BPSD Barrels Per Stream Day

SAP Systems Applications Procedures


The objective of this report is to focus those activities

that take place in the Administration and

Management sections on regular basis and all those

areas that are included in the domain of this section.

It is also meant for finding the weaknesses and

shortcomings and then giving the suggestions for

improvement.

The main emphasis of this report was to develop a

clear understanding of the organization i.e. PARCO,

especially its human resources department and

administration department, which is a branch of

Human Resources Development and in which I

worked as an internee. The report covers all the

practices going on in the personnel and

administration department particularly in Human

Resources Management, Administration and

Management services sections along with the history

of PARCO, its structure, its management style and

roles performed by the managers, and finally the last

chapter provides the concluding words like SWOT

analysis, recommendations and conclusion.

This report contains my subjective feelings and

perceptions that may differ with any other internee Khalid Mehmood Anjum 10

or with the management of PARCO, so all the

Recommendations and Conclusion constitute my own

opinions.



OBJECTIVE OF STUDING THE

ORGANIZATION

It is a integral part of my course of MBA and mandatory. The main

emphasis of this report was to develop a clear understanding of the

organization i.e. PARCO, especially its human resource dept. Development

and in which I worked as an internee. The report covers all the practices

going on in the particularly in Human Resources Management, along with

the history of PARCO, its structure, its management style and roles

performed by the managers, and finally the last chapter provides the

concluding words like CRITICAL analysis, recommendations and

conclusion.

In the report the objective was to focus those activities that take

place in the human resource management on regular basis and all those

areas that are included in the domain of this section.

This report contains my subjective feelings and perceptions that may

differ with any other internee or with the management of PARCO, so all the

recommendations and conclusion constitute my own opinions.

Why I selected PARCO for Internship:

There are the following reasons that impelled me to carryout my internship

with PARCO:


I am already working and living in the MCR Housing Complex so it was

easier for me to understand the working environment, the culture of the

refinery, to cope with the thoughts of the people, to understand and

manage the local culture, external forces and demographic effects and

their consequences.

Being an employee personal interest is important in selection of

PARCO for internship and made me aggressive to apply for internship

and I got an opportunity to work for eight weeks in HR section at MCR.

PARCO is the joint venture between Abu Dhabi and Pakistan and

technical support will be provided by the Austrian company named

OMV and well maintained pipeline system through out the country

attract me and provide me better opportunity to relate the theoretical

knowledge with practical work.

PARCO’S MCR is the largest refinery currently operating in the

Pakistan, and accounts for approximately 40% of total refined oil

production in the country and working under the Ministry of petroleum

and natural resources with broader policies, mission, and clearly

defined vision. For these reason I have selected the MCR for internship.

PARCO currently in 2005 achieved the certification of ISO

9001(QMS), 14001(EMS) & 18001(OSHAS).

PARCO was assigned AAA Credit Rating in 1997-98. As a result of

continued financial growth of the Company has got a unique

achievement among the entire Public and Private Sector companies of

the Country, which compelled me to work with management that made

enable PARCO to achieve record performance.

The history of PARCO and the huge size of its operations also made

this a suitable choice for me over other institutions that were available

for the internship program.


INTRODUCTION TO THE

ORGANIZATION

Incorporated in Pakistan in May 1974, as a Public Limited Company, Pak

Arab Refinery Limited (PARCO) is a 60:40 joint venture between the

Governments of Pakistan (GOP) and Abu Dhabi, having paid – up capital of

Rs.12 billion and total equity of Rs.36 billion. Since the commencement of

commercial operations 24 years ago, the company has expanded a

phenomenal 53 times, achieving an asset base approaching Rs.100 billion

PARCO, as an energy company, is a key player in the country’s

strategic oil supply and its logistics. With the synergy of a comprehensive

and expanding oil pipeline network, integrated with a significant and

modern refining capability. The company has emerged as the strategic fuel

supplier to the country. PARCO’s competitive advantages through the

integration of pipeline operation, strategic storage, leading edge refining

and a significant role in the refining of petroleum products, have enabled it

to achieve a unique position in the energy supply chain.

Brief History of the Organization:

History of any organization shows the chronological development status,

but history of PARCO is very much interesting as it has many phases


before coming into its actual shape. i.e. from Refinery to Pipe Line then

Refinery.

a) Initially in 1974 PARCO recognizes its growing role and

responsibility as a Pipeline transporter, then made the strategy for

Refiner and Marketer in the vitally important energy sector of the

country and encourages and expects its employees to strive for

excellence in all their endeavors by focusing on the following four

productivity related areas: As initially this project was approved for

refinery but it was changed to pipe line and refinery project came into

existence later on.

b) PARCO has adopted a modular growth strategy in which the

investments are staggered and Project implementation is

synchronized in such a manner that completion of one Project marks

the beginning of the new Project. This strategy has the following

distinct advantages towards continuously extending PARCO's

contribution to the economic development of the country:

The following account gives a true insight into PARCO's story of success,

its trail of roots and its up-coming aspirations.

1981: Commissioning of Karachi-Mahmood Kot crude-cum-product

pipeline system.

1990: Additional 50,000 tons of Storage facility at Korangi and direct

discharge of ships into PARCO network to ease pressure on Keamari

Oil Piers (DKF).

1992: Introduction of flow improving technology to increase pipeline

installed capacity of 2.9 to 4.0 million tons/annum.

1994: Completion of Bhubak and Fazilpur Pumping stations, further

raising the pumping capacity by 50%.

1995: System UP-gradation / Modernization: Telecom & SCADA,

Revamping, Intelligent Pigging & Pipeline Rehabilitation.


1997: Completion & Commissioning of 360 kilometres Pipeline

Expension Project from Mahmood Kot to Sheikupura near Lahore via

Faisalabad.

March 1998 to September 2000: Started construction of Mid Country

Refinery (MCR) and its completion.

2000-2001: Commissioning of PARCO Mid Country Refinery (MCR)

with a 4.5 MT/annum capacity.

2002-2003: Launching of Marketing Operations of PEARL in

partnership with SHV & OMV and incorporation of a Joint Venture Co.

with TOTAL Fina Elf for development of retail outlets.

2002-2005: 781 KM White Oil Pipeline at a cost of US $ 480 million

commissioned in November 04, with Commercial operations

commencing in March, 2005.

In March, 2009: Recently PARCO started a project i.e. DHDS (Sulphur

hydro treating desulpharization Unit) that will be provide the sulphur

free gasoline product. This project will complete with in two years in

2011.


OVERVIEW OF THE

ORGANIZATION

PARCO has four Divisions:

Corporate affair

Marketing

Pipeline

Refining

PARCO is presently engaged in the transportation of petroleum

product on behalf of oil marketing companies OMC’s from Karachi to

Mahmood Kot near Multan and to Faisalabad and Machike near Lahore

through its 1,228 kms. Pipeline. PARCO’s pipeline system includes a

network of highly sophisticated telecommunication facilities and a

comprehensive supervisory control and data acquisition system.


Initially, PARCO’s pipeline network was functioning up to Mahmood

Kot near Multan, a distance of 864 kms. Its operating on the basis of two

pumping stations at Karachi and Shikarpur with an annual pumping

capacity of 2.9 million tons. Two additional intermediary pumping stations

commissioned in 1994 at Bubak (Sindh) and at Fazilpur (Punjab) increased

the pumping capacity to 4.5 million tons per annum. Later, with further

technological upgrading of the system the pumping capacity was

increased to 6 million tons. This additional capacity is a major step towards

meeting the increasing requirements of petroleum products in the central

and northern areas of the country, which account for over 60% of the

country’s demand of petroleum products. This increased capacity will also

come in extremely handy for transporting 4.5 million tons of Crude and 1.5

million tons per year of products through the existing pipelines. This timely

initiative by PARCO will relieve a lot of pressure on road movement.

In June 1997, PARCO completed its 364 Kms. MFM pipeline

extension project and extended its operations to Faisalabad and Machike.

The project design allows for further expansion of the pipeline from

Faisalabad to Kharian besides Sahiwal and from Mahmood Kot to

Peshawar.


Mr. Syed Naveed Qamar Chairman

Mr. Mohamad Al Mehairi Vice Chairman

Mr. M. Rasheed Jung Managing Director

Mr. Mehmood Akhter Director

Mr. G.A. Sabri Director

Mr. Hidayatulla Khan Khaishghi Director

Mr. Nawab Hasan Ali Khan Director

Mr. Mohamed Mahmoud Al Khaja Director

Mr. Ahmed Ghalib Al Muhairi Director

Mr. Jeffrey Rinker Director


Corporate Office

Corporate Headquarters,

Korangi Creek Road,

Karachi- 75190, Pakistan.

Islamabad Office

House No. 2-B,

Nazimuddin Road,

F-8/1,

Islamabad. Pakistan.

Refinery Office

Qasba Gujrat, Mahmood Kot,

Distt. Muzaffargarh,

Pakistan.


PARCO’s pipeline system consists of 7 pumping stations namely :

PS-1 Korangi PS-2 Bubak

PS-3 Shikarpur PS-4 Fazilpur

PS-5 Mahmood Kot PS-6 Kot Bahadur Shah

PS-7 Faisalabad (Not operational yet)

Also, there are four terminal stations namely:

TS-1 Keamari TS-2 Mahmood Kot

TS-3 Faisalabad TS-4 Machike

PARCO delivers the products at Mahmood Kot through a further pipeline

connection of 4.5 kms to the Joint Oil Marketing Companies facilities called

JIMCO.

All PARCO terminals and pumping stations have been designed according to

the latest international standards and laid out in a standardized fashion for ease

of operation. PARCO across the country installations have been adjudged to be

comparable to the best available in the international oil industry.

The refinery was on stream by September 2000, which placed PARCO in a

unique position, with an additional capability to exploit the future trends of the oil

industry in Pakistan.



WOPP

PORT QASIM

OF DIFFERENT REFINERIES IN PAKISTAN

The Crude oil design processing capacities of different

refineries is as follows.

S.No. Name of Refinery

Crude Processing

Capacity

‘M. tons’

Percentage

‘%’

1 PARCO 4,500,000 35.6

2 NRL 2,710,500 21.4

3 PRL 2,133,705 16.9

4 ARL 1,711,200 13.5

5 DHODAK 101,182 0.8

6 BOSICOR 1,485,550 11.8

Total 12,642,137 100


Crude oil Processing share of Refineries

PARCO35.6%

NRL21.4%

PRL16.9%

ARL13.5%

DHODAK0.8%

BOSICOR11.8%



The PARCO Mid Country Refinery commissioned in September 2000 at

Mahmood Kot, comprises a grass root Refinery Complex of main Process Units,

treatment and recovery units and full range of Offsite /Utilities System. It also

includes a new residential colony that provides housing and other amenities.

The Refinery design capacity is 100,000 BPSD of Arabian Light or Upper

Zakum/ Murban Crude oil (4.5 million tons per annum), which is being

transported to the Refinery site by PARCO’s. Keamari to Mahmood Kot (KMK)

pipeline system from Karachi.

Location Qasba Gujrat / Mahmood Kot

Project Cost US Rs 886 million

Main Supply & Construction

ContractorsJGC & Marubeni Corp. Japan

Completion Period 36 months

First time Crude oil put in Pipeline August 03, 2000

First time Crude oil received at August 25, 2000


Refinery

First Product out and Commissioning September 04, 2000

Formal Commissioning February 2001

The major cost involved in any organization is in the shape of

construction cost. The total cost of the refinery is around USRs886 million of this

colossal amount, USRs50 million have been spent on environmental protection

measures and Rs. 28 million have been spent on buildings and civil works,

including the housing complex hospital, school, refinery buildings, approach

roads etc.

“Capacity is the minimum rate of output for a facility”

The Refinery complex includes 11 onsite units process units besides numerous

off site / utilities units and other permanent facilities with 51 tanks to store the

Crude oil, intermediate feeds stocks and finished products.


PARCO’S mid-country Refinery will have a refining capacity of 100,000 barrels

per day or 4.5 million tons per annum making it the largest in the country.



Unit code Unit BPSD

100 Crude distillation 100,000

110 Vacuum distillation 42,800

200 Naptha Hydrotreater 25,650

300 CCR Platformer 16,350

284 Diesel max 22,450

130 Visbreaker 15,560

801 Kerosene merox 20,000

802 LPG merox 4,500

411 Gas concentration Liquid: 22050

Gas: 11.242 (MMSCFD)

810 Aminetreating (RNH2)F.G.: 7.721 (MMSCFD)

SWS: 9,963

820 Sulfur recovery 115 MTPD

30

At 100% - Refinery Capacity

CRUDE FEED

4.5 Million tons/year

Case - 1 Case - 2

Arabian Light =

100%

Upper Zakum=

70%

Murban = 30%

PRODUCTS M. Tons /Year

LPG 145,000 169,000

Mogas/ HOBC 469,000 / 201,000 465,000 / 200,000

Kerosene/Jet Fuel 1 (JP-1) 637,000 654,000

High Speed Diesel Oil

(HSD)/

Light Diesel Oil (LDO)

1,358,000 1,537,000

Furnace Oil 1,546,000 1,241,000

Sulfur 25,000 24,000

Note: Design operating days per year = 330



PARCO

MCR CHQ PIPELINEWOPP

PROCESS

TSD

U & OM

HSE

MAINTENANCE

ENGR SERV

P & A&

FINANCE

ORGANIZATION STRUCTURE:


Chairman PARCO

Deputy Managing Director(DMD) Refinery

Deputy Managing Director(DMD)

Deputy Managing Director(DMD)

Managing Director PARCO (MD)

General Manager (refinery)]

MangerDepartment

MangerDepartment

ChiefSection

Group/Section Head

Senior Engineer /Executive

33

Positional Hierarchy at PARCO


Managing director

Deputy Managing director

General Manager

Deputy General Manager

Manager

Chief Accountant/Engineer/Management Executive

Senior Accountant/Engineer/Management Executive

Grade IAccountant/Engineer/Management Executive

Grade IIAccountant/Engineer/Management

Executive

Grade IIIAccountant/Engineer/Management

Executive

Assistant Accountant/Engineer/Management

Executive

34


HUMAN RESOURCE DEPARTMENT AT PARCO

At PARCO, Human resource department is working to integrate to

choose a quality of its people in every sphere of its actual strength of its

employees. The effective Human resource planning helps in mitigating the

unforeseen market forces.

The main task of human resource department is to evaluates and

assess and make a long run effective human resource strategy to meet

the new challenging with diversifying the globalization all over the

world in time .so as to make the right choice, in selection of people,

which can be used to devise the most effective choose the right person

for right place. The purpose of this is to achieve the target to quality of

work and increase the over all efficiency and productivity in the field of

human resource managing in better form in systematic and sustain

able way .while maximizing the quality of work life through human

resource . While Main activities performed by human resource

department are as follows

Parco Human resource Department


Manpower

PlanningRecruitment

Performance

Management

Training and

DevelopmentStaff Relations

Management

Information

Manpower Planning

PARCO manpower planning enables a department to project its short

to long term needs on the basis of its departmental plans so that it

can adjust its manpower requirements to meet changing priorities.

The more changing of environment in the department is in, the more

department needs manpower planning to show:

the number of recruits required in a specified timeframe and the

availability of talent

early indications of potential recruitment or retention difficulties

surpluses or deficiencies in certain ranks or grades

Availability of suitable qualified and experienced successors


http://www.csb.gov.hk/hkgcsb/hrm/e-hrm-guide/mis.htm

http://www.csb.gov.hk/hkgcsb/hrm/e-hrm-guide/mis.htm

http://www.csb.gov.hk/hkgcsb/hrm/e-hrm-guide/staff.htm

http://www.csb.gov.hk/hkgcsb/hrm/e-hrm-guide/pm.htm


http://www.csb.gov.hk/hkgcsb/hrm/e-hrm-guide/recruitment.htm

http://www.csb.gov.hk/hkgcsb/hrm/e-hrm-guide/manpower.htm


Recruitment


PARCO Human resource department takes steps to employ staff, it

should work out the type of staff it needs in terms of grade and

rank, and the time scale in which the staff are required.

The general principles underpinning recruitment within the

employee that recruitment should:

use procedures which are clearly understood by candidates

and which are open to public scrutiny;

be fair, giving candidates who meet the stipulated minimum

requirements equal opportunity for selection; and

Select candidates on the basis of merit and ability.

Recruitment of overseas officers is undertaken only when no or

insufficient local candidates are available.

PARCO Hiring Policy:

PARCO have a clear policy to the recruitment and selection of

employees. The overall requirement of the jobs and qualification of the


individuals are the determining factors in the selection and placement of

employees .The company however, endeavours to bring about and maintain ,

as far as possible , a fair balance among candidates from various provinces .

The policy of the company is to develop and promote its employees

from within the organization when ever possible. Where there is an absence

of qualified personnel within the organization, the company recruits from

external sources. Recruitments and promotions are carried out to fill

vacancies of the basis of the approved organogram.

SELECTION PROCESS

1- Reception and employment office

2- Preliminary interview

3- Application blanks

4- Selection tests

5- Employment interview

6- Offer letter

7- Medical examination letter


8- Final medical clearance letter

9- Appointment letter

10- Joining letter

CONDITIONS

1-Employment Age:

Those who have completed the 18 year age and not exceeded the age

of 60, which is our normal retirement age ,are eligible for hiring

2-Re-employment

A person terminated from Parco on charges of indiscipline ,

misconduct or unsatisfactory performance shall not be re-employed .

3- References:


It is a condition of employment that all successful applicants for any

position in Parco authorize reference checks with previous employers when

an offer employment is made .Any offer is subject to satisfactory references

4- Pre-employment

Medical Check-up: Selected candidates must under go a pre –

employment medical examination with a physician selected by the

company .Any offer is subject to a satisfactory medical report.

5- Probationary Periods :

All new employees are employed on an initial probationary periods as

indicated in their letter of Appointment .After probationary periods

completion management informed in writing of either

a) His confirmation

b) The extension of his probationary periods

c) The termination of his employment


Performance Management

Performance management is a very important Human Resource

Management function. Its objective is to improve overall productivity

and effectiveness by maximizing individual performance and

potential. Performance management is concerned with -

improving individual and collective performance;

communicating management's expectations to supervisors and

staff;

improving communication between senior management,

supervisors and staff;

assisting staff to enhance their career prospects through

recognizing and rewarding effective performance;

identifying and resolving cases of underperformance; and

providing important links to other Human Resource

Management functions, such as training

Training and Development

PARCO Human resource Departments manage their own training

function and have varying levels of responsibility to do this effectively.

Management formulates departmental training policies and draws up


training and development plans to support departmental missions, objectives

and values.

Managers identify competencies and training needs, implement

training activities and provide coaching and supervision to

ensure staff development occurs.

Staff takes responsibility to make the most of the opportunities

provided to maximize their potential.

Staff Relations

In Parco the purpose of staff relations is to ensure effective

communication between management and staff, to secure maximum

cooperation from staff, and to motivate staff to give their best by

ensuring that they feel fairly treated, understand the overall direction

and values of the employees and those of their departments, and

how decisions that affect them have been reached.

The principles that govern staff relations are that, where possible:

management should communicate regularly and openly with

staff;


HUMAN RESOURSEDEPARTMENT

staff should be consulted on matters that affect them;

problems and disputes should be resolved through discussion

and consultation;

the Government should uphold the resolutions of the

International Labor Organization conventions; and

Management should devise and encourage activities that

contribute to staff's well being.

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

following sections

1- Manpower Planning and Recruitment

2- Performance Management And Staff Relations

3- Training and Development & information system

Each section is headed by Chief Management Executive followed by

Senior Management Executive.




Training and Development & information system

Performance Management and Staff Relations OMPENSATION

Manpower Planning and Recruitment

MANAGER HRD

Sr MANAGEMENT

EXECTIVE

Sr MANAGEMENT EXECTIVE

OTHERSTAFF

OTHERSTAFF

OTHERSTAFF

CHEIF MANAGMENT

EXECTIVE..

CHEIF MANAGMENT

EXECTIVE.

CHEIF MANAGMENT EXECTIVE.

Sr MANAGEMENT

EXECTIVE

HUMAN RESOURCE MANAGEMENT PROCESS IN

THE ORGANIZATION:

Human Resources Planning (HRP) and Forecasting






Human resource is also some time called manpower planning

and other word that is called employment planning. In simple

word human resource planning is a process for determining and

assuring that the organization will have an adequate number of

qualified person , available at the proper time , performing job

which meet the need of enterprise and which provide

satisfaction for the individual involved .

Human resource planning is an ongoing process. It is not

static .It involves many interrelated activities. Further human

resource planning requires detailed analysis of the present and

the future to ensure the organization has the right number of

people available who posses the right kinds of skills to perform

the jobs required by the enterprise when the work is needed.

Job analysis is the foundation for forecasting the need of

human resource as well as for plans for such activities as

training, transfer and promotion.

Job evaluation and compensation; Before jobs can be

ranked in term of their overall worth to an organization or

compared with jobs in other firms for purposes of surveys. It is


important to understand what the jobs require job description

and specification provide such understanding to those who

must make job evaluation and compensation decisions.

Recruitment: It is very important for human resource planning

to company recruiter needs is full knowledge of the job

Selection: Any method used to select or promote applicants

must be based on a keen ,meaningful forecast of job

performance . An understanding of just what a worker is

expected to do on the job is reflected in job related interviews or

test questions is necessary for a meaning full cast

Placement: In many cases, applicants are first selected and

then placed in one of possible job. When there is a picture of

the needs of a job and abilities of the workers to fulfil those

needs selection decisions will be accurate and worker will be

placed in jobs where they will be placed in jobs where they will

be the most productive.

Orientation , training , and development .

Performance appraisal

Career path planning

Labour relation


Engineering design and methods improvement

Job design

Safety

Job classification system

HRP Process

Although HRP mean different things to different people, general

agreement exists on its ultimate objective-namely, the most

effective use of scares talent in the interests of worker and the

organization. Thus we may define HRP broadly as an effort to

anticipate future business and environment demands on an

orginisation, and to provide qualified people to fulfil that

business and satisfy those demands. This general view

suggests several specific, interrelated activities that together

constitute an HRP system. They include:

A talent inventory to assess current human resources

(skill, abilities, and potential) and to analyze how they are

currently being used.

A human resource forecast to predict future HR

requirements (the number of workers needed. the number

of expected to be available based on labour market


characteristics, the skill mix required, internal versus

external labour supply).

Action plans to enlarge the pool of people qualified to fill

the projected vacancies through such actions as

recruitment, selection, training, placement, transfer,

promotion, development and compensation.

Control and evolution to provide feedback on the overall

effectiveness of the human resource planning system by

monitoring the degree of attainment of HR objectives.

Issues analysis

Business needs

External factors

Internal supply

analysis

Management implications

Forecasting

requirements

Staffing levels

Staffing mix

(qualitative)

Organisation and job design

Available/projected

net requirement

Action plans

Staffing authorisations

Recruitment

Promotion and transfer

Organizational changes

training and development

Compensation and benefits

Labour relations

Forecasting HR requirements

The human resource forecast is determination of the

demand of people and the appropriate types and skills for given

period in the in the future such as one and three and five years.


The forecast also requires the preparation of an estimate of the

supply of people who will be available for the selected periods.

The supply is composed of two parts. The first part the estimate

of number and types of employees presently on the payroll who

will be avail able on the end of the chosen periods. The second

part of the supply is that portion which must be recruited

extremely. These figures for the planning periods are obtained

by the subtracting the internally manpower from the projected

demand. If the figures are positive, people will have to hired if

negative, if negative people may eventually have to be laid

off .The demand forecast is derived from the information

generated in step-1 Goals and plans of the organization of the

human planning process describe earlier. Step-1 should

provide the human resource planners which data on such factor

of projected volumes of sales, units be produced, number of

client to serviced new facilities to be constructed, new

departments to be created and so on

Methods to forecast HR needs

Normally must use variety of techniques to project future

personnel needs. We will describe four major categories of

forecast techniques Khalid Mehmood Anjum 51

These are under

1-Judgement and experience

2-Budgetary planning

3- Work standard data

4- Key productive factor

1-judgement and experience:

This category includes estimate made by people are very

familiar with he products, processes and job and the business.

It is appropriate for relatively short term for cost of, say up to

two years. Supervisors and managers of the various units of the

business make estimate the future manpower need by

judgmentally converting information on short-term future

business activity.

The Delphi techniques is a systematic way of obtaining and

refining judgment by a group of experts it was originally

developed.

Employee Recruitment and selection:

The employment process begins with a perceived

need to obtain a person perform some job . Commonly a

manager submit a written request to the HR department stating


that he wishes to will a given position The position should be

define in term of its jobs description and job specification. This

process should be integrated with the human resource plan of

the organization.

Recruitment involves identifying the sources of potential

employees, informing people of jobs opening and attracting

applicants who have the requisite qualification to perform the

jobs. People may be recruited either with in organization or from

out side the organization, the job requirements as expressed in

job description and job specification identify the

kinds of people to be recruited

Human resource

plan Identification

need for

people

Requirement


internal and external

Sources of candidates:

Recruitment is the development

and maintenance of adequate

manpower resource. It involves the creation of a pool of

available labour from which the organization can draw when

it needs additional employees.

One convenient way of classifying the source of supply is


Job Requirements

job description and

specifications

Pool of candidates

Selection

comparison with job

requirements via

interview, test

background checks

Rejected candidate

Job placement,

orientation training,

probationary status

Accepting candidate

54

to divide the source in to categories. Thus a particular job

vacancy side sources. Thus a particular job vacancy occur, it

can be filled by transferring or promoting an other employed

from within the company to that post. If there is to be a net

addition to the size of the work force then, of course

someone will have to be employed from the out side of the

organization open market work force place.

c) Internal Sources : If management wishes to fill

vacancies by choosing from among present

employees it may utilized any of three procedures

1-Informal search

2-Skill inventory

3-Job posting

External Sources:

Depending upon management policy , the type of jobs

involve, and the nature of labour market management

have options available for obtaining people from outside

the organization

1- Employment agencies

2- Unsolicited applicants

3- Labour unions


4- School, colleges and universities

5- Advertisement

6- Employee referrals

SELECTION PROCESS

INTRODUCTION :

Hiring and promoting the best possible

employees are among the most important of all

supervisory duties. Interviewing properly and

conducting reference checks are more efficient uses

of time than dealing with the consequences of poor

personnel selection.

The key to a successful selection process is good

planning. Planning helps you to learn the necessary

information about each applicant while at the same

time avoiding potential legal pitfalls of the process.

The following guidelines will help you develop a

sound and defensible selection process.

DEFINING THE JOB AND THE IDEAL APPLICANT

PROFILE:

Identify the most important aspects of the job

(i.e., skills, knowledge and abilities). Use the job

description as the primary basis. Then, using these

aspects, develop a profile of the type of employee

who would best fit the job. This should be done in

terms of skills/knowledge/abilities required, previous


experience, compatibility with the job, and the kinds

of personality traits desired (e.g. aggressiveness, a

desire to work with people, creativity, willingness to

work as part of a team, ability to work

independently). As a part of the profile, consider the

job parameters (e.g. amount of overtime required,

pay level, work hours, necessity for travel,

opportunity for promotion, available benefits, limits

on when vacation may be taken, etc.).

DEVELOPING THE INTERVIEW OUTLINE:

The process of filling most positions involves a

review team or search committee. Efforts should be

made to use a team or committee with a diverse

membership. Where necessary, unit heads should

consider adding individuals from other units or job

categories (faculty, associates, classified staff,

graduate assistants, etc.) to provide adequate

diversity (e.g. by gender, race, etc.). Based on the

ideal applicant profile developed earlier, select

interview questions, which will help determine

whether an applicant fits this profile. The questions

must be based on objective criteria and all must be

job-related. Develop an appropriate number of

questions, depending on the amount of time allotted

for the interview. Generally you will want to cover

education and experience, goals, work habits,

working conditions and relevant technical knowledge.


If your interview process is to include any in-house

"test" (e.g., typing), note that the test MUST be an

actual sample of duties involved in the position. Once

your interview outline is developed, review it with

emphasis on looking for areas, which might be "out of

bounds".

SELECTING APPLICANTS FOR INTERVIEW:

For most Civil Service positions, applicants must

have the appropriate test score when they apply for

an advertised position. The top applicant’s package

for all positions must be reviewed to ensure that the

applicant meets the established qualification

requirements. For Civil Service positions, these are

stated on the job specification sheet. For academic

positions, they are stated on the Position Vacancy

Announcement.

Applicants who don't meet the stated

qualification requirements should be eliminated

immediately. However, their records should be

retained because they will be reported as part of the

applicant pool but with a notation that they were not

qualified. When an unusually high number of

applicants respond to an announcement, it is not

necessary to interview them all. However, in order to

make an initial "cut," objective criteria, which relates


to the stated qualification requirements must be

used.

THE INTERVIEW ITSELF:

• Begin the interview by trying to put the applicant at

ease.

• Outline the structure of the interview, explain the

organization and give a general description of the

job (or provide a copy of the job description).

• Discuss the job parameters. Applicant should have

enough information to make a preliminary

determination as to whether he/she is interested in

job.

• Explain to the applicant that he may take some

notes to record the most valuable information.

• Begin questioning. When your questioning is

completed, make sure that you have the necessary

references.

• Allow the applicant to ask questions.

• Explain to the applicant how and when a decision

will be communicated to him/her.

• End the interview on a positive note. You want all

applicants to leave with positive feelings about the

organization, regardless of the outcome of the

interview.

AFTER THE INTERVIEW:


Add details to your notes while the information is

still fresh. Compare your information to the ideal

applicant profile. Always check references. Most

references are checked by telephone, although in-

person and written references are common. Sources

of references include the immediate supervisor, past

employers, coworkers, clientele, or peers. (Be sure

you have the applicant's express approval to contact

the present employer). Develop questions for the

reference check in the same manner used to develop

questions for the interview.

Often you will want to hold a second interview

for the applicants who appear to have the most

potential after the first interview. Structure it in a

manner similar to the first interview, but ask

questions which fill in gaps in your information.

Make your decision by comparing applicants to

your ideal applicant profile. Communicate your

decision to the selected applicant as well as to those

who are not selected. (Do so only after you are

authorized to make an offer and it has been

accepted!) If an applicant who was not selected asks

you for an explanation, explain that you selected the

applicant who best fits the job. Don't discuss

shortcomings of applicants who were not selected.

You are not required to give specific reasons to an

applicant who was not selected.


LEGAL RESTRICTIONS:

These generally prohibit discrimination on the

basis of race, color, sex, religion, national origin, age

or handicap. The attached "Acceptable Pre-

Employment Inquiries," outlines the specific kinds of

inquiries, which are acceptable and unacceptable.

“DO’s and DON'Ts" provides general information on

avoiding legal problems in the interview process. All

interviewers should be thoroughly familiar with this

material.

REPORTING REQUIREMENTS:

When it's time to process appointment

documents for the applicant selected, you will be

asked to provide a list of all applicants including their

race, ethnic origin and sex. However, since you can

not ask for this information during the interview

process, you must rely on your observations. In those

unusual situations where you are uncertain as to the

race or sex of an applicant, you should feel free to

state "unknown."

Training and Development

The objective of training and development is to enable employees

to acquire the knowledge, skills, abilities and attitudes necessary to

enable them to improve their performance. Staff training and


development should focus on the department's objectives and goals

and staff's competencies in achieving them. A strategic approach has

the following characteristics:

Commitment to training and developing people;

Regular analysis of operational requirements and staff

competencies;

Linking training and development to departmental goals and

objectives;

Skilled training personnel;

Regular evaluation;

A continuous learning culture;

Joint responsibility between managers and staff for identifying

and meeting training needs; and

A variety of training and development methods for different

circumstances and learning styles.

Training Needs Assessment

There are several techniques that can be utilized individually or

in combination with each other. More than one tool should be

considered to get a better view of the big picture, however, which

tools are used should be left up to company.


1. Meet with management.

Since most supervisors are involved with the planning of

projects and the future of the company, they know what will be

needed. They should be able to communicate where their employee’s

current abilities lie and what is needed to get them to the next level

for the new projects.

2. Meet with employees.

Discuss what struggles they may be facing from day-to-day and

what would make their job easier and more efficient. Remember to

keep them focused on what they need rather than what they want.

3. Conduct surveys.

Surveys are beneficial because many people can be polled in a

short period of time. Additionally, surveys provide employees with the

opportunity to confess a need on paper that they may be too

embarrassed to admit needing in a face-to-face meeting.

Surveys should take the form of a questionnaire and can include

close-ended or open-ended questions, or a series of both. Close-

ended questions require the respondent stay within certain

perimeters set by the person who created the survey. Being that the

answers are limited, tabulating the data is simple. Open-ended


questions allow an employee to provide more feedback and introduce

new ideas that may not have been considered initially, although

tallying the results may be more difficult. A good option during the

creation of a survey would be to include a combination of both close-

4. Conduct focus groups .

Focus groups allow for small group interaction, allowing the assessor

to uncover details about their target audience. Brainstorming is

encouraged allowing for an exchange of new ideas and a revelation

of what training may be needed. They should be at least ninety

minutes long to initially break the ice and for participants to become

comfortable enough to express their thoughts. Depending on time

limits, focus groups can be held once or repeatedly.

5. Review company goals and mission statement.

A brief review of the company’s past and where they are headed for

the future may reveal valuable information for training. A comparison

should be made of what employees are currently doing and what will

be expected of them as the company continues to grow and change.

Several basic Needs Assessment techniques include:

Direct observation

Questionnaires


Consultation with persons in key positions, and/or with specific

knowledge

Review of relevant literature

Interviews

Focus groups

Tests

Records & report studies

Work samples

Employee Development

The organization may highlight need s and opportunities for

growth and development of the person. Growth may be

accomplished by self-study formal training courses, or job

related activities, such as special broadening assignments and

job rotation .It should be clear that training and development of

employees and managers strengthen the organization as well

as aid individual.


Performance management objective is to improve overall productivity &

effectiveness by maximizing individual performance and potential. It is a

very important Human Resource Management function. Performance

management is concerned with:

Improving individual and collective performance.

Communicating management's expectations to supervisors and

staff.

Improving communication between senior management, supervisors

and staff.

Assisting staff to enhance their career prospects through

recognizing and rewarding effective performance.

Identifying and resolving cases of low performance.

Providing important links to other Human Resource Management

functions, such as training.

PARCO's Performance Management System:

PARCO’s Performance Management Process has been developed to

achieve a number of important objectives. Attract, retain and motivate high-

quality management employees who are critical to the overall achievement

of PARCO’s mission, vision and goals

PARCO’s Performance Management Program has been developed to

achieve a number of important objectives. Specifically, it has been

designed to:

1. Refocus the performance assessment as a management process

designed to achieve PARCO’s strategic goals, drive necessary

organizational change, and directly link each employee’s performance

goals and behaviors to PARCO’s strategic goals.


2. Establish clear and measurable performance goals and against which

accountability will be established and performance assessments will

be conducted.

3. Define a common set of behavioral expectations that are linked to the

achievement of PARCO’s values and support the achievement of

strategic goals.

4. Attract, retain and motivate high-quality management employees who

are critical to the overall achievement of PARCO’s mission, vision and

goals.

5. Reward superior individual and/or team performance measured by

organizational results, the demonstration of desired behaviors, and

the achievement of personal/team goals.

6. Be clearly and consistently communicated to all management

employees

Source: PARCO policy Manual Volume – II

Everyone Has a Role to Play in PARCO

Supervisors and employees share joint accountability for making sure

three steps of the performance management process (PLAN, COACH,

and REVIEW) are carried out each year.

First is the PLAN component, where supervisors and employees work

together to set SMART (Specific, Measurable, Attainable, Relevant, and

Time-based) goals for the year ahead, identify appropriate behavioral


competency levels to be observed, and identify developmental activities

that should take place.

During the performance cycle, supervisors should COACH management

employees. Activities include keeping track of progress being made;

ensuring development plans are being implemented, holding a mid-year

review meeting, and working to ensure any obstacles to achievement are

addressed.

In the REVIEW process, employees and their supervisors jointly discuss

the year's performance, with reference to the Performance Log, and identify

ways in which performance can be improved in the months and years

ahead. The overall review of an employee's performance during the

performance cycle enables a determination to be made about performance-

based pay recognition.

Competencies (How Work Is Done)

A competency is "an underlying characteristic of an individual that causes

or predicts effective and/or superior performance in a job or situation."

Think of a competency as a skill or behavior that a superior performer uses

to perform a task exceptionally well.

Source: PARCO’s policy manual – Volium II


To establish an optimal program and then formalize the process become more of

a challenge because of the complexities of human beings and the wide variety of

expectations that everyone executives, managers, supervisors, employees,

brings to the workplace. The performance appraisal process, called the

performance appraisal system, is the term frequently used for an organization’s

formal efforts to evaluate individual performance. The most frequent use of

performance appraisal is evaluating performance for merit pay increase granted

or withheld. Any performance appraisal process is complex and requires a lot of

support from many well-placed individuals throughout the organization to

succeed. It includes the following steps that must be performed when

establishing a new performance appraisal system.

Provide written periodic appraisals of job performance at least once a year.

Set performance standards that lead to accurate job performance

evaluation.

Encourage employee participation in the development of performance

standards.

Advise employees of these standards before the appraisal period

commences.

Use appraisal results as a basis for developing, rewarding, assigning,

promoting, demoting, retaining, or removing employees

Purposes of Traditional Performance Appraisals:

Performance appraisal for evaluation using the traditional approach has served

the following purposes:

Evaluations of relative contributions made by individuals in achieving higher

level organization goals.

Reward decisions, including merit increases, promotions and other rewards.

Ascertaining and diagnosing training and development decisions.

Promotion, separation and transfer decisions.


Feedback to the employee regarding how the organization viewed the

employee's performance.

Criteria for evaluating the effectiveness of selection and placement

decisions, including the relevance of the information used in the decisions

within the organization.

Criteria for evaluating the success of training and development decisions.

Information upon which work scheduling plans, budgeting and Human

Resources planning can be used.

Two serious flaws in the traditional approach to performance appraisal exist. The

flaws are:

Performance appraisal is usually tied to the employee’s salary review.

Dealing with salary generally overwhelmed and blocked creative,

meaningful or comprehensive consideration of performance goals.

Organizational performance appraisal is typically primarily concerned with

the past rather than being forward looking through the use of setting

objectives or goals.

Performance Appraisal System in PARCO: In the month of April, performance

reports are sent to all the divisional heads down the line to the Managers of all

departments. The managers then sent these reports to the respective immediate

supervisors of all the employees.

They are supposed to fill the performance appraisal form accordingly and sent

back to the HRD. The report is consists of the many aspects of the individual with

reference to his/her performance. For example, effectiveness of the job, his

understanding of the job, efficiency, confidentiality of the assignments, etc. etc.

Point-wise, allocation of marks is given to the each category mentioned above,

and then finally sent to the Divisional Head. HRD Department prepares the salary

revision, promotion letters on the basis of the assessment of each incumbent.

Performances of employees are reviewed once in a year. Salary increases are

not automatic are not granted slowly on the basis of completing a fix period of

service.


Compensation strategies support the delivery of short and long-term business

objectives by encouraging desired behaviours of the organization. Compensation

is a powerful tool that can give a company a distinct competitive edge when it is

aligned to an effective business strategy. Given below are some ever changing

trends in compensation which are likely to force companies to adopt a more

proactive approach in this area.

Responsibility/accountability given earlier in career with implications for

reward and risk taking.

Responsibility/accountability given earlier in career with implications for

reward and risk taking.

Flatter organization structures with greater differentiation/overlap in salary

bands.

Less hierarchical structure with less differentiation in visible perquisites.

Bonuses and incentives linked to performance.

Cleaner salary structures with less perquisites.

PARCO’s Compensation Philosophy:

When determining compensations, prevailing rates in other comparable

industries are also taken into account through periodic salary surveys. PARCO

pays salaries are competitive and performance oriented. Pays ranges are

determined after a systematic and comprehensive job evaluation in which each

job is evaluated on the basis of skills, efforts, responsibilities and working

conditions.

The company endeavours to maintain a balanced programme of employee

benefits aiming to supplement employee’s own efforts to provide economic

protection for themselves and their families in the event of retirement, physical


disability or death.

To this end, following benefit programmes have been offered:

a) Provident Fund

b) Pension

c) Gratuity

d) Death & Disability Plan

e) Medical Assistance

A. Provident Fund:

An employee is eligible to become a member of the Provident Fund from the first

day of the month following the month in which he is confirmed in service.

Employee’s contribution to the Fund is matched by the Company. Both

subscriptions from employee & the company’s contribution are held with a Trust

and the entire sum together with profit is paid back to the employee upon

separation from service.

B. Pension:

The company has a Pension Scheme. A minimum of ten years’ continuous

service and must have attained the age of 45 years, may apply for early

retirement. The amount payable as pension is computable by an independent

Actuary engaged by the company.

C. Gratuity:

The company maintains a registered Gratuity Fund. The benefits of gratuity are

available to all regular and permanent employees, who have completed five

years continuous service with the company.

D. Death & Disability Benefits:

Upon death or disablement of an eligible employee, whether the death or

disablement occurs as a result of accident or otherwise, including death or

accident occurring during air, sea, rail or road travel, whether on or off the job, or

during authorized leave.


However, no death or disablement benefits are payable in the following

circumstances:

Death or disablement through suicidal attempt.

Intoxication under the influence of drugs or alcoholic drinks.

Unauthorized use of operation of company’s tools, machines

transport, etc.

E. Medical Assistance:

All regular and permanent employees and their eligible dependents are entitled

to the medical benefits. Dependents, including one wife or husband, unmarried

sons up to the age of 21 years and unmarried daughters. Provided such

dependents do not have income of their own from employment, business trading,

farming, investment or any other source and are residing with the employee.

Where as father & mother are entertained as 60:40 ratio (60% medical expense

is borne by employee and 40% will be paid by the company). If an employee

wishes to avail medical facilities for his eligible dependents, they would be

required to undergo such medical examinations, at the employee’s expense, as

would be prescribed by the company’s Senior Medical Officer (as per company

policy). If Wife / Husband, Father & mother already had some disease then for

that Disease Company will not pay any compensation.

Medical Officer (Doctors):

The company provides the medical treatment facilities by appointed medical

officers at each of its stations, who is available for employees and their eligible

dependents for free consultations, first aid and dispensary level / stabilizing

treatment during Company prescribed duty hours or during emergency in off

hours.

Medicines:

The cost of any medicines prescribed by the doctor will be paid by the Company.

This will include all the necessary curative and preventive medicines, antibiotics,

injections and inoculations other than those vitamins and drugs which are mainly

for health maintenance purpose taken over an extended period.


Hospitalization:

Employees and their eligible dependents are provided, upon recommendation of

the Company doctor, hospitalization and surgery in the company’s selected

hospitals, which covers medicines, laboratory tests, Doctor/Surgeon’s fees,

operation cost, anesthesia, blood transfusion and room charges, as per

entitlement, which may be ascertained from HR Department. The charges for

food, telephone or any other thing during hospitalization are not borne by the

company.

Upcountry Medical Allowance:

Regular employee whose eligible dependents are neither residing with him at

permanent places or postings nor at a place where Company medical facility is

available are allowed to claim medical costs of such dependents up to certain

fixed amounts and in accordance with procedures notified from time to time.

Retired Employees:

Pensioners shall be entitled to the same medical benefits as are available to the

MPT employees belonging to the same salary grade as the pensioners at the

time of their retirement. These benefits shall be available to themselves and their

spouses for as long as they are in receipt of pension under the company’s

Supervisory staff pension fund.


Career planning is important because consequences of career success or failure

are closely linked to an individual’s self esteem and identity as well as to career

and life satisfaction. Ultimately, it is top management’s responsibility to develop

and implement a cost effective career planning program. The programme must fit

the nature of the business, its competitive employment practices and current

organizational structure.

The PARCO management believes that there is only one thing constant over

time and that is change and they know how to manage it. Consequently they are

on the look out for breakthrough in knowledge and cutting edge technologies.

They embrace them and make them readily available for all within the company.

As man power is becoming the global issue. Arab and Western Countries are

inviting new immigrants as work force. Keeping in view PARCO management in

this regard not imposes any restriction on an employee and thinks that is the right

of an employee that he can change the job at any time to secure his future and to

support his family.

PARCO employee can resign by giving one month notice otherwise one month

salary is deducted as per company policy.

From the organization’s point of view of career change there are four broad types

of internal moves i.e. (up), (down), (over) and (out). These moves correspond to:

Promotions/Move Over (Up),

Demotions (Down),

Transfers (Over) and

Separations / Lay off / Retirements / Resignations (Out).


Promoted / Moved over employees usually assume greater responsibility and

authority in return for higher pay, benefits and privileges. Psychologically,

promotions help satisfy employees, needs for security, belonging and personal

growth. Promotions are important decisions that should receive the same careful

attention as any other employment decision.

Parco promotes its employees on merit system on every year on the basis if their

appraisals.

It is a part of job because some time due to fill the vacancy or for punishment of

employees or some time employees’ better career growth planning organization,

higher management of the organization takes the decisions to transfers their

employees to other departments or locations.

Before considering a performance related demotion or high level of crucial

mistake managers are reminded to peruse any counselling or remedial action

which may improve the employee performance. Demotion has implications to

both the employee and company and advice from Human resource should be

obtained prior discussing the action with the employee. Normally demotion cases

involving poor performance of the employee continuous.

The term Separation used for the organization to increase the turn over ratio or

employee left to the organization due to different reasons.


PARCO have stated situation no lay off policy because it is a growing

organization in oil sector.

The company may terminate the contract forth with specifying reasons giving as

stated in the confirmation letter by intimating one month notice.

Company also have the right to give one month salary and terminate the services

with out prior notice (with immediate effect).

As stated in a policy, services of any employees shall be terminated immediately

if he is found to have:

Indulged in willful insubordination or instigation.

Indulged in theft, fraud, mistreatment or other dishonest acts in connection

with PARCO property or property of any PARCO employee.

Taken or given illegal gifts.

A record of habitual absence from work.

Indulged in drunk or riotous behavior at work or possession of any intoxicant

or drugs.

Indulged in gambling or company properly.

An employee guilty of misconduct may be warned, fined, suspended,

demoted or discharged depending on the company’s discretion.

In PARCO employee may terminate the contract of employment by giving written

notice in accordance with the time in his individual contract or if the contract is

silent in accordance with the notice period.

A resigned employee who fails to report for work during the entire notice period

will be considered unauthorized leave and will not be paid in any uncorked days.

If early released by the Group Manager the employee will pay for any uncork

balance of notice period. Resigned employees are not eligible to take annual

leaves during their notice period.


010030405

All employees will retire on their 60th birthday as per birth dates establish at the

time of their recruitment by birth certificate. Changes will not be made to the date

of birth after recruitment. The company will allow in special cases beyond their

60th birthday up to maximum five year from the advice medical officer and

approval the Managing Director of PARCO. However, employees who have

completed ten years’ continuous service and attained the age of 45 years may

apply for early retirement. All the benefits of retirements as mentioned above in

the Gratuity etc. are the same for the both the cases.


The relation between managements and labors in PARCO is the is the good

example of labor management relations, in this way the PARCO management

always take care the grievances of the labors. Management first emphasizes on

Workers labor Union to allow the issues and disputes to be discussed across the

table rather then fighting them out before the third party. This happens in the

collective bargaining through technique “par excellence” of resolving frequently

divergent and conflicting interests of the employers and the employees. A

number of mechanisms also developed to facilitate the resolution of any disputes

Trade Union:

It means any combination of workers formed primarily for the purpose of

defending interests and rights of the workers in any industry or establishment.

Collective bargaining:

The process of collective bargaining culminated on reaching an “agreement”

which is a written statement of revised service conditions and is legally

enforceable. In PARCO uses the technique “par excellence” of resolving

frequently divergent and conflicting interests of the employers and the

employees. It means negotiations between union(s) on the one hand and the

employer or group of employers on the other, for the purposes of regulations of

terms and conditions of employment and for the improvement of wage levels. It

tends to remove any ambiguities, which might have cropped up over the period

of last agreement and redefines the relationships with the labor union.

Explanation of the Collective Bargaining in PARCO:

It is the process where workers organize collectively & bargain with employers

regarding workplace & by which management & unions establish terms &

conditions of employment. It is described as “collective” because workers are

involved in it as group & are represented by individuals chosen for that purpose.

It is bargaining” because it involves give & take for reaching to some suitable

collective agreement.

Collective Bargaining takes place where workers are collectively organized in


trade union which negotiates on their behalf with a management which

recognizes the union's right to represent their members. It is based on

understanding that there are differing & often conflicting interests to be reconciled

between the workforce as wage earners & the employer as shareholder/owner.

The workers shall without distinction whatsoever have the right to form and

subject to the constitution or rules of a trade union, join any trade union of their

choice within the establishment or industry they are employed in, provided that

workers shall not be entitled to be a member of more than one trade union at any

time.

Fig: 6.1

Source: PARCO Policy Manual – Volume II

Styles of Bargaining:

PARCO enjoys very good working relations with its employees union. The union

is called as PARCO WORKERS’ UNIONS, an officially registered Industry wise

Trade Union with National Industrial Relations Commission (NIRC). It is the

intention and purpose of the PARCO to ensure sound and mutually beneficial

industrial and economical relationship with its workers’ union.

PARCO recognize Unions’ rights and respects it. On the other hand union also

understands the growing discomfort in the prevailing employment conditions in

the country. They are working as partners and on both side a win-win

philosophical approach can be seen in the agreements.


No strikes or layoff have taken place in PARCO in the history of the company.

This is a proof that the relationships in both parties are strong and flexible in

demands.

SWOT Analysis


The overall evaluation of a company’s strengths, weaknesses,

opportunities and threats is called SWOT analysis.

INTERNAL ENVIRONMENT ANALYSIS

(STRENGTHS AND WEAKNESSES):

Internal

environment of PARCO has the following strengths and weaknesses.

STRENGTHS:

INTERNATIONAL RECOGNITION:

PARCO can rightly be considered as a

national organization with an international image. PARCO may be the

only Pakistani company apart from a few others that enjoy a

worldwide recognition for their excellent work methods. The most

recent example of this international recognition is the loan extended

to PARCO by the development bank of the EU and the coupon

swapping involving NBP and City Bank that makes the two

respectively responsible for PARCO domestic and international debt.


LARGEST REFINERY IN PAKISTAN:

PARCO has the largest refinery in

Pakistan and the 4th largest in Asia. The production schedule of

refineries in Pakistan over the last few years will make it more

evident. Apart from being the most technically advanced refinery

PARCO has production capabilities that cannot be matched by other

refineries in Pakistan.

TECHNICAL ADVANCEMENTS:

PARCO is one of the most technically

advanced organizations in Pakistan today whether it is the refinery or

the pipeline its operations are advance and highly automated. Usually

regulated by a central command. The organization has its own

communication system both in terms of data transport and sonic

communications powered by companies like ALCATEL and

ORACLE.

HIGHLY TRAINED AND SKILLED WITH STRONG HR

PLANNING:

Another strength of PARCO

is the highly trained and skilled work force that it has. The people


operating the technical and management sides of this huge

organization are experts of their fields and constantly try to add value

to the already extensively value adding operations at PARCO.

DETAILED FUTURE HR PLANNING:

PARCO is an organization that is always

ahead of its time and environment. The leadership of PARCO is

aware of the fact that real power lies in continuous improvement and

with this philosophy to guide them they have chalked out a road map

for PARCO no matter what the success they get form a project that is

completed today from the vary moment of its completion the

Parconian’s as they call them selves are on the task of

completing the next.


PRODUCT QUALITY:

The value adding philosophy at PARCO also directs

them to produce those products that end up adding value not only to

the customers but also to the company itself. The products produced

at PARCO are of high quality due to this fact PARCO was chosen by

the allied war command in Afghanistan to supply jet and standard fuel

to the coalition forces involved in the war their. A living example of

PARCO’s international recognition of its high quality products.


MANY FACES ONE ORGANIZATION:

PARCO can also be credited for being

the only oil sector company to act as an importer of crude oil,

producer of refined oil, whole seller of refined oil, exporter of refined

oil, retailer of refined oil and a marketer of petrochemicals and

lubricants. This is due to the diversified nature and flexibility of

PARCO that it can be stationed in all of these compartments. This

provides PARCO with a unique ability of growth and value addition.

FINANCIAL POWER:

The company was established with a seed money of

Rs. 540 million and in the last 25 years has expanded a phenomenal

34 times and achieved an equity base of over Rs.18 billion and an

asset base exceeding Rs.90 billion or just over US$ 1.5 billion in

current dollar terms. The latest results are just another element in a

long chain of good financial results that PARCO has produced over

the years of its operation.

DYNAMIC AND RESPONSIVE ORGANIZATION:

At PARCO a shortened

response time to problem identification, solution, actions and results


http://www.ntsearch.com/search.php?q=money&v=56

has given it the competitive edge necessary for survival in a

deregulated competitive environment.

PURSUIT OF EXCELLENCE:

PARCO management knows that their long-term

survival can only be assured by continuously adapting to change and

excelling in every activity of business. This distinction can only be

achieved by a professional outlook and active acquisition of

knowledge. PARCO promotes this by reading, listening, discussing,

observing, thinking, sharing and continuous investment in human

resources.

SIMPLICITY:

At PARCO it’s a belief that complex theories are really

founded on simple thoughts and unless something is explained in

simple terms it’s not understood. The systems and procedures at

PARCO originate and culminate at the floor where the work is done;

they are made by all are used by all.

SUSTAINABLE GROWTH:

The people at PARCO have realized the pitfalls of

artificial and opportunistic growth. Their growth is founded on their


inherent strengths acquired through consistent and high standard

performance, which they plan to continue at a steady pace.

RELATIONSHIP WITH CUSTOMERS:

According to the business philosophy

that PARCO follows customers are not limited to entities and

individuals that buy from them. They include in this category their

suppliers, associates and the nation, who are being affected by their

individual and collective actions. They know the value of reliable

service and assure that they deliver it.

CHANGE MANAGEMENT:

The PARCO management that there is only one

thing constant over time and that is change and they know how to

manage it. Consequently they are on the look out for breakthrough in

knowledge and cutting edge technologies. They embrace them and

make them readily available for all within the company.

PIPELINE OPERATIONS AND WOPP:

Another strength that makes this

strength portfolio for PARCO more interesting is PAPCO or Pak-Arab

Pipeline Company that is another name for PARCO when dealing


with its pipeline operations as explained in the start of the report the

pipeline that PARCO manages is the only one of its kind in Pakistan

and now with the inclusion of White Oil Pipeline the swing has

nurtured towards PARCO more because this means that PARCO can

now freely transport refined and crude oil and can extend its

operations all over the country with relative ease.

TECHNOLOGICAL ADVANCEMENT AND HUGE

INFRASTRUCTURE:

Another

Strength is the Technological Advancement and Huge Infrastructure

that prevails in PARCO. The working of the whole organization is

highly automated in all respects of its operation whether its

communications or routine office work. Latest inclusions are FAS or

Financial Accounting System from ORACLE that has made possible

the integration of finance sections at all PARCO offices with the CHQ

in Karachi.

WEAKNESSES:

UNUSED CAPACITY:

The refinery at Mahmood Kot is the largest in

Pakistan and the 4th largest in Asia. But in operates on 70-80% of its


capacity because of the domestic demand, which does not meet the

full potential of the refinery. This idle capacity is a value loss to the

company new markets should be found and whole of the capacity

must be used to attain economy of scale.

HIGH COST OF PRODUCTION:

Due to the large extent of its operations the

cost of operating and producing in PARCO is very high as compared

to other large scale industry but as the time passes the influx of CNG

in automobiles and power stations will cause the demand for HOBC,

kerosene and motor spirit to fall that will result in less profitability and

the high cost’s of operation will then really start to hurt.

NON-FLEXIBLE PRODUCTION:

This weakness is inherent in all refinery

structures that their production flow is not a flexible one you cannot

produce more diesel if its demand is more if you don’t have the

required crude. The only way is to correctly forecast the market

demand for the times ahead but even that can be faulty as deviational

trends can affect demand adversely at any time. Than, it would not be

possible for a refinery to change its production with the change in the


demand of the market. The same happened when PARCO had to

export 90-RON HOBC because it was not demanded in the domestic

market.

NON-AGGRESSIVE MARKETING & COMMERCIAL EFFORTS:

Although the marketing efforts being made by PARCO are

commendable but looking at the size of the company and its

resources it can be said that they lack an aggressive and dynamic

marketing strategy that can help them penetrate the domestic lubes

and petrochemicals market with ease and allow them to dominate it

comprehensively. But one feels that the Marketing & Commercial

policy of PARCO could be more aggressive in the sense that it should

not alienate its current customers such as PSO, SHELL etc.

EXTERNAL ENVIRONMENT ANALYSIS

(OPPORTUNITIES AND THREATS):

The external environment of PARCO offers it the following

Opportunities and Threats.


OPPORTUNITIES:

In March 2009,DHDS Project:

DHDS (Diesel Hydro Desulphurization) unit project started for

the treatment of sulphur free diesel that enable the environment will

guard against the effects of smoke in the atmosphere and secure a

healthier future for coming generations.

PIPELINE EXPANSION:

As explained in the introductory phase of the

report the pipeline network that PARCO has is the only one of its kind

in Pakistan the network is huge and is currently under expansion.

Apart from it a new network is being developed that will transport only

refined oil from Mid Country Refinery to the facilities all around

Pakistan this will release the pressure on the existing system but will

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

Pakistan.

EXPANDING DOMESTIC MARKET:

The growth prospect in the domestic

market is also an important opportunity for PARCO especially when it

comes to HSD and LSD the domestic market is rapidly expanding


because the use of diesel engines that are in trucks, power engines

or motors for industrial or agricultural use is increasing. It will depend

on PARCO to capitalize on this market trend and to use its extensive

pipeline to capture the relevant market.

TOTAL-PARCO VENTURE:

A "TOTAL-PARCO Pakistan Ltd." Joint

Venture Company has been formed to market 25% of MCR production,

through retail outlets, which are currently in the development stage. It

provides a unique opportunity for PARCO to excel in the field of petroleum

retailing using its superior products and the TOTAL brand name.

WOPP (White Oil Pipeline):

Apart from the existing pipeline PARCO is

currently establishing a new pipeline that will transport only refine oil form

the Mid Country Refinery to other facilities it will relieve the pressure on the

existing system and will provide PARCO with the desired level of product

maneuverability that it requires to make the product readily available at all

virtual depots and terminal stations.


LUBRICANTS MARKET:

Currently the lubricants market in Pakistan is dominated

by either small dealer that sell non branded or non famous brand lubricants

or by Oil Marketing Companies that use their own brand name to sell the

lubricants in the market PARCO has an opportunity to capitalize in this area

either under the banner of TOTAL or using the brand name PEARL which

its currently doing.

INTERNATIONAL EXPORT OPPORTUNITIES:

Although due to the existence of high-

tech refineries n Saudi Arabia, UAE and Qatar the export opportunities for

Pakistani companies are very few but with its superior quality product

PARCO can capture the emerging market in Central Asia and

SAARC countries that will not only increase recognition abroad and

profits but will also allow an window of opportunity for PARCO in the

face of expected low demand of gasoline in Pakistan.


THREATS:

SMUGGLED IRANIAN PETROL/DIESEL:

Smuggled Iranian Petrol/Diesel

presents a threat to PARCO the Iranian oil much more cheaper as

compared to PARCO oil and will no doubt cut the market for PARCO

oil especially in areas such as Balochistan that are the heart land of

Pakistani transport truckers PARCO’s most important target market.

Which has become ever more important due to CNG conversions of

gasoline run cars. The recent border situation with Afghanistan has

made the border less porous for the smugglers but more needs to be

done to prevent this act that destroys the legitimate right of a

company to sell its goods in a market after passing the necessary tax

and regulatory hurdles.

WTO IMPLICATIONS:

One might think that WTO will not pose any danger

to an organization like PARCO because of the strategic mode of

industry that it is a part of but this assumption is wrong with the

implementation of the Uruguay accord of 1999 the restrictions

imposed by the Government one any foreign goods including oil will


have to be removed due to the free trade deal. This will cause an

influx of Qatari and Iranian oil that will be damaging to PARCO and

other refineries due to the economies of scale that the latter posses.

CNG PHENOMENON:

Since the start of CNG operations in Pakistan in

1997 the market for gasoline and HOBC has taken a fall and the

current lifting of duties by the government of CNG kits has alarmed

the oil producers, as this will cause more and more cars to be

converted to CNG in the near future. Apart from this the Power Plants

that operated on Kerosene oil now are shifting to CNG as is cheaper

and causes less damage to the plant these developments are a

threat to PARCO future sales of HOBC and Motor spirit both of which

have been the main profit delivering extensively demanded products

in the past.

RISING OIL PRICES AND THE MIDDLE EAST CONDITION:

The oil industry all

around the world is involved in the same way with international

political developments as the steel industry used to be in the 1800’s.

The price of oil in DOW-JONES Industrial Index reached 45$ per


barrel on August 11, 2004 the highest since the 1974 Arab-Israeli

war. This will cause the prices to increase worldwide and there is no

indication by OPEC to increase production. The situation in Iraq will

also further deteriorate the situation causing demand to exceed

supply as forecasted by the International Institute for Energy

Research. PARCO has to monitor these developments closely to

determine their future strategy.

Location of MCR:

MCR is situated at Qasba Gujrat which is 75 km away from Multan to Kot Adu

road. As residents of PARCO (MCR) are facing problem of medical & education

facilities. The have to travel to Multan for patient special check ups and same

way for higher education have to shift their children to some big city.

Dependent for the Benefits & Improvements:

There is a lot of frustration found between employees because of the PARCO

management is totally dependent on Board of Directors approval for revision of

benefits and some time it take long time and some time not approved the

increments and benefits of the employees or in limited.

Training and Development:

At PARCO there is no independent setup of Training and Development. It is lying

under the umbrella of Admin, while administration dependent on the control of

the corporate office at Karachi, so policies and approval are required from Head

office. This process is slow and some time dates of training passed away. Some

time they hire the specific trainer for the specific purpose who charges the lot of

amount for the training so this may cause the extra burden on the organization’s

financial position.


Policies Imposed by Government:

Policies of Government are changing day by day regarding oil sectors refinery

profit margins are becoming less. As well as the PARCO management does not

implemented the increases of the packages or increment which periodically

government increases in the form of the high inflation rate over the country.

Setup at Mid Country Refinery:

Administration Department which is established here at PARCO is directly

reporting to GM (CA) but it looks as it totally dependent on Corporate Head

Quarter office. They are not independent in any of the decisions rather all policies

and decisions are defined/finalized by Human Resources from Corporate Head

Quarter. It takes long time for persons sitting there to acknowledge the problems

of persons working at MCR.

Multiple Setups at PARCO:

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

Existing pipe line,

MCR and

WOPP

As pipe line set up was established in 1974 and policies defined by that time

initially, were implemented at MCR as such, which was wrong.

Both pipe line systems are entirely different from refinery setup, but initially

Human Resources at Corporate Head Quarter did not acknowledge it.

Managing Director’s Office:

In same way the office of the Chief Executive is established at Corporate Head

Quarter which is situated at Karachi.

CONCLUSION


Now coming up towards some concluding words, in short, one

can say that Human resource Department is meant to facilitate and

support in all matters related to service of employee’s right from their

induction in the company to their last day in service and even beyond.

This department is also responsible for maintenance of service

records of employees. Transfers –postings, maintenance of seniority,

handling grievances, etc. the importance of the Human resource can

be narrated by the fact that developments in human behaviour and

psyche during beginning of last century have forced business

enterprises world wide for sole searching and introspection in human

resource management. Today there is no company in the world, big

or small, which can do without an HR set up. It is men who thinks and

works for quality difference from place to place.

Given the creativity, enthusiasm, commitment and dedication of

PARCO professionals, their continually improving skills due to their

on the job exposure and practical experience, PARCO can really spur

in its field.

Another dimension important to mention here is the role of CHQ that

is continuously pouring its share in strengthening of PARCO. All

those who get an opportunity to excel their abilities there improve

their innate abilities and can work better than before.


RECOMMENDATIONS

The following suggestions can be put forward that can allow

PARCO to capitalize on its strengths and opportunities and to tackle

its weaknesses and threats.

1) Using its level of international recognition PARCO should open

new windows of opportunities relating to export of its premium

products.

2) PARCO should maintain the level of technical superiority and

advancement over its competitions to reach appoint in the long

run that will allow its strong Human Resource Planning.

3) PARCO should keep on training its already highly trained work

force as it’s the human capital that makes the physical capital to

work training and development in human resource department.

4) PARCO should keep detailed plans of the future so that it will

give its workers a sense of directions and achievements to


increase the productivity of their employee with god favorable

HR Policies.

5) PARCO should also strengthen the already strong ability to

react to changes in the business environment, as now it’s a

market as well as a production entity.

6) PARCO should try to maintain the high credit rating that it has it

will give a confidence to prospect investor when the company

decides to launch its shares on the open market.

7) PARCO should also develop a dynamic and responsive attitude

towards it internal and external environment so as to predict

and counter changes instead of being alarmed by them.

8) PARCO should further improve its already high standards of

performance and safety that will result in better Human

resource management.

9) PARCO should reduce the level of office paper work as its

trying to do by automating the office functions as far as

possible.

10) PARCO should also try to develop a strong team based

management system that will result in better and efficient

functioning of all of its systems at all levels.


11) PARCO should, as referred above try to increase the prospect

of export so as to use its full capacity and attain maximum

profit.

12) PARCO should try to reduce its high cost of production and

should try to attain the economy of scale that is required to

compete in the open trade scenario.

13) PARCO should also try to intensify its marketing efforts and

should try to develop an aggressive and dynamic marketing

strategy that will make it possible for it to attain the desired level

of recognition and sales.

14) PARCO should try to further strengthen the PARCO-TOTAL

venture as this is the single most important project when it

comes to either logistics, operations and marketing all of which

PARCO can deliver due to its extensive structure.

15) PARCO should try to lobby support in the government to

prevent smuggling of foreign oil and lubricants into Pakistan.

16) PARCO should try to adjust its operations in advance of the

arrival of the WTO regime so that it doesn’t suffer a reality

shock.


17) Finally the management at PARCO should not fear the advent

of CNG as a product killer but as a new prospect of investment

and growth.

Reference Used:


For references consulted:

PARCO Personnel Policies Volume I

PARCO Personnel Policies Volume II

Working with Pak-Arab Refinery Limited, Employees Guide to

Personnel Policies and Procedures.

Sources Used:

Section Head of Human Resources (H.R)

Manager Administration (Administration)

Senior Management Executive (Administration)

Senior Management Executive (Personnel)

Management Executive-I (Industrial Relations)

Management Executive-I (Training & Development)



i

Annexure - I

Annexure -IIPARCO Organizational Structure


Chairman PARCO

Deputy Managing Director

(DMD Operations) Refinery


(DMD Finance & CA)

Managing Director PARCO (MD)

General Manager (Refinery)

MangerDepartment

MangerDepartment

ChiefSection

Group/Section Head

Senior Engineer /Executive

PARCO Divisional Structure Annexure -III


Managing Director


General ManagerRefinery

Deputy General Manager

Manager

Chief Accountant/Engineer/Mana

gement Executive

Senior Accountant/Engineer/Manag

ement Executive

Grade IAccountant/Engineer/

Management Executive

Grade IIAccountant/Engineer/


Grade IIIAccountant/Engineer/


Assistant Accountant/Engineer/


Managers

General Manager

Corporate

ManagerHRD

Section Head Human Resource

MCR

Group Heads I.R, Medical

MCR

Annexure - V


Annexure - IV

Organizational Structure of theHuman Resources Management Department


General ManagerCorporate

Policy & Procedures

Manager HRD

Section Head Industrial Relations

Section Head Human

Resources

Group Head Recruitment

Group Head Shared Services

Group Head Organizational Development

Group Head Medical Services

(CMO)

Job Evaluation

Training & Development

Performance Management

Performance Management System in PARCO


Annexure - VII

Performance Log (STAR EVIDENCE)

Name P. No.

Title Location

Review Period Supervisor

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

DATE

Situation/Task(Outline the

setting in which performance/be

havior was observed, i.e.

Who was involved? What task, target or assignment

needed to be done?)

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

Result(Describe or quantity the

outcome of the actions, i.e. What

was the impact/affect? What was the

learning?)

STAR for which

Performance Goal or

Behavioral Competency?

Is it +/- indicator?

Sign. of Employee: __________________ Sign. of Supervisor: _________________


Annexure - VIII


Documents

Khalid Mehmood Anjum Internship Report MBA UOL