• Introduction• Pakistan International Airlines (also referred to as PIA), is the national flag carrier of Pakistan and the national

airline operating passenger and cargo services around the world. Its main hubs are Jinnah International Airport, Karachi, The Allama Iqbal International Airport, Lahore and the Benazir Bhutto International Airport, Islamabad/Rawalpindi.

• It also serves regional airports, including Peshawar International Airport, Peshawar, Faisalabad International Airport, Faisalabad and Multan International Airport, Multan that connect to the main hubs and have flights to the Middle East.

• Pakistan International Airlines PIA can trace its beginnings to the days when Pakistan still was not a nation. In 1946, Muhammed Ali Jinnah, also known as Quaid-e-Azam, realized the need for an airline network for the forming country. He called upon the help of an experienced industrialist Mirza Ahmad Ispahani. Orient Airways, registered in Calcutta, was formed on October 23 1946, In February 1947, three DC-3 airplanes were bought from a company in Texas, and in May of that year, the airline was granted a license to fly. Services were started in June from Calcutta to Akyab and Rangoon. This was the first post war airline flight by a South Asian registered airline company.

• Two months after this service began, Pakistan as a nation was formed. Orient Airways began relief flights to the new nation, and soon after, it moved operations to Karachi, where it began the important route from Karachi to Dhaka. In addition, their initial domestic route in Pakistan was established, from Karachi to Lahore to Peshawar, and from Karachi to Quetta to Lahore.

• The government of Pakistan, realizing the operation was failing economically, asked the airline to merge into a new national airline that the government was planning. On March 11 of 1955, Orient Airways merged with the Government's proposed airline, becoming Pakistan International Airlines Corporation. During the same year the airline opened its first international service, under the PIA name, from Karachi to London Heathrow Airport in London, United Kingdom, via Cairo International Airport in Cairo, Egypt, Italy using Lockheed Constellations. The DC-3s continued operating the domestic services in Pakistan.

• Pakistan International Airlines (also referred to as PIA), is the national flag carrier of Pakistan and the national airline operating passenger and cargo services around the world

• Pakistan International Airlines PIA can trace its beginnings to the days when Pakistan still was not a nation. In 1946, Muhammed Ali Jinnah, also known as Quaid-e-Azam, realized the need for an airline network for the forming country. He called upon the help of an experienced industrialist Mirza Ahmad Ispahani. Orient Airways, registered in Calcutta, was formed on October 23 1946, In February 1947, three DC-3 airplanes were bought from a company in Texas, and in May of that year, the airline was granted a license to fly. Services were started in June from Calcutta to Akyab and Rangoon. This was the first post war airline flight by a South Asian registered airline company.

• Vision• PIA's vision is to be a world class airline

exceeding customer expectations through dedicated employees, committed to excellence.

• Mission• Employee teams will contribute towards making

PIA a global airline of choice:• Offering quality customer services and

innovative products• Participating in global alliances• Using state-of-the-art technologies• Ensuring cost-effective measures in

procurement and operations

Social Services

• PIA Planetariums

• PIA Horticulture

• Boy Scouts Association

• Support for Non-Profit Organizations

• PIA Sports Division

• Training and Education

Training and Education

• PIA Training Center

• PIA Model Secondary School

• PIA Industrial Training Institute

Compensation system at PIA

• PIA is a Government based and a bureaucratic organization working under the Ministry of Defense. It has already developed and implemented its system. It is among those organizations whose system is self developed and is implemented successfully. The compensation system of PIA is completely different from the rest of the organizations of Pakistan. The employees of the PIA are very much satisfied with its compensation system.

• Seniority Pay• Pay Grades/Groups• COLAs ;COLAs stand for Cost for Living Adjustment.

This is basically the adjustment of pay with respect to the inflation each year. But there is no specific concept of COLAs in PIA.

• Merit Pay• Increment• Pay for Knowledge/Pay for Skills• Bonuses • Employee Benefits• Legally required benefits:

Benfeits• Following are the different types of benefits that PIA is providing to its

employees:• Medical Facility• Tickets• Transport Facility• Fuel Allowance• House Rent• Special Allowance• Utility Allowance• Car Maintenance• Employee Stock Ownership Plans• Provident Fund• Retirement Programs for Everyone• TADA (Traveling Allowance and Disbursement Allowance)• Overtime

• Medical Services

• PIA Employee Health and Medical Services

• Types of Leaves No of Days

• Casual10 to be consumed

• Medical12

• Privilege30<10 years and 35>10 years

Overtime

• Overtime is the benefit given to the employees of PIA. This overtime can be considered as the compensation for the employees and it is calculated as following:

• 1 Overtime Unit = 2 Regular Units• Which means if an employee provide its services

for one hour during overtime then he will be compensated for two regular hour work. Similarly, this overtime work can also be compensated as a full day off.

Human Resource Functions at PIA

• Recruitment and Selection

PIA advertises the Job Vacancies in Newspapers and Websites. They try to select the best employee for their organization and offer the best salary package to attract and retain him.

Performance Appraisal• Performance Appraisal is the process of identifying the performance

of the individual within the organization. This is the key to promotion and demotion of employees.

• PIA evaluates the performance of its employees through a performance appraisal form called ACR (Annual Confidential Report). The appraisal is done by the immediate supervisor. The organization uses a generic form that is simple and adaptable. Every department uses the same form. The employees do not get pay for performance but get a substantial amount for their extraordinary performance. This amount does not affect their salary.

• The employees are not allowed to discuss about their ACR until and unless they are assessed poor by their supervisor. Appeal is only applicable in case of below average performance. The appeal is being done through a panel that consists of people from Special Group, Human Resource Department and immediate Supervisor.

Training

• PIA Training Center• The PIA Training Center is a leading airline training

institution established in Karachi that delivers the highest standards of aviation instruction. The Training Center is built around a highly advanced training infrastructure, approved by local and international regulatory authorities such as CAA, ICAO, and IATA. The PIA Training Center's courses are based on a unique, standards-based curriculum designed to impart knowledge and best practices in all the aspects of the airline industry.

• HR Training Request

• Workshops

• Job Rotation

• Career Development

Unions

• The Union of PIA is very strong so which ever Government comes, it places its leader for that union so as to bring changes at a big level with a majority vote.

• The political leaders also keep their planes separate and make two aircrafts stand-by that not only creates economic loss but also creates other losses for the customers as they cannot get flights on desired schedules.

• ERO (Employee Relations Officer) deals with the Union. Separate Unions are formed for every level of employees. Working Class has its own Union and technical staff has its own Union.

Employee Termination

• PIA provides complete benefits to permanent employees at the time of retirement and speified benefits to temporary employees or if employees are terminated early before their retirement age.

• It is difficult to fire any employee from the PIA because of strong union presence but it is only possible if there is any violation of rules by the employee or if the performance of the employee is consistently poor.

Contextual Influences on Compensation Practices in PIA

• Economic• Political• Social• Technological• Union • Processes• Size• Market influences

Organisation Communication

• Communication process at officcers level is Horizontal

• Communcation process for non officers is Horizontal

• Both Mailing and Filing system exists

Leadership Style

• Autocratic Leadership Style exists in PIA as this organistion totally comprises Beauratic Culture

Orientation Policy

• PIA is having a strong training programme for all new hirees

• Depending on the Job cadre all new hirees are trained and and thoroughly been brought into the real situations

• Formal and Informal orientation also takes place

Retention

• unfortunately the organization has always been under certain political and competitive influences that have resulted in the economic downfall and increased turnover rate.

Conclusion• Pakistan International Airlines Corporation (PIAC) is the one of the

largest organization in the airline industry which has successfully implemented its systems to retain its employees by providing them with the attractive compensation packages. It has been observed that the human resource department of PIA has developed its own strategies to gain competitive advantage by hiring and retaining the most technically perfect and experienced staff. But unfortunately the organization has always been under certain political and competitive influences that have resulted in the economic downfall and increased turnover rate. Political influences have been the major cause of the financial problems whereas the offering of the increased salaries for the technical expertise by competitors have been a major threat for PIA. To overcome these problems PIA has developed its own culture, procedures and HR practices. The compensation package for the Engineering Department was redesigned so as to increase the salaries of the technical staff to retain them.

SWOT Analysis

• Strength– Leading Market Position– Brand Recognition– Superior Operating Structure– Network Presence– Hub Airport at Karachi

Weaknesses

• Formulation of Govt Rules

• High Dependance on Passenger Revenues

• Debt

• Reliance on OIL Prices

Oppurtunities

• Having the maximum Route and Fleet

• Growing demands for low cost Airlines

• Custometr Loyalty

• Shiftinfg Customer needs

Threats

• High Interest Rates

• Accidents

• Strong Competition with Air Blue

• Decline in Airline Industry

Recommendations

• Job Analysis musyt be revised• Training outcomes must be made measureable• Career Development Programme must be

activated in real spirit• Performmance Appraisal system must be

cahnged• 360 degree feedback must be brought in• Medical Facility, Tickets, Transport Facility Fuel

Allowance, House Rent, Special Allowance, Utility Allowance, Car Maintenance, Employee Stock Should be as per competitors

• Decentralization Autocratice Style to be replaced with Participative StyleMinimal Delegation authority to be maximisedEasy Management

Inresed MotivationEasy Access to Information and resolution to the Conflicts

Recommendation

• Strategic Buisness Unit

PIA Should Make its different department s SBU

• Employee Empowerment

More Employee Motivation, Satisfaction

• Two Way Communication

Top Down approach must be replaced with two way communication