A detailed analysis of Engro Foods HR department with respect to Human Resource Management practices

Human Resource Management Report

Prepared by
Wasif Qureshi (4701) Sohaib Khan Niazi (5885) Danish Ahmed Qazi (4440) Mohammad Sharif (5945)

Course Facilitator
Mrs. Abida Asif

TABLE OF CONTENTS

Acknowledgment

We would like to begin this undertaking by thanking God, the most glorified, for providing us with all the strength and courage to complete this report successfully and on time We are highly indebted to Mam Abida Shaheen for her guidance and constant supervision as well as for providing necessary information regarding the project & also for their support in completing the project. We would like to express our gratitude towards the members of Engro Foods HR department for their kind co-operation and encouragement which help us in completion of this project.

We would like to express our special gratitude and thanks to Compensation Manager Mr. Umer Sharif, Asst. HR Manager Mr. Faisal Chaudhry, and Asst. ERP Manager Miss Sidra Tariq for giving us such attention and time.

Executive Summary
This report contains a detailed analysis of Human Resource department of Engro Foods Limited a fully owned subsidiary of Engro Corporation which is one of the largest conglomerates of Pakistan. All areas of Human Resource Management including the major functions have been covered in this report. It talks about the job analysis process, recruitment and selection, training and development, performance appraisals and motivation, employee commitment, health and safety environment, and labor relationship concepts and how effectively they are implemented at Engro Foods Limited. To make this report and provided information more accurate multiple visits have been made to the office of Engro Foods. Most of the information about HR functions at Engro Foods is provided by their HR department employees including Compensation Manager, Asst. HR Manager and Asst. ERP Manager.

Introduction
Engro Corporation
Engro Corporation is one of Pakistans largest conglomerates with stakes in the fertilizers, food, power generation, petrochemicals, automation and terminal shortage industries. The fertilizer plant of Engro is the worlds largest single train ammonia-urea plant located in Daharki, Sindh.

Engro Foods
Engro Foods one of the fully own subsidiaries of Engro officially launched and started its operations in 2004. Engro selected dairy as a 1st step to enter into the food industry with state of the art processing units in Sukkur and Sahiwal. Engro Foods invested heavily in milk processing infrastructure and the 1st product launched by Engro Foods was Olpers milk followed by a number of other related products like Olwell, Tarang, Omore and Owsum. After getting tremendous response from its customers and the success of dairy products Engro planning to enter into some other areas of food sector which includes plans of starting up a new rice processing plant and venturing into North American market starting from Halal Foods category with acquirement of Al-Safa which is an established Halal meet brand. According to the company its substantial focus would be on the way to the global operations.

Organogram of HR Department
President & CEO (Engro Foods) Vice President HR & Public Affairs HR Manager

Recruitment Head

Asst. HR Manager

Compensation Manager

Manager Legal

Human Resource Department of Engro Foods, an overview

Due to its financial and innovation strengths Engro has made and proved itself as a dynamic place to work where the voices of the employees are heard. Engros Industries gives it s employees the opportunity to experience new markets and provides unmatchable career options. Engro believes that its people made it a great company exciting place to work. Engro values each of its employee, their input and views, provides a workplace where people feel confident, valued and inspired

HR Policy Setting
Human Resource policy setting is made by an Executive Committee which is headed by the President & CEO of Engro Corporation, including the functional heads of HR & Finance and CEOs of all Engro Corp divisions/subsidiaries. The committee meets to discuss performance appraisals and annual business plans and management and development of top talent including high potential human resource.

1.0 Hiring Activities

1.1 Job Analysis Process
1.1 Need Analysis Engro foods hiring activities start from the analysis of job that have to be staffed which they called Position Analysis process which is a detailed analysis of the specific job from very aspect like, what type of candidate is suitable for this job, what gender should be appointed, what should be the qualification, age and experience of the candidate, pros & cons related to the job. For that matter they collect the data from relevant department which includes a) employees who are performing similar tasks b) direct supervisor(s) c) departmental head d) (optional) any other specialist (within or outside the related department) who has sufficient knowledge about the tasks related to the specific job. Relevant department raises the need and submits a proposal of a position which is than approved by a committee, which they call Compensation Organization and Executive Development (COED) Committee. COED Committee decides whether the proposed job is needed or not. Members of the COED Committee include all divisional heads that approve or disapprove the job. After approval a detailed job description and job specifications form is prepared which include all the needed information related to that specific job. Job description and job specifications are also approved by the same committee and without approval none of the departments can take a final decision of job posting. 1.2 Job Posting When the position is analyzed and approved it is openly publicized internally or externally depending upon the need and requirement. Job posting includes mentioning the position characteristics, attributes and job descriptions. Internal advertising sources include the bulletin board, internal network (Intranet), in-house magazines. External recruitment means include the companys official webpage, different newspapers selected depending upon the nature and level of the job, social network sites like Facebook and LinkedIn. Rozi.pk is also one of the major median of Engros job posting.

Sometimes, depending upon the situation, they also contact an external source and agency for recruitment process. They are in contact with other recruiters like N-recruitment etc. when they hire through them they pay them some amount in return but even in that case the final decision and interview is taken by the Engro officials. 1.3 Screening Applications that sent by candidates are initially screened on the following basis: a) Candidate does not have required qualification and experience b) Age limit is higher than the require c) Location of the candidate is not suitable d) Educational institution is not on the panel list e) If an ex-employee applies for the position (who has left or fired due to any unethical activity) 1.4 Test & Interviewing After screening the applications qualified candidates are called for a written test and an interview, selection of the candidates depends upon the test and interview both but test is a prerequisite for an interview. An HR executive has the ownership of developed test formats and he is responsible to conduct the tests. 1.4.1 Test Format They have divided test into four sections: a) IQ b) General Knowledge c) Math d) English Most of the time they conduct the test at Engro but sometimes they arrange the test schedule in any university which is on their panel list. 9

1.4.2 Interview Interview method depends upon the nature of the job but mostly they follow a series of interviews (Sequential interview). A candidate must be interviewed by four different departmental managers separately which include the relevant department manager, finance manager, HR manager and any other departmental head selected by HR department. They follow structured and unstructured both type interviews and also observe (by asking questions) that how would the candidate react in a given situation or how he/she has reacted in his/her past experience. While taking interview they very much focus on the job, candidate has applied for, especially in case of technical jobs they mostly ask the job related questions. Interview is evaluated on several basis like self-management, team management, work management, values etc. (interview evaluation form is attached in the appendix) interviewer rate the interviewee on the basis of basis of above mentioned criteria keeping the position in mind that what matters most for which job. Panel interview is not a common practice there but sometimes when they hire growth trainee engineers GTEs (for two years on their plant) then during their training period they conduct panel interviews. 1.7 Background investigation In order to verify the accuracy of an applicant HR department asks for the original educational documents, CNIC, character certificate and employment references. Candidates Identity and residence is also verified to check whether the applicant is who he or she claims to be. In case of Re-hiring they check the previous record of the employee maintained through a Human Resource information system HRIS.

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2.0 Training & Performance Management

2.1 Training and development According to Engro they give employees the flexibility for change, the opportunity to learn about new markets and provide unparalleled career options. They believe that Engro people are some of the best in the world with a shared passion to learn and stretch beyond their limits. To make them best and competent enough to perform the tasks efficiently and effectively Engro follows different types of training programs including six sigma and mangers tool kit. While hiring engineers for their plant they initially hire them as Growth Training Engineers (GTEs) on two years on the job training period this training policy is only applies on hiring engineers. 2.1.1 Six Sigma Engro wants to be recognized as a best practices organization so they follow some international standards to measure and maintain the quality and safety standards, and Six Sigma is one of those standards. They provide six sigma certifications and trainings to their employees. Every employee must be trained according to the six sigma levels for example employees of CL 21 to 23 employees must be yellow belt holder which is the initial expertise level of six sigma training. 2.1.2 Managers Toolkit Training They conduct different Managers Toolkit training programs in order to help their managers to be a good manager and make them competent and equipped with the qualities and potentials to manage their subordinates. Recently they held a three days program in a reputed hotel. 2.1.3 Outdoor Training Programs They also send their managers to LUMS and other reputed institutions to attend different certification programs to get the better understanding of different business processes and how these practices are used worldwide. They also send their employees abroad to attend different conferences, roundtables, workshops and interactive sessions to increase their knowledge about different dimensions of business. For example they send their IT department employees to Malaysia to attend SAP workshops and seminars, and marketing people to the respective seminars. 11

2.1.4 Training Schedule & Budget At the start of each year HR department prepares a training schedule that how they will conduct training programs for the whole year. Every department requests higher management that they want to conduct some training programs for the year and they also mentioned the budget required for a specific training program. Once all the requests are collected than management decides the number of training programs and allots the budget to run the approved program. Some of the training programs like Six Sigma are conducted each year others are conducted as per the requirement. 2.2 Performance management and appraisal To evaluate the employee performance they follow a Performance and Development Program (PADP cycle) which includes evaluation of individuals on quarterly and yearly basis. Appraisal assessment cycles starts from the month of December but before that they circulate quarterly appraisal forms. At the end of each quarter HR department circulates the appraisal forms and each employee fills and rates itself according to what he thinks about his tasks performance, efficiency and growth. Employee rates himself by giving himself point from 1 to 10, one being lowest and 10 being highest. This form than recheck by the direct manger of the employee and he rates the employee according to his view point. After the direct manager three other mangers also review the appraisal form submitted by the employee. At the end of each year all forms are reviewed by the board of directors and they take the decision that which employee will be doing what for the next year (Job rotation and promotion).

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3.0 Payroll Activities

3.1 Payroll Records HR department maintains payroll records through Human Capital Management (HCM) module of SAP. When an employee joins the organizations they store his data in HCM that whether he is a permanent or contractual employee, CL of employee and other related data. At the end of each month HCM runs a transaction code and generates the payroll of an employee on the basis of stored data. 3.2 Time sheets Time sheets are also managed through HCM module. Employee is responsible to work eight hours a day and five days a week (employees on plant work for 6 days in a week). MPT employees do not write the in and out time while NMPT employees do mention the log in and out time. They also do not require the start and end time for the tasks performed by the individual. 3.3 Payroll Deductions Payroll deductions include taxes, provident fund, cafeteria (optional), mobile bills in case of making personal calls from official cell phone. They neither deduct any amount on late coming nor pay anything for overtime to MPT employees but deduction and overtime policy applies on NMPTs. 3.4 Workers Compensation Insurance They offer 100% medical free for every permanent employee whether he is an executive or a frontline worker. So in case if an employee gets injured during the course of employment he gets 100% free treatment. If an employee is married than he gets 50% free medical for Spouse & children. 3.5 Social Security A specific is calculated as a percentage and deducted from employee salary and returned to him in form of provident fund on his retirement.

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A part from provident fund Engro foods also provide a gratuity fund to the employees who served for longer duration. An employee who worked for more than 5 years is eligible for gratuity scheme. A portion of your last drawn salary would be multiplied with the number of years of service and paid out to you when you leave an organization after years of service. 3.6 State Income Tax A specific amount is deducted from every employees salary under the part of income tax which is withhold by the company and paid to the government as per the law. Calculation and deduction of taxes happens as per the government policy. 3.7 Advances Employees can take loan from the firm and a specific amount is deducted from their salary every month without charging any interest. For CL 24 they give around RS. 1000000 for Car advance and if employee remains with the company for 3 years this amount is write off. For CL 26 and more 1600cc or more luxury car is given but that has to be returned if the employee leaves the organizations. Employees of CL 25 and more are also eligible to avail home loan. 3.8 Pay Checks For new employees on temporary basis they provide cash payments or checks but once the formalities are completed they provide a salary slip. When an employee left the organization immediately without one month notice than the salary of last month is blocked. 3.9 Paid & Unpaid Leave Activities The offer annual paid leave but to avail these leaves employee has to fill up a leave request form which is approved by his manager. In case of an absent like if employee could not come due to an emergency he should inform the management with in three days otherwise his leaves will be unpaid. Employees can have two monthly casual leaves. If an employee has worked for one year he is eligible for 15 annual paid leaves and after 3 years he gets 25 paid leaves. In case of an injury during the work or any serious illness an employee can get paid long sick leave. Most of the times they ask their employees to make their leave plans at the beginning of the year that when they will be taking the annual leaves. 14

4.0 Dress Code

Dress code policy is not very strict at the head office but its appreciated that employee wear formal attire during working hours. Friday is a casual day and employees can wear jeans, T Shirts, Kurta Shalwar, etc. For meetings and conferences formal attire should be wear. For annual dinners and other ceremonies they specify the dress code. For orientation program (which is a 3 days program for employees hired in a four to six months period) special Shirts are provide from the company and employees should wear them during the orientation sessions. At plant the dress code policy should strictly be followed especially for machine operators and those who look after the food processing units. Safety shoes must be worn during the visit of specific areas. A special cap should also be worn by the employees who work at milk processing units.

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5.0 Separation Activities

If an employee wants to leave the organization than he has to inform one month before and if he does not than his last month pay is blocked. Sam e is the case if employer wants to fire an employee he has to inform him one month before. They do not in the favor of mass layoffs and usually this thing is not in their practice that without any solid reason they have fired any employee except he has broken any safety rule or audit policy. When an employee leaves the organization he has to go through an exist process which include exit interview with the departmental manager and HR manager.

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6.0 Employee Labor Relations

6.1 Employee Categories There are all together four types of employee categories a) Management Permanent Employees (MPTs) b) Non-Management Permanent Employees (NMPTs) c) Growth Training Engineers (GTEs) d) Third Party Contract Employees MPTs are the permanent managerial staff which belong to CL 19 and above, NMPTs are also permanent employees but their scale is lower than 19. Third party hired employees are those hired trough an HR firm. Engro has the contract with that firm and the firm has an agreement with the hired employees. They mostly hired on plant on a contract of three months period which can be revised. They are also valuable employees and fulltime workers for the company and included in the number of total employees but they mentioned them separately like we have 500 employees and 150 third party contract employees. 6.2 Employment of Relatives (Policy) Relatives of existing employees are also hired but they have to go through all the formal procedure like written test, interview and all. Husband and wife working in the firm cannot work in the same or closely related department and they strictly follow this policy 6.3 Probationary Period They have replaced the probationary period with a six months contractual period. Some employees are hired directly on a permanent position without any contract period and some of them are hired on a contract of six months. For engineers as it has been discussed earlier that they have a two years contract period and after that they either hire or do not depending upon the vacancy availability.

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6.4 Orientation Programs After every four to six months (depending upon the hiring capacity) they conduct a 3days orientation program for the employees hired during that time. Engro Corp. chairman and CEOs of all subsidiaries attend the program arranged in a well reputed hotel. First two days the give presentations and table talks and the third day of the orientation they take all new employees to the plant in Sahiwal. Since they cannot afford to wait for the proper orientation program so on immediate basis individual orientation takes place in a way that they arrange his meeting with the concerned persons related to safety, audit policy etc. just to give him an overview of the company policies and procedures and what he is expected to perform. (Process of orientation program is not a defined hard and fast rule every time they come up with something new and change it according to the situations). 6.5 Transfer Policy During the transfers they issue a one month prior notice mentioning the department and the position an employee will be appointed, in that one month handing and taking activities take place. They believe in job rotation and cross functional workforce so they rotate employees after every two years they switch the employee from one position to another despite of the qualification and background of the employee like if an employee is a purchase manager the can appoint it in IT department to increase the cross functional learning knowledge 6.6 Employee-Management Forums On yearly basis they conduct a Speak Up program in which they make employee aware that they have a right to speak up and their voices are heard. They also whistle blowing policy like if you have any kind of formation that something is wrong going on within the organization even if an executive is involve in any unethical activity they can inform about this to the audit department or upper management. Their suggestions are also welcome by the company and employees are encouraged to give their ideas and suggestions openly.

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6.7 Trade Union & Labor Disputes Handling NMPTs have formed their proper trade union and they come up with strikes also if their disputes are not solved properly. During the strikes the do not work on plant for specific hours to gain management attention. HRM people related to the IRD section handle the disputes and negotiate with the trade union.

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