The Company and the Brand

The fifth biggest brand in the world, China Mobile is the largest cellular operator in the
world and has over 450 million subscribers. China Mobile provides GSM roaming to
over 271 operators in 206 countries and GPRS roaming services with 93 operators in 101
countries in the world

China Mobile Pakistan (CMPak) is a 100% subsidiary of China Mobile. The pioneering
overseas set up of China Mobile came through acquisition of a license from Millicom to
operate a GSM network in Pakistan.

So far CMPak has invested more than US$ 700 million in the telecom sector in Pakistan
and an additional US$ 800 million will be invested till the end of year 2008.
With ambitious plans to cater to the fastest growing Pakistani market and to win over the
ever demanding Pakistani customer, it will be offering unprecedented coverage, voice
and data services as well as a wide range of tariff options to choose from. CMPak’s edge
comes from the experience and expertise of running the world's largest telecom service
and the commitment they make to setting quality and customer relations standards.

CMPak is geared to offer neatly packaged VAS products that will benefit individual
consumers, corporates’ as well as small businesses. Led by a team of professionals from
the field of cellular communication, CMPak is determined to make its mark in the
Pakistani market and to change the way people communicate.

Zong, the first international brand of China Mobile, was launched in April 2008, at a time
when other cellular brands in the market had already carved out their own niches and
established identities for themselves. It is meant to empower and liberate the people of
Pakistan in every nook and corner of the country. It will become a part of their hearts,
their minds and bring about a change in their lives that every one desired but few thought
would be possible.
The core essence of Zong is to allow people to communicate at will; without worrying
about tariffs, network coverage, capacity issues or congestion. Zong will be supported by
ground breaking communications, trend setting customer service and an unmatched
product offering which will redefine rules of the game and establish Zong as a serious
contender for the number one spot.

Zong would offer its customers with entertaining & innovative value added services and
will empower them by giving a wide variety of products, services & content to choose
from.
Mission Statement

“To be the leading mobile operator of Pakistan by continuously innovating and offering
exceptional quality services, to be a good corporate citizen and envoy of friendship
between China and Pakistan”

Vision

“Make communication exciting”

Core Value

“Responsibility makes perfection”

Zong’s 5 Key Values

Trust Worthiness

Building trust and integrity must characterize in everything we do. We want

everyone who comes in contact with us to know that we do things the right way at
Zong. We work with honesty, integrity and loyalty. We don’t take short cuts.

Respect

We treat each other with respect, giving individuals autonomy, privacy, due
courtesy in day to day interaction with our customers, suppliers, contractors and
of course each other. We tolerate and accept diversity.

Responsibility

Zong is a much larger company today than previously. With this increased size,
comes the challenge of operating in a timely fashion. We must avoid bureaucratic
delays in the pursuit of excellence. We must be agile enough to act faster than our
competitors.

Communicate Openly

We want good news to travel fast and bad news to travel even faster up the line.
We need to be mindful of the importance of honestly communicating problems as
well as breakthroughs. The sooner we communicate a problem, the easier it is for
 us to marshal or company’s resources to solve it. We must communicate with
each other at all levels, fostering harmony and a culture of openness.

Team Work

Zong’s power comes from the talented people who make up our company. By
cooperating and sharing our knowledge with each other seamlessly across
organizations, we can make our company even stronger. Our power comes from
building on positive working relationships internally and externally irrespective of
departments.

Products
CMPak Zong offers the following products & value added services:

1. GSM Mobile Service

 Prepaid phone services

 Postpaid phone services
 Messaging services (SMS, MMS, etc)
 Mobile internet
 Call forwarding
 Call conferencing
 Call waiting
 Caller identification
 Caller ring back tone
 Fax and data services
 International roaming
 Mobile entertainment

2. Mobile Handset

3. Wireless Broadband Internet

4. Blackberry Internet Services

 Phone
 Email and text messaging
 Blackberry messenger
 Internet
 Instant messaging
 Personal organizer
Market Share

Organization Chart
 CEO

C.H.R.O

C.I.O C.F.O C.O.O C.T.O

Director
Director I.T. Director S&D Director O&M
Financial Cont
Director
Director Director
Financial Ops Director NP&S
Administration Marketing
Director
Director
Procurement Director CS
Rollout

Director R. &
C.A.

Director
Segments

HR Org. Chart
 C.H.R.O

Director HR

Manager
Manager Manager Manager
Cultural Excel
H.C.A. Comp & Ben HR Operations
Management
Asst. Manager
Recruitment Senior Officer Executive
HR - South
Specialist Comp & Ben PM
Operations
Officer HR -
Senior Officer Senior Officer Executive
South
Recruitment Comp & Ben Training
North&QH
Executive
Senior Officer Senior Officer
Building
Comp & Ben North & HQ
Bridges

Senior Officer
Central 1

Senior Officer
Central 2

Industry Background
Since the inception of Pakistan, basic telecom services were being provided by a
monopolist, previously called as Telephone and Telegraph department (T&T). The
department was being run by the government and played multiple roles as regulator,
policy maker, operator and service provider in the country. The T&T department was
later converted into a corporation. Although the corporation was earning huge profits
from the services, it was re-investing the same profits into the sector for the provision of
more telecom service but the investment was not enough. Further, with the
technological advancement, more and more telecom services were becoming
available but there was not enough money available with the corporation to install
new telecom systems for the provision of modern services. Resultantly, a digital divide
prevailed in Pakistan keeping it behind its neighbors and other comparable countries in
terms of telecom access. Cellular mobile services in Pakistan commenced in 90s when
two cellular mobile telephone licenses were awarded to Paktel and Pak Com
(Instaphone) for provision of cellular mobile telephony in Pakistan. Currently there are
six cellular players in the market. Pakistan Telecommunication Company Ltd has
emerged as a successful Forbes 2000 conglomerate with over $1 billion in sales in 2005.
In addition, there are over 60 million landlines in the country. As a result, Pakistan won
the prestigious ‘Government Leadership’ award of GSM Association in 2006. By March
2009, Pakistan had 91 million mobile subscribers out of the total 161 million population
of the country; 25 million more subscribers than reported in the same period an year
earlier. According to the PC World, a total of 6.37 billion text messages were
sent through messaging systems across Asia Pacific over the 2008/2009 Christmas
and New Year period. Pakistan was amongst the top five ranker with one of the highest
SMS traffic with 763 million messages. Although tremendous growth has taken place in
the Pakistan telecom sector but most of it can be attributed to the cellular growth. Fixed
line is still awaiting a take off. Similarly ‘Value Added Services’ have grown but are still
a drop in the bucket. Now that the competition has been introduced in the telecom
cellular sector some very positive impact have been observed on the growth of the sector
in a short span of time which is expected to continue to grow for at least next
five years.
Business Strategy
The 5 key values described previously is what the company wants to be. They want their
decisions and actions to demonstrate these values. The company believes that putting
these values into practice creates long term benefits for shareholders, customers,
employees, suppliers and the communities they serve.

Responsibility for Quality

Zong’s products and services should be ‘best in class’ in terms of value received
for rupees paid. They will deliver excellence, strive for continuous improvement
and respond vigorously to change. Each of them is responsible for the quality of
whatever they do.

Deliver customer satisfaction

They are dedicated to satisfying their customers, respecting their customers,

listening to their requests and understanding their expectations. They strive to
exceed their expectations in affordability, quality and delivery.

Act with integrity in all they do

The employees are each personally accountable for the highest standards of
behavior, including honesty and fairness in all aspects of their work. They fulfill
their commitments as responsible citizens and employees. They will consistently
treat customers and company resources with the respect they deserve.

Value one another

They treat one another with respect and take pride in the significant contributions
that comes from the diversity of individuals and ideas. Their continued success
requires them to provide the education and development needed to help their
people grow. People are committed to openness and trust in all relationships.
 With responsibility comes perfection

People take responsibility for their actions, seek to understand each other and
behave in a professionally responsible way. The company values each others
ideas and treats each other with respect. Employees at Zong seek perfection in all
things they do and accomplish perfection through team work and finding
solutions to problems.

Regard their suppliers as essential team members

They owe their suppliers the same type of respect that they show their customers.
Their suppliers deserve fair and equitable treatment, clear agreements and honest
feedback on performance. They consider their suppliers’ needs in conducting all
aspects of their business.

HR Department at Zong
The human resource department at CMPak Zong provides staffing services. Being well-
versed in employee policies and procedures, the human resources department is in charge
of employee benefits, compensation, health, safety, wellness, and training of the
employees of Zong.

Sub-sections of the HR Department

The HR department of Zong has 4 sub-sections:

1. Human Capital Acquisition

Manpower planning
Participating in job fairs
Head hunting
Sourcing, recruitment & selection
Headcount management
Staffing and budgeting

2. Cultural Excellence
Employee Training
Organizational Development
Talent management
Competency management
Employee orientation and induction
Performance appraisal and management

3. Payroll & Benefits

Payroll information
Compensation, benefits and incentive
Leave and medical record
Final settlements and provident fund
Employee records
4. Operational Excellence
Policies and procedures
General HR administration
Conflict management
Regional resources: Compensation & Benefits, OD and Recruitment
Employee well-being initiatives
Employee recreational activities

Mission of the HR Department

“To facilitate organizational growth through innovative & effective HR and people
practices within a supportive work environment based on consultation and
communication with all the other departments in the setup.”

Hence, Zong HR goals are:

 Employ the best talent

 Motivate employees
 Have people striving for higher standards
 An open-minded and enterprising corporate culture
 Team focus

Formulation of the HR strategy

Human resource department is putting its efforts towards nurturing a winning corporate
culture and building organizational capabilities by ensuring that its people at all levels are
both able and willing to perform at consistently exceptional levels. At Zong, people have
been empowered to a large degree by minimizing out dated rules/regulations and plans to
further eliminate the bureaucratic barriers to capitalize on their ingenuity and talent.

The top team continues to play its role in providing the guidance and support to people at
all levels. The HR (people’s) function ensures that it leads the transformational change by
nurturing a climate, which would help in converting the huge potential at disposal of the
company into world-class performance. The active and effective role played by HR in
people development at different levels organizational, departmental and individual is
considered in Zong to be one of the most critical factors leading to the development of a
winning corporate culture. The effort continues to be directed towards developing the
skills of their front line employees; customer services representatives and customer
support officers, improving competencies of field operators and enhancing the leadership
qualities of managers.
Like all other big organizations, the development of HR strategies at Zong is done in
accordance with company’s mission. First, strategic planners analyze what actually is the
prevalent culture of the organization; the strengths, weaknesses, opportunities, threats of
business and its market, and on the basis of all the above analysis, company’s strategic
plan is established. In the end, the HR strategies are formulated in accordance with this
overall strategic plan of the company. Based on these HR strategies, HR policies and
practices are formed and implemented. Any abrupt change in the market requires the
organization to follow this analysis in order to be successful. The department
continuously keeps on updating its strategies and policies.

The HR strategy of Zong

 To offer the best salary and benefits package to attract, recruit and retain talent
 To encourage an open door policy for facilitating communication
 To identify and train employees with high potentials for advancements
 To foster a culture of continuous learning and innovation
 Have a performance appraisal system in place to reward and recognize employee
contribution
 Maintain a healthy work life balance for employees

Evaluation of the HR strategy

CMPak Zong has come a long way since the Paktel days. The number of customers has
increased 10 times, the network has seen a massive growth of 300% annually and the
number of employees has increased from 1300 to over 2700 nationwide. Zong has been
able to put impressive numbers up on the scoreboard in the last 2 years despite being the
last entrant into an already saturated market plagued with cut throat competition. Like
any other telecom company operating in the Pakistani market today, Zong is also faced
with a few challenges. Some of these challenges arise within the company, internally, and
some are from the external environment over which one has little control, such as intense
competition, economic recession.

Below we have analyzed the current HR strategy of Zong and have tried to highlight the
areas where it has been a success and the areas of its shortfall.

Success factors

Compensation

Zong considers effective compensation a strategic asset. The company’s effective

compensation plans reinforce the unique vision and goals of the organization and serves
to align and motivate people to focus their energy in a common and consistent manner.
Fair and equitable financial compensation has been an essential tool for the company to
build and nurture an organization of outstanding people; most of whom were hired from
the competition. CMPak Zong has a very well balanced and realistic incentive program
which focuses on giving additional benefits to its employees apart from the basic
remuneration, such as Cost of Living Allowance, Medical benefits, Leave Assistance,
Provident fund, Gratuity and Annual bonuses.

Compensation to individuals reinforces and supports the culture of their organization.

Culture is largely determined by a firm’s vision and values. Culture defines what is
important in a firm and, thus, what is rewarded. Monetary compensation, as we will see
later in the report, is not the primary reason most employees stay with the company.

Work Life Balance

CMPak realizes how important the work-life balance is to the productivity and creativity
of its employees. Although Zong follows an office timing routine from 9 AM to 6 PM in
the evening, many of its employees work on flexible hours. The company follows the
theory that people can come to office and leave the office at whatever time they like as
long as their line managers are satisfied with the content of their work and as long as the
work they turn in is on time and of the quality expected.

The company extends to all its employees 20 days of annual leaves, 10 days of casual
leaves and 10 days of sick leaves. It is mandatory for all employees to avail at least half
of their annual leaves and on doing so they become eligible for their ‘Leave Fair
Assistance’ which pays them 1 monthly gross salary. This way employees are sort of
pushed into taking leaves and managing things outside their office lives.

Employee Recreation

The HR understands the value of fun at work and hence offers a wide range of services
and programs to make it’s people bond well amongst each other, enhance team spirit to
work effectively and efficiently. All regional offices of CMPak are equipped with
gymnasiums, snooker tables, flat screen TVs and table tennis tables. Employees can relax
and blow off some steam during office hours or after work while sipping on a cup of
espresso. The HR operations team holds excursions on a regular basis where employees
and their families are invited on a day out to theme parks, beaches, and country clubs or
farm houses. Every year a number of sporting competitions are arranged where
departments can take part as teams. Year 2009 saw a cricket, table-tennis, snooker and
badminton tournament take place.
Recreational activities help employees relax, bond with their team members, have a
healthy day out with their families and stay motivated.

Shortfalls/Failures of the HR Strategy

Zong has faced a very high rate of employee turnover in the past one year. This turnover
was the outcome of resignations and separations. Exit interviews have showed that most
of these resignations were due to such causes as dissatisfaction with bureaucratic work
culture, insufficient training, lack of opportunities for career development, the absence of
a solid performance management system, the need for recognition and the lack of
motivation. Dismissals on the other hand were mainly based on misconduct and
inefficiency. The company has totally failed to address the issues resulting in such a high
rate of turn over. As discussed earlier on there are many factors that contribute to
employee retention and maintaining healthy levels of employee motivation; they may not
necessarily be compensation or work life balance.

We have tried to highlight a few of these issues below where we feel the HR of Zong has
gone weak.

Training and Development

One key factor in employee motivation and retention is the opportunity employees want
to continue to grow and develop job and career enhancing skills. In fact, this opportunity
to continue to grow and develop through training and development is one of the most
important factors in employee motivation. Training and development also articulates your
opportunity to create devoted, growing employees who will benefit both your business
and themselves.

At the end of year 2008, a very sophisticated and effective training calendar was initiated
by the OD team. This calendar was formed after an in-depth study of the skills inventory
and competencies of the staff present at that time, in consultation with the HODs of
various functions. The calendar contained state of the art training programs to cater to a
variety of needs for both lower, middle and upper management. Beginning of 2009 saw
the training calendar in action. Unfortunately, the recent recession that was triggered by
the sub-prime mortgage issue took its toll on economies world wide. As a result there was
a sharp decline in revenues in the telecom industry in Pakistan. CMPak was similarly
shook up during the crisis and the company had to resort to laying off many of its
redundant work force, slowing down on its expansion works, seizing its once aggressive
recruitment and slashing its training budgets by almost 70%.

Since April 2009, the company has had only 5 training programs as opposed to the 47
planned ones at the beginning of the year. The training calendar has been taken down
from the corporate intranet for an indefinite period of time.

Orientation of New Employees at time of Induction

A complete orientation program includes a formal new hire training program with an
overview of the job expectations and performance skills needed to perform the job
functions. A new hire training program provides a fundamental understanding of the
position and how the position fits within the organizational structure. The more
background knowledge the new associate has about how one workgroup interrelates with
ancillary departments, the more the new associate will understand his or her impact on
the organization. Orientation for new inductions is an alien concept at Zong.

It was noted in the exit interviews of the many recently resigned employees, that they
never had their job descriptions. On investigation it was found out that since China
Mobile had taken over Paktel, these job descriptions were under preparation. How and
what can an employee be expected to do if he doesn’t know what is expected of the job?
In many organizations, job descriptions are handed out to new employees right on the
first day at the job as part of their orientation.
Building a Culture of Communication

The work culture at Zong to date is very bureaucratic, something that it has inherited
from Paktel. Although the new management of the company boasts of having an open
door policy, there is still restricted communication between the ranks. Employees want
face-to-face communication time with both their supervisors and executive management.
This communication helps them feel recognized and important. Because of this weak
culture of communication, employees feel that there is a:

 Lack of clarity about expectations

 Lack of clarity about earning potential,
 Lack of feedback about performance,
 Failure to provide a framework within which the employee perceives he can
succeed.

Performance Appraisal and Management

Performance appraisal is a method by which the job performance of an employee is

evaluated (generally in terms of quality, quantity, cost and time) typically by the
corresponding manager or supervisor. Performance appraisal aims to give an employee
feedback on his performance, identify his training needs and form a basis for personnel
decisions, such as, salary increases, promotions and bonuses.

There are many factors within the internal environment that have affected the
performance appraisal process at CMPak Zong. Firstly, the type of corporate culture has
hindered the process to a great extent. Identification of specific goals and communicating
these goals to workers and teams is the first step in the performance appraisal process.
Informing employees of what is expected of them is an important employee relations
task. Since communication is such a hurdle at the company employees have a lack of
clarity of these expectations. At the end of the appraisal period, the appraiser observes
work performance and evaluates it against established performance standards.
The evaluation results should then be communicated and discussed with the employees
on one-to-one basis. The focus of this discussion is on communication and listening. The
results, the problems and the possible solutions are discussed with the aim of problem
solving and reaching consensus. Such one-to-one exercises never seem to happen at this
company leaving the employees gloomy and lost.

This year’s performance appraisal cycle at Zong was a 2 weeks process which ended on
the 24th of December, 2009. To that date only 48% of the employees had filled in their
appraisals. An exercise which is pivotal for the development, of both the organization and
the employees, was taken so lightly that not even half the people at the company took an
interest. This low turn out can be attributed to the low morale of employees who feel that
this exercise exists just for the sake it; increments and promotions are pre-decided by the
top management based on favoritism.

Lastly, the biggest flaw in the performance appraisal system at Zong is that it only caters
to the performance of permanent employees. Performance of contractual employees, who
make up more than 55% of the workforce at the company, is unaccounted for.

Conclusion
Today’s HR has to play the vital role of a change agent amongst it many other roles;
especially when it is managing a company that has come out of a merger or acquisition.
HR needs to make sure that corporate inhibitions such as favoritism, the boss is always
right, follow the leader, old is gold, etc are considered things from the past.

Recommendations

Zong should implement numerous effective plans to improve the performance of its
various departments. Supervisors must manage employee performance well in order for
Zong to accomplish its mission and achieve its goals. Following are some
recommendations for Zong, which we feel can be useful for the organization, its
employees and the customers.

 Provide opportunities for people to share their knowledge via training sessions,
presentations, mentoring others and team assignments.
 Demonstrate respect for employees at all times
 Offer performance feedback and praise good efforts and results.
 People want to enjoy their work. Make work fun. Engage and employ the special
talents of each individual.
 Involve employees in decisions that affect their jobs and the overall direction of
the company whenever possible.
 Recognize excellent performance, and especially, link pay to performance.
 Recognize and celebrate success. Mark their passage as important goals are
achieved.
 Staff adequately so overtime is minimized for those who don't want it and people
don't wear themselves out.
 Nurture and celebrate organization traditions.
 Provide opportunities within the company for cross-training and career
progression. People like to know that they have room for career movement.
 Provide the opportunity for career and personal growth through training and
education, challenging assignments and more.
 Communicate goals, roles and responsibilities so people know what is expected
and feel like part of the in-crowd.