INTERNSHIP REPORT Submitted To: Mr.

ATIF RANA Submitted By: SALMAN AWAN MI-107-030 Program: MBA (HRM) Department of Management Sciences The University of Lahore June 10, 2009.

Table of Contents LIST OF TABLES ................................................................. ...................................................... iv LIST OF FIGURES ...... ................................................................................ ................................ v ACKNOWLEDGEMENT ................................................................ ........................................... 1 EXECUTIVE SUMMARY ................ ................................................................................ .......... 2 INTRODUCTION ...................................................... ................................................................. 3 1. 1.1 1.2 1.3 ORGANIZATIONAL GOALS & ACHIEVEMENTS ............................. ........... 4 STRATEGIC GOALS .................................................. ..........................................4-6 MILESTONES OF THE COMPANY ........ ...........................................................7-8 CODE OF ETHICS .. ................................................................................ ............ 9-10 2. INDUSTRY REVIEW ................................................................ ................... 11 2.1 BACKGROUND ................................................................. ................................... 12 2.2 RESEARCH METHADOLOGY ................ ....................................................... 13-14 2.3 THE GLOBAL MOT ORCYCLE INDUSTRY .................................................. 15-16 2.4 PA KISTANS INDUSTRY ................................................................ ................ 16-20 2.5 ORIGINAL EQUIPMENT MANUFACTURERS & STAKEHOLDERS ..... ... 21-22 2.6 COSTING OF CHINESE MOTORCYCLES ................................... ...................... 23 2.7 INCIDENCE OF TAXATION ............................ ................................................... 24 2.8 REGIONAL COMPETITOR A NALYSIS ........................................................ 25-26 2.9 MOTOR CYCLE PRODUCTION POTENTIAL IN PAKISTAN .................... 27-28 2.10 PROBLEMS FACED BY COMPONENT MANUFACTURERS AND THEIR SOLUTIONS ........................... ................................................................................ ....... 29-30 DEPARTMENTS UNDERSTUDY DURING INTERNSHIP ....................................... .... 31 HUMAN RESOURCE DEPARTMENT .............................................. ................................. 32 FUNCTIONS OF HUMAN RESOURCE DEPARTMENT .... ............................................ 33 3. RECRUITMENT & SELECTION PROCE SS ........................................... 34 3.1 STANDARD OPERATING PROCEDURES (SOPs) & RATIONAL FOR RECRUITING & SELECTION . ................................................................................ .......... 35 a. INDUCTION PLAN ................................................ ......................................... 35-38 4. 4.1 4.2 TRAINING & DEVELOPMEN T ........................................................................ 39 TR AINING OBJECTIVES .............................................................. ........................ 39 EMPLOYEE TRAINING & DEVELOPMENT STRATEGIES ......... ............... 39-40 i

Table of Contents 4.3 TRAINING POLICY ............................................................ ............................. 40-42 4.4 TRAINING PROCESS ....................... .................................................................... 43 4.5 STAN DARD OPERATING PROCEDURES (SOPs) & RATIONAL FOR TRAINING & DEVELOPMENT ......... .............................................................................. 4 4 HUMAN RESOURCE HIERARCHY AT AHL ................................................ ................... 45 MISS ASMA (HR MANAGER) ......................................................... ................................ 46 SOPs & RATIONAL FOLLOWED BY MISS ASMA....... ................................................. 47 Mr. OMER AKRAM (EXECUTIVE H R) ........................................................................... 4 8 SOPs & RATIONAL FOLLOWED BY Mr. OMER AKRAM ................................... ........ 49 Mr. SYED ZEESHAN HAIDER (EXECUTIVE HR) ............................. ............................ 50 SOPs & RATIONAL FOLLOWED BY Mr. SYED ZEESHAN HAI DER ........................ 50 Mr ABDUL HAQ (EXECUTIVE HR)..................... ........................................................... 51 SOPs & RATIONAL F OLLOWED BY Mr. ABDUL HAQ .............................................. 51 HUMAN RESOURCE PROJECT ......................................................... ............................ 52-53 ADMINISTRATION & I.R HIERARCHY AT AHL ....... ............................................. 54-55 Mr. RIZWAN RASOOL (EXECUTIVE ADMIN. & I.R) ..................................... ........ 56-57 SOPs & RATIONAL FOLLOWED BY Mr. RIZWAN RASOOL ................... ............. 57-58 MISS HUMAIRA (EXECUTIVE ADMIN. & I.R) ...................... ....................................... 59 SOPs & RATIONAL FOLLOWED BY MISS HUMA IRA ........................................... 59-60 Mr. SHAHZAD SARWAR ((EXECU TIVE ADMIN. & I.R)............................................. 61 SOPs & RATION AL FOLLOWED BY Mr. SHAHZAD SARWAR ........................... 61-65 5. 5.1 5.2 5.3 6. 6.1 a. b. INSTITUTIONAL SALES ............................................................ ....................... 66 SALES & SPARE PARTS HIERARCHY........................ ....................................... 66 INSTITUTIONAL SALES PROCESS.......... .......................................................... 67 SOPs & RATIONAL FO LLOWED IN INSTITUTIONAL SALES ...................... 67 SPARE PARTS ............ ................................................................................ .......... 68 SOPs & RATIONAL FOLLOWED IN SPARE PARTS .......................... .............. 69 HUMS STRATEGY ................................................ ........................................... 69-70 CRITERIA FOR DEALER MAKING ... ............................................................ 71-72 Table of Contents ii

Table of Contents 7. 7.1 7.2 SERVICES ....................................................................... ...................................... 73 SERVICES HIER RCHY ................... ................................................................... 73 CUSTOMER C RE CENTER .................................................................... ...... 73-75 SWOT N LYSIS .................................................................. ................................................. 76 RECOMMEND TIONS & CONCLUSION ................................................... .................... 77 REFRENCES ppendices ................................................................................ ................................................. 83 ppendix ..................................................................... .......................... SENCE FORM ppendix .............................. ................................... CCEPT NCE OF RESIGN TION ppendix C........ ......... PPOINTMENT FOR EMPLOYMENT INTERVIEW & TESTING ppendix D ............. .................................................. TERMIN TION OF EMPLOYMENT pp endix E ......................................EMPLOYEE EMERGENCY NOTIFIC TION FO RM ppendix F .................................................................. ......... CCEPT NC E OF TENDER ppendix G ..................................... .................................................JO N LYSIS FORM ppendix H .. ...................................................... LETTER TO CONFIRM EMPLOYM ENT ppendix I ................................................................. ...................................... QUOT TION Table of Contents iii

Table of Contents

LIST OF T LES T LE 1: T LE 2: T LE 3: T LE 4: T LE 5: T LE 6: T LE 7: T LE 8: T LE 9: T LE 10: WORLD PRODUCTO OF MOTORCYCLES..15 S LES OF MOTORCYCLES I P KI MOTORCYCLE PURCH SE19 PROJECTED DEM D FOR EW MOTORCYCLES20 M RKET SH RE & MODEL...22 COSTI G FOR 70-CC C U MOTORCYCLE FROM CHI 23 TOT OF I DUCTIO ...37 DUR TIO OF I DUCTIO . Table of Contents iv

Table of Contents

LIST OF FIGURES FIGURE 1: FIGURE 2: FIGURE 3: FIGURE 4: FIGURE 5: FIGURE 6: FIGURE 7: FIGURE 8: FIGURE 9: FIGURE 10: FIGURE 11: FIGURE 12: FIGURE 13: FIGURE 14: FIGURE 15: FIGU RE 16: TL S GROUP COMP IES6 MILESTO ES OF THE COMP Y E PURCH SE......19 PROJECTED DEM D FOR EW MOTORCYCLES.20 M RKET SH RE OF P S22 T X O O E U IT OF MOTORCYCLE24 RECRUITME T & SELECTI S PROCESS......67 SERVICES HIER RCHY.73 CH Table of Contents v

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CKNOWLEDGEMENT Throughout six weeks duration of my internship period I got tremendous support f rom all the staff at HL (plant and sales office) they helped me in every possib le way. office), Dr. Usman Zafar and Mr. tif Rana ( (internship coordinator) ha ve been great motivators and supporters of me for last 2 years years.

EXECUTIVE SUMM RY

tlas Honda Limited leads the list of fifty competitors in motorcycle manufactur ing industry in Pakistan due to distinctive quality policy. Their corporate visi on and values are the driving forces and at present tlas Group spreads over 11 companies both private and public limited. tlas Group is a responsible entity w hich is highly committed to comply with is the corporate, environmental laws and to conduct their business with utmost honesty and sincerity. t HL it is belie ved that development can only be achieved by equality and respect at work place. They have been doing it for decades and there is no doubt they are reaping its benefits. Human Resource plays its vital role to meeting the employee needs in c ollaboration with dministration Department. HL has a manufacturing capacity of 1600 units per day under strict quality standards and their sale network is wel l spread to sell all of them. They have a 5s dealer network to satisfy the custo mer to the optimum level. Page 2 of 83

INTRODUCTION I am about to complete my M degree and after that I will start my practical li fe and looking at the grim employment situation worldwide its imperative to have something extraordinary in you. For that particular reason I selected the intern ship so that I can have a practical experience of what I will be doing for rest of my life. It was a sheer proud to have done my internship with tlas Honda. e fore starting the internship I was speculating a tense office environme with no environment respect for internee, but really I was absolutely wrong about it as I entered the Honda really premises. Of course there is a big influence of Japan ese Culture but still to promote that culture is a difficult task. It was one of the most important experiences of my life where I learnt: 1. How to balance your social and work life? 2. You respect others and others re spect you? 3. t work place everybody is equally important? 4. Work with honesty and company will regard your efforts? 5. alance of authority. 6. Team work is more important. Limitations: eing internee I was limited to specific departments, material and working proce dure. I had no authority so I was not responsible for anything; this is great if you do not want to learn anything. ut if you want to learn something you shoul d be made respon responsible for different things so that you should feel yourse lf a part of the organization and then you will be able to add something to thei r culture. I would not call it a restriction by company but to be very precise i t is a drawback of internship process. Page 3 of 83

1. ORG NIZ TION L GO LS & CHIEVEMENTS Vision: Market leader in the motorcycle industry as a global competitive center of production and exports. Mission: dynamic, profitable and growth oriented company through market leadership, max imizing export and excellence in quality and service; to ensure attractive retur ns to equity holders; reward employees according to their ability and performanc e; to foster a network of researchers and engineers ensuing unique contributions to the development of the industry; customer satisfaction and protection of the environment by producing stry; emission friendly green products and to remain a good corporate citizen fulfilling its social responsibilities in all respects. 1.1 Customers: STR TEGIC GO LS Our customers are the reason and the source of our business. It is our joint aim with our dealers to ensure that our customers enjoy the highest level of satisf action from use of Honda Motorcycles. Quality: To ensure that our products and services meet the set standards of excellence Local Manufacturing: To be the industry leader in indigenization of motorcycle parts Page 4 of 83

Technology: To develop and maintain distinct business advantages through continuous inductio n of improved hard and soft technologies Shareholders: To ensure health and viability of business and thus safeguarding shareholders in terest by maximizing profit, Payment of regular satisfactory dividends and addin g value to the shares Employees: To enhance and continuously up date each members capabilities and education and t o up-date provide an environment which encourages practical expression of the in dividual potential in goal directed team efforts and compensate them attractivel y according to their abilities and performance. bilities Corporate Citizen: To comply with all government laws and regulations, to maintain a high standard of ethics in all operations and to act as a responsible member of the community Page 5 of 83

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1.2 MILESTONES OF THE COMP NY The company is engaged in the manufacturing, sales of motorbikes and auto parts. Since its inception the company has experienced an unprecedented growth in its operations from a small manufacturing company to the leading motorbike manufactu rer of Pakistan. Following is the chronological order of the major events in the company s history: Page 7 of 83

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1.3 CODE OF ETHICS tlas Honda Limited ( HL) conducts its operations with honesty, integrity and op enness, and with respect for human rights and interests of the employees. It res pects the legitimate interests of all those with whom it has relationships. HL is committed to comply with the laws and regulations of Pakistan.

HL is committed to create the working environment where there is mutual t trust and respect and where everyone feels responsible for the performance and reputa tion of the company. HL is equal opportunity employer which recruits, employs a nd promotes employees on the sole basis of the qualifications and abilities need ed for the work to be performed. HL is committed to safe and work healthy worki ng conditions for all employees. We will not use any form of forced, compulsory or child labor. HL is committed to provide branded products and services, which consistently offer value in terms of price and quality. Products terms and serv ices will be accurately and properly labeled, advertised and communicated. HL conducts its operations in accordance with principles of good corporate gove rnance. It provides timely, regular and reliable informati information of its ac tivities, structure, financial situation and performance to all the shareholders . HL is committed to establish mutually beneficial relations with its suppliers, customers and business partners. HL strives to be a trusted corporate citizen and, as an integral part of societ y, fulfills its responsibilities to the societies and communities in which it op erates. HL is committed to make continuous improvements in the management of environmen tal impact. It works in partnership with others to promote environmental care, i ncrease understanding of environmental issues and disseminate good practice. Pag e 9 of 83

nce Compliance with business principles is an essential element. The oard of Di rectors of HL is responsible for ensuring that these principles are communicate d to, and understood and observed by, all employees. ssurance of compliance is given and monitored each year. Compliance with the Code is year. subject to revi ew by the oard supported by udit Committee of the oard. The oard of HL expe cts employees to bring to their attention, or to that of senior management, any breach or suspected breach of these principles. Page 10 of 83

HL make innovations to meet consumer needs. It respects the concerns of consume rs and of society. It works on the basis of sound research, applying high qualit y standards. HL believes in fair competition and supports development of appropriate competi tion laws. HL and employees conduct their operations in accordance with the pri nciples of fair competition and all applicable regulations.

2. INDUSTRY REVIEW GL NCE T SI N INDUSTRY (Yesterday, Today & Tomorrow): Following part of the project has been taken from a research study conducted by Competitiveness Support Fund (CSF) which is a joint venture of the Ministry of F inance (MoF), Government of Pakistan and the United States gency for Internatio nal Development (US ID) on December 12, 2006. The CSF has been established to support Pakistans goal of a more competitive econ omy by providing input into policy decisions, working to improve regulatory and decisions, administrative frameworks and working to enhance public private partn erships within public-private the country. The CSF will also provide technical a ssistance and co co-financing for initiatives related to innovation and competit iveness, the private sector with research competitiveness, institutes, universit ies and business incubators that contribute to creating a knowledge knowledgedri ven economy.

fter showing a compounded growth rate of 58% in the past 5 years, sales of new motorcycles in Pakistan appear to be stagnating at between 750 775,000 units per be annum. This Report titled Policy nalysis on the Competitive dvantage of the Motorcycle Industry in Pakistan: Problems & Prospects aims at identifying: The r easons behind the rapid growth in the past 5 y years. Problems being faced by th e key stakeholders, namely the Original Equipment Manufacturers, the component a nd parts industry and the final consumers. Implement able solutions and their im pact. Page 11 of 83

2.1

The development of China as the major player in the global motorcycle industry h as been achieved by linking its strong domestic demand to the abundance of low t echnology dependent manufacturing or cloning. chnology Pakistan faces a similar situation with its current suppressed demand. s compared to other industries in which competitiveness can only be achieved with high levels of human capital, t he motorcycle industry is more concerned with better management of human resourc es and high levels of productivity at all levels, i.e. OEMs as well as parts and component manufacturers. Page 12 of 83

CK GROUND

The auto industry of which the motorcycle industry is a part has got deep backwa rd (metals such as steel, aluminum. Copper, rubber, chrome, nickel, plastic, pai nt, glass, textiles, electrical, capital equipment, trucking, warehousing) and f orward (dealerships, retailers, banking, credit and financing, insurance, logist ics, advertising, repair and maintenance, petroleum products, services, parts) l inkages as such any major shifts in demand are felt in a variety of other indust ries. The industry Worldwide has seen a tremendous growth in the past two years. the P roduction in 2005 has been estimated at 40.0 million units with China producing 17.0 million units. This global surge in demand has also been felt in Pakistan w here the industry in the financial year ending June 2006 manufactured more t tha n 750,000 units. There are currently 43 Original Equipment Manufacturers (OEMs) in the Industry. These include 6 OEMs who are members of the Pakistan utomotive manufacturers ssociation (P M ) and 37 OEMs who are not P M members. These OE Ms are supported by nearly 2,000 parts and component manufacturing units employi ng close to ed 50,000 persons.

2.2 RESE RCH METHODLOGY The various steps followed in the completion of this Study include: Step 1: Orientation session with the CEO of CSF to develop a better understandin g of the requirements of the study. Step 2: Secondary Data Collection and review, list of literature reviewed. focusing Step 3: Primary Data Collection mostly related to focusing on the probl ems being faced by the OEMs, parts and component manufacturers. This involved co nducting surveys of OEMs and vendors as well as having discussions with industry experts and officials of ED , PSQC , C R and banks. Step 4: nalysis of the Secondary and Primary data Page 13 of 83

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2.3 THE GLO L MOTORCYCLE INDUSTRY Global motorcycle production increased from 30 million units in 2004 to 40 milli on units in 2005 with China alone producing 17 million units. The second largest producer was India with 7.7 million units while Pakistan came at number seven w ith a production of 751,000 motorcycles or about 2% of the global total. The Wor ld market for motorcycles is dominated by the Japanese brands, namely Honda, Suz uki, Yamaha and Kawasaki. lthough Japan itself produced only 700,000 motorcycle s, its brands with strong presence in the Low Cost Countries (LCC) like China, I ndia, Indonesia, Thailand etc., control 50% of the world market. Even in China where the local Chinese brands control more than two thirds of the market, the basic designs are still modeled round the popular Japanese models. Indian companies like Hero Honda and TVS rely heavily on their Japanese partners for basic designs and model innovations. This is perhaps because of the fact th at R&D for ns Page 15 of 83

the industry is both expensive and time consuming. The Japanese manufacturers na med above have both the financial muscle as well as the technical capability to undertake the require R&D. required 2.4 P KIST NS INDUSTRY In Pakistan, motorcycle assembly started in 1964 when the local tlas Group star ted assembling Honda motorcycles in Karachi. Currently in addition to Honda, the other Japanese brands being manufactured in Pakistan include Yamaha and Suzuki. The most successful design among the Japanese brands has been the Honda 70CC wh ich enjoys tremendous popularity on account of its fuel economy, resale and low maintenance features. The Pakistan utomotive Manufacturers ssociation (P M ) was formed in 1984. (P M ) Initially three motorcycle OEMs namely tlas Honda, Dawood Yamaha and Suzuki Motorcycles Pakistan became P M members. The other founding members of P M we re OEMs manufacturing Passenger Cars, Tractors and Light Commercial Vehicles (LC Vs), Truck & us manufacturers etc. In the 1990s, three more OEMs joined P M , LCVs ), these were, Fateh Motors, Pakistan Cycle Industrial Cooperative Society Limit ed and Siagol Qingqi Motors Ltd (subsequently renamed Qingqi Motors Ltd.). s The Non-Japanese OEMs entered the Pakistani market in the late 1990s by introdu cing clones of the popular Honda 70CC motorcycle using critical parts and compon ents imported from China. For the basic frame and other low tech parts they used the local vendors (part suppliers) whose development had been facilitated by th e Government of Pakistans indigenization / localization programs for the motorcyc le industry. Other than the original 3 Non-Japanese OEMs who became P M members , the new entrants Japanese preferred to form their own trade bodies and as such are referred to in this study as trade Non-P M members. Page 16 of 83

Presently there are 43 OEMs producing various brands of motorcycles. Out of thes e 6 are P M members and the remaining 37 Non P M members. The Engineering NonP M Development oard (ED ) issues licenses to the OEMs for undertaking assembl y sues operations. The Pakistan Standards & Quality Control uthority (PSQC ) is responsible for monitoring the production of quality products by the OEMs. s s uch both the ED and the PSQC play an important role in the establishment, lice nsing and role monitoring of the technical operations of the motorcycle assemble rs. The entry of the Non-P M OEMs with a competitive price difference of approxi mately P M 25% (Rs.52,000 Vs. Rs.68,000 for the Honda 70CC in 1999) and con con tinuous price reductions (2006 price for av average Non-P M OEM 70CC clone was Rs.40,000 Vs. P M Rs.54,000 for a Honda 70CC). This has seen the total motorcyc le market increase from 120,627 in 2001 02 to 751,667 in 2005 06. Following Tabl e shows the sales increases in the past 5 years. creases Page 17 of 83

lthough the number of assemblers has increased from 3 to 43 the P M members co ntinue to hold the dominant market position with 79% of the market share with t las Honda alone accounting for 55% of all new motorcycles sold in Pakistan. With the increase in production, the prices of motorcycles have come down consid erably. In 1999 2000, the price of a Honda 70CC motorcycle was Rs.68,000. The sa me year the Non-P M OEMs supplied 70CC clones for Rs.50 52,000. In P M order t o compete with the Non P M OEM products, tlas Honda and other P M Non-P M me mbers considerably reduced prices. s a result of these price reductions, the Ho nda 70CC is currently selling at Rs.54,000, Non P M member clones are available in the Non-P M Rs.35 42,000 range. If this trend in prices continues, the mark et is likely to expand further. Page 18 of 83

Following Table shows a positive trend between increases in per capita income an d motorcycle sales. Internationally a positive relationship has been seen betwee n per capita income increase and new motorcycle ownership. Page 19 of 83

Per capita income in Pakistan has increased in the past 5 years at an average an nual rate of approximately 14.0%. The economy is projected to continue to grow a t more than 7.5% in the coming decade. ssuming an annual decrease in number of persons g per new motorcycle purchased in the next 5 years at 14% demand for new motorcycles in the coming years may be forecasted as shown in the following Tab le. Page 20 of 83

2.5 ORIGIN L EQUIPMENT M NUF CTURERS ND ST KEHOLDERS Currently there are 43 Original Equipment Manufacturers (OEMs) operating in Paki stans motorcycle industry. These include 6 OEMS who are members of P M including the 3 Japanese OEMs and 37 OEMs who are non P M members. The total installed c apacity of the OEMs is approximately 1.310 million units per year as per the ed Engineering Development oard (ED ). The OEMs are located in and around the citi es of Karachi (Karachi, Hyderabad & Hub) and Lahore (Lahore, Gujrat and Gujranwa la). Market shares of the major OEMs are shown in following Table. Page 21 of 83

Market Shares of P M

& NON P M Members NON-P M Members:

The total installed capacity of the industry is 1.31 million units as stated ear lier. bove chart shows distribution of capacity by OEM membership and Model: Mo del Page 22 of 83

2.6 COSTING OF CHINESE MOTORCYCLES Non- P M industry is intensively Chinese oriented and they are managing a price lower than the P M member companies. No doubt price is very low but they lack quality in big way so let us see how they manage to make such cheap motorcycles. Page 23 of 83

2.7 INCIDENCE OF T X TION Currently there is a very high rate of indirect taxation on the manufacture and sale of Motorcycles. On a CD70CC the total incidence of Indirect Taxation is aro und Rs.17,124 as shown in the following Table: Page 24 of 83

2.8 REGION L COMPETITORS N LYSIS CHIN s already stated above, China is the largest exporter of motorcycles. Some of t he advantages which the Chinese industry enjoys are:

Strong domestic demand of more than 10.0 million units Huge investment by Japane se OEMs Low cost of infrastructure land, utilities are all state subsidized Gove rnment support to export industries in general Encouragement to component manufa cturers who supply to the OEMs Market presence in 200 Countries Worldwide vaila bility of most raw material locally Chinas indicators are more favorable than all its competitors INDI The Indian industry enjoys the following benefits in pursuit of its export strat egy: Strong domestic demand of more than 7.2 million units ng Vibrant component manufacturing industry with a strong technical base Comprehensive consensus buil t road map for development of both OEMs and component sector through both SI M & CM Most raw material locally available Strong presence in regional and frica n markets Japanese OEMs exporting local JV production, also participating with l ocal companies in forming JVs in third countries Strong manufacturing capability , eyeing the quality conscious European markets Page 25 of 83

TH IL ND The Thai industry is being driven by Detroit of sia Vision. 3rd largest auto industry and motorcycle producer (3 million units in 2005) iming to become regional assembly hub, strong infrastructure support program provided by the go vernment including auto clusters, training, component development etc. Preferent ial exports to SE N countries Japanese brands dominate VIETN M The Vietnamese industry has emerged stronger after the recent failure of a large number of smaller companies where the number of producing units came do wn from 60 to 12. The current export strategy being followed by Vietnam includes : Short term strategy aimed at clearing stocks, dumping at below costs in certai n instances Exporting to SE N due to pref preferential treatment Some penetration of the frican market Presence of Japanese OEMs and low costs coupled with strong domestic demand of 1 .9 million can help make it a major player Page 26 of 83

2.9 MOTORCYCLE PRODUCTION POTENTI L IN P KIST N

s stated before the total production of motorcycles is likely to reach 1.7 mill ion units by 2010 11. Out of this, the local OEMs should aim to export 100,000 u nits to angladesh, Sri Lanka, fghanistan, the six Central sian Republics and selected East frican countries like Eritrea, Somalia, countries Ethiopia, Djibo uti, Kenya, Uganda, etc. TL S HOND : In anticipation of being able to export fr om Pakistan, tlas Honda has taken the following measures: Setup a new world cla ss production facility near Lahore which can assemble a motorcycle in 35 seconds . This is regarded as one of the semble most modern Honda plants worldwide tlas Honda has successfully negotiated global rights with Honda Japan to export the 70CC motorcycle and regional rights for the 125CC motorcycle Honda Japan has ack nowledged the quality standards and commitment of tlas Honda tlas Honda has he lped upgrade capabilities of its component manufacturers to international standa rds chieved 93.0% localization which gives them a cost advantage Worked activel y with their supply chain to reduce costs of the components s arranged over 20 technical collaborations for its vendors in Pakistan with the Japanese manufactu rers Forcefully presenting their case at all forums D WOOD Y M H Dawood Yamaha is manufacturing the 100 CC Yamaha motorcycles, it has taken the following steps to increase production and start exports: Increased plant capacity from about 7 2,000 units to 100,000 units per annum. Negotiated with Yamaha exclusive marketi ng rights for fghanistan and exported some units in 2005. Dawood Yamaha has not been xported Page 27 of 83

refunded customs duty by the C R on C Us exported to fghanistan. The local spon sors of Dawood Yamaha have setup aluchistan al Engineering, a most modern motor cycle component manufacturing unit SUZUKI MOTORCYCLES The Suzuki Motorcycles Pak istan Limited is 84% owned by Suzuki Japan. It is currently producing only 20,00 0 units of 100, 110, 125 & 150CC capacity. The installed capacity of the plant i s over 100,000 units which the management is planning to utilize in the next fiv e years. Suzuki is currently concentrating on the domestic market where it is investing i n developing it dealer network. lso the company is investing to develop its ven dors The Company at the moment has no rights for exports, however on country to country basis permission maybe obtained. Page 28 of 83

2.10 PRO LEMS F CED Y COMPONENT M NUF CTURERS & THEIR SOLUTIONS Survey of the component manufacturers supplying to both the Japanese and the Chi nese OEMs revealed a number of problems being faced by them. The following parag raphs contain a summary of the problems being faced along with their solutions. The percentage signs in brackets indicate % of respondents who felt that this wa s a major problem. ke Problem #1: Utilities like electricity, gas etc., are expensive and their sup ply is erratic (100.0%). Solution: Move component suppliers into Motorcycle Park s or clusters and provide them electricity through gas powered generation plants . Problem # 2: Land is expensive (95.0%) Solution: Move component manufacturers in to Motorcycle Parks or clusters and provide them land at affordable prices. Problem # 3: Non availability of skilled workers (64.0%) Solution: Upgrade vocat ional skill centres and setup training facilities in the Motorcycle Parks or ven dor clusters. Problem # 4: Cheap under invoiced imports are damaging the local vendor industry (95.0%) Solution: Formulate and implement mechanism for fair valuation of impor ted parts through a committee comprising representatives o ED , Customs, OEMs an d of P P M. The local component industry is effectively out of the Replacement Parts market because of the availability of under invoiced parts. In addition th ere is no guarantee that the parts which are imported are of the required qu qua lity. The manufacturer or importer in most cases cannot be traced in case any pa rt fails Page 29 of 83

Problem # 5: Locally available raw material is expensive as compared to regional competitors (91.0%) Solution: Form vendor buying coops to reduce cost by buying in bulk Problem # 6: Sales Tax and other government departments are victimizing the loca l vendor industry (77.0%). Solution: Increase contacts between component manufac turers and relevant departments, ED can act as mediator. Problem # 7: Engineering Development oard is not monitoring and upgrading the l ocalized parts list. This list has not been updated since 2004 (59.0%). Solution : P P M should get the list updated on a quarterly basis by working closely wit h ED . Page 30 of 83

DEP RTMENTS UNDER STUDY DURING INTERNSHIP 1. 2. 3. 4. 5. Human Resource Department uman dministration & I.R Spare Parts I nstitutional Sales Services (3 Weeks) (1 Week) (3 Days) (1 Week) (3 Days) Page 31 of 83

Human Resource Department Page 32 of 83

FUNCTIONS OF HUM N RESOURCE DEP RTMENT 1. Recruiting & Selection This includes activities like giving ads on appropriate media so that potential candidates are attracted and after acquiring a pool deserving candidates are sel ected purely on merit basis. 2. Training & Development Selecting a good employee is not enough till he is trained to give his best for the organization. To make him more useful for the organization an induction proc ess is done at HL. 3. Performance ppraisal Now when an employee is trained and he has performed his job for a certain perio d then company has to identify if that person is doing his work according to job description so they conduct performance appraisal. 4. Compensation On the basis of performance appraisal employees are compensated according to the ir performance. High performing employees get encouragement certificates and cas h rewards. ll above functions are performed by H.R specialist team at Honda bot h collectively and individually. Now I will explain who performs what in Honda H .R department department. Page 33 of 83

3. RECRUITMENT & SELECTION PROCESS Requisition Slip Induction Plan Data Entry

pproval

Medical Probation Evalation dvertisment

2nd Interview Confirmation Pool 1st Interview Short Listing /Screening Written Test Page 34 of 83

3.1 ST ND RD OPER TING PROCEDURES (SOPs) & R TION L FOR RECRUITING & SELECTION

d is prepared by Manager HR but the Final selection of staff of grade 11 and ab ove is done by CEO while the final selection of staff of grade 12 or below is do ne by Director HR. CEO issues letters of appointment and salary documents with a copy to HR Department and another copy to Corporate Office. t very first step HR department receives a requisition slip from the department requiring a new em ployee this goes to HR manager. HR manager brings this in notice of GMHR who is the approving authority for the recruitment and selection process. Once it is ap proved by GMHR an advertisement is given in the pre decided mediums. s soon as public gets to know about the vacancy they send in their CVs the pool of these C Vs is short listed and a letter for the written test is sent to the candidates. Candidates who pass the written test are then called for two interviews and reme mber after first interview candidates are eliminated. Whoever passes 2nd intervi ew is eliminated. subjected to a medical examination and success in that medical examination will make you on probation employee at HL. bation

a. INDUCTION PL N The induction program for joining employees is necessary as per new training pol icy approved by GEC. Separate induction program is prepared for new employees: 1 . 2. Up to grade 11 From grade 12 and above Page 35 of 83

HR Department of every company will find out a mentor from each department who w ill organize the induction in his department. There will be an overall mentor wh o will keep liaison with new employee to make him comfortable during induction p eriod so that h he can focus on the main objective of this program. Program- 1 Up to grade 11: The incumbents job will be mostly clerical/repetitive nature so mostly concern wi th his job. Following will be the program for this level of employees. 1234567Gr oup Video and brochu brochure. Organization charts of company and group. HR syst ems (M O performance appraisal etc) Staff rules and his grade related entitlemen t. ll necessary info regarding timings, uniform, canteen and transport etc. Int roduction to his manager, peers and colleagues. manager, Visit of all the depart ments for 3 hours each in which specifically the related employees will brief ab out his respective departments in routine business. 89Job description of the inc umbent. Departmental objective and his expected specific role. Dept. Mgr Dept. M gr Page 36 of 83

Duration of Induction HR Other departments His own department (depends on size and location) 1 Day 5 D ays 1 ~ 7 Days Total duration 7 ~ 14 Days The company HR will issue his induction program. The incumbent will submit his i nduction experience to HR Manager. His report will be studied and if it is usefu l will be presented in Managers meeting after the approval of CEO. Half an hour presentation will be enough. The presentation should cover cultural, discipline and technical issues. Program 2 For grade 12 and above: The incumbents job will be at middle /senior management level and requires routin e decision making so he should be equipped with good knowledge of his job and fa ir interaction with all his peers and department managers. He should have fair k nowledge of group companies specially related to his job. 1. 2. 3. 4. Group vide o and brochure Organization charts of company and group Systems (M O, performanc e appraisal etc) Staff rules and his grade related entitlement. Page 37 of 83

5. 6.

ll necessary info regarding timings, uniform, canteen and transport etc Visit o f all the departments for 3 hours each in which specifically the related employe es will brief about his respective departments in routine business. 7. 8. 9. Job description of the incumbent. Departmental objective and his expected specif ic role. Visit to other group companies located in same area Specifically he should meet his peers in group companies to department understan d the nature of interaction which will take place between them manager in routin e business will arrange. Duration of Induction: HR Other departments His own department (depends on size and location) Group Com panies Total duration 3 Days ays 10 ~ 11 Days 1 Day ay 5 Days ays 1~D Day The Company HR will issue his induction program. The incumbent will submit his/h er induction experience to GMHR of his company. His report will be studied and i f it is useful will be presented in Managers meeting after the approval of CEO. Half an hour p presentation will be enough. Page 38 of 83

4. TR INING & DEVELOPMENT

HL is determined to take employee training and development as a continuous proc ess that eventually will result in performing the employees best at the jobs ent rusted to them. 4.1 Training Objectives The broad objectives of the training should be to: Match the training with specific job assignments. Enable the successful trainees to acquire and apply the training lessons in their work; Specify the criteria for acceptable performance; Elicit target behavior (accepta ble performance) from the trainees. cit Promote continuous employee performance improvement. Encourage career-long learning. long Provide an environment that fo sters learning and encourages employee participation. Provide learning experiences that facilitate the improvement of employee experie nces reasoning, confidence, judgment, and self self-esteem. Cultivate a work culture that provides a balance between organizational goals an d personal development. 4.2 Employee Training and Development Strategies In an effort to serve employees better and to develop them for the upcoming role s at HL, we work to: Page 39 of 83

Set clear employee performance goals that align with ls. Provide on-going going performance feedback with adequate documentation

throughout the performance management cycle. Understand and deal effectively wit h performance management related special circumstances, as they occur. 4.3 a. Objective Training Policy To help each individual, in the interest of the Company and himself, to do his p resent job more effectively and to help him equip himself for higher responsibil ity to reach his optimum potential. b. Policy Training is a line responsibility. Each manager is fully responsible for providing adequate development opportunit y to promote maximum growth in each of his Page 40 of 83

ssess employee training and development needs regularly, in an effort to improv e employee performance. Provide employees with a reasonable number of equitable and consistent equitable training and development opportunities. The objective to assist supervisors and managers lies in the following area To a ssist managers and supervisors to: Participate in performance management processes that are collaborative with your employees, and result in "no surprises" for either of you. Develop and manage a performance management process that includes annual perform ance planning, employee development development, on-going going feedback and performance evaluation. HL vision, mission and goa

subordinates. Managers contribution in this respect is an important considerati on in his own appraisal by his superior. Each General Manager must personally ac tively must participate in fulfilling the training needs of his subordinates wit h particular attention to; Systematically determining training needs for each su bordinate. Setting his training objectives and plans to achieve them Monitoring the implementation of these plans Evaluating the effects and usefulness of the t raining being given with a view to, if necessary modify the training plans. Moti vating subordinates to improve performance and to make full use to training. Fol lowing above, each CEO is responsible for effective training in his unit. ing i. Formal training courses, both inside and out side the company, should only be a part of a Managers over all plan for the development of his subordinates. Inform al day to day on the job coaching must be regarded as the most job important par t of a Managers responsibility in training. ii. Corporate HR department has an ad visory role in providing Line Managers whatever advice / assistance they may req uire. In particular, opportunities wil will be provided to line Managers for imp roving their Training Skills. iii. Formal training should be in the form of in c ompany courses /seminars as far in-company as possible. c. Implementation This p olicy shall be implemented by the following four main activities. 1. Each Manage r shall review the development needs of his subordinates constantly but more spe cifically at the time of annual appraisals when the development plans of a subor dinate should be agreed with him. The CEO concerned shall be actively involved i n the process. The Line Manager shall motivate his subordinates to make full use of the training being provided. 2. Each Manager shall constantly monitor the ef fectiveness of training being given and shall provide feedback to Corporate HR D epartment. Page 41 of 83

3. If at any stage the Line Manager wishes to change the training plan he may do so after agreement with his CEO and if necessary advice from Corporate HR Depar tment. 4. Once a year all CEOs shall individually, formally review all aspects o f development activity in their units. Page 42 of 83

4.4 TR INING PROCESS Performance Gap Identified Report by Immediate Supervisor Training Need ssessment ssessme Cost enefit nalysis GM s pproval Training Institute Selection Training Report Post Training Performance

nalysis of Pre and Post Training Performance

Page 43 of 83

4.5 ST ND RD OPER TING PROCEDURES (SOPs) & R TION L FOR TR INING & DEVELOPMENT

ny new employee is never familiar with the culture and working conditions of a new company, to make him feel at home socialization and training is important. t HL socialization is done during the induction stage while some part of traini ng for new employees is done also. What if an employee is been working for some time and if he starts performing bad, there should be some measure for that and it is covered under training and development. oss of every employee keeps a che ck on his performance and when he sees a continuous decline in his subordinates p erformance he can always identify a gap. t the identification of that gap he ex tends a report to the Manager HR, who identifies TN . He also conducts a cost be nefit analysis to determine the importance of skills lacked by the employee. He then takes this working to the GM who is the training approving authority. fter training has been approved by GM it is now the responsibility of raining Execut ive HR to select the institution of training. fter employee is done with the tr aining that ranges from 2 weeks to a month he is supposed to submit a report des cribing his training experience and how training has helped him overcome his sho rtcomings. Now he is allowed to perform again normal working conditions and afte r a certain period his performance is checked again. Pre training and post train ing data is then matched to see if the training has improved his skills or not. Page 44 of 83

HUM N RESOURCE HIER RCHY

T HL UM N

G.M Human Resource / dministration N.M Human Resource Manager Human Resource Executive Human Resource Executive Human Resource Executive Human Resource Page 45 of 83

Following are the staff working at HL in Human Resource Department Their name w orking Department. and designation is described with their job descriptions. Miss sma Manager Human Resource Responsibilities: 1. Personal Loans These are the kinds of loan extended to the employees by the HL. These loans ar e given against Provident Fund and are payable in installments. 2. Recruitment She monitors all recruiting activities like: i) ii) iii) udget for recruitment d preparation Selection of Medium

3. Reports She prepares the reports for Management Committee, Group Executive Committee. Wh enever a meeting is commenced she takes notes of that and prepares a report late r to be circulated among the concerning authorities. 4. H.R Information System This system includes all work functions regarding H.R and her responsibili is to responsibility supervise all functions and to make a report for the National Ma nager. Page 46 of 83

SOPs & R TION L FOLLOWED Y MISS SM eing Manager HR she is answerable to NM and GM While dealing in personal loans GM. she has to make sure of many documents because it involves monetary issues. When an employee comes with a request to take loan against his provident fund fo llowing documents are important: 1. Employees Employment Record 2. Provident Fun d Documents ent

She consults the matter with NM and with the approval by NM loan is awarded to t he employee. Designing of recruitment ad and budget determination is also her re sponsibility. fter preparing ad within the budget limit the ad is shown to NM a nd GM and if both agree with that then the recruitment ad is given through desir ed medium. She maintains the record of management committee reports it is her re sponsibility to attend the meetings and make a report within a week and then she sends the c copies of that report to the CEO and the officials who have attende d the meeting. Page 47 of 83

Mr. Omer kram Executive Human Resource: Responsibilities: 1. Insurance Employees at HL are insured in three dimensions: i) ii) iii) Life Insurance Hea lth Insurance ccidental Insurance Insurance are covered by two different insurance companies i) ii) New Jubilee Life Insurance Company (covers Life & Health Insurance) nce (covers ccidental Insurance)

2. Job Descriptions: He also maintains a data bank of all Job Descriptions of all the employees which is updated as per the requirement of the jobs. dministration and H.R managers ar are responsible for updating J.Ds J.Ds. 3. Training Need ssessment: Immediate boss reports the performance of his subordinates at the t time of perf ormance appraisal. list of employees needing any kind of training is generated with the suggestion from the immediate boss of a particular employee. Now this list is handed over to General Manager and Mangers to identify what kind of trai ning should be given to which employee. They decide on this Training Need ssess ment in the meeting presided by General Manager Human Resource, dministration & IR. Page 48 of 83

tlas Insura

SOPs & R TION L FOLLOWED Y Mr. OMER KR M Mr. He works closely with the insurance companies to make sure every employee at HL is covered under the promised policy. It is a part of his daily routine to make insurance company aware of addition and deletion of employees. This process is same for Life & Health Insurance. While under accidental insurance only test rid ers are covered so the insurance family members of that rider are not covered. ddition is done when: 1. new employee comes in 2. Employee gets married 3. ir th of daughter or son to any employee In above case Mr. Omer sends following doc uments to the insurance company: insurance 1. Proof of above three happenings 2. Employees Insurance Number (if any because in case of new employee there will b e no number) 3. Copy of Insurance Plan ll these documents and a letter by Natio nal Manager are sent to the insurance company through courier. In response to th is insurance company sends an e mail of acknowledgement as soon e-mail as they r eceive the documents They send the confirmation documents in next 2 days documen ts. while the insurance card is sent within next 2 weeks. Second scenario is of deletion so a deletion is done when: 1. Employee Leaves ll above addition proce ss will be repeated to cover this deletion. tlas Honda follows the concept of M O management by object; this concept emphas izes the importance of worker in setting the target. So whenever job description or new year targets are updated then every employee above grade 11 has to meet Manager dministration to discuss it on mutual basis. When all job descriptions are updated this record comes to Mr. Omer kram. Now it is the responsibility of him to Omer determine whether every employee is following his J.D in the right direction. Page 49 of 83

Mr. Syed Zeeshan Haider Executive Human Resource Responsibilities: 1. Data retrieval from all six attendance machines installed at plant 2. Updatin g Daily utomated ttendance 3. Generating attendance report of previous day (3 shifts) and presented to General Manager Human Resource, dministration & IR 4. Twice a month an *Inconvenience llowance Report is generated which is to be submi tted to the finance department. 5. Salary Processing *Inconvenience llowance Report: It includes the list of Grade 16 or above who h ave worked on an off day or four hours more then the official working hours. SOPs & R TION L FOLLOWED Y Mr. ZEESH N H IDER Mr. He is mostly responsible for all the attendance issues. Everyday first part of h is job is to retrieve the attendance data from automated machines and then he pr epares a report consisting of the data of all the machines and of all the shifts . GM dem demands a report of previous day three shifts. Workers who go out of th e plant have to submit an attendance slip for that at the gate. Very next day th ese slips will be on the table of Mr. Zeeshan who has to make sure that the reco rd of half day leave or full day leave is maintained. ll his activities help to determine that which employee deserves reward for his regularity. Page 50 of 83

Mr. bdul Haq Executive Human Resource Responsibility: 1. Vehicle Insurance Vehicle insurance is covered by tlas Insurance. These vehicles are the one owne d by the employees only. 2. Purchase of Motorcycles by Employees This purchase is made in two different categories: i) ii) Installment Policy Under installment agreement only motorcycles are given to the employees on insta llment basis while under Policy both cars and motorcycles are given to the ile e mployees. ut there is a certain criterion for the employees who can get the car on installment. Grades determine the level on which an employee is eligible to have a car. SOPs & R TION L FOLLOW FOLLOWED Y Mr. DUL H Q r. He deals in vehicle insurance and purchase of vehicles. Like Mr. Omar kram he a lso stays in contact with insurance company to make sure each and every vehicle of employees is insured. If an employee wants to purchase a motor cycle or car f rom the company he has to go to Mr. bdul Haq and he will make sure about the pr esence of following documents. 1. Grade of the employee 2. Signed greement 3. pproval Letter from GM Page 51 of 83

Human Resource Project During my time in Human Resource Department I was advised by National Manager to prepare a report on Is there any room for improvement in the current Insurance e re Policy? I came up with the following points regarding the above statement: Current Policy 1: s per Insurance Clause: Insurance Company is not liable if the insured person i s dead in any terrorism act.

My Suggestion: There should be flexibility in the terrorism clause. t present t errorism is claiming most of the lives so what will be the use of a life policy if you are not covered against a very common and unfortunate cause of death. Ins urance Company should pay at least 50% of insured amount. State, Companies and i nsurance companies should compensate the family of dead against any ki kind of a ct of terrorism. Though its not a binding by the law but still its an ethical duty of concerning institutions. Current Policy 2: s per Insurance Clause: Insurance Company will not cover the parents of employe es but their wife or children. My Suggestion: Insurance Company should cover the parents of non non-married employees till they are married. Page 52 of 83

Current Policy 3: s per Insurance Clause: Under Health Insurance there will be no coverage for th e treatment of Hepatitis. My suggestion: Hepatitis is a dangerous disease and suffering due to this is qui te usual these days. Moreover its treatment is not quite affordable that why it should be covered to some extent to facilitate the insured employees. Page 53 of 83

DMINSTR TION & INDUSTRI L REL TIONS (I.R) INDUSTRI L HIER RCHY T HL dministration Manager dministration

G.M Human Resource / .M dministration

Executive dministration Executive dministration Executive dministration Page 54 of 83

DMINSTR TION & INDUSTRI L REL TIONS (I.R) DEP RTMENT at NDUSTRI L D HL: This department runs with the co ordination of Human Resource Department, both c o-ordination departments occupy the same office. It performs the following funct ions like: 1. 2. 3. 4. 5. 6. 7. 8. 9.

Canteen Uniform Traveling pprenticeship Job Contract Union Industrial Relations Security & Safety Transportation ll these functions are performed by dmin. & I.R specialist team at HL both co llectively and individually. Now I will explain who performs what in Honda dmin . & I.R Department. Following are the staff working at HL in Human Resource Dep artment. Their name and designation is described with their job descriptions. Page 55 of 83

Mr. Rizwan Rasool Executive dministration & I.R Responsibilities: 1. Canteen HL spends around 1.8 million rupees on subsidized food each month. They have a promise to provide good quality, mouth watering and cheap food to their employee s. For the food they charge Rs. 50/ month from all employees. Canteen is very sp acious with ventilators around. Macro & some other suppliers supply all the kitc hen items to the HL. 2. Visits t HL there are two kinds of visits:

i) ii) Japanese & Higher Management Visits Study Visits 3. Stationery Stationery shop at HL meets the needs of daily stationery. It is opened for two hours everyday from 8:30 am to 10:30. Personals from different department come with the Stationary Requisition ook to collect the required items. 4. Uniform When you enter HL Sheikhupura plant it is almost impossible to recognize some a lmost someone by his grade or rank due to uniform. Concept of equality prevails over HL with all the employees dressed in white uniform. This equality is a sym bol of HL and it surely boosts the culture at HL. Page 56 of 83

SOPs & R TION L FOLLOWED Y Mr. RIZW N R SOOL Mr. monthly canteen budget is given to the dmin. & I.R Department by Finance Depa rtment and menu is strictly decided considering that budget limit. Monthly menu is decided by four member committee on 24th or 25th each month. This committee i ncludes: i) ii) iii) iv)

Executive dmin. & I.R Executive dmin. & I.R (Union) Production Personal Cost P ersonal (Finance Department) Once a menu is prepared it is forwarded to Manager and ssistant Manger dmin. & I.R. These both gentlemen decide whether to make some changes in the monthly me nu. ny complaints regarding food are forwarded to Mr. Rizwan Rasool and he disc usses forwarded them with Manager & ssistant Manager dmin. & I.R. Visits by Ja panese and Higher Management are quite frequent and due to the security concerns now a days there has to be some security plan for these guests. O Once the date of arrival of any guest is confirmed either by Fax or E mail or Phone, the E-ma il dministration and Security Department works closely to ensure security prote ction. They prepare a visit plan most commonly includes; meeting, lunch session and photo session. Study visits are also a very frequent issue; HL receives man y Institutional Visit Requests daily. Now let us see that how this process takes place. Institution has to send a formal request of Study Visit in the name of G eneral Manager Human Resource, dministration & I.R. Once signed by G.M it comes back to Mr. ce, Rizwan and he sends an acceptance e mail, letter or phone. He a lso makes a schedule e-mail, Page 57 of 83

Every employee gets three white gle pair of shoes (since it can n three uniforms then they have facility is also available at low as Rs. 1/wash.

uniforms including shirt and trousers plus a sin be of any color) per year. If they need more tha to purchase their own from any anywhere. Laundry HL; employees can get their clothes washed in as

for the visit and makes institution aware of it as well. HL tries to schedule t he visits on the days when plant is open and working because it makes the educat ional trip more meaningful. Page 58 of 83

Miss Humaira Executive Responsibilities:

1. Traveling Related Services 2.

SOPs & R TION L FOLLOWED Y MISS HUM IR ISS Traveling services include air tickets, hotel rooms and traveling. Higher Manage ment and Japanese Official move through the airplanes so her first responsibilit y is to see who wants to travel and where. For that she contacts the travel agen cies to book the travel tickets and hotels as well for the stay purpose. This tr aveling privilege is not for every one, only ssistant Mangers and above can enj oy this luxury. These officials travel in business class and stay in five star h otels. For last year or so due to bad economic last conditions the HL officials started using economy class which costs almost half of business class. In case the cancellation of the ticket is required she makes sure right amount is deduct ed with right refund. ship pprenticeship lies under 1962 ordinance which makes it compulsory for the firms to offer candidates the apprenticeship. It can also be called an agreement b/w the company and candidate. HL each year takes 25 students for apprenticesh ip and gives them in house training for 3 years. During that time they attend in stitutes for six months ning to complete two batches of study. pprenticeship ca ndidates are paid half of the basic salary of permanent employees. gradual inc rease is awarded as: 1st Year 50% of asic Salary o Permanent Employees of Page 59 of 83

dministration & I.R

pprenticeship Recruitment & Selection

2nd Year 3 Year rd 60% of oyees asic Salary of Permanent Employees 70% of asic Salary of Permanent Empl

When the apprentice agreement takes place, three copies are generated; i) ii) iii) Copy For Company Copy For Candidate Copy For * pprenticeship Directorate rentice ship *It is the apprenticeship governing body of the government Page 60 of 83

Mr. Shahzad Sarwar Executive Responsibilities:

1. Industrial Relations 2. Union 3. Job Contract SOPs & R TION L FOLLOWED Y Mr. SH HZ D S RW R Mr. Industrial relation is very vast in its definition but precisely its about the re lations within the industry and employees. Difference of opinion or any dispute can take you to the court straight away so you got to have some one to take a lo ok at that. Thus it defines the basic purpose of I.R. Following are the HL legal consultants; Naeem ukhari, Islamabad (Supreme Court Matters) ukhari

When ever the court calls HL to the court then a Power of ttorney is given to th e Manager dministration & I.R by the General Manager. Some years ago Plant Mana ger used to enjoy Power of ttorney. This power means that the MIR will act on th e behalf of the company. If an employee takes a plea in court against the company then comp company has t o justify its decision over that matter. They can not straight away terminate so me one but they have to show the procedure they have followed in doing so. t in ternship I just came across a Page 61 of 83

dministration & I.R

ziz & Kareem, Lahore

case of bsent without permission. n employee was terminated because of absents t erminated without any permission or intimation. He went to the court against HL now court ordered HL to show that how his termination was done. This procedure follows as: Union: Union is made to protect the employee right and it falls under the Industrial Re lations under ct 2008. Union leader negotiates on the behalf of employees. Unio n leader is elected by the elections and union is supposed to be in the power fo r the period of two years. Security & Safety: t HL five Japanese rules are followed when it comes to the security & safety. These can be called 5s. 1. Seiri is the sorting out and discarding of unnecessary items in the work plac e. 2. Seiton is the arrangement of necessary items into good order so that they can be easily selected for use. 3. Seiso is cleaning up ones work place complete ly so that there is no dust on floors, machines and equipment. 4. Seiketsu is ma intaining ones work place so that it is productive and comfortable by repeating Seiri Seiri-Seiton-Seiso. 5. Shitsuke is training people to follow good work hab its and strict observation of work place rules. It is not necessary to follow them only in case of security and safety but they can be followed at the work place at any time. Page 62 of 83

Security: Theft at HL plant and DCC store was once an issue but with the passage of time they have improved to such a level where there is almost zero theft possibility. It has become possible sheer because of effective Security Guard Patrolling and v ery impressive RFID Reader. Now let us go into the details of this Security Guard P atrolling system details that how it works. Total Number of Guards = 38 Guards Patrolling at Plant = 26 Guards Patrolling at DCC Store = 12 Guards at Plant are divided in 3 shifts (8 hours each) as: Shift : 7 Guards Shift : 9 Guards Shift C: 10 Guards To rotate these guards in effective manner a Monthly Duty Chart is prepared which shows the duties of all guards for all shifts. In case a guard has to be absent on a particular day, security officer will make sure next shift guard will be av ailable on current shift as well. In this case a guard will be doing a double du ty so he will be compensated accordingly. Night time at plant is a challenge for security and that is when they use this device RFID reader. Patrolling guards k eep this device with them during their duty at plant. this They go around the pl ant on a mapped track and on their way they use this RFID device on electric boo ths which notes the time. t morning RFID device is scanned to get the night dat a recorded by guards. It is then feed into the computer and a generated report i s is sent to the Manager dministration & I.R. Page 63 of 83

Safety: HL has generated its own Manual for Safety & Environment that explains every thin g in case of some emergency.

Pakistan Institute of Quality Control is the safety training institute for HL. Th is institute conducts fire training sessions at HL plant to make employees awar e of the dangers not visible. During training sessions they: Define all Terminologies Chemistry of Fire (i.e. Oxygen, Fuel Heat) Fuel, How It Expands? Prevention Methods F ST C (Fire & Security Training Center) offers First id Training Course which was attended by the relevant employees of HL. Recently Rescue 1122 were invited to HL Sheikhupura Plant to give some know how a bout First id to all the employees. bout Not only HL arrange such activities but also they have also ensured safety meas ures to get ISO certification. Transportation: HL plant is at 26/27 km Lahore Sheikhupura road so it is very hard for the empl oyees to reach there at time. For the convenience of their employees they run 80 o vans on 121 different routs covering Lahore, Sheikhupura, Sanglahill, Ferozab ad. HL charges Rs. 125/month for the transportation. Page 64 of 83

They make sure that the employees reach at plant around 7:30 am so that they can around start working at 7:45 am for this reason they prefer drivers who live ne ar the starting point of the route. They not only make sure that employees reach the destination but also that they reach safely and they have made a code of conduct for the travelers and drivers; code i) ii) iii)

particular driver can not drive more than a shift Driver can not go above 80 k m/h In case of rainy weather its not necessary for the driver to abide by the tim e. Late arrival will be no issue since the weather was dangerous. weather iv) t morning pick up driver can not leave some one before the committed time and h e would not wait even a minute after that time. v) vi) Monthly check up is ensured to keep the vans in good condition. Smoking, eating and using abusive language is strictly prohibited in the vans. Now the question arises how they make sure that no violation is going on, for th at they nominate a traveling employee to be the monitor. Monitor makes sure that driver and travelers are following code of conduct. Page 65 of 83

5. INSTITUTION L S LES Mr. Zaheer Minhas National Manager Institutional Sales This includes four types of sales: 1. CSD (canteen sales department) 2. Government Institutions 3. Private usiness es 4. Exports 5.1 S LES & SP RE P RTS HIER RCHY Vice President Marketing National Manager P RTS National Manager S LES National Manager Dealers Dev. National Manager Institutional Sales. Regional Manager Karachi Region Regional Manager Multan Region Regional Manager Lahore Region Regional Manager Rawalpi ndi Region Page 66 of 83

5.2 INSTITUTION L S LES PROCESS Personal Inquiry Quotation Purchase Order Delivery

ooking

Pay Order 5.3 SOPs & R TION L FOLLOWED IN INSTITUTION L STITUTION L S LES

t first step purchasing institute inquires about the prices and product and mos t probably he asks for the quotation. This quotation is prepared and signed by M anger Institutional Sales which shows all the terms and conditions. Once the cus tomer is ready to purchase he send in a p order along with a document pay of spe cifications he requires. On receipt of pay order motorcycles are booked for that institution and delivery is made within stated time or two weeks. Page 67 of 83

6. SP RE P RTS Mr. Hassan Cheema Regional Manager Parts Responsibilities: Meeting the demand of the spare parts in the market and to make new dealers by e xploring new markets. Functions of Spare Parts Department: Sales department works with dealers who are at the same time working as the dist ributor and the retailer also. Dealers from respective areas send their orders i n quantity that contain delivery period with advance payment with marketing depa rtment. Payment is sent to accounts department or dealers respective accounts. Wh en payment becomes clear then demand is sent to marketing department to ensure d elivery to dealers. If dealer has sent some extra amount then it is separately s hown as a pending payment in his account. This is adjusted after next delivery. Spare Parts Sources: HL gets these spare parts from three sources:

1. In House 2. Vendors 3. Import Vendors occupy the market because there are thousands of different vendors provi ding industry with required components. Vendors lead the market share with a big lead. Page 68 of 83

6.1 SOPs & R TION L FOLLOWED IN SP RE P RTS 5s DE LERS: HLs dealers deal in five categories: In the past Honda allowed the dealership even for 1s but now they want to streng then their dealership network so they now only form 5s dealerships as: 1s 2s 3s 4s 5s Sales Service Spare parts Special sales (installments or leasing) Exchange facil ity These 5s dealers deal in all the above categories and the reason for that is cus tomer can get all the facilities regarding Honda motorcycles under one roof. a. HUMS STR TEGY 5s Exchange Facility: ility: It is relatively a new concept in automobile industry it works under a concept k nown as HUMS Dealers. Developing HUMS Dealers (Honda Used Motorcycles Sales): Page 69 of 83

CONCEPT

ENEFITS TO HL Phase-I t present, the contribution of exchange in sales is 4%, and by introducing HUMS , it will raise to 6%. We are linking 20 HUMS with 5 s Dealers in 15 cities duri ng 2008 5-s 2008-09 Phase-II We will increase HUMS in further 10 towns in 2009-10 300 to 325 Sales Dealers 36 to 50 SSP 145 to 155 Warranty Dealers Page 70 of 83

lot of customers want to purchase new motorcycle, in exchange of old Motorcycl e and they want to pay balance payment in terms of Cash or Installments. These k inds of customers mostly go to used motorcycle market for exchange purpose. We w ant to create est 2nd hand Sellers as our representatives of 5 Dealers in the 5-s 2nd hand market, who bring these kinds of Customers to 5-s Dealers and provide new s motorcycle on mutual understanding. The HUMS will get the commission from the 5 s Dealers and also from 5-s Customers and further get the profit after sel ling of old motorcycle.

b. CRITERI FOR DE LER M KING The criterion is very clear and that is the expansion of business so before any expansion anything else we have to find the answers to these questions: WHY, WHERE, WHEN, WHO WHY? There can be countless reason ns to this Why but at most of the time its about ca pturing the market. Success comes when we keep a track of our competitor so any move from competitor can also bring an answer to this Why. WHERE? This will include some research work because we have to inspect and analyze the data of potential markets we are intended to intrude. survey of market potenti al, competitor analysis and the need of customer will help us in a big way. It w ill also include the location of our dealership as demographics plays an importa nt part in sales activities. WHEN? There is always a specific perfect time of doing something or most commonly we s ay there is a right time for right thing. This aspect spreads from our social li ve to the lives business activities. In the case of dealership our dealer is mos t concerned about it but at the end of day we are worried since the dealer carri es our name. WHO? Now the dealer comes into the equation, we have to find what kind of potential d eale dealer should have to be our part. His past experience business wise? What is his personality attributes? What is h is background? What is his potential in the market? Page 71 of 83

Dealer Facilities: HL is always ready to facilitate its Dealers to expand their business for this purpose they have launched a new facility for its dealers in co operation with llied ank Limited. co-operation ank will provide them the f acilities like: 1. ccount

Running Finance Mark up will be charged on the money used 2. Limit to Loan 1 million to 50 million mount can be 30% of last years sale 3. Purpose of Loan To buy the motorcycles or stock from 4. Security a. Stock through hypothecation b. Mortgage c. Personal Guarantee 5. Mark Up Rate 14% 6. Payment Payment on quarterly basis 7. asis Qualification a. Dealing relationship with company should be more than 5 years b. No bank defa ult history c. Value of Mortgage Property should be 25% more than the loan amoun t d. Firm or Companys ccounts Page 72 of 83

HL

7. SERVICES 7.1 SERVICES HIER RCHY ational manager Service Regional Manager Lahore Regional Manager Rawalpindi Regional Manager Multan Regional Manager Karachi. 4 Territory Inch. 4 Territory Inch. 4 Territory Inch.. 4 Territory Inch. 7.2 CUSTOMER C RE CENTRE proactive approach to enhance customer satisfaction and add value to HL brand

How will the centre work work? Will supplement and coordinate the present departments and systems rather than r eplace them The centre will be as effective as the support it gets from the allied departmen ts Will depend on the data base of customers generated by dealership and sales t eam Page 73 of 83

ow How will the centre achieve its goals? To reach each & every new customer creating a trust between him and the company provide information and solution to his problems Introducing services and products dding to the MIS system to improve marketing effort efforts Why is a proactive approach required? hy To reach out to those who are or have the potential to be dissatisfied r custome rs To give customers confidence that HL cares Too nurture loyalty through grievanc e management oo To improve company customer relationship and to use it to improv e sales in all areas. Page 74 of 83

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SWOT nalysis: Strengths: acked by a big and financially strong group tlas Hon da Limited Enjoying 55 to 60% market share at present Exporting to some countrie s in sia CD 70 is a symbol of success which is already enjoying a big market sh are Honda Japan and tlas Group are working together in a close connection Weakn esses: Cost cutting is becoming a serious problem in presence of Chinese Manufac turers Opportunities: Japanese technology is considered a bench mark in relation to quality. So this Japanese quality fame is still attracting customers. t the his introduction stage of Chinese Motorcycles customers were interested in low price but with the passage of time they realized the quality difference. Thats wh y there is so much opportunity for a quality conscious companies like tlas Hond a Limited. Only company producing 4 stroke 100 CC bike. CD 100 has good economy as compared to the competitors. Threats: Political instability, Govt. Taxes and Chinese companies are a threat but these are usua threats for any business. usua l Page 76 of 83

RECOMMEND TIONS & CONCLUSION 1. Glasses always appear suspicious with regard to cleanliness. 2. Canteen shoul d be paints in more cheerful colors. 3. Intrusion from outside can be best stopp ed by electric fences. 4. Too many contractors are like too many cooks spoil the broth. 5. Personally I fear CNG cylinders in company like ICI they avoid using CNG cylinders in their vans. 6. Instead of so many vans and routes we can have c oasters or other buses. It will give two benefits: spacious, C will not be requ ired. 7. If we just stick with these vans then we should make them stand under a shed or its becoming like a journey to the hell instead of home. 8. Vans are over crowded which makes this long journey to home very uncomfortable. 9. Smoking sho uld not be allowed in canteen area or other premises. There should be a specific smoking place, room or area for smokers. 10. There should be more variety in th e menus means freedom of choice. 11. Safety board and plant map is in the securi ty office while it should be appea appearing near the main gate so that even the visitors can know the place well. 12. Office computers are a bit problematic an d soft wares are not up date. 13. LCDs should be there to protect the eyes. Peopl e spend most of the time on their computers so it is necessary to protect their eyes that will also help to lessen the stress. 14. Conservation of energy is nea r to nil, when it comes to turning off monitors, everybody can use monitor auto power off option for that. 15. Stationary should be given to each shop or department once in the month till some emergency requirements. There should be a chart of expected demand of each department. Page 77 of 83

16. On Friday there is a break from 1:00 pm to 2:00 pm for lunch and to offer th e prayer. Time is sufficient but in such a large group like tlas Group, there w ill be tlas a mosque inside the factory factory. College 17. We should ensure different suitable types of Recruitment i.e. Col Re cruitment evelop 18. For this purpose need to develop Liaison with Intellectuals and Higher uthorities i.e. directors. Head of departments etc through Exchange of E E-Mails, Cards, Letters, Phone calls, Visits etc 19. Have Seminars in diff erent universities 20. Offer visits to different universities 21. Offer internsh ips to different universities 22. Ensure our participation in different Exhibiti ons and Functions encompasses industrial sector in different universities and s sociations. 23. Job dvertisement on Website 24. For this purpose need to upgrad e our website with an addition of career tag on upgrade our website to Convey ca reer path and growth at EDMF to our pplicants ur 25. Inform current opportuniti es for job, internships, apprenticeships etc 26. For online Resume submission ti me to time to have excellent application pool not only at the time of Job postin even before it. posting 27. Give detail for every advertisement of job opportun ities along with detail about job description and career path, status of adverti sed job opportunities along with compensation packages to manifest potential can didates because this all detail is not possible through newspaper advertisement and we have competitive edge of offering excellent compensation package to Mgt. Trainees so we should get benefit of this strength. 28. pplicant s ratio should be of (4:1) in short listing. Test, 1st in interview and (3:1) in final intervi ew to have purely potential candidate by following successful Recruitment Pyrami d 29. Need to improve our newspaper advertisement format and style. Page 78 of 83

ours organization 30. 15 minutes pre- screening phone call can save hours of our organization s time. 31. Define the behavioral characteristics of the person you feel is your ideal efine candidate. Finally, list your five - ten key respo nsibilities and characteristics you will use to screen out your pplicants initi ally because some time in 1st interview we find applicant is good but we are bou nd to reject them on the basis of ge e limit, Expected salary Cultural misfitti ness etc salary, 32. Some time even in final interview no candidate is selected. ome 33. There is need to have well defined standard of Written Test and n need to have very sincere and pure attentions and contribution of relevant department managers to develop an excellent test which later on evaluated by Manager HR as per test standards then recommended to proceed or modify it. 34. Induction plan /Orientation process demands a lot of improvement as suggested below. 35. There is need of separate place or Room along with equipments, which is purely reserve d for newly hired applicant s Selection, Orientation procedure and preexisting e mployees training existing 36. There should be complete pre defined program alon g with orientation module ld pre-defined and contents supposed to be highlighted and discussed by every department. 37. HR department require to develop Orienta tion program and specific course contents for every department along with co-ord ination of every relevant ordination department managers, discussed and highligh ted during orientation training and upgraded with the passage of time as for as changes takes place. nd should be handover to every department and its one copy will remain to HR de department in orientation program file 38. Every departmen t Manager or sst. Manager will deliver lecture in training room by keeping in r egard course contents given to their department and then followed by their depar tment visit to ensure complete practical exposure about their exposure departmen t role and practices. Page 79 of 83

39. Every department s representative will give assignments to new hires followe d by lectures and visits of that department and in response they will make sure submission of assignments next day which depicts their understanding after visit s. depicts 40. There should be very accurate time division of orientation proces s as per requirement of every department. 41. First two days of orientation shou ld be based on lectures only given by T Training Manager and MHR based on detail introduction and history of HL, cultural tail aspects. Organizational strategi c vision, mission, policies and procedures, workplace environment. Employee comp ensation, motivation, career path, promotional policies, and behavioral aspects. Etc 42. Rest of the days should be divided as per requirement of departments. e 43. Head of every department makes sure exact implementation of orientation pro gram concerning their department by taking feedback in the form of report. 44. N ew hires are supposed to give a comprehensive exam at the end of orientation pro cess arrange and co ordinate by HR department to know about their understanding and their abilities, performance for any future objectives. 45. ccording to us our job description is very clear but our all empl employees are not doing work purely within their job description, JD is not enough for any employee to keep t hem motivated. ecause Job description provide an opportunity to clearly communi cate direction and where the employees fits inside of the big picture Job descri ption set clear statement for what you expect from your people Whether you are r ecruiting new employees or posting job for internal applicants, job description tells the candidate exactly that what you want your selected person Well-written job description help organization employees, who must work written description with the person hired, understand the boundaries of person s responsibilities. 4 6. Job description becomes dated as soon as you write them in a fast fast-paced, changing customer-driven work environment. driven 47. Poorly written job descri ption can work as evidence of wrongdoing or wrong orly telling. 48. For effectiv eness you must regularly look and use job description as part of your day-to-day work. Page 80 of 83

office, are waste 49. Job description that is unused in a drawer, or worst filed in HR offi of time, they must be integral in your hiring process. 50. So if we want to say our employee is suppose to be familiar all work of his department th is is fact we enforce him/her to do work beyond his/her job description so there is solution for that Make certain job description has enough for flexibility so individual "can work outside the box". 51. Make different job description for o ne employee encompasses all areas of his/her department but for work he or she c an do and let him/her to do work by following one job description for one time o r specific period of time, until unless ollowing he/she becomes proficient in hi s/her work and then replace his/her job description with another one you have de veloped already for him/her, in this way he/she will be familiar with work of wh ole department and there will be no burden ar of additional work as well which m ay create de motivation for him/her. de-motivation 52. Performance ppraisal pro grams should be revised by following changing trend and employees behavioral elem ents etc. 53. There is gap in training of employees especially for worker level of employee, re there is need to ensure behavioral and technical training of wor kers by following performance appraisal after every six months. 54. On Friday th ere is a break from 1:00 pm to 2:00 pm for lunch and to offer the prayer. Time i s sufficient but in such a large group like tlas Group, there will be a mosque inside the factory. 55. lthough HL gives leadership strategies in the market a s 5s but there is need to improve dealers perception, towards customer, need is to educate dealer towards accordingly and adopt some type of motivation tools to boost up his morale and loyalty level to company. In this situation dealership given criteria must be so strict to qualify to generate good dealer network whic h are the back bone of HL which or sales pillars 56. s there is not a beaurocr atic culture in HL management is flexible then one drawback is cross rides one cross his immediate boss and report of upper level boss which create disturbance so in this management style feedback should be Page 81 of 83

vertical but communication in HL should be horizontal and one should be answera ble to his superior only 57. In HL environment use of computer is pre requisite but we must try maximizing to develop paperless environment with in an organiza tion and the people link to HL like vendors, or dealers to generate computer ge nerated reports. 58. HL is a leader in motor bike industry in Pakistan but it s hould not be proud enough but to be used on the continuous improvement theory in all its p policies 59. System, procedure even it should about after period modi fication to make them stylish and according to the trends of the market. 60. HL must create economies of scale in order to develop good quality and standardize d products and to need is to enhance its production level as per enhance demand 61. On plant there is need to make HL environment more attractive and landscapi ng is to be made to make it dream organization 62. In HL there should be separa te research and development department R and D for the continuous improvement in all aspects of the business of HL 63. Employee rotation from one department to the other department for handling the multiple tasks and to train them for emer ging situations 64. Technological upgrading within. Short span of time so that p lant must to be a strategic advantage or competitive edge not only in Pakistan b ut in sia 65. Instead of all HL is performing its best in Pakistan. HL under pin the economic system and provide it with the required strength and vigor. HL has shown strong commitment and response, great confidence in Pakistan. The ope rations of the bank are carried on latest computers network, which has increased the efficiency of the HL manifold. On the whole the services pr provided by th e HL are fantastic as I have worked in HL it seems that the customers fantasti c, d are happy from the services provided by the HL and they are satisfied. The re is need for reduction in expenditure for the maximizing of profit. The saving s should be invested in the growth of the HL. lthough HL is performing well i t should performing invest in other to become the leader in Pakistan economy. Page 82 of 83

REFRENCES P M Pakistan utomotive Manufacturing ssociation (official website) Research Paper: US id gency & Ministry of Finance

Hand ook: Human Resource Department at HL Printed Material: roachers & Literature at Page 83 of 83

HL