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Project on Compensation and Benefits Ufone

Submitted To: Respected Mr.Habib Khan

Submitted By: Ghulam Akbar Rasham Naqvi Ali Nadeem

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Table Of Contents
Executive Summary 3 Company Introduction..

.3 Mission/Vision Statement..

...4 Structure of U-

fone 5 Geographic Divisions.

.....6 Departmental Divisions ..7 HR Department .7




System 9 Job Evaluation

System ..15 Performance Management

System..18 Employees Reaction to System. 21 Suggestions.. 22

EXECUTIVE SUMMARY This project has been undertaken in order to highlight the Human Resource Practices of Ufone. Its all about YOU its all about Ufone, a company very highly spoken of these days. A company paying more attention to its customers delights rather than the customers satisfaction.

Ufone is a company starting from scratch and has shown utmost performance in the last seven years. Ufone owes its success to its employees believing that providing employees with job satisfaction motivates them to work hard and provide better results.

COMPANY INTRODUCTION Ufone PTML is a wholly owned subsidiary of PTCL established to operate cellular telephony. The company commenced its operations, under the brand name of Ufone, from Islamabad on January 29, 2001.During the year, as a consequence of PTCLs privatization, 26% of its shares were acquired by Emirates Telecommunication Corporation (Etisalat). Being part of PTCL, the management of Ufone has also been handed over to Etisalat. During the year July 2005 to June 2006, Ufone continued on the path to success. The Company further expanded its coverage and has added new cities and highways. Ufone has network coverage in more than 3475 locations and across all major highways of the country. Ufone currently caters for International Roaming to more than 200 live operators across 121 countries and introduced International roaming facility for Prepaid subscribers in Saudi Arabia, United Kingdom, United Arab Emirates, Singapore, Portugal, Thailand, Cyprus, Bangladesh, Uzbekistan, Tunisia and Kuwait with lowest rates, featuring no security deposit and activation charges. GPRS Roaming facility is available with more than 100 Live Operators across 80 countries.

MISSION STATEMENT "To become the best cellular communication option available in the country for u".

VISION STATEMENT Ufone provides superior Service Quality to its customers. We believe in creating superior values for our customers and meeting their expectations, by listening to their queries and understanding their needs, constantly providing efficient customer service and optimized solution with multiple communication modes and well organized feedback. We Commit its all about you.


Structure (Chain of Command) C.E.O


V.P G.M Senior Manager Manager Assistant Manager Senior Executive Permanent Executive Outsourced Executive M.T

When a company wants to compete in innovation, it needs to maximize flexibility. Flexibility is maximized by aggregating work into larger, holistic pieces that are executed by teams of higher wages, high skilled workers. Giving the units their own support systems and decision-making authority to take advantage of local opportunities in regional or specialized product markets also enhances flexibility.

Keeping in view of all these factors the structure of Ufone is designed i.e. the overall Structure of the Ufone is Divisional (More flexible and innovative). Mainly Ufone has four regions and within those regions the structure is functional .The decision making authority is centralized at the top but within the regions it is decentralized i.e. regional heads have to inform top management before making any decision.

Services line of Ufone There are two basic products of Ufone Ufone Prepaid and Ufone Post pay. Both of these products are available at their franchise for public.

Geographical Divisions This is what Ufone looks from the organizational hierarchy point of view. There are eight different departments each headed by a Project Director. They report directly to the CEO. There are four BU (Business Unit) each Project Director is responsible for these eight divisions. BUs are divided geographically into three divisions: 1. 2. 3. 4. BU North (Peshawar to Jhelum) Islamabad (Head Office) BU Central-1 (Gujranwala till Sialkot) BU Central-2 (Multan till Rahim Yar Khan) BUM South (Sindh and Baluchistan)


In order to give a jump-start to the company, a comprehensive initiation plan has been made along with aggressive customer acquisition, care and retention strategies. Ufone has the best integration of eight departments each project director: Engineering Administration Business Analysis Marketing & Sales Customer Care Human Resource Finance Information Technology

Provision of quality service to the customers is of utmost importance for the progress of any service-based company. At Ufone the management is mindful of the same and has been constantly endeavoring to enhance the existing facilities. Therefore operations at Ufone are all planned and carried out in such a way so as to maximize operational efficiency, customer satisfaction and employees motivation. Although it is the subsidiary of the Pakistan Telecom Company Limited (PTCL), Ufone carries out its operations autonomously under the license of Pakistan Telecom Mobiles Limited (PTML). The company head office is established in Islamabad (F-7 Markaz), which serves as the center for all its strategic activities.

HUMAN RESOURCE DEPARTMENT UFONE considers their employees to be the asset of the company, so in order to retain their employees following practices are followed in the company. HR PRACTICES Recruitment and selection Orientation Training and development Compensation and Benefits Performance Appraisal

1. Work Force HR at UFONE is divided into the following two major categories Permanent Employees (1500-2000 Approximately) Outsourced Employees (2000 Approximately)

2. Permanent employees HR Permanent employees are further divided into following two categories. Compensation & benefit Training and Development o HR Operations

COMPENSATION AND BENEFITS Ufone follow the performance base pay structure and pay for their performance and work output. Compensation The total returns which an employee gets against his or her work. It maybe: Employee Health Plans Employee Insurance Employee Leave Employee Retirement Income Security Act Executive Compensation Maternity & Paternity Benefits Pension & Retirement Plans Wages & Salaries 1. Workplace Programs Compensation strategies are usually market based and is linked with the performance with a greater emphasis on variable pay. Salary adjustment is based on the performance, market movement and internal/ external equity adjustment. Revision of compensation is based on total pay and monetization of benefits. 2. Salary Range:

Minimum scale starts from 15000 Maximum C.E.O (Not disclosed by the organization)

Individual Salary Fixation:


The Ufone seeks the market trend and try to compete with market for individual salary fixation but they also analyze their own financial positions and budgeting, it also varies from department to department.

Current Base Pay: (Job Based Structure and competitive)

The Ufone follows the job based structure, and compensate its employees for the work they have done, for their tasks and duties they performed, their work content, behavior and for their responsibilities. To develop this structure Ufone conducts some surveys, to compete with others in the same industry.
Work Analysis Evaluation & control Market trends Employee J.D Surveys Policy Lines Total Compensation: Example: 60% 30% 10% Basic Pay House Rent Utilities OPD Hospitalization Provident Fund Gratuity Bonuses Incentives 15-k 7.5-k 2.5-k 2 Gross salaries Employee siblings, Parents, Wife / Spouse and childrens 50% Employee, 50% Org If work for 10 Months 1.4% Of Gross salary Only Sales department depend upon their performance.


Assistant Manager Level: 1000 cc Car + 200 Liters petrol / Month Manager level: Car + Blackberry Senior Manager: Islamabad Club Membership + BMW Car + House + Foreign Tours Further Ufone has developed some grades for employees. AH A is the minimum grade and H is the maximum grade and they compensate their employees on the basis of their grades. Grade A 500 minutes + 500 Rs mobile usage. Same like this all other benefits. After every Two years Ufone give the amount of Rs 6000 to lower level employees if they want to purchase a new mobile and this limit increases as grade increases. At each stage the amount is different. Increments:

The increments are totally based on the performance of the employees and their seniority level. If the scale is 15000-20000 then the increment is the 20% of the base pay, but if any employee shows the performance then this may increase up to 35% to 50%.

Recognition of The work: On Jan 29 (anniversary of Ufone). Employees who is working in Ufone for seven years or more than seven years gets Cash Rewards, Trophy, badges and other things. Leave fair assistance 1 year 20 holidays 40 leaves 1 Gross salary 2LFAs

UFONE focuses on providing a large number of the compensation and benefits to its employees in a form of the following categories:

Minimum wage:

The minimum salary for Drivers is Rs.10,000 for Tea Boys it is Rs.9,000, for Administrative Staff like HR, Finance, Marketing, etc it is Rs.20000 and for engineering it is Rs.20000 to 25000. Medical Allowance:

1 gross salary per year is given to each employee; half is given in mid of the year and remaining half will be given at the end of the year.
Health Insurance:

Like all other cellular companies Ufone also provides health insurance policy to its employees.
Loan Insurance:

At Ufone loan insurance policy is also provided to their employees through banks.
Transport allowance:

Rs 1500 are given to female employees only, if they travel on local transport.
House Rent:

10% of the basic salary is given to each senior/ executive level employee.

All employees are entitle for the overtime more than 130 hours per month .For overtime UFONE have specific formula that apply on the employees gross salary, due to which every employee have different per hour overtime rate.
EOBI: EOBI is contributed as per the standard Children Education Facility: collaboration with different institutes Provident Fund:

All permanent confirmed employees are eligible for membership of Ufone Employee Provident Fund Scheme. An employee contributes 8.33% of month basic salary in a year and an equivalent amount is being contributed by the employer.

Leaves: 7 Casual and 10 sick leaves are given to each employee at all level. Travel Policy: Revised and categorized different levels such as the senior level, the middle level and the junior level staff. Expense Claim:

The expense Claims are the expenses which an employee make on the behalf of the company E.g. fuel used for business travel, overnight stays on a business tour etc, such claim are made while returning back to the office , after the whole process the HR pay them back the next month along with their salary.
Medical Claim: Different medical facilities are provided to employees at different level of hierarchy, so if any employees make use of this facility they can claim for the amounts to be return next the month while submitting the hospital receipt. Their medical clearness is done by the HR department. Mobile deduction Claim: Such an expense claims which are made if an employee has made long duration call for the official purpose and they have exceeded the limit given to them then they can make a claim by attacking a copy of mobile bill and if its valid then HR department approved it and pay the employee their claimed amount along with their monthly salary of the following month.

Job Evaluation Method The job evaluation method of Ufone is lined to appraisal system. Whenever the appraisal report of any employee is generated he is being paid according to his performance. The job is evaluated on the basis of appraisal reports. If any post is vacant those past performance on that post is evaluated and the market conditions are observed and then the job is evaluated. The value for the

job is concerned with the performance report. The value of any job can be increased if the employee on certain post has performed very well and his appraisal report is very outstanding then according to his performance value of job is increased and this process is carried out by the HR department of Ufone. Moreover, the job evaluation is linked with the merit. Any person who is employed on merit and is performing very well will be given salary on the basis of his performance and merit. The job evaluation method was not very much good in the past but now it is linked to appraisal system of Ufone. The present basic salary structure of Ufone is based on Job description (Tasks and duties performed). I. Job Analysis

Job analysis is systematic exploration of activities within a job. It is a technical procedure used to define the duties, responsibilities, and accountabilities of job. It is proved that job analysis is almost first activity of HR department to be done. Because on this, pay packages, compensations, job descriptions, job specifications, job evaluation etc are made. So at Ufone experts do job analysis. II. Job Analysis Process

Following steps should be taken by the Ufone. Step1: Obtain Documentary information such as procedure manuals and written instruction. Step 2: Ask about more general aspect such as the job purposes, the main activities. Step 3: Ask the jobholders about the job. Step 4: Observe the jobholders to see what they actually do. III. Information Collected in Job Analysis Work activities Worker-oriented activities Machines, tools, equipment, and work aids used Job-related tangibles and intangibles Work performance Job content Personal requirements for the job


Why Ufone conducts job analysis


The Ufone conducts the job analysis to get the right person for the right job at the right time. If the Ufone does not conduct the job analysis then there will be a huge chance of selecting the wrong person or to reject the right person who is suitable for the job. V. Knowing Who Does What? Major duties or activities required? Conditions under which the job is performed? Job analysis Methods

There are mostly following procedure of the Ufone about analysis of a job: Direct Observations Interviews VI. How Ufone formulate job description and specification

In Ufone most of the announcements for jobs are being done through newspapers having wide circulation in the country. Whenever Ufone offers any job it also describes the responsibilities and duties with in a job to be performed. The HR people after analyzing any job that has become vacant makes a job description defining clearly what the jobholder will do and how it will be done. On the whole job description defines characteristics of job, environmental conditions and responsibilities of the job. The HR people define the job in such a way that it clearly describes the job and guides new employees what to do etc. now they are moving towards E-Recruitment also to ensure best candidates apply for the jobs and professional people are employed in the Organization. VII. Job specification

Ufone also has well developed criteria for each job in term of the job specification. In all the area of the jobs the pre- requisite for the job are defined for example: Qualification required for a job Skill required for a job Experience required for a job VIII. Job Description

Human Resource Division analyzes each job and its required outcomes. Job analysis is done by analyzing the past experience and emerging trends.

Ufone holds documents about terms, duties responsibilities, and specifications about each job. In job description Ufone define the following: Duties of HR manager are to select, hire and train employees. Responsibilities are to update records and processing insuring claims Task is to complete the activities of job. .

PERFORMANCE MANAGEMENT SYSTEM 1. Objective of the Performance Management:


The basic objective for performance UFONE employees circles around the following: To look at Performance system as a means to an end Setting an individuals goal Aligning goals across the company Ensuring employees get coaching from managers Determining merit pay Identifying training and development needs Providing data for promotion decision Input from multiple source on worker performance 2. The Performance Appraisal Process: The Performance appraisal system used by UFONE for reviewing the performance status of its employee starts with identifying specific appraisal goals set by each Group for each cadre. After this a detail job analysis is done with looking in account the job expectation and then matching the actual performance with the desired performance. Afterward the performance is appraised according to the set standards and this appraisal is not done by the supervisor alone, their major focus is on taking into the account the employees perspective as well. Therefore whenever the appraisal is done employee is fully participative in the process. 3. Performance Appraisal Method Use by UFONE UFONE is using 180-Degree Performance Appraisal Method. Within this method, managers, peers, customers or colleagues are asked to complete questionnaire on the employee being assessed. In UFONE, performance of an employee is appraises twice a year. Once in June while other in December. In the questionnaire there are five sections and in each section there are five questions related to the performance of employee. 4. Rewards Related to Performance There is also a reward related to performance of the employees. For Customer Facilitation Agents there 50% pay is based on their performance which is assessing every moth by their managers. For other employees like in administration, engineering, finance, marketing, etc their performance is assessed after every six and they get increased Rs.5000 in their salary as a reward. In each case employee have to show consistent performance to win reward next time.




Compensation Responsibilities of Ufone HR Department Compensation Administration (designing and installing job evaluation program, pay structure, analyzing jobs and their dollar-worth, maintaining suitable records, wage and salary surveys of the labor market). Health and Safety (health programs, safety programs, Medical facility). Employee relations (wages, rates of pay, hours of work, conditions of employment, negotiation, contract interpretation and administration, grievance handling, allocation of overtime). Benefits and Services (insurance programs, Transportation facility, sick leave pay plans, loan funds, LFA salary, Yearly bonus programs along with special bonuses for achieving high targets).

Some suggestions for improvement While answering a question the manager of H.R expressed his thoughts that the employees who are hired by third party and working in organization on contractual basis, the manager answered we dont want them so we are not bound to compensate them equally in comparison with our permanent employees. In our point of view as we see the organization size figures that show there are more than 2500 employees are on contractual basis which are more than the 55% of the overall size of the organization. And all those employees are not much satisfied because of these criteria and they are a big part of the organization, they are stressed with their job because they are getting only salary not benefits or any other compensation tools against their work. This thing shows that there is a lack of motivational factor among contractual employees and cause increase in turnover rate. These things increase the cost of new hiring and training of new employees. We observed another important point with the prospective of Human Resource


practices that in organization the concept of relational return is not very satisfactory but this matter a lot in organizations like Ufone. We think the Ufone should have to focus on the contractual employees and needs to motivate them by compensating fairly, with communication and make them understand that what they are getting is fair. They have to provide them some necessary benefits, bonuses and incentives according to their J.D. Ufone should have to start some career development programs to attract and retain most valuable employees, once if the employee feels that they have some career growth in the organization they are motivated and loyal to the organization. HR Department must also forecast for long-term Human Resource needs. It is also found that no referral bonus was given to contractual employees who refer competent, skilled and knowledgeable candidate. The HR Department must convince the higher management to give such bonus which not only motivated the employees but the organization can in this way get competent, skilled and experienced worker which may participate in the success of the organization. Ufone HR Department must clearly communicate its promotion policy to all employees.