Contents

Brief overview of PIA

Recruitment and selection in PIA

Eligibility Criteria
Selection Procedure
Recommendation and conclusion

Training and Development in PIA

Functions
History of PIA Training Centre
Courses offered at training
Conclusion
Recommendation

Performance Management System of PIA

Performance in view of PIA
Performance Measures and Standards
Recommendation
Compensation in PIA
Conclusion
Recommendation
 Brief Overview Of PIA

Pakistan International Airlines Corporation, more commonly known as

Pakistan International Airlines or PIA, is the flag carrier airline of Pakistan,
based in Karachi. It is the 31st largest airline in Asia, operating scheduled services
to 35 destinations throughout Asia, the Middle East, Europe and North America, as
well as a domestic network linking 23 destinations. Its main bases are Jinnah
International Airport, Karachi, the Allama Iqbal International Airport, Lahore and
the Benazir Bhutto International Airport, Islamabad/Rawalpindi. The airline's
secondary bases include Peshawar International Airport, Faisalabad International
Airport, Quetta International Airport and Multan International Airport, from which
it connects the metropolitan cities with the main bases, the Middle East and the Far
East. The airline is owned by the Government of Pakistan (87%) and other
shareholders (13%). It employed 18,043 people as of May 2008.

Mission Statement

“As a symbol of national pride, we aspire to be a choice airline. Operating

profitability on modern commercial concepts and capable of competing with the
best in the International as well as the domestic market”
PIA’s Vision
“To be fiercely competitive, consistently exceeding customer expectations and be
the choice employer that embraces modern technology in all spheres of its
activities.

Privatization in PIA
PIA is owned by the government of Pakistan. In the late 1990s, the Government of
Pakistan considered selling the airline to the private sector due to the persistent
losses suffered by the airline. The Government announced the privatisation plans
but they were never implemented. Several steps towards outsourcing of non-core
business have been initiated.

Financial Performance
During the first quarter of 2007, the airline achieved a 5% growth in overall
revenue mainly due to increase in passenger traffic. The revenue growth was
lowered by a 10% reduction in cargo revenue. The EU ban on PIA in March 2007
reduced the revenue growth because only the Boeing 777 was allowed to fly to
Europe. Many of the European routes were put on hold until the airplanes were
repaired and brought up to EU standards. The impact of the 2006 salary rise,
increased cost of leased airplanes, and higher maintenance cost of the PIA fleet
increased the overall operating expenses by 19%.

Marketing and Sponsorship

 Pakistan International Airlines (PIA) supports a first-class cricket team that
plays in the ABN AMRO Patron's Trophy in Pakistan.
 PIA is also sponsoring the Pakistani team for the A1 Grand Prix.
 PIA also promotes the Shandur Polo Gala, that takes place every year in the
Chitral and Gilgit regions of northern Pakistan during the summer period.
 PIA is one of the official sponsors of the "Destination Pakistan 2007"
festivals.
  PIA also has its own Boy Scouts Association (PIA-BSA) working in
partnership with Pakistan Boy Scouts Association. After the earthquake,
PIA-BSA was working in partnership with other charity organisations to
provide relief help.
 PIA Planetariums located in Karachi and Lahore are owned by PIA, which
enable the public to see static aircraft as well as astronomy shows.
 PIA Horticulture, set up in 1996, provides flowers for display in PIA's
offices and for a range of events, winning several awards and accolades at
flower exhibitions across the country.
 PIA also supports non-profit organizations within Pakistan such as; Al-Shifa
Trust, Zindagi Trust, The Citizens Foundation and Sindh Institute of
Urology and Transplantation (SIUT).

Achievement and Recognition

 First airline from an Asian country to fly the Super Constellation.
 First Asian airline to operate a jet aircraft.
 First Asian airline to be granted maintenance approval by the US Federal
Aviation Administration (FAA) and the Air Registration Board, predecessor
of the British Civil Aviation Authority (CAA).
 First non-communist airline to fly to the People's Republic of China, and
operate a service between Asia and Europe via Moscow.
 First airline in Asia to induct the new technology Boeing 737-300 aircraft.
 First airline in the world to induct the Boeing 777-200LR, the world's
longest range commercial airliner.
 First airline in the world to take delivery of the Boeing 777-200LR
Worldliner (Longer Range Variant).
 Pakistan International Airlines Flight Services Department was awarded the
ISO 9001:2000 certification award during May 2006.
 First airline in Pakistan to operate a flight with an all female crew at
command and in the cabin.
 First airline in the world to operate the Boeing 777-200ER, 777-200LR and
777-300ER altogether - all the three variants available on the market.
 PIA Flight Kitchens in Karachi were awarded the HACCP Certification.
RECRUITMENT AND SELECTION
PROCEDURES
Recruitment and selection in PIA
Applications are invited on the prescribed Form available (free of cost) in PIA
Recruitment & Placement Office at Karachi and in PIA Offices at other stations
and also on PIA website. www.piac.com.pk. Vacancies are announced on all the
local news paper and the PIA official website.

Eligibility Criteria

Qualification
The qualification that is compulsory for applying in PIA is started from
intermediate degree and end up at to graduate degree and this very from job to job.
As one of the employees Amir told us in his interview. “PIA have dropped the
required level of education from a graduate degree to an intermediate degree”

Age Requirement
Requirement for the age is also very from post to post and its most probably
depend upon the experience required for a specific job. But generally the age
requirement for PIA is ranging from 19 to 24. “The age barrier has also shifted
upwards, meaning that a candidate must be a minimum of 19 years old and a
maximum of 24,”

Physical Requirement
Physical requirement for the candidate of PIA is also differ from gender to gender.
The minimum required height is 5 feet, 6 inches for men and 5 feet, 2 inches for
women, with proportionate weight.
SELECTION PROCEDURE

Candidates want to join PIA are go through a strict selection procedure before
being allowed to become the part of the PIA. Normally three types of the tests are
conducted by PIA for selecting a candidate. Following are the tests that are
conducted

1-Physical Test
Physical test is considered the first selection test in which the interviewer
determines that either candidate is full filling the physical requirement for the job
or not. “Their skin quality, height and weight are noted in the first interview
session,”

2-Grooming Test
If candidate selected in the first interview, the hopefuls take a grooming test. Here,
men and women present themselves in a manner, both physical and behavioral,
befitting the job while women’s make-up skills are also checked.

3-General Test
Once the grooming test is cleared, the candidates’ general knowledge is tested in
written and oral tests. These tests are some times based on brainstorming. Now
days this selection tests are administered by NTS.

The selected candidates attend an intensive three to four week training course
which is organized by the airline since there are currently no institutes in Pakistan
offering training courses for flight attendants. During this period, the selected
candidates are trained to handle emergency situations such as evacuation and
hijacking. They are also given basic training in first aid and are taught to deal with
problematic passen.
Recommendation and Conclusion
 Employment opportunities would be on non-discrimination bases. Means
hiring decisions must be made without regard to race, gender, marital status,
religion, age, national origin, disability, or other prohibited factor.

 Encourage all qualified candidates to apply for employment but select only
those who fulfill the requirements of the given job; but the selection should
be honest.

 Organization should not have inflexible quota system at the expense of

quality.

 Diversified the staff for the betterment of an organization.

 Qualification or criteria given consideration in the hiring process may

include education, training, experience, skills, aptitudes, and general ability,
as well as qualities such as motivation, ability to work with others, etc.

 Do have temporary hires, i.e., when the position is for a term of twelve
months or less with no expectation of the possibility of renewal.

 Use the rank and regular or non-regular title that is most likely e.g., if you
think you will hire an assistant professor on the professional practice track
but want to leave open the possibility that you might find someone perfect
for tenure track, enter the job code for professional practice assistant
professor, as it better identifies the position you are likely.

 Committee that is composed should have reasonable representative of hiring

unit. In most instances the Committee should have three to seven members.
Membership may include faculty, staff, and students from any department,
as well as alumni or other outside constituents when desirable. Optimally,
the Committee will include persons of both genders and where practicable
minority group members as set forth. All members of the Committee must
be provided the opportunity to participate fully in the search and screening
activities.

 Advertising of a position is generally required in order to make sure that

access to information about the vacancy is widely disseminated. Ads which
 merely refer readers to a Web site or ask the reader to telephone for a full
job description should not be used. Before a position is advertised or re-
advertised, the ad and/or job announcement must be approved by the
authorities.

 Minimum qualification must be clearly stated. Preferred or desired

qualification beyond those minimally acceptable may also be specified.
TRAINING & DEVELOPMENT IN PIA
Training and Development in PIA
PIA has a leading Airline Training Institution. It is the mother organization to
develop the career in Airline Industry. PIA offers Airline Training in all areas of
the Airline Industry. PIA has one of the most advanced Airline training
infrastructures approved by local and international regulatory authorities such as
CAA, ICAO and IATA. The PIA training center’s courses are based on unique
standards-based curricular designed to impact knowledge and best practices in all
over air line industry. From pilot to air traffic control personnel, the PIA training
centre has been instrumental in providing training to professional from over 30
airlines and associated global agencies.

Functions
 To develop and conduct quality training as per the requirements of user
departments and regulatory authorities
 To maintain centralized training database of all PIA personnel for organizing
HR activity
 To maintain regular contact with vendors regarding new functionalities,
modifications and additions to update training programmes and train the
instructors
 To formulate criteria which will enable the training of PIA personnel to
achieve excellence in their respective fields/functions
 To conduct courses, workshops, seminars, workouts, conventions, and to
present papers so as to make PTC prominent in aviation training, particularly
in this region

History of PIA Training Centre

PIA Training Centre, Karachi-an institution of comprehensive instruction
dedicated towards imparting quality training in all the major areas associated with
civil air transport. The centre is housed in a three-storied spacious building,
essentially self-contained in facilities and centrally air-conditioned. It is situated
about 300 yards from the Corporate Head Office building of PIA.
The prestige and esteem that the Training Centre enjoys has been a result of
tireless efforts expended, since the very inception of PIA in 1956, in making the
programs of study worthy of its name. Training has been offered for PIA
employees as well as for other airlines' staff intending to work, or already working
as members of the cockpit and flight service crew, as passenger service and
marketing staff, and as mechanics and engineers, etc. It was in 1960 that all
training was amalgamated under one roof at the Hotel Midway House, Karachi.
The Centre was moved to its present premises in October 1975.

Specialist instructors are assigned at the Centre for imparting rigorous training to
those who fly, and to those who service and maintain various types of aircraft (B-
747-200, A-310, A-300, B-737, F-27, Twin Otter, B-777). The training aids and
equipment used are the latest. The methods of knowledge and skill transfer,
adopted at the PIA Training Centre, are varied all pragmatic and useful. Classroom
lectures are augmented by group discussion, observations, experiments,
simulations, case studies, etc. Study tours to a number of PIA facilities are
regularly conducted and seminars on topics of general interest are frequently
convened.

Training facilities available within the airline also include flight simulators which
are used in the Transition and recurrent Training of pilots and other operational
crew. The equipment here includes: a cabin service procedures trainer, A310 Flight
Simulator, 747-200 Flight Simulator and B743 FFS with RB211 Engines also A-
310 Video & Audio Computer Based Instructions (VACBI ) Systems. These are
largely supplemented with apprentice workshops and laboratories for new entrants.

During the past, for many years the PIA Training Centre has also been
instrumental in rendering training to a large number of pilots, engineers, flight
stewards/stewardesses, traffic and sales personnel from over 30 airlines and
associated agencies worldwide, mostly from Asian and African countries.
Courses offered at training
PIA offers the highest standard of aviation training at very economical terms and
even the stay in Karachi is in-expensive. The courses offered to the trainee are
depending on the need and the requirement of the employees. Broadly speaking
there are five types of training available for the employees .

1-Customer Service
This type of training is provided to the employees who are directly dealing with the
customers like air hostess, customer service staff, marketing staff etc. training is
compulsory for the newly joined employees as well as need based employees.
Following training comes under the umbrella of the customer services.
 Flight Service
 Marketing
 Passenger Service

2-Engineering & Maintenance

In engineering & Maintenance shed, following types of training exist. Such
training is provided in the technical school of PIA by the engineers. Latest
equipment and procedure are being used to train the employees.
 Apprentice
 Aerospace
 Avionics

3-Flight Operations
Such training is provided to the pilots in virtual environment so that risk may be
reduced while making real time operations.

4-Information Technology (CBT)

PIA provides training to their employees so that they can run properly the
information system based on oracle and SAP.
5-Management
Management staff plays a key role in PIA. Stress Management, Team work,
leadership, skill building and other such traits which are necessary for a good
manager, PIA arrange seminars and workshops to train their staff.

Conclusion
Theoretically speaking, PIA provides one of the best platforms for training and
development but in reality things are little bit contradicting. As far as technical
training is considered since the start of PIA there are four major incidents which
are due to the technical mistakes by the employees. In the same way if we talk
about the interpersonal skills there are a lot of annoyed customers due to the
unsatisfactory services of customer services representatives. Same there are late
flights, cargo problems, which are commonly held to the mistake of the staff. But
as I have told earlier in general all the things are well written and documented.

Other things which I come to know that employees at management level don’t take
the training serious just took it as a formality and pay little interest towards training
program.

Recommendation
Orientation of the new employee is very much necessary in this session
management should tell him about the background of the organization and about
the future goals. First of all PIA should introduce training and development
programmes consist of five steps:

Need Analysis

Instructional Design

Validation

Implementation

Evaluation
It should focus more on technical training. Technology can be one of the
competitive edges for PIA. Just introduction of Boeing 07 are not enough,
personnel should also align to achieve the strategic goals.

Emphasis on the customer care department should be made. It is the department

which can create the good or bad image of that particular company. Apparently in
PIA case it looks like that the customer representatives are not train enough that’s
lead to the annoyed customers. Individual training program should introduce
beside this 360 feed back will also work well for the good name of PIA.

Management should make realize to the employees that the training programs are
for their betterment as well as for the company beside this a proper feedback
should be there after training.

Training should not take as a formality; it should be on need based by proper

evaluation of the employees.

There should convene an achievement test in which management can analyze that
the capability of the employee that how much training effective for employee.
PERFORMANCE MANAGEMENT
SYSTEM OF PIA
Performance Management System of PIA
After conducting web-assisted interview of HR manager regarding the evaluation
of employee’s performance, how they measure, how they set standards and when
they are evaluated. We were guided about PIA management. According to them,
they responded that preliminary their was no proper system regarding employee’s
evaluation and performance. But now we are improving and changing our strategy
and focusing on employees’ performance and their task respectively. The
effectiveness of any appraisal system depends on the cooperation and ability of the
immediate supervisor. Performance appraisal is an ongoing process of
communication between the supervisor, who is trained and assisted by human
resources staff, and the employee. It’s too much difficult to measure the employee
actual performance. Compare the performance of the employee being appraised
with the performance of all individuals who have performed the same job, keeping
in mind the requirements of the job. We assess employee’s performance by seeking
time, situation and behavior of employee by performing their task: like Graphs
Rating scale and Paired comparison methods. We do not focus only one method
because one method can’t be so appropriate for evaluation. When an employee is
performing well, we do appreciate him/her to motivate and to improve their
performance.

Following are few simple guidelines that will help facilitate constructive
discussions during the actual appraisal meeting.

1. Put the employee at ease. Begin the meeting with positive general friendly
conversation. Describe the purpose of the meeting.
2. Focus the meeting and discussions on objective job-related behaviors.
3. Actively listen to the employee’s feelings regarding his/her performance.
4. Do not argue with the employee.
5. Ask open-ended questions to stimulate discussion.
6. Close the session on a positive note if at all possible

During the evaluation every organization faces some problems that effect
employee’s performance. Some of them confer with you are:
1. The Halo Effect
Allowing one highly favorable (or unfavorable) employee behavior or
characteristic to affect judgment about the entire appraisal ignores other employee
strengths and weaknesses.

2. Not Knowing Employees

Unfortunately, many supervisors don't really know their employees or the quality
of their work. Such evaluations aren't credible.

3. Overemphasis on Isolated Events

A particularly recent or significant event may skew overall judgment of an
employee. Take informal notes about employees (both good and bad things)
throughout the year to ensure your evaluation is based on the entire appraisal
period - not just what happened last week.

4. Appraisal of Potential Worth

When managing a new or inexperienced employee make sure you rate her on
actual job performance, not on what she might become. Evaluate the employee
based on current results and action. You can use comments to address her
potential.

5. Evaluating Attitude
While we all are forced to deal with employees' attitudes (whatever that means!),
attitudes are basically impossible to evaluate and even harder to change. Focus on
results and objective, observable actions. They're easier to complete and much
more readily justified.

6. Ignoring Employee Feedback

Asking employees for input only to ignore their comments can be very damaging.
It makes evaluation meetings much less effective, and communicates to employees
that while their ideas may be asked for they're not listened to or acted upon.
Performance in view of PIA
Performance Management should be an ongoing activity consisting of regular,
timely, productive feedback and active coaching.

Performance Review is an annual process that formally documents performance

and identifies ways to help employees continue to contribute to achieving PIA’s
mission and to provide staff with personal and professional growth opportunities.

There are essentially two components to this program:

 Look Back
reviewing the past year, discussing how the staff member performed and giving
constructive feedback .

 Look Ahead
Identifying specific ways in which the staff member could improve
performance, build skills and competencies, and/or take on additional
responsibilities and setting goals and objectives for the coming year.

Setting up a good performance management system doesn't happen overnight or by

calamity. You need to consider its design and carefully plan how it will work
before managers begin using it to evaluate employees.

A performance management system should provide employees with these four

basic benefits:

1. A clear understanding of job expectations

2. Regular feedback about performance
3. Advice and steps for improving performance
4. Rewards for good performa.
Updated Job Descriptions
Job descriptions should clearly describe the employee's current duties and
performance expectations. Position descriptions should be specific, clearly
defining the job function, required skills, deadlines and goals, and should delineate
expectations for the employee's relations with peers and customers. Keep job
descriptions current, especially during times of organizational change. Rapid
growth and downsizing inevitably add new responsibilities and shift employees'
workloads.

Performance Measures and Standards

Once you have job descriptions in place, you need to establish performance
standards that describe what constitutes below-average, average, and above-
average performance. Start by thinking about the best- and worst-case scenarios
until you reach realistic standards for measuring performance.

Next, determine how you're going to measure the expectations outlined in the job
description. This requires both objective and subjective methods of assessment. In
some situations it's easy to gauge performance by looking at the numbers: for
example, how many new accounts an employee brought in or how many products
an employee assembled. Quantifying an employee's coping skills, customer service
skills or attitude is much more difficult. Some managers also have biases or poor
evaluation skills. Establish clear guidelines and measures that eliminate potential
bias and prevent evaluators from subjectively determining what constitutes
excellent and unacceptable behavior.

Evaluator Training
Research shows that managers with poor communication or interpersonal skills
are often the downfall of a company's otherwise sound performance management
program. All managers need training on how to communicate and how to conduct
fair, nonjudgmental and consistent appraisals. An effective performance
management system will administer training to managers before they conduct their
first reviews.
Guidelines for Improvement
Institute basic policies to cope with employee weaknesses and poor performance.
Decide if you'll provide training or mentoring for employees exhibiting subpar
performance. Set guidelines that outline how long it should it take an employee to
improve and what steps will be taken if the employee fails to show improvement.

Employee Input
Seek and evaluate staff suggestions for your performance management program.
Incorporate employee input into your program or system as needed.

Recommendation
Appraising employee performance is an important component to the human
resource management function. The performance appraisal is a formal meeting
between a manager and employee. Its purpose is to improve the employee’s
performance by discussing and documenting these three areas:

• Recent performance (that which has occurred since the last appraisal)
• Improvement objectives (to target future performance)
• Development objectives (also to target future performance)

Recent Purpose
Using performance standards to appraise recent performance gives consistency to
the entire management process. It works like this:

 You and your employee establish the standards before measuring.

 You measure their performance according to the standards.
 Based on what you find, you praise or correct (coach) your employee by
comparing their behaviors to the standards.
 You summarize their work for the year by rating their recent performance
according to the performance standards.
Improvement Purpose
Identifying improvement objectives starts when you list several areas that need
improvement. From this list, you and your employee agree on the top one to three
priorities. Then together you write:

• Each objective.

• Then list specific actions the employee will take to meet each objective.

• Then list a deadline for each action.

Development objectives
A development objective is created in the same way as an improvement objective.
The development objective is designed to help the employee cultivate skills
beyond those required to meet the performance standards. Its purpose is to develop
the employee’s career path and prepare the person for promotion. To identify a
development objective:

• Make a list of several areas the employee can cultivate.

• Then list specific actions the employee will take to reach each objective.
• Then list a deadline for each action.

There are some useful tips if followed in the right manner, will be fruitful to every
organization. It can be said that it is only performance appraisal which can help an
organization to design better strategies and so train and motivate the employees to
effectively work towards it.

 Communicate the performance appraisal.

 Conduct meetings before the performance appraisal.
 Take feedback after the completion of performance appraisal process.
 Conduct performance appraisal from the perspective of training employees.
 Performance appraisal should be a measurement of motivation.
360 Degree Feedback

360 degree feedback, also known as 'multi-rater feedback', is the most

comprehensive appraisal where the feedback about the employees’ performance
comes from all the sources that come in contact with the employee on his job.

360 degree respondents for an employee can be his/her peers, managers (i.e.
superior), subordinates, team members, customers, suppliers/ vendors - anyone
who comes into contact with the employee and can provide valuable insights and
information or feedback regarding the “on-the-job” performance of the employee.

Self appraisal gives a chance to the employee to look at his/her strengths and
weaknesses, his achievements, and judge his own performance. Superior’s
appraisal forms the traditional part of the 360 degree appraisal where the
employees’ responsibilities and actual performance is rated by the superior.

Subordinates appraisal gives a chance to judge the employee on the parameters like
communication and motivating abilities, superior’s ability to delegate the work,
leadership qualities etc. Also known as internal customers, the correct feedback
given by peers can help to find employees’ abilities to work in a team, co-operation
and sensitivity towards others.

Self assessment is an indispensable part of 360 degree appraisals and therefore 360
degree Performance appraisal have high employee involvement and also have the
strongest impact on behavior and performance. It provides a "360-degree review"
of the employees’ performance and is considered to be one of the most credible
performance appraisal methods.

360 degree appraisal is also a powerful developmental tool because when

conducted at regular intervals (say yearly) it helps to keep a track of the changes
others’ perceptions about the employees. A 360 degree appraisal is generally found
more suitable for the managers as it helps to assess their leadership and managing
styles. This technique is being effectively used across the globe for performance
appraisals. Some of the organizations following it are Wipro, Infosys, and National
Bank of Pakistan etc.

If PIA will use the modern techniques of the appraising the employees they will
get maximum output of the employees. And PIA can reward its employees very
well.
COMPENSATION IN PIA
Compensation in PIA
PIA believes that they can use compensation as a key tool to recruit and train
employees, increase and maintain morale/satisfaction, reward and encourage peak
performances, achieve external and internal equity, reduce turnover, and modify
practices of unions.

According to the Interview conducted, PIA employee believes that compensation

and retention of employees is a common goal shared by everyone. Morale and job
satisfaction are affected by compensation. In an attempt to save money, employers
may opt to freeze salaries or salary levels at the expense of satisfaction and morale.
Conversely, an employer wishing to reduce employee turnover may seek to
increase salaries and salary levels. He also added that compensation may also be
used as a reward for exceptional job performance. Examples of such plans by PIA
includes: bonuses, commissions, stock, and profit sharing, gain sharing.

We do have a clear picture of the compensation components that our PIA

organization has discussed in many meetings yet we have to consider their full
implementations with time. These include
 Job description
 Job analysis
 Job evaluations
 Pay structures
 Salary survey

A critical component of both compensation and selection systems, job descriptions

define in writing the responsibilities, requirements, functions, duties, location,
environment, conditions, and other aspects of jobs. Descriptions may be developed
for jobs individually or for entire job families. Job analysis techniques include the
use of interviews, questionnaires, and observation. A system for comparing jobs
for the purpose of determining appropriate compensation levels for individual jobs
or job elements. There are four main techniques: Ranking, Classification, Factor
Comparison, and Point Method. Useful for standardizing compensation practices.
Most pay structures include several grades with each grade containing a minimum
salary/wage and either step increments or grade range. Step increments are
common with union positions where the pay for each job is pre-determined
through collective bargaining. Collections of salary and market data. May include
average salaries, inflation indicators, cost of living indicators, salary budget
averages. Companies may purchase results of surveys conducted by survey
vendors or may conduct their own salary surveys. When purchasing the results of
salary surveys conducted by other vendors, note that surveys may be conducted
within a specific industry or across industries as well as within one geographical
region or across different geographical regions. Know which industry or
geographic location the salary results pertain to before comparing the results to
your company.

As said by one of the employee;

“Principles of Compensation Discussed Compensation will be perceived as

fair if it is comprised of a system of components developed to maintain internal
and external equity.

After questioning about the types of compensations the PIA employees are getting,
one person replied that we do know many types of compensation aspects but those
we receive include:

 Base Pay
 Commissions
 Overtime Pay
 Bonuses, Profit Sharing, Merit Pay
 Stock Options
 Travel/Meal/Housing Allowance
 Benefits including: dental, insurance, medical, vacation, leaves, retirement,
taxes...

PIA follows a proper compensation plan for its employees by having a proper
outline of the budget, target and the objectives to be met. It than design the
compensation program including: whether the position will be permanent or
temporary, who will oversea the program once it is established, and the cost of
consultant reviews. The compensation philosophy is also considered essential part
of PIA compensation programs. It defines the pay structures for all level of
employees and whether to set pays above or below market level. PIA holds a
proper job analysis of all employee levels; and evaluates jobs on the basis of above
mentioned results. Jobs are ranked and the grades are determined; resulting in a
appropriate salary structures and compensation objectives. The program is then
monitored through feedback from managers. If their exist any flaw, it gets revised
by the good authorities of PIA.

CHAIRMAN PIA’S ADDRESS ON VITAL POLICY ISSUES OF BUSINESS

PLAN, INDUCTIONS, SALARIES AND REVENUE MANAGEMENT
SYSTEM

Karachi, 20th March, 2010: Chairman PIA Mr. Tariq Kirmani has addressed
following Annual Message to all PIAC employees as regular feature of
established HRM practices and team-based output in public interest. The text is
listed below for information of our values readers since it touches vital policy
issues:

“I feel privileged to lead an organization of such a hard working and variously

skilled human resources that you are. With this strength that you provide PIA, I
can say with a great deal of confidence that PIA has a bright future that will
certainly be evident in reality in a very short span of time, provided we remain
focused. Please consider, had it not been for the rise in fuel prices, the highest ever
in history, and had the fuel prices remained at 2007 level, your airline would have
made a massive Rs. 4.8 billion profit in the last two years. We are indeed well on
our way, as slowly the system and processes that we are setting up with your help,
begin to bear fruit. It is well worth recalling some of these initiatives that are now
in place and focus on our vision and our 3C’s policy of convenience, comfort and
competitiveness, with a smile!

I would like to take this opportunity to brief you on the numerous things and events
that have taken place since my last communication with you, so that you are aware
of PIA’s point of view on all matters of concern to PIA.

The first most important thing that has happened is that the human and material
resources of PIA have both been enhanced and restructured organizationally.
Finally, we have a fleet plan that is the basis of any airlines business plan and
determines the human and material resources that will be required to implement it.
The Board of PIA has approved the 2010 Business Plan and the five year (2010-
2014) Strategic Plan also stands approved. Meanwhile, the Government has
recently approved PIA’s proposed comprehensive Financial and Operational
Restructuring Plan, which now ensures that PIA is and will be a viable and going
concern. You will be glad to know that the Board of PIA has also approved PIA’s
proposal to attain and maintain the average age of the fleet to be 10 years. This
translates into year round activity of the Corporate Planning Department to ensure
that it happens and automatically heralds the beginning of a new airline with a
young fleet.

The Human Resource Department is now fully functional and policies and
procedures are now in place. New recruitments with clearly defined levels of skill
and competence in all areas are being made. New inductions both on the
management side, and specifically the operational side of cockpit crew, cabin crew
and ground engineers, have now taken place and will continue to be inducted at
regular intervals so that the shortages we experienced in these areas are fully taken
care of and do not occur again. Our policy is to promote people from within the
airline at all levels.

In all this I assure you of a clean working environment, better facilities such as the
upgraded offices and cafeterias, better health care, and safety, both yours and our
passengers. Safety has been, is, and shall continue to be PIA’s forte. In all of our
sixty years of existence we have an enviable safety record, certified nationally and
internationally like in CRM, EASA JAR 145, IOSA, ISO and other certifications.
We will only fly safe and airworthy aircraft.

Outsourcing and joint venture agreements with Swissport and Singapore Airport
Terminal Services (SATS), have already been signed and joint venture formation is
in progress.. Lufthansa Tecknik have been contracted to help us in acquiring
Enterprise Resource Planning (ERP), system. We are partnering ourselves with the
best of the breed in the world, in order to enhance PIA’s capabilities and skills.

You are all well aware of the unfair, unjust and discriminatory treatment meted out
to PIA by the European Union. You will also recall that PIA had already, on its
own initiative and, as early as February 2009 i.e. much before the EU restrictions
began to be applied, started refurbishing our ageing fleet in the context of
appearance, both interior and exterior. We had agreed with the EU to further
comply with their requirements in the form of an action plan mutually agreed upon
by the PIA-CAA and EU, which also defined a clear timeline. We exchanged
numerous emails and faxes along with three meetings with them from October last
year to February, 2009. Throughout this period they never even once hinted to us
that our progress had not been satisfactory nor did they give us anything in writing
about our discrepancies, if any. The restrictions, therefore, came as a complete
surprise to us. When I visited the EU Air Transport office on March 02, 2009 the
decision to restrict PIA had already been taken.

Thanks to the Revenue Management System, we got an opportunity to critically

review and rationalize our network structure. We were able to reevaluate our
unprofitable routes and create hubs for the maximum convenience of our
passengers to overcome this EU limitation. Starting March 25, 2009, we will be
back to normal again with only minor adjustments of frequencies into UK, Europe
and North America. Hidden in all this was also a silver lining, for whereas this
restriction has a negative impact on PIA revenues of 1%, the cost to PIA will go
down almost 6%.

Unless we acknowledge our limitations and weaknesses in each area we will not be
able to move forward towards progress. We are a team and we are on the same
side, the side of PIA. Let us give it our commitment, our hundred percent and
thereafter, reap the harvest of benefits that will most certainly accrue to all.”

Conclusion
As mentioned by the Chairmen of PIA, Mr. Tariq Kirmani, unless we acknowledge
our limitations and weaknesses in each area we will not be able to move forward
towards progress. We are a team and we are on the same side, the side of PIA. Let
us give it our commitment, our hundred percent and thereafter, reap the harvest of
benefits that will most certainly accrue to all. In all of PIA’s sixty years of
existence there have been an enviable safety record, certified nationally and
internationally like in CRM, EASA JAR 145, IOSA, ISO and other certifications.
We will only fly safe and airworthy aircraft. Hence, compensation rather the HR
department is running to its best. The room for improvements is always welcomed
by PIA.

Recommendation

Not all the above mentioned details about compensation are being properly
implemented due to many factors that this Public limited company is facing.
Secondly, there is no proper check and balance for the proper implementation of
the HR practices and policies that need resources as well as the human mind to
cater problems and lead the corporation to the road of success.