Title/Topic: HR POLICY REPORT
Organization visited: PSO
Submitted to: SIR KAMRAN MAQBOOL
Submitted by: JAVERIA GUL
Date: 25. JUNE. 2022
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TABLE OF CONTENTS
SR.
NO.
TOPICS
PG.
NO
1
ACKNOWLEDGEMENT
03
2
ABSRTRACT
04
3
INTRODUCTION
05-06
4
BACKGROUND
05
5
SCOPE OF STUDY
05
6
OBJECTIVES
06
7
DATA ANALYSIS
07-17
8
CONCLUSION/ RECOMMENDATIONS
18
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ACKNOWLEDGEMENT:
I WOULD LIKE TO EXPRESS MY SPECIAL THANKS OF GRATITUDE TO MY
TEACHER “MR. KAMRAN MAQBOOL”, WHO GAVE ME THE
OPPORTUNITY TO DO THIS CHALLENGING PROJECT.
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ABSTRACT:
This project discusses the HR practices of Pakistan State Oil. This project contains all the HR
practices of the company.
The data was collected through interview of Azra khalique (HR manager) at regional office of PSO
in Karachi. The web site of PSO is also used as source of data.
At PSO, they Strongly believe that Human Resource are the asset that should be appreciated
with the passage of time. Consequently, PSO considers the strong focus on training and
development of their employees a value added and worthwhile investment. Then by the
detailed study of the HR policies and practices used by the company some recommendations
are made and based on the analysis of company’s practices conclusions are drawn.
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1. INTRODUCTION:
1.1 BACKGROUND
Pakistan state oil is the largest oil marketing company of Pakistan and among the top 1000 largest
companies in Asia. Pakistan state oil was set up on December 29th, 1976, through the merger of
ESSO undertakings with Pakistan national oils limited (PNOL) and Premier Oil Company Limited
(POCL). PSO is currently the largest oil marketing company (OMC) in Pakistan and is engaged in
the storage, distribution and marketing of petroleum product, Petro-chemicals, LPG and CNG.
The company has the largest market share ie.40% market share in motor gasoline and 60%
market share in diesel oil. It operates largest retail network (350 outlets) in the country. PSO is
committed to begin the preeminent marketer of petroleum product and services to its customers
and achieving its goal while maintaining high level of efficiency and profitability.
PSO is well-managed company and is focused to meeting the energy requirements of Pakistan.
The company recently embarked upon an extensive program of restructuring, rationalization of
its network of retail outlets, improving its marketing image through a nationwide initiative to
refurbish and re brand key retail stations and further improving efficiencies by streamlining its
structure. It has adopted modern management practices and prepares its strategic business plans
regularly. It continuously monitors its performance vis-à-vis annual plans. At PSO, they strongly
believe that Human Resource are the asset that should be appreciated with the passage of time.
Consequently, PSO considers the strong focus on training and development of their employees a
value added and worthwhile investment.
1.2 SCOPE OF THE STUDY:
This project discusses HR practices of Pakistan State Oil. The group studied all the HR practices of
the company. Required data was collected from regional office of PSO Karachi.
BENEFIT OF THE STUDY:
In today’s fast and competitive business environment any company can’t grow without giving
importance to its HR strategies and practices. PSO is deeply conscious of the pivotal role that
human resources play in the success of an organization. As a matter of fact, human resource
development has been identified as an area of key importance. While strengthening the ranks of
its work force with quality professionals at various levels of management, the company also
undertakes several initiatives for improving productivity and efficiency at all levels of services.
Through computer training, various courses, sponsorships of staff for studies at professional
institutions and seminars, the company is providing its employees on going opportunities for
continuous self- improvement and learning. This study helps in recognizing the best way to train
develop and retain one of the key asset of any organization that is “human”.
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1.3 OBJECTIVES:
To identify and study the practical implication of HR policies:
1) HR planning (i.e. to forecast and foresee the future business and employee needs and plan for
them)
2) Recruitment and selection job descriptions, selection tools, background checks, offers
3) Compensation (i.e. methods, consistency, market)
4) Employee relations (i.e. labor agreements, performance management, disciplinary
procedures, and employee recognition)
5) Mandated benefits (i.e. social security, unemployment insurance, worker's compensation,
COBRA/HIPPA)
6) Optional group benefits (i.e. insurance, time off benefits, flexible benefits, retirement plans,
employee assistance programs, perks)
7) Payroll (i.e. internal vs. external options, compliance)
8) Recordkeeping (i.e. HRIS, personnel files, confidential records, other forms)
9) Training and development (i.e. new employee orientation, staff development, technical and
safety, leadership, tuition reimbursement, career planning)
10) Employee communications (i.e. handbook,
announcements, electronic communication)
newsletter,
recognition
programs,
11) Internal communications (i.e. policies and procedures, management development,
management reporting)
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2. DATA ANALYSIS:
ORGANIZATIONAL CULTURE
Organization culture is a system of shared meaning within an organization that Determines in large
degree how employees act.
IMPORTANCE OF CULTURE IN PSO
According to the opinion of the PSO’s sales officer PSO is a sales-oriented company. Strong culture
is a symbol of more profit more earning and sense of responsibility. It is also a monument of welldisciplined enterprises in which every organ of that organization is well concerned with the
ultimate objective of the organization. As it’s a fundamental truth that every individual from
worker to Top manager is aware of his rights privileges responsibilities and outcome of efforts
being invested.
SIX DIMENSIONS OF CULTURE
1. Innovation and risk taking
According to our survey what we have found is that employees are not much encouraged to be
innovative and take risks.
2. Attention to detail
According to our survey employees have given importance.
3. Outcome Orientation
The manager’s focuses on both results or outcomes and the techniques needed to achieve those
outcomes.
4. People Orientation
Management decisions do not take into consideration the effect of outcomes on people within
the organization. They have made their employees a central part of their culture.
5. Team orientation
They emphasize on team orientation i.e., work activities are organized around them.
6. Stability
PSO is maintaining the status in contrast to growth.
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HRM STRATEGY
WHAT IS HUMAN RESOURCE MANAGEMENT?
Human resource management is staffing an organization with competent, high performing
employees who can sustain their performance level over a long period of time.
IMPORTANCE OF HUMAN RESOURCE MANAGEMENT
HRM is an important strategic tool, and it can contribute to the development of a sustainable
competitive advantage. It is the most important intermediary body between the employee and
the organization that works to develop relations advantageous to both. All activities related to
non- management employees are handled by the industrial relations division and that of
Management employees are handled by the personnel division of the HRM.
HUMAN RESOURCE MANAGEMENT OF PSO
PSO believes that human resource is the most valuable resource for their organization so therefore
they have very employee friendly policies. The main theme of their human resource is as follows
•
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Consider human resource as the only resource which appreciates the passage of time.
Employee right person at the right position.
Align organization with all the contemporary business practices.
Make the HR more flexible and more responsive.
Handle human resource with the maximum care and fairness.
RECRUITMENT AT PSO
Before recruitment for any post PSO checks if there is any replacement or not. They always prefer
their current employees for important managerial jobs because they think that the current
employees know the company better as compared to someone else. Another reason for this
internal hiring is to build the morale of their employees as seeing the reward for their loyalty and
hard work. If there is no replacement PSO checks the approved strength of department. It always
takes fresh intake of candidates. The candidates are interviewed. PSO takes preview-based
interviews. The candidates are asked questions which are related to their CV and some other
regular structured questions.
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SELECTION
Selection is the process of screening job applicants to ensure that most appropriate candidates
are hired. In PSO they select an employee based on his qualifications. Different selection devices
are used to choose the best suitable candidate for the job.
SELECTION DEVICES
Number of selection devices is used to accept and reject applications. These are stated below:
CV:
CVs as all organizations requires a form on which the applicant fills in his name, address and
telephone number and a comprehensive personal history profile detailing the person’s activities,
skills, and accomplishments. Some relevant biographical data and facts that can be verified are
also required. Written Test:
When a candidate applies for a job at PSO he must give a written test. It is an intelligence, aptitude,
and ability test. First IBA used to conduct these tests for PSO.
INTERVIEW:
Interview is the most important and reliable method of determining the personal abilities of the
applicant by PSO. They get to know about the interpersonal skills of the candidate.
PHYSICAL EXAMINATION:
After an applicant has been selected after the interview, he is physically examined. For jobs with
certain requirements, the physical examination has some validity.
After the applicant is selected and the management of PSO is sure of their decision that this person
is suitable for the job, he must undergo a training process of one year.
ORIENTATION:
Orientation is the introduction of a new employee to the job and the organization. Every new
employee that has been hired in PSO is given an orientation to familiarize with the company’s
functions, policies, employees, and programs. The type of training would be an individual or group
basis depending upon the number of participants
PLACEMENT AT PSO
The competencies of the candidates are matched with the required standards. A trained panel
interviews the call backs. To understand the employee behavior more closely that how has reacted
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in some certain situations behavioral based and job-based interviews are taken. The selected
candidates are then given formal appointment letter. He is made to sign the joining agreement.
He is kept on probation period for 1 year after which he is given a permanent job. During this
probation period he is trained for the job.
PSO have outsourced the selections tests to IBA. IBA makes the test papers. It’s kind of an aptitude
test. It includes arithmetic, English, and general knowledge necessarily. These tests are checked
by IBA as well and the results are given to PSO. They then select the candidates.
These days government has frozen the external recruitment, so PSO is doing job rotation and job
enrichment for the posts. PSO is taking the advantage of this and is reengineering the HR
department. They have planned to do the job evaluation of every job in the upcoming time. The
top positions have already been evaluated.
DERECRUITMENT
De-recruitment is a technique for reducing the labor. According to PSO’s policies if the employee
has done something wrong then the company uses the option of firing as a mean of derecruitment. This seldom happens unless someone has broken the rules of the company.
Sometimes employees are also transferred.
PSO recently used another method of de-recruitment. They used the Golden handshake scheme
and voluntary separation schemes.
TRAINING AND DEVELOPMENT
Training and development increase the knowledge and skills of employees. It increases the quality
of work life. This progress train and prepare new workers to perform and achieve its goals. It can
increase the skill of decision making and problem solving. Organizations gain synergy effect
through training and development. Training and development make employees more cost
effective and task oriented.
TRAINING AND DEVELOPMENT AT PSO
Training and development are very important for PSO. Training and development programs
provide to their employees to be at competitive edge and develops its potential employee to
enrich their knowledge. PSO also wants to enhance their skills by training them with business
related courses available in the corporate sector.
At PSO certain types of training are left up to the employee. The employee assesses his strengths
and weaknesses and goes for the required training. For example, if he thinks he can’t manage time
then he will go for the training for time management. A training calendar is given, and employees
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choose which areas they need to improve and go for that training. Training related to business has
to be taken by all the employees who are concerned with it.
HOW TRAINING STARTS
At PSO Training usually starts from orientation programs to management training. At PSO certain
types of training are given to employees to enhance their skills, capability, and knowledge to
perform the task such as off the job training, on the job training and coaching programs.
OFF THE JOB TRAINING:
Off the job training is formal training method. PSO sends their staff for this training. The employees
are also sent overseas for technical training. Although sending employees overseas can be costly
monetary decision but PSO wants their employee to have the overseas exposure which can be
very beneficial for the company in the long run.
ON THE JOB TRAINING:
This training is only given to PSO employees. This training is conducted at PSO house. At PSO
candidates are selected for this training after getting approval from company. Some are
compulsory for all the employees like training related to health and safety etc. and others are
optional for example training on leadership, time management etc.
COACHING PROGRAMS:
Training and development also arrange coaching programs for their employee. It includes
workshops and seminars. Different coaching programs are held for different levels of job. But the
coaching regarding health safety and environment are mandatory for every employee. Most of
these workshops and seminars are conducted by the top and experienced managers of the
company. One of the reasons of these workshops and seminars are that PSO believes in open door
policy so with these sessions employees got the chance to easily communicate and understand
the top hierarchy of the company.
Such as ICAP seminars are arranged for finance department. The entire employee in finance
department must attend these seminars. Penalty is given to those employees who do not attend
this seminar.
ASSESMENT AND TRAINING NEED
Employee’s strength and weaknesses are evaluated through performance appraisal and formal
training is given to employees based on their skills and knowledge. Training can be varying from
employee to employee.
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At PSO employees are motivated through job rotation because it enables employee to learn more
skills and apply their own skill and abilities in other task in this way employee will not get bored
with their current job.
MAJOR FOCUS OF TRAINING
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Health and safety environment
Computer training for integrated resource planning
Technical and operational focused inputs
Management development
Leadership
Presentation skills
Computer based finance
Human resource management
Team building
Labor and corporate laws
Supply chain management
PERFORMANCE MANAGEMENT AND APPRAISAL AT PSO
Oil marketing industry is one of the most competitive industries in Pakistan, so this is the reason
that PSO always looks for measuring and developing the performance of team and individual and
aligning them with business objectives. Performance management appeal process at PSO is an
important source of performance management system. In this process issues regarding conflicts
between employee and supervisor, making of judgments s, disagree with decisions related to
performance review decisions. The purpose of this process is to resolve issues and conflicts
between supervisor and employees and includes matters related to performance evaluation.
HOW THIS PROCESS STARTS AT PSO:
Suppose if employee has an issue, he will submit an appeal by completing the PERFORMANCE
EVALUATION APPEAL FORM and also provide evidence regarding to the issue. Then the appeal will
forward to HR DEPARTMENT OF PSO and then HR dept. will further forward it to HEAD OF dept.
The appeal must be submitted within 15 days after signing the performance review.
PSO have an open-door policy for grievance handling; aggrieved employee can walk in any time to
discuss the issue with head of HR.
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CAREER DEVELOPMENT:
Leadership skills are the main skills which each employee should possess which enables them to
work in the most competitive environment. In PSO those employees who are ready to contribute
in a maximum way are identified for the career development.
PERFORMANCE STANDARD:
System of authentic performance evaluation and feedback is implemented at PSO and is an
integral part of our appraisal management
Individual performance is aligned with the company’s goal and objective
Reward system is being introduced on yearly basis.
Bell curve covers all management employee’s annual appraisal through a population spread
EMPLOYEE RECOGNITION AT PSO
Employee recognition policy is followed by PSO during last few years. The objective of employee
recognition is to increase morale of employees. Every year two best employees are selected for
this activity based on their performance. This is a good platform for creating an active competition
among employees.
SUCCESSION PLANNING
The PSO have a team called “Talent management”. This team has the 3 main PSO’s business units
heads in it.
1. HR and services
2. Finance information and technology
3. Ones with Direct reporting to MD (SECP )
This team makes decisions for the succession planning. Training orders are given by them as well.
They decide who they plan to retain and promote to major jobs.
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COMPENSATION AND BENEFITS
CREATING AN ATTRACTIVE COMPENSATION AND BENEFITS PACKAGE
In the past several years, because of hiring freezes and a larger supply of accounting candidates,
PSO did not have to raise salaries much to recruit and retain top talent. Now that the economy
and job market are gaining steam, however, PSO is once again assessing their compensation and
benefits packages more frequently to avoid losing current and prospective employees to other
opportunities.
An effective employee incentive program is mandatory for every business in these days of high
attrition rates and a serious dearth of talent. Companies spend sizable sums on their retention
strategies, which may focus on a combination of ways to inculcate loyalty among employees –
compensation, training and career growth being a few.
COMPENSATIONS AND BENEFITS AT PSO
PSO offers competitive starting salaries and bonuses. PSO offer attractive salaries to its employees
and provide increment in salary and rewards based on their job performance
PENSIONS AND GRATUITY:
The company approved and fund pension scheme for both management and non-management
employees. The scheme provides pension based on the employees last drawn salaries. Pensions
are payable for life. The company also operates unfunded gratuity scheme for all its employees.
MEDICAL:
The company also provides post-retirement medical benefits to its employees. PSO’s medical
policies are the best in the country. Medical is free for the employees and their families.
Vaccination program for employees: in recognition of the importance of human resource and its
health. PSO has an organization a ‘vaccination program’ for its employees. PSO inaugurated the
program under which the employees were vaccinates against diseases like cholera, typhoid,
hepatitis B at the PSO houses dispensary.
PROVIDENT FUND:
The company also operates an approved provident fund scheme for all its employees. Equal
contributions are made to the fund by the company and the employees in accordance with fund
rules.
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LOANS:
Loans are granted for house construction repair or for the purchase of land. Employees can also
avail the car loan facility.
REWARDS:
Rewards are given based on performance of the employee on monthly and weekly basis. These
include the monetary rewards and the Points for promotion.
MILLION LITER AWARDS:
The million-liter award ceremony was held at the PSO house. These awards were given to the
dealers who crossed the million-liter figure in selling the products of the company. The award had
been initiated to recognize and encourage promoting the business and services to their customer.
HAJ-DRAW 2002:
The hajj draw was also held at the PSO house auditorium. Seventeen members were sent to
perform hajj.
EMPLOYEE RELATION
PSO has a balanced relation with employees because they treat all employees as per policy.
Employee relation is based on Employees’ Performance. Employees with good characteristics,
efficient employees, deserving and hardworking employees who give more output and good
performance always enjoy good and healthy relation, benefits, and rewards with PSO. On the
other side inefficient employees, inactive and with bad characteristics and qualities have to suffer
with problems, unhealthy and bad relationship with PSO. Policy plays a key role.
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There must be a consistent policies, proper policies, and strong policies.
Policies should be a cosmetic document
Policies should not be taken as stationary document
It must be dynamic, as to be constantly reviewed in terms of what is happening in
marketplace and what modern day’s requirements are.
Forcefully implement all policies.
PSO always develop smooth relationships with employees by giving them equal
opportunities and benefits.
Always advice managers on ER issues.
Negotiate with unions.
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JUSTICE AND FAIR TREATMENT
PSO have a diverse work force, in terms of gender, personality, qualities, and communication skills.
M Rana Idrees, Senior Executive at PSO said “…But we face discrimination factor because it’s
natural. We can’t let it go. It’s natural! But the point is that how can we overcome this problem?
So, the solution to overcome this is as follows:
Employees should focus on performance, do their best and give more output. Put the objectivity
element in the work instead of subject. To follow all the companies’ policies. Then the
management will not be able to discriminate employees. PSO treat equally to all employees.
Deserving candidates get
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Promotion
Benefits
Recognition
Opportunities
Power of Decision making
Performance based rewards are offered to all employees on a yearly basis. Increases in salaries of
deserving candidates are given. PSO give equal opportunity to all employees to do justice by
proving yourself. “The deserving candidates” gets all the “deserving things” so that’s a fair
treatment, which PSO always give to all employees.
EMPLOYEE HEALTH AND SAFETY
PSO says that “THEY ALWAYS CARE FOR EMPLOYEES’ HEALTH AND SAFETY” and which is their first
priority that’s starts from the working environment. It is always ensured at PSO that they provide
the following facilities to their employees
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Healthy working environment
Employees’ privacy rights.
Security of employee’s record
Workplace safety
FOOD FACILITY:
In words of PSO senior executive, said that this is their first responsibility to make sure that
employees are in good health and condition “physically” by providing healthy food and hygienic
food.
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GYMNASIUM FACILITY:
Employees can also avail gymnasium facility t in PSO. It will provide convenience by working out in
private gymnasium to get fresh.
PSO CLUB:
PSO provides different activities and platform for their health and also provide social activities.
Different forum organized sports and different activities which encourage employees to
participate in it.
SICK LEAVE FACILITY:
Recent Example:
A new employee of PSO met an accident when he was coming to work and broke his leg. PSO
bearded all his hospital expenses plus gave him a sick leave rather than firing him. This shows that
they care.
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3. CONCLUSION AND RECOMMENDATIONS
Pakistan state oil (PSO) is the largest company of Pakistan not only in the field of oil marketing but also
otherwise. It has been included in Asia’s top 1000 companies and thus is surely a pride for Pakistan.
Although up till now it is Govt. owned but it is about to be privatized in a month or so. As expected after
privatization the company would be further more prosperous and generative in terms of revenues.
PSO certainly has a competitive advantage over all its competitors because of the vast network of its
outlets all over Pakistan but at the same time a great deal of responsibility is required by them as they are
not only an oil marketing company but they have some responsibilities towards the people of Pakistan.
Take an example of a PSO outlet in Chitral, while deciding to undertake this project or not the feasibility
report rejects the idea of building it but being a Pakistani socially responsible company if even one public
transport bus goes there then they have to build a petrol station over there.
PSO has been very innovative and successful since it realized the competition has actually started after
SHELL came and acquired the market share from PSO. But after coming up with all those “new vision”
outlets, PSO has proved to be never far behind.
Marketing strategies starting from “Gold card” to “PSO LOYALTY CARD” has been amazingly good and can
be rated as first class strategies.
A major problem faced by PSO is the misconception in people’s mind that the oil used by shell is imported
and of better quality, as shell is a foreign company in Pakistan. Although the sources are same but still
shell is also aware of this fact and is exploiting it. PSO should do something about it like printing brochures
that could explain people about the only sources available in Pakistan, emphasizing upon the fact that no
oil is coming to Pakistan from any direct abroad sources.
Caltex basically has some control over the market because of the lubes it sells and the profit margin on
lubes is much higher than on petrol. But as PSO and CASTROL have come together to make the right
combination of “Top two together” they can overcome this problem as well.
PSO has done very well in the financial sector, since its new vision period and will continue with the pace.
Innovations and up to dating of the outlets in accordance with the needs of the changing world is a very
important step towards both marketing and financial prosperity.
The other problem faced by PSO because of the competition is that the land acquiring at old or new places
the bid gets too high that the land acquired becomes too expensive.
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