Company overview of pakistan telecommunication company limited

Introduction

Pakistan Telecommunication Company Limited (PTCL) is the largest telecommunication company in Pakistan. PTCL provides telephonic services to the nation and is the backbone for country’s telecommunication infrastructure. The company consists of around 2000 telephone exchanges across Pakistan. They provide the largest fixed line (land-line) network, currently having 4.8 million fixed line customers. GSM, CDMA and Internet are other services of PTCL. The Government of Pakistan sold 26% shares and control of the company to Etisalat (U.A.E’s telecom company) in 2006. The Government of Pakistan retained 62% of the shares while the remaining 12% are with the general public. PTCL also provides Wireless Telephonic network by the name of ‘Vfone’, having 1.25 million active customers. Ufone, which is the second largest cellular network in the country, is also owned as a subsidiary of PTCL. Ufone has about 6.5 million mobile subscribers and a market share of nearly 25% currently in Pakistan. PTCL has the potential to be an influential means in Pakistan’s economic growth. It has laid the Optical Fiber Access Network technologies in major metropolitan cities of Pakistan. (Retrieved from http://www.ptcl.com.pk).

Privatization of PTCL

The process of the privatization of the state owned and managed PTCL was initiated in November 2004. Early in January 2005, 18 companies registered their EOI (Expressions of Interest), out which 3 bidders qualified for the final bidding which held on June 18, 2006. Dubai based company Consortium of Emirates Telecommunication Corporation (Etisalat) and Dubai Islamic Bank, Etisalat International Pakistan (EIP) gave the highest bid US $ 1.96 per share, equivalent to PKR 117.01 per share, which translates into US 2,598,960,000 (2.599 billion) or PKR 155,157,912,000.00. (Retrieved from www.go-pakistan.com). After the purchase of shares of PTCL Etisalat was given permission to fully control the management, which is against the provisions of Companies Ordinance of Pakistan, 1984.

This deal has also created much of a drama within the company as well. The employees of PTCL resist this deal and there had been strikes in PTCL offices to oppose this. As many as 40,000 people will quit the job through Voluntary Separation Scheme (VSS) offered by the PTCL management. 60 percent of employees may opt for VSS. Among the 44,000 employees 26,400 will quit the services who have served the organization for as many as 20 years. The cases had been signed by opposition, employees of PTCL against all this scenario and they are still waiting in Supreme Court for hearing.

After privatization of PTCL, the company remained encircled by various controversies and disputes, mainly due to bad management by PTCL administration and lack of interest from Government. All this resulted in bringing down the net profit of PTCL from Rs 29 billion before privatization to mere Rs 10 billion. (http:// www. propakistani.pk retrieved dated 16 July, 2008).

PTCL employees came to know about a new contract named as U.P.S (Unified Pay Scale). U.P.S highlighted that the previous employment agreements were null and void and no previous benefits could be claimed by any of the employee of PTCL. U.P.S also dispossessed the employees of their respective pensions. Until and unless their demands are met, the employees of PTCL are on a protest. As much as 21’000 employees of PTCL would be affected by U.P.S. Employees believe that U.P.S was bought in PTCL to change the status of the employees to contractual status, instead of their permanent ones which was present before. Government had promised the employees that they would be receiving facilities like, pay scale/allowances up gradations, but they were never fulfilled, as the event of privatization had taken place.

Significance/Rationale of the study

The significance of this study is to identify the post effects of privatization on the employees of PTCL. We will be identifying the level of satisfaction of the employees after the privatization of PTCL. The performance of their employees and similar other indicators will exuberate the dedication of employees to this organization. There is a need for a study concerning how employees perceive changes in their employment system, since this process will result in the change of the management and the policies that were present in PTCL before privatization. Generally, a well motivated and a satisfied employee means that the organization is achieving high levels of productivity. Similarly, if the employee has negative reactions for this process, that would result in de-motivation and dissatisfaction of employees. This is bad for the organization as well as its employees in the future.

Aim of the study

The main aim of the study is to analyze post effects of privatization on the satisfactory level of employees. This research will look upon the status of employees in PTCL after privatization, especially those employees who had been working in PTCL for more than twenty years and on the variables that have their impact on the PTCL employees. Finding out the consequences that the employees had to face after privatization is also the area of interest.

Research objectives

The research objectives of this study are as follows:

To understand the effects of privatization on the PTCL employees.

To study how the job satisfaction of the employees is affected after privatization of PTCL.

To investigate how the employee’s work-related attitudes and strain have changed after privatization of PTCL.

To assess the needs of PTCL employees at different hierarchy level.

Research questions

The questions posed by the researcher in this study are:

How are the employees affected by privatization of PTCL?

What are the reasons for satisfaction/dissatisfaction of the employees of PTCL?

How to increase the job satisfaction of PTCL employees after privatization?

Delimitations of the study

The study cannot be undertaken on a broad scale because of the following constraints and will be delimited to only the city of Islamabad/Rawalpindi.

Time constraint.

Resource constraints.

Set of variables

Literature Review

Concepts and definitions

Privatization can be simply explained as a process in which the ownership transfers from Government hand to private hand. This term is also known as denationalization. It means transferring the control of a firm from the government sector to the private sector. It can be accomplished by sale or lease such as government selling 100% of an enterprise or selling 51% or even by selling a minority stake as long as the private sector is given full managerial (management) control. In financial terms, privatization means transferring a company from one whose shares are listed on the stock exchange and can be bought by the general public to one that is no longer listed or publicly traded because it has been bought by a private group.

Privatization takes place to reduce the depletion of Government resources caused by losses of the state owned enterprises, this mostly creates greater opportunities for the private sector to expand and modernize these enterprises. Productivity, efficiency, profitability increases and the development of a valuable capital market occurs which releases resources for development of the social and physical infrastructure. The process of privatization has some disadvantages as well. Private firms tend to be more efficient and cost effective so the excess workers are laid off to minimize costs. Employees do not benefit from paid leaves, which are given to government employees. Employees also don’t get contracts for ‘life time’ job in privatization, which they do get in the public sector.

Hassan (2008) stated that Saudi Arabia is experiencing the expenditures of public sector. Privatization does have an impact on employees in public organizations. When there is a policy of ‘gradual privatization’, the old employees are trained in a certain manner, as to be ready for their new jobs respectively. If the company is sold through selling stocks than some of stocks should be sold to the employees themselves or given it to them (stock options). This increases their interest in the company and they become more motivated and satisfied. The resultant is good governance and profit. During the privatization period there should be certain specialized organizations who should be allowed to take part in processes in order to find solutions or relocation of surplus labor force. Employees should be motivated and trained from specialized trainers before and after the privatization period as it results in better performance and productivity. Bhaskar and Khan (1995) states in the jute industry case, privatization reduced employment considerably, while the output was not much reduced. Reduction in jobs was mainly of managers and the labor or mill-workers were not fired after privatization. The employment of manual (labor force) workers was increased in the privatized firms.

Brown, Earle and Telegdy (2008) states that the greatest resistance of privatizing a firm usually comes from the firm’s own employees, who are afraid of wage cuts and job losses. The new management of privatized firms reduces the organization’s labor costs as harder budget constraints and stronger profit-related incentives are promoted by them. This is called as the ‘Efficiency Effect of privatization’. The lower costs increase the firm’s market share and the total quantity demanded for the industry. New owners may reduce wages in order to cut back costs but if the firm plans to expand, then they might offer high wages to attract new better and trained workers. Also, the new owners might bring in high tech machinery which does the job of attracting workers with higher skills, thus they get higher wages.

Cunha and Cooper (2005) states that the companies which are undergoing the process of privatization, several issues take place with the employees of that organization. Some of them are, role confusion, role over-load and under load, new-work relationships, job insecurity, career advancement/future trainings and deterioration of working conditions. All these factors may lead to physical health symptoms such as headaches, depressions, cardiovascular diseases, tension and anxiety etc, these factors and all of the listed above lead to dissatisfaction of the job subsequently.

Falkenberg, Naswall, Sverke1 and Sjoberg (2009) states the employees working at different hierarchic levels have different resources and means to handle uncertainty associated with change (in our case privatization). Employees at a higher level of hierarchy have a greater responsibility in an organization and thus could experience more stress than other employee. Research also suggests that employees at higher positions are better able to handle uncertainty, as they are having more access to resources that help improve the possible negative consequences of privatization. Higher level executives tend to report less suffering than other employees during privatization. The employees present at the lower hierarchic levels, who have fewer resources for handling change disorder, there is an inclination for them to be more negatively affected by privatization. In conclusion, we can observe that dissatisfaction is observed at all levels of the hierarchy, whereas the greatest levels of disarray experienced as we move down from the top to the bottom levels.

Critical Analysis of literature

The articles in the literature reveal that privatization in the major parts of the world has created dissatisfaction amongst employees. Apart from the advantages of privatization to the firm itself and the employees, the method causes the firms to become cost effective, which means that downsizing takes place, jobs are lost. Paid leaves were offered to public sector employees along with life-time contractual jobs in most scenarios. All of this is removed once privatization takes place. As the management changes, the existing employees get confused about their roles, they experience stress, which leads to health problems such as cardiovascular (heart) diseases, depression, headaches etc. Usually, higher level executives are less affected than other employees during privatization. The employees present at the lower hierarchic levels, which have fewer resources, are more negatively affected by privatization.

After the careful analysis of literature review, we have identified the following variables that will help us in making out theoretical framework:

Fear of Job insecurity

Stock-option plan

Fringe Benefits

Employees Union

Training and development

Rewards to the employees

Training and development

Rewards to the employees

Stock-option plan

Fear of Job insecurity

Fringe Benefits

Employee satisfaction level at PTCL after privatization

(D.V)

(I.Vs)

Employees Union

Theoretical Framework

Employee satisfaction level at PTCL after privatization’: This is our ‘Dependant Variable’. Other factors will be affecting the satisfaction level of the employees of PTCL after privatization directly.

‘Independent Variables’:

Fear of Job insecurity:

Employees will have a constant fear of job security which was not present before with the firm when it was owned by the state. This happens because the firms ‘downsize’ to cut costs.

Stock-option plan:

The employees if given a stock option plan would make them involved in the organization, as they would have a feeling of control and involvement in the firm. If this option is not given to the employees, they would be considerably dissatisfied and de-motivated.

Fringe Benefits:

Fringe benefits such as paid leaves, housing allowances, travel/fuel allowanced etc increase the satisfaction level of employees. In a private firm, paid leaves are cancelled and are declared null and void.

Employees Union:

The Employee Unions protect and safeguard the laws/rights of employees. Basically, it’s a support and the ‘voice of employees’. They are very helpful in resolving the disputes between the employees and the employers. Private firms usually put a stop to all the unions and their activities.

Training and development:

Training (O.T.J/O.T.J) increases satisfaction level of employees, as they are offered a chance in advancing in their careers.

Rewards to the employees:

Rewards, compensations and better salary packages are the employee essential reasons for the satisfaction levels of employees.

Proposed Research Methodology

Sample Selection

Sampling involves selecting individual units to measure from a larger population. The population refers to the set of individual units which the research question seeks to find out about. The Sample would consist of the employees that are working in Islamabad only. Our sample will base on every nth employee of PTCL in Islamabad. We will take every 10th employee of PTCL in Islamabad as our sample.

Sampling frames

The sampling frame is the group of individuals who had a real chance of being selected for the sample. Our sampling technique would be Systematic Random Sampling for the masses of the workforce of PTCL in Islamabad. The population will include all employees that are working in PTCL. Total numbers of employees of PTCL are approximately 64000 (It comprises 56,000 regular and 8,000 contractual).

Unit of Analysis

Our target is not towards the collective communities in the data collection stage, but instead is focused on the ‘individuals’ i.e. the employees of PTCL in Islamabad.

Type of Study

Our study type is Exploratory as we are exploring the level of employee satisfaction after the privatization of PTCL. We are exploring the impact on employee after the privatization of PTCL.

Time Horizon

The total time period for this research is not over a period of time but is specifically at a time. That time is the cross-sectional (snapshot).

Researcher’s Strength

The researchers are graduates who are pursuing their masters degree presently. This gives them the added advantage of being familiar with report writing and research capabilities. They have access and knowledge to latest methods and tools for academically related research work.

Instrument development/selection

• Questionnaires

• Interviews

Proposed Data-Collection Methods

The proposed data collection methods are questionnaires. They will be consisting of both, open and closed ended questionnaires. Another data collection method would be the use of likert scale, which will consist of responses.

SURVEY QUESTIONNAIRE

MEASURING THE LEVEL OF EMPLOYEE SATISFACTION IN THE PAKISTAN TELECOMMUNICATION COMPANY LIMITED AFTER PRIVATIZATION

Please show your level of agreement by marking tick (ƒ¼) against each statement:

Key:

5 = SA : Strongly Agree 4 = A : Agree 3 = N : Neither Agree Nor Disagree

= DA : Disagree 1 = SD : Strongly Disagree

Fear of Job insecurity

SD D N A SA

Q1) I fear that I will be replaced by another employee who will be hired from the corporate sector.

1

2

3

4

5

Q2) I fear that, while adapting the cost-benefit strategy after privatization the firm might fire me as a downsizing measure.

1

2

3

4

5

Stock-option plan

SD D N A SA

Q3) My Company offers stock-options/shares at a discounted price.

1

2

3

4

5

Q4) My Company gives stock-options/shares instead of cash bonuses, so that I have a feeling of increased satisfaction with the firm.

1

2

3

4

5

Fringe Benefits

Q.5) My Company gives attractive benefits in housing allowances for both purchasing and rental.

1

2

3

4

5

Q.6) My Company provides yearly travel and holiday packages for me and my family.

1

2

3

4

5 SD D N A SA

Employees Union

Q7) My Company has an employees union, which protects and fights for the rights of employees, when an incident of injustice occurs.

1

2

3

4

5 SD D N A SA

Training and development

Q8) My Company offers training and development program that helps me in career progression.

1

2

3

4

5 SD D N A SA

SD D N A SA

Q9) Rewards are offered to employees on a timely basis.

1

2

3

4

5

Q10) Rewards are given in monetary/nonmonetary forms.

1

2

3

4

5

Q11) Project/goal completion in early timeframe and high achievers get rewards practically.

1

2

3

4

5Rewards to the employees

Employee Satisfaction

Q12) I am satisfied with the work assigned to me in this organization.

1

2

3

4

5 SD D N A SA

Personal information

Q13. Gender

1: Male 2: Female

Q14. Age

1: 15-25

2: 25-35

3: Below 50

4: Above 50

Q15. Qualification

1: Matric-P.T.C 2. FA/Fcs-C.T 3: Grad (B.Ed) 4: Post Grad (M.Ed) 5: Others

Q16. Designation

1: Top/Administrative level 2: Middle level. 3: Low level / Supervisory / First-line managers

Q17. Experience

1: 1-5 years.

2: 6-10 years.

3: 11-15 years.

4: 16-20 years.

5: 21 & Above.

Thank you for your valuable time and input.

Best regards,

M.B.A Students:

Haseeb Raza

Asher Shafqat

S.Z.A.B.I.S.T, Islamabad.

Results and Discussions

Descriptive Statistics

Descriptive statistics is used check the nature of the data and its Mean values and Standard deviation.

Mean: ΣX / N (ΣX = Sum of all Mean)

= 31.42 / 30

= 1.0473

The mean value is 1.0473. This shows that most of the responses are towards strongly disagree. It means after privatization of P.T.C.L most of the employees are dissatisfied with their work and other benefits given to them.

Correlation

Correlation coefficient is a measure of the relationship between two attributes. It is also known as the Pearson product-moment correlation coefficient. The value of coefficient can range from -1 to +1.

Consider the variables x and y;

• If r = -1, then x and y are perfectly negatively correlated.

• If r = 1, then x and y are perfectly positively correlated.

• If r = 0, then x and y are not correlated.

QUESTIONS

Fear of Downsizing

Stock-options/shares at a discounted price

Housing allowances

Employees union

Goal completion and high achievers get rewards practically

Employee Satisfaction

Fear of replacing by another employee

0.902

-0.7873

-0.8640

Stock-options/shares instead of cash bonuses

0.5048

Travel and holiday packages

0.6621

Training and development program

0.7897

0.8518

Monetary/Non-monetary Rewards

0.6690

Fear of downsizing is positively correlated with fear of replacing by another employee.

Goal Completion and high achievers get rewards practically is negatively correlated with fear of replacing by another employee. If there will be fear that employee will be replaced then the employee will not complete his goal and will not achieve high.

Stock-options/shares at a discounted price is positively correlated with Stock-options/shares instead of cash bonuses.

Housing allowances is positively correlated with Travel and holiday packages.

Employees union is positively correlated with Training and development program.

Employee satisfaction is negatively correlated with fear of replacing by another employee. If there will be fear that employee will be replaced by another employee of corporate sector then employee will be dissatisfied.

Employee satisfaction is positively correlated with Training and development program.

Employee satisfaction is positively correlated with Monetary/Non-monetary Rewards.

Regression

Regression analysis is a statistical technique that is used to survey and represent the relationship between two or more variables. A linear regression model is used to explain the relationship between two or more variables, Using the Formula Y= a + bX.

Y= Dependent Variable

a= Y intercept/ constant

b= Slope

X= Independent Variable

Dependent Variable: Employee Satisfaction

Independent Variable: Fear of Job insecurity, Stock-option plan, Fringe Benefits, Employees Union, Training and development, Rewards to the employees.

TABLE 1:

Regression

Dependent Variable: Employee Satisfaction

Independent Variable: Fear of Job insecurity, Stock-option plan, Fringe Benefits, Employees Union, Training and development, Rewards to the employees.

TABLE 2:

TABLE 3:

As shown in Table 3 the value of constant ‘a’ is 1.853.

Fear of Job insecurity

Fear of downsizing

If we take dependent Variable “Y” as Employee Satisfaction and Independent Variable “X” as Fear of downsizing taking 1.360 as constant then its slope “B” would be -0.291

Putting the values in the Y= a + bX, we get:

Y= 1.360-0.291 X

Job Satisfaction = 1.360-0.291 (Fear of downsizing)

Significance Level = 0.158

The value of “B” Is negative, so the variables have inverse relation with each other. If we increase satisfaction then Fear of downsizing decreases.

Stock-option plan

Stock option-shares at a discounted price

If we take dependent Variable “Y” as Employee Satisfaction and Independent Variable “X” as Stock option-shares at a discounted price taking 1.360 as constant then its slope “B” would be 0.080

Putting the values in the Y= a + bX, we get:

Y= 1.360+0.080 X

Job Satisfaction = 1.360+0.080 (Stock option-shares at a discounted price)

Significance Level = 0.528

The value of “B” is Positive, so the variables have direct relation with each other. If we increase satisfaction then Stock option-shares at a discounted price also increases.

Stock option-shares instead of cash bonuses

If we take dependent Variable “Y” as Employee Satisfaction and Independent Variable “X” as Stock option-shares instead of cash bonuses taking 1.360 as constant then its slope “B” would be 0.140

Putting the values in the Y= a + bX, we get:

Y= 1.360+0.140 X

Job Satisfaction = 1.360+0.140 (Stock option-shares instead of cash bonuses)

Significance Level = 0.220

The value of “B” is Positive, so the variables have direct relation with each other. If we increase satisfaction then Stock option-shares instead of cash bonuses also increases.

Fringe Benefits

Travel and holiday packages

If we take dependent Variable “Y” as Employee Satisfaction and Independent Variable “X” as Travel and holiday packages taking 1.360 as constant then its slope “B” would be 0.082

Putting the values in the Y= a + bX, we get:

Y= 1.360+0.082 X

Job Satisfaction = 1.360+0.082 (Travel and holiday packages)

Significance Level = 0.610

The value of “B” is Positive, so the variables have direct relation with each other. If we increase satisfaction then Travel and holiday packages also increases.

Employees Union

If we take dependent Variable “Y” as Employee Satisfaction and Independent Variable “X” as Employees Union taking 1.360 as constant then its slope “B” would be 0.063

Putting the values in the Y= a + bX, we get:

Y= 1.360+0.063 X

Job Satisfaction = 1.360+0.063 (Employees Union)

Significance Level = 0.764

The value of “B” is Positive, so the variables have direct relation with each other. If we increase satisfaction then Employees Union also increases.

Training and development

If we take dependent Variable “Y” as Employee Satisfaction and Independent Variable “X” as Training and development taking 1.360 as constant then its slope “B” would be 0.206

Putting the values in the Y= a + bX, we get:

Y= 1.360+0.206 X

Job Satisfaction = 1.360+0.206 (Training and development)

Significance Level = 0.269

The value of “B” is Positive, so the variables have direct relation with each other. If we increase satisfaction then Training and development also increases.

Rewards to the employees

Timely basis rewards

If we take dependent Variable “Y” as Employee Satisfaction and Independent Variable “X” as Timely basis rewards taking 1.360 as constant then its slope “B” would be 0.198

Putting the values in the Y= a + bX, we get:

Y= 1.360+0.198 X

Job Satisfaction = 1.360+0.198 (Timely basis rewards)

Significance Level = 0.280

The value of “B” is Positive, so the variables have direct relation with each other. If we increase satisfaction then Timely basis rewards also increases.

Goal completion and High achievers

If we take dependent Variable “Y” as Employee Satisfaction and Independent Variable “X” as Goal completion and High achievers taking 1.360 as constant then its slope “B” would be 0.024

Putting the values in the Y= a + bX, we get:

Y= 1.360+0.024 X

Job Satisfaction = 1.360+0.024 (Goal completion and High achievers)

Significance Level = 0.877

The value of “B” is Positive, so the variables have direct relation with each other. If we increase satisfaction then Goal completion and High achievers also increases.

Recommendations

Our recommendations are based on the results generated from the questionnaire. Overall we can conclude that the variables identified in out framework do strongly affect the satisfaction level of employees at PTCL after privatization. Employees strongly agree that they have a certain fear of losing their jobs after privatization. Stock option plans, or giving employees stock/share as added benefits instead of cash bonus etc. would increase satisfaction levels and make the employees more productive in the privatized firm. The employees agreed for having regular handing out of the stock options in the company. Fringe benefits are those services that motivate the employees and increase their satisfaction levels considerably. Employees were ‘disagree’, when they were asked to assess the fringe benefits as direct measure of their satisfaction levels in PTCL after privatization. Employee unions or those entities that safeguard the rights of employees. Employees responses were strongly disagree that there were no Employees Union present in their organization. Basically these unions prevent unfair measures from happening with the employees. Training and development enhances the careers of employee and grooms them in the corporate world. It also paves way for their promotions in an organization. The employee’s responses were mostly disagreed because there was no training given to them after privatization. Training should be given to them that help them in their career progression. Rewards should be given to them on timely basis and all kind of monetary/non-monetary rewards should be given to them. To appreciate the employees who complete their Projects/goals before time rewards should be given to them so that they get motivated and satisfied and achieve high.