Human resources and training development of Engro Food
Engro Foods (Pvt.) Limited (EFL) has been established in 2005 as part of a diversification process at the Engro Group. The plant located at Sukkur on 23 acre land, has the raw milk reception capability of 300,000 liters per day and UHT milk capacity of 200,000 liters per day. The plant has been established at a cost of Rs. 1 billion which provides direct employment to 750 people. Engro Foods has entered the Food business through milk processing and sale with the company’s vision to pursue growth opportunities based on country fundamentals and own strength. It also positions the company to influence its corporate social responsibility initiatives and work closely with rural communities to promote integrated farming and livestock development. This effort is expected to play a pivotal role in poverty alleviation and improving livelihoods of the poor in the milk collection areas.
Another plant near Sahiwal in the Punjab is completed. The EFL plan envisages growth by innovative launches to command a product range across the dairy spectrum backed by milk collection infrastructure and top end in the distribution of products. EFL is well positioned to become a substantial player in the dairy sector.
1.2 Mission Statement [2]
“To help farmers maximize their farm produce by providing quality plant nutrients and technical services upon which they can depend. To create wealth by building new businesses based on company and country strengths in Petrochemicals, Information Technology, Infrastructure and other Agricultural sectors. In pursuing the mission we shall at all time be guided in our conduct and decision making by our Core Values.”
1.2.1 Vision [3]
“Our vision is to become a fast expanding mega foods company. To achieve our vision, the company will initially focus on dairy by investing a substantial amount in plant, milk collection capability and marketing. We are making concrete efforts to expand in and beyond Pakistan; through strategic international alliances, to eventually become global.”
1.2.2 Our Dreams [4]
EFL dreams to be BIG. We want to be a major player in the food industry which is also evident in our vision, “Elevating Consumer Delight Worldwide”. EFL wants to challenge the industry norms and surprise whoever has eyes on EFL.
1.3.1 Safety Health & Environment
We will manage and utilize resources and operations in such a way that the safety and health of our people, our neighbors, our customers and visitors in ensured. We believe our safety, health and environmental responsibilities extend beyond protection and enhancement of our own facilities, and we are concerned about the distribution, use and after-use disposal of our products.
1.3.2 Ethics and Integrity
We do care how results are achieved and will demonstrate honest and ethical behavior in all our activities. Choosing the course of highest integrity is our intent and we will establish and maintain the highest professional and personal standards. A well-founded reputation for scrupulous dealing is itself a priceless asset.
1.3.3 Leadership
We have leaders of high integrity, energy and enthusiasm who have the necessary managerial, professional and people skills to inspire a group or organization to set high goals and achieve them willingly. We believe that leadership skills need to be strengthened at all levels within our organizations and that managerial and professionalism is a necessary foundation.
1.3.4 Quality and Continuous Improvement
We believe that quality and relentless commitment to continuous improvement are essential to our ongoing success. To this end, we define quality as understanding the customer’s expectations, agreeing on performance and value, and providing products and services that meet expectations 100% of the time. Our motto is, “Quality in all we do”.
1.3.5 Enthusiastic Pursuit of Profit
Successfully discharging our responsibilities to our shareholders to enhance the long-term profitability and growth of our company provides the best basis of our career security and meaningful personal growth. We can best accomplish this by consistently meeting the expectations of our customers and providing them with value.
1.3.6 Candid & Open Communication
We value communication that are courteous, candid and open and that enable each of us to do our jobs more effectively by providing information that contributes to the quality of the judgment and decision making.
1.3.7 Innovation
Success requires us to continually strive to produce break through ideas that result in improved solutions and services to customers. We encourage challenges to the status and seek organizational environment in which ideas are generated.
1.3.8 Individual Growth & Development
We strongly believe in the dignity and value of people. We must consistently treat each other with respect and strive to create an organizational environment.
1.3.9 Teamwork & Partnership
We believe that high performing teams containing appropriate diversity can achieve what individuals alone cannot. Consciously using the diversity of style, approach and skill afforded by teams is strength we must continuous building into our organization.
1.3.10 Diversity & International Focus
We value differences in gender, race, nationality, culture, personality and style because diverse solutions, approaches and structures are more likely to meet the needs of the customers and achieve our business goals.
10.4 Product and Services [5]
Olper’s milk
Olper’s cream
Olwell
Omore
Tarang
Tarka Ghee
Engro Foods Limited is subsidiary of Engro Chemical Pakistan Ltd. which is one of the most reputed enterprises in Pakistan with more than 40 years of diversified business operations in the areas of fertilizer and chemicals. Engro Foods started its business operations in March 2006 and with the successful launch of Olpers Milk, Tarang, Olwell, and Olpers cream, recent launched Omore ice cream and recently it has established itself as a major player in the foods business. Engro Foods has already set up two processing plants at Sukkur and Sahiwal. With the ever expanding milk collection network and processing facilities, the Supply Chain has geared us for the growing sales of our products.
We believe that our recent successes will take us to our goal: To be one of the biggest players in the food business. Our aim is to dominate the food business, and to achieve this we will settle for nothing less than the cream!
1.5 Functional Areas [6]
1.5.1 Administration
Efficient management of all administrative affairs of Engro Foods (Pvt.) Limited is the job of the Administration department. From legal matters to general day-to-day operations of the office, the Administration department ensures that all affairs run smoothly.
1.5.2 Finance and Accounts
The Finance and Accounting departments at Engro Foods are responsible for the total financial management of the different businesses of the company. From the usual accounting statements and sheets to risk and portfolio management, the team ensures that every rupee coming into and out of the Companies’ pockets is properly documented and audited.
1.5.3 Human Resource
The Human Resource department at Engro Foods (Pvt.) Limited spearheads the recruitment process to ensure that the finest human resource is taken on board at Engro Foods. Resumes of candidates are carefully filed and documented for current or future reference. The department, besides carrying out succession planning, maintains and implements HR policies pertaining to employment, retention and superannuation. Assessing training needs of employees and ensuring adequate training is also carried out by the professional HR team at Engro Foods.
1.5.4 Marketing
Consisting of leading marketing professionals of the industry, who are graduates of top business schools of Pakistan, the Marketing Department ensures that from product need identification to product development, launch and post-launch, all strategic decisions are made based on authentic information and research. Identifying the target markets, effectively communicating to them and building the image of the brands as well as the Companies, is the job of the professionals running the marketing at Engro Foods.
1.5.5 Milk Procurement
As all of our food products are milk based, the entire Milk Procurement department plays a critical role in defining the quality of the end product that reaches our customers. Ensuring regular collection of fresh and pure milk right from the farmer to the factory and ascertaining the freshness of milk all across the milk procurement process, is the responsibility of Milk Procurement department, consisting of food technologists working at the collection centers and veterinary doctors providing service to the farmers.
1.5.6 MIS
The MIS department at Engro Foods ensures that all automation is running error-free at all times. Regularly modifying and updating the Company’s accounting software is also the MIS team’s responsibility.
1.5.7 Production
Modern technology is part and parcel of Production at Engro Foods. The state-of-the-art plant set up near Sukkhar has a processing capacity of more than 300,000 liters of milk per day, making it one of the largest in the country. Professionally qualified human resource efficiently works night and day to maintain highest hygiene standards.
1.5.8 Quality Assurance
Quality Assurance is strictly followed in Engro Foods. Qualified food technologists at this department ensure that highest quality parameters are adhered to through all steps of production and that the products reach the consumers as per promise.
1.5.9 Supply and Distribution
This department ensures timely and effective distribution of the products to different shops and stores spread all across Pakistan. From transportation management to obtaining route permits and approvals, is done by this department.
Figure 1.2: Organization Structure [7]
CEO
GM FARM
Production
GM
Technical
GM
Business Modle
Manager
Milk Pocket
GM
Finance and Admin
Manager
HR
GM Farm
Production
Manger Farmer
Training
Model Farms
Manager
Commercial Forming
GM
Technical
Cooling tanks
Biogas
Processor training
GM
Business models
Mobile milk
Collection
Farms input
Stores
Animal Importers
Ruler contractors
CHAPTER NO 2
HUMAN RESOURSE DEPARTMENT [8]
2.1 HUNAM RESOURCE PLANING
It is the process of forecasting demand & supply and making comparison. Or creating balance between demand & supply. In the Engro foods they forecast it by two ways;
Business orientation
Expert opinion
The forecasting is done on the above two basis. In the expert opinion the selection is done on the basis of the opinion of the experts. Basically the bench of experts selects that how many employees are required to them in the particular department. And they also decide that what quality and what quantity of employees they are going to hire in the particular department.
And the other thing Engro foods adopts is the business orientation, the management of the organization planed about the hiring of employees on the basis of the new work started in the organization. For example as the Engro foods has started its 2nd production unit at Sahiwal so that’s why they are adopting the business orientation technique.
2.2 Recruitment and Selection
Recruitment and selection are the processes through which an organization takes in new members. Recruitment involves attracting a pool of qualified applicants for the positions available. Selection requires choosing from this pool the candidate whose qualifications most closely match the job requirements.
In companies like Engro that function in a global environment we have to distinguish different types of employees. Traditionally, they are classified as one of the three types:
2.2.1 Parent country national
The employee’s nationality is the same as the organizations. For example, an American citizen working for an American company in Pakistan.
2.2.2 Host country national
The employee’s nationality is the same as the location of the subsidiary. For example, a Macedonian citizen working for a Slovenian company in Macedonia.
2.2.3 Third country national
The employee’s nationality is neither that of the organization nor that of the location of the subsidiary. For example, an Albanian citizen working for a Slovenian company in Macedonia.
2.3 Recruitment Policy of EFL
There are five recruitment channels of EFL.
Internal movement
Online-portal
News paper ad
Write ins & walk ins
Customize hunting
2.3.1 Internal movement
HR departments become involved when internal job openings are publicized to employees through job positioning programs, which informs employees about opening and required qualifications and invite qualify employees to apply. The notices usually are posted on company bulletin boards or are placed in the company newspaper. Qualification and other facts typically are drawn from the job analysis information.
The purpose of job posting is to encourage employees to seek promotion and transfers the help the HR department fill internal opening and meet employee’s personal objectives. Not all jobs openings are posted .Besides entry level positions, senior management and top stuff positions may be filled by merit or with external recruiting. Job posting is most common for lower level clerical, technical and supervisory positions.
2.3.2 Online-portal
Now today no body thinks anything without internet. So EFL give advertise on internet. EFL most of the times use the online-portal for the recruitment of the employees.
2.3.3 News Paper Ads
EFL also place their ads in news papers for the recruitment of the employees.
2.3.4 Walk-ins and Write-ins
Walk-ins are some seekers who arrived at the HR department of EFL in search of a job; Write-ins are those who send a written enquire .both groups normally are ask to complete and application blank to determine their interest and abilities. Usable application is kept in an active file until a suitable opening occurs or until an application is too old to be considered valid, usually six months.
2.3.5 Customize Hunting
EFL prefer foreign qualifier and students of LUMS.
2.4 Selection Procedure in EFL
The selection procedure in EFL consists of 7 steps;
Test (aptitude)
Interview (3 to 7)
Medical evaluation
Reference & background check
Offer
Placement
The selection in the EFL is done on the basis of above 7 steps. First of all an aptitude test is conducted and the successful candidates are called for the interview and most of the times 3 to 7 interviews are conducted. The successful candidates in the interview are called for the medical evaluation, that they do not have any serious medical problem. After it any reference of the employee is checked, and the background of the employee is checked, they he or she doesn’t have any criminal background or have any problem in the background. If everything is clear then he or she is offered for the job and if the offer is accepted the person is called for the job.
Figure 2.1: Recruitment and Selection
Resume Short Listed
Interview Selection
1st Interview
2nd Interview
Medical Test
Final Interview
Offers
Select
2.4 De-recruitment
EFL do not de-recruit because our business is started newly and It only recruit new employees for the expansion of our business.
CHAPTER NO 3
TRAINING AND DEVELOPMENT [9]
The overall aim of the development function is to provide that adequately trained personnel in a company are capable to fulfill their goals, as well as to contribute to better performance and growth with their work (Armstrong, 1996). The development of employees can be treated as a special field of human resource
management that includes planned individual learning, education, organization development, career development and training.
3.1 EFL Orientation/Induction
EFL make a plan for the orientation and induction of its new employees, most of the times a 15 to 30 days plan is created for the new employees. The new employee has to work with the managers of the different departments in the organization. And the work of the different departments is told to the employee. After the completion of the plan the feedback is taken from all the managers and also from the employee. If the feedback is satisfactory then the person is assigned its seat and he or she start doing his/her work. On the other hand if the feedback is not satisfactory then the entire plan is repeated.
At the organization, human resource development professionals are responsible for:
1. Training and development of employees located in subsidiaries around the world,
2. Specialized training to prepare expatriates for assignments abroad, and
3. Development of a special group of globally minded managers.
Creation and transfer of international human resource development programs may be carried out in two ways:
Centralized
Decentralized
With a centralized approach, training originates at the headquarters and corporate trainers travel to subsidiaries, often adapting to local situations. This fits the ethnocentric model. A geocentric approach is also centralized, but the training develops through input from both headquarters and subsidiaries staff. Trainers could be sent from various positions in either the headquarters or subsidiaries to any other location in the company.
In a decentralized approach, training is on a local basis, following a polycentric model. When training is decentralized, the cultural backgrounds of the trainers and trainees are usually similar. Local people develop training materials and techniques for use in their own area.
EFL most of the time use the decentralized approach in its organization.
To maximize training effectiveness, it is important to consider how trainees learn most effectively. Cultural factors have a strong impact on training practices in different parts of the world. For example, in North America, where power distance is small, the relationship between the trainer and trainees tends toward equality. The trainer and trainees use first names, and the trainees feel free to challenge or question what the trainer says. In Malaysia, where power distance is large, a trainer receives greater respect. Students use his surname and title, and he is an expert that students rarely challenge.
As global competition increases, it is increasingly important for successful companies to have a group of managers with a global perspective. Companies must identify managers with global potential and provide them with various training and development opportunities. For example, having one or more international assignment(s), working on cross-national teams and projects, and learning other languages and cultures contribute to making a manager more globally minded. In addition, an organization should include not only parent country nationals, but also host country nationals and third country nationals in this group.
3.2 Engro Foods’ Training Policy
There are three main policies for the training of the employees;
In house
External
Training need assessment
EFL most of the times use the external training for its current employees. The current employees of the company are sent to the different seminars and organizations for the training purposes.
3.2.1 Types of Training in EFL
There are two main types of training in EFL:
3.2.1.1 Technical Training
It is given to the persons who work in the labor force or doing any type of technical work. Due to change in the technology or any type of change in machinery, technical training is required to those persons.
3.2.1.2 Soft Skill Training
It is given to those persons who are working in the office. It is also called the development of the persons. It is given to the middle level managers in the organization.
3.2.1.3 Training
To get the outbreak team building experience, we send our employees abroad. Engro foods bear many expenses for the training of the employees.
Figure 3.1: Training Need Assessment
Training need assessment
Department manager PADP Top management
Figure 3.2: Training and Development
CHAPTER NO 4
PERFORMANCE MANAGEMENT
In companies, the performance evaluation is most frequently carried out for administration or development intentions (Cleveland and others, 1989). For administration purposes, performance evaluation is called for when the decisions on work conditions of employees, promotions, rewards and/or layoffs are in question. Development intention of performance evaluation is oriented to the improvement of the work performance of employees, as well as to the enhancement of their abilities on the ground of the adequate training program and advising employees regarding behavior in the work environment.
4.1 PADP in EFL
In Engro Foods Ltd the performance evaluation is done on the basis of performance appraisal development process. In EFL it has two parts;
In the first part at the start of the year the employee himself define the objectives for the whole year and then lock these objectives to his or her supervisor and then start doing work on that.
In the second part at the end of the year the employee firstly define the objectives for the next year and secondly performance evaluation is done by him self before it present in front of the supervisor. That person evaluate that whither he has achieved his goal or not and then held a detail meeting with the supervisor. They made a discussion on that objective and try to meet each other points if the person is not satisfied or the supervisor is not satisfied then that person goes to the top level management.
In EFL, performance appraisals are usually done yearly and use a standarized evaluation form. Sometimes, the organization also requires supervisions to discuss the results of the appraisals with each employee.
Performance evaluation is challenging for any organization. At the international level, the complexity is greater because the organization must evaluate employees from different areas working in different subsidiaries. The need for consistency across subsidiaries for performance comparisons conflicts with the need to consider the cultural background of employees to make the evaluation meaningful. Consequently, the delivery of a balanced performance review, including both strengths and weaknesses, requires tact and delicacy.
As with other functions, the approach to performance evaluation depends on the organization’s overall human resource management strategy. A company with an ethnocentric approach is likely to use the same performance evaluation process used at the headquarters for its subsidiaries. Some companies translate evaluation forms into local languages, whereas others use the original language everywhere. A company with a polycentric approach develops local procedures within each country. Finally, a company with a geocentric approach uses the same performance evaluation system worldwide, but it has universal applicability. Developing a global system is the most challenging.
CHAPTER NO 5
REWARDS AND REMUNERATION [10]
Remuneration of employees has a key role in acquiring new employees and is important for employees as well as for the employers. Pay is the basic resource of living of the employees, while benefits cover better health care, the possibility of spending holidays in the company’s holiday facilities at a favorable price and also other advantages. The decisions the employers make concerning remuneration are a factor that has an impact on the expenses of their company as well as on the ability of selling the products at a competitive price in the market (Treven, 1998). The decisions about remuneration may also enhance the ability of the employer to compete for employees on the labor market. The rewards he warrants make the standing personnel either want to keep their jobs or quit.
5.1 EFL Compensation Program
The compensation in EFL has two parts;
Salary
Incentives
5.1.1 Salary
Salary in the EFL has the following components,
Basic pay
Home rent allowance (45% of the basic pay)
Utilities allowance (10% of the basic pay)
Conveyance allowance (10% of the basic pay)
Supplementary pay (23% of the basic pay)
The supplementary pay is the special pay given by the EFL to its employees.
5.1.2 Incentives/ Allowances
EFL gives incentives to the employees of the field. Mean the field based employees are given the incentives on the basis of there performance in the related sector. Greater is the performance greater will be the incentives.
Then the second thing is the allowances which are given to the office based employees. Normally the allowances are fixed. From grade 11 to 19 it is Rs. 3000 and for 20 and up it is Rs. 8000.
5.1.3 Benefits
The benefits which are given to the employees by EFL are as follows;
Provident fund (10% of the gross basic pay)
Gratuity fund (10% of the gross basic pay)
VPP (variable pay plan) (10% of the gross basic pay) it is paid on the yearly basis.
Compensation cars
Field car + bike
OPD cover (medical)
Hospitalization cover (50% by employee + 50% by the company)
Life insurance (50% premium by employee + 50% premium by the company)
Death benefits (12 basic salaries)
House rent advance (4 gross salaries)
Out breaks
In developing an international system of compensation and benefits, EFL has two primary concerns.
The first is comparability. A good compensation system assigns salaries to employees that are internally comparable and competitive within the marketplace. For example, the salary of a senior manager is usually higher than that of a supervisor, and each position should receive an amount within the local market range. The EFL must also consider the salaries of people who may transfer from other locations.
The second major concern is cost. Organizations strive to minimize all expenses, and payroll is one of the largest.
Remuneration and benefits in EFL are closely tied to local labor market conditions, even when an organization takes an ethnocentric or geocentric approach. The availability of qualified local people to fill positions, prevailing wage rates, the use of expatriates, and local laws interact to influence the level of remuneration and benefits. For example, if there are few applicants available for positions, the remuneration for those positions generally increases. To reduce expenses, the human resources manager might then consider bringing in an expatriate.
5.2 Employee Benefit after Retirement
As this Organization is private limited so they do not provide as much retirement benefits as the Govt. organizations do.
Final settlement
Provident Fund (10%)
Gratuity
Pension
5.3 Span of Control
Engro has a wider span of control. As it believes in diversity of opinions. Engro believes that wider span of control can increase communication among employees that helps in improving its production.
5.4 Planning
Engro do planning on short term and long term basis simultaneously. Engro is mostly having long term plans and for achieving these long term plans it gains support of short term plans.
5.5 Motivation Plan
For the motivation of our employees we gave those provident funds, yearly bonus, and medical facilities.
5.6 Communication in the Organization
They provide wireless system in every plant for fast communication. They also do video conferences at higher level. And they have Two-way communication system in their organization.
5.7 Six Sigma at ENGRO
Engro is among the first Pakistani companies implementing six sigma across all areas and utilizing it as a management system to execute our strategic objectives. Six sigma was launched in February 2006. Among the focus areas, employee development is the most critical and six sigma will be leveraged to help bring out the best in our people. Employees will drive improvements in other areas: speed, innovation, perfection and becoming world class. Six sigma’s robust problem-solving methodology and statistical toolkit allows the company to benchmark processes against global standards in a language that is comparable across any industry or function. It helps ensure that we sustain our promise of delivering high quality products and services to our customers – on time, every time. Communication is critical and Engro conducted six sigma launch events country wide as well as two internal conferences and electronic and print updates throughout the year management and non management employees were trained extensively during 2006 on six sigma principles, with further plans for learning in 2007.
5.8 360 Feedbacks
Motivation, work ownership and fair evaluation are some of the defining attributes of staff management practices at Engro. Our commitment to continuous improvement in the performance management systems for employees at all levels was reflected in adoption of the 360 Degree Feedback System. This system ensures better employees accountability, at the same time providing the employees with chances to make use of their competencies. The 360 Degree mechanism became fully operational for senior management in 2006.
CHAPTER NO 6
INDUSTRIAL RELATION [11]
The labor relations function identifies and defines the roles of management and workers in the workplace. The concept of labor relations varies greatly in different parts of the world. In the United States, for example, labor relations are often a formal relationship, sometimes antagonistic, between labor and management defined by a union contract. In Japan, the relationship between management and unions is cooperative, and management often appoints union leaders (Hodgetts, Luthans, 1994).
In many countries, the government regulates labor relations practices. Consequently, in this function EFL has more than other human resources management functions, an organization may have to be polycentric. However, even though labor relations are local level issues, it is good corporate strategy to coordinate a labor relations policy across subsidiaries.
But, there is no union exit in EFL. EFL hire labor through consultancy agencies like UNIVERSAL and SS (solution security). UNIVERSAL provide labor like plant technician, packing technician and other labor. And security guards through SS.
These consultancy agencies are responsible for their compaction reward and other benefits. EFL only pays lump sum amount to these agencies.