Stress: Effect on employee performance

BACKGROUND

People at work worry about all sorts of things like increasing competition for jobs, change in culture, globalization, terrorism, new technology, looking after aging parent and relatives, annual performance appraisals, outsourcing of jobs along with increased demand of employer for higher productivity. At times, these and some other different factors make the employees to go through certain pressures when they have to meet deadlines, cope up with some kind of strange but critical situations. They need to become accustomed to the cultural changes of the organization, learn new procedures and timely attend meetings along with being innovative. Looking at these situations, at first hand, appear to be the integral part of any job but when we look deeper and closer at all these, they are nothing but stressors which cause hindrance to the performance thus causing damage to the productivity and performance of the organization on the whole. All the good organizations take necessary concern and exercise extreme care and foresight with reference to job stress. So they, in their own larger interest, take very good care of their employees, value them, invest in them and work extra mile to cope their problems and fulfill their needs.

Work place pressure is growing day by day, people face changing economic and business situations, changing customer expectations and changing expectations from their own role and position in the organization (Moten, 2009). Therefore, there are three issues that arise in considering effect of job-related stress on individual organizations and the economy in general which are: how should work-related stress be specified, what determines its presence at the workplace and what is its importance as a predictor of individuals’ behavior?

Job stress Or Workplace stress

Job stress Or Workplace stress is the harmful physical and emotional response that occurs when there is a poor match between job demands and the capabilities, resources, or needs of the worker. The Health and Safety Executive (HSE) (1995) defined work stress as ‘pressure and extreme demands placed on a person beyond his ability to cope.’ In 1999, the Health and Safety Commission (HSC) stated that ‘stress is the reaction that people have to excessive pressure or other type of demands placed upon them.’

Nearly everyone agrees that job stress results from the interaction of the worker and the conditions of work. Views differ, however, on the importance of worker characteristics versus working conditions as the primary cause of job stress. These differing viewpoints are important because they suggest different ways to prevent stress at work.

Performance

Performance is defined as the results and accomplishments cherished by the organization or system that one works in. It is natural that the working environment of the system where people work directly affects performance of human beings. People need work that motivates them with healthy working conditions, and the chance to play a part in social surroundings of work and to feel valued. Stressful working situations and conditions, arising from any of above mentioned factors, can directly or indirectly effect on job performance of the employee.

Work place pressure affects the performance at a greater extent and it need to be dealt with carefully. Stress at a greater level on the other hand is harmful and has a negative effect on performance of employees over the long term as it wears down an individual and underutilizes his or her energy resources. High levels of stress can cause, low morale at work, fatigue, late comings, absenteeism and trouble in getting along with other team members or co-workers.

Recently many organizations are becoming responsive towards increasing cost of occupational stress, not only in human and financial terms but also to the national economy in general. The cost of replacing an employee who is underperforming owing to stress is between 50 to 90 % of his salary (Personnel Management, Factsheet 7, July 1998). Job stress is as much a corporate business issue as it is a health issue for organizations. Job stress charge American businesses billions of dollars a year in employee burnout, low morale, turnover, higher absenteeism, lower performance and increased health care costs. The American Psychological Association estimates that 60 percent of all absences and late comings are because of issues related to stress, costing American companies about $57 billion in a year.

Thus the study aims to find the impact of job stress on employee’s performance. As it is obvious that no one can work to its optimum level when s/he is under stress. Under severe stress, an individual fails to take clear-cut decisions, reevaluate and reassess the priorities and lifestyles, and ultimately, tend to fall into unproductive distractions. This can be described as a classic case of ‘burnout’. The ‘burnouts’ often engage in reckless or risk-taking behaviors. Starting from glamour and sport celebrities to common men, ‘burnouts’ are found everywhere. Often burnout will manifest itself in a reduction in motivation, volume and quality of performance, or in dissatisfaction with or departure from the activity altogether.

PROBLEM STATEMENT

Moten suggested that employee performance is declining due to the on the job activities and managerial policies.

On the basis of her findings we are researching that “Work activities and culture effect the work performance and behavioral performance in positive or negative way”

OBJECTIVES OF THE STUDY

The macro objectives of this study are:

  • To determine the causes of job stress in a workplace.
  • To find out the effect of job stress on the performance of the employees.
  • To determine the factors that can reduce the job stress at PTCL.
  • How can Stress at work be prevented or reduced

The micro objectives are:

  • To determine the effect of work activities on the work performance and behavioral performance of employees of PTCL
  • To determine the effect of culture on work performance and behavioral performance of employees at PTCL.

RESERCH DESIGN

Independent variables Dependent variables

Identification of Effect on

Factors causing Stress Performance of employees

Work activities

Deadlines

Work Load

Culture

Support from Boss/Supervisor

Management Style of Boss/ Supervisor

Work Performance

Completion of given tasks

Sense of responsibility

Behavioral Performance

Satisfaction level

Low Morale

Independent Variables

Work activities and culture were the independent variable of the study. All the job conditions that may lead to stress are the result of stressors and can be used to measure the stress.

Work activities

Includes multi-tasking, strict deadlines and work load on employees

Culture

It includes support from Boss/ Supervisor and Management style of Boss/ Supervisor.

Dependent Variables

Dependent variable for the study is Work Performance and Behavioral Performance of the employees. Performance is the outcomes and accomplishments of the employees that are valued by the organization. It determines the success of the organization or we can say that success of any organization depends on the performance of its employees. The different dimensions of work performance are:

Completion of given tasks

Sense of Responsibility

And the dimensions of Behavioral Performance are:

Satisfaction level

Low Morale

MODELS / RELATIONS OF CAUSE AND IMPACT OF INDEPENDENT VARIABLE ON DEPENDANT VARIABLES

Work Activities

•Deadlines

•Work Load

Work Performance

Behavioral Performance

Culture

•Support from Boss/Supervisor

•Management Style of Boss/ Supervisor

Independent Variables

Dependent Variables

Dimensions

Dimensions

Work Performance

Behavioral Performance

•Completion of given tasks

• Sense of Responsibility

•Completion of given tasks

• Sense of Responsibility

•Satisfaction level

•Low Morale

•Satisfaction level

•Low Morale

RATIONAL FOR THE STUDY

The framework of this project is inspired by the work of Moten’s research conducted in 2009. Her work consisted of several variables and its effect on employees. Our aim to conduct the research is to verify the effect of work activities and culture on the work and behavioral performance of employees. These variables have several dimensions. Thus it will help PTCL, in particular, and other organization to find the reasons of the difference in actual performance and the expected performance.

RESEARCH METHODOLOGY

Type of Study

The study being conducted is descriptive in nature. Using this mode of analysis is favored to smooth the progress of study, establish and be able to describe the characteristics of a group in a situation. Descriptive study used helped to present and analyze the data in significant form. It also helped to understand the effects of job stress on the employee performance at PTCL.

Type of Investigation

The study is co-relational. The researcher identified the factors that cause stress among employees in PTCL and in turn how the performance of these stressed employees gets effect. Many factors were known as vital reason of the stress depending on the host as well. Any of these factors can cause stress but at times they all act as stressors.

Sampling Method and Type of data collected

Non-Probability sampling method was selected to collect the data from the population and the data gathered was qualitative in nature.

Population

The study is about the performance of employees under job stress. The population for this study will be employees of PTCL.

Sample size

The planned sample size for this study is 100 employees of PTCL.

Research approach

Research approach was basically qualitative. But data was analyzed by both quantitative and qualitative techniques. Research topic was related to the Employee Performance under Job Stress. The research type was quantitative because after getting the response from sample through questionnaire the results extended from data were in numerical form and presented in the form of charts and graph. The research type was qualitative since it included literature review industrial and organizational analysis along with survey analysis.

Study Area

Field work of the study will be carried out in the City of Islamabad.

LITERATURE REVIEW

This part of the study provides the literature available on the research topic. It includes the citation from the previous works and theories done by different researchers. This helps to assist the research process and gains insight and in-depth knowledge about the subject and problems that are considered critical to this whole work. The sources of literature, studies, information, surveys and reports through articles have indeed enlighten and given us as a researcher proper direction to work and move into. By the help of the review the most important fact that came to researcher’s knowledge is that very little has been done in regard to cope with Job/workplace stress in Pakistan. To the researcher’s best knowledge, the current research is the first detailed and comprehensive study that shows the effect of job stress on employee performance in the business field of Pakistan.

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Occupational stress can be defined as the “harmful physical and emotional responses that occur when the requirements of the job do not match the capabilities, resources or need of the worker” (Sauter and Murphy. 1999).

Porter and Streers, (1973) presented the study of occupational stress and its health consequences. It constitutes a major area of research in the behavioral sciences. Studies of specific stress-related illnesses feature prominently in the medical literature, while in occupational psychology work-related stress has been linked to both physical and psychological health problems across a broad section of the working population. Individuals under stress are reported to suffer adverse personal health, including ulcers, high blood pressure, heart attacks or even death and studies in the behavioral sciences have shown that poor employee performance, absenteeism and high labor market turnover are all linked to worker stress.

According to James Tighe (June 2000) in his article “Stress affecting mental health and physical health” contributes that when people experience and feel under impossible pressure at work, meeting dead lines, unsupportive boss, being undervalued and lack of control over the work they lean to work harder and harder to try to close the gap between what they’re achieving and what they think they should be achieving. They stop taking breaks and lose touch with their own needs which creates stress not only in the organization but also disturbs their personal lives.

Due to the increased popularity of Call centers Ruyter, K. & et al. (2001) examined the causes and outcomes of role stress in a call center setting as a result of the conflicting demands of the company, supervisors, and customers. The participants of the study were 1200 employees of Insurance industry of Netherlands. The findings were that role stress is an originator of job satisfaction that, in turn, is an originator of poor job performance and turnover intention. Both empowerment/autonomy and competence were found to be antecedent conditions for role stress. They also found that while autonomy leads to role stress that leads to job satisfaction, competence has no direct impact on role stress. Another finding was that leadership had less impact in the model. So the researchers suggest that empowerment autonomy seems to have a relatively strong impact in terms of role stress reduction. Thus the employees should be given the freedom to influence pace, working method, and sequence of tasks in dealing with customers. In stressful work environments, it has been emphasized that job rotation and reinforcement of employees’ faith in their own competencies and skills are particularly useful in increasing job satisfaction. Employee recognition by management as well as strengthening employees’ confidence in their competence through task-related training programs may be the key to keeping high-performance call center employees.

Another research by Lambert, Alysa D. & et al. (2008) suggest that employees are so much strained due to different stressors that they readily give up some part of their salary even job. The study was conducted by taking 211 employees of two different organizations as sample. It was a two part on-line survey. Data was analyzed with the help of regression analysis. End results were that many work related factors induce employees to imitate the behavior of their co-workers to seek ways that can make the work schedule a bit flexible. The idea that people who are using flexible working arrangements were more productive is supported by this research also.

Mubashir T. and Ghazal, S. (NA) conducted a research identify role of different contributing factors of job stress and to investigate level of stress on those factors among different departments of Wall’s Unilever Pakistan. And also to find that how job performance is affected by job stress. The sample for the study consisted of 65 employees having different levels of job in five different departments of Wall’s ICF. The data from the sample was collected through questionnaires. They concluded that Workload, co-workers and repetitive work are the major factors causing stress however a strange finding was that there was no affect of stress on job performance in the selected organization.

Moten (2009) is of the view that workplace pressure comes from various factors and is expressed by employees in various behaviors. According to her, job stress is shaped through a range of ways such like interpersonal demands, role demands. Though the sources of these aforementioned types are different, their impacts are the same i.e. Low level of performance. She found out that employees are often thought to complete certain tasks which normally are not their job requirement. Most organizations impose multitasking upon their employees to cope with the recession and cut costs but unintentionally they are doing vice versa. Posing strict deadlines, requiring them attend meetings in very short notice, forcing them work late hours and making them prone to cut-throat competition and mounted work can lead to stress and anxiety. Workers may show signs of fatigue, absenteeism, and low morale. So at workplaces, friendly relations are very much important. Bosses should give their employees some space to help them cope with the pressure and determining success at work.

Stranks (2005) states in his book that stress is a pressure placed on a person beyond his ability to handle. It has a major hidden cost to employers. There are many direct and indirect causes of stress. Anxiety and depression is manifestations of stress so employer should be aware of the fact that employees experience certain types of stress in their lives. Particularly female workers can be subject to many stressors that male colleagues are not prone to. Changes in the organization can be a major reason for stress. There are techniques available for the measurement and evaluation of stress in organizations. So employers must give attention to various forms of human errors and violation at workplace and must find way to identify the traces of stress among their employees. This could be done by analyzing the standards of performance, staff attitude and behavior, relationships at work and sickness absence levels. His investigations in this line area brought out the fact that there is a direct relationship between stress-related human failure and accidents occurring at work. Strategies must be designed and considered at both individual and organizational level. Stress management programs and trainings should be introduced.

Glazer & Gyurak (2008) carried out a cross-cultural study to find the sources of stress among the nurses of various countries with respect to and free of the cultural influence. They filled a questionnaire regarding stress sources. Results were obtained by performing Chi-square analyses and t-tests. They found that quantitative workload might be a source of stress or anxiety in each country. Similarly leadership, lack of resources, low salary, negative rewards, certain patients and performing certain tasks can lead to stress. So there is a need to tailor occupational stress interventions to deal with the needs of nurses in a specific country, by addressing the specific stressors.

Stress management includes taking care of organizational issues like leadership, peer support, organizational culture and policies, work design and reporting arrangements as well as job analysis, staff selection and training to enhance role clarity such that there is a balance between the individual and his work environment. Effective systems for motivation and performance management are essential (Jennifer et al, 2006).

Kim (2002) conducted a research to show that participative management has positive effects on the job satisfaction and better communication can improve the performance of employees. The questionnaire was circulated among 4,097 employees of local government agencies. After running the regression analysis on the data collected, researcher found that employees who believe that their managers use participative style of management were more satisfied with their jobs. Also those mangers who applied strategic planning process found their employees to be more productive and easy to deal with. At the end, the researcher relates his findings with job stress and says that if employees are more satisfied they will eventually be less stressed and more productive.

Zahavy & Freund (2007) examined team effectiveness under stress. The author says that in case of stress team can lose cohesion, members may become dependent on others to avoid faults or lay off their burden or that they may become less effective. In order to avoid these troubles, team structure must be considered a vital aspect. For this purpose, data were collected from 643 members of 73 primary healthcare teams randomly selected from 1200 primary care clinics of the largest health maintenance organization in Israel. Participants filled the questionnaires as advised by the researcher. As a result this study differentiated among qualitative and quantitative stress, suggested that quantitative stress holds back team effectiveness, it also indicated that qualitative stress can enhance team effectiveness. In addition, the results also prove the fact that structure of the team really matters. Researcher suggests that organizations must support standardized routines to block the negative impact of quantitative stress on team commitment and effectiveness, and put into practice the ways that encourage self-sufficiency and a systems approach to enhance the positive effects of qualitative stress on team effectiveness.

Glazer & Beehr (2005) conducted a research to find out the correlation between stressors and how it leads to absenteeism or induce an individual to leave the job. These stressors can include workplace conditions, role ambiguity, role overload and role conflicts or any other issues that can cause anxiousness and strain among employees at workplace. The purpose of study was to observe the effect of these stressors from cultural aspect. So nurses working at hospitals of various countries were the population. Researchers distributed questionnaire among the sample through mail. After filling, nurses mailed back the questionnaires. The results supported the hypothesis that turnover is related to stress at some extent. However culture affects the tolerance level of the stress. Researcher is of the view that some cultures are more prone to stress but people take it for granted and as part of their job. But at some places stress has a great influence over employee and it affects their performance as well as expectations from their workplace. Whatever the reason may be to this fact, researcher suggests more investigation in this line.

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Anxiety Disorders Association of America (2006) conducted a survey research and observed the effect of anxiety disorders and the level of everyday stress in the workplace also. Findings of survey showed that majority of Americans experience stress and anxiety on a daily basis. And this stress is not without impact. For the four in five working persons who say they experience it daily, job stress often takes a toll on performance, quality of work, relationships with bosses and interactions with coworkers. A number of factors were indicated by employees that cause stress. These include deadlines, interpersonal relationships (i.e., interacting with superiors, coworkers, subordinates), staff management and dealing with problems. They also explained that stress affects their performance, relationship with co-workers/peers, quality of work and relationships with immediate superiors. Survey results suggested that people found sleeping a common relief practice for stress. Others are eating, talking to friends, or/and taking drugs. The only thing that people avoid is talking and asking their bosses. This is due to fear of being perceived as incompetent person, poor performer.

Pearsall, M. J. & et al. (May 2009) investigated the situations where both challenge and hindrance stressors coexist. They took interest in this topic because on the grounds that the positive motivational effects of challenge stressors might to some extent balances the harmful effects of interruption stressors on team outcomes. In an extremely stressful situation, team members will be incapable to split a range of stressors into positive and negative facets, and take into account multiple methods of coping. They are also of the view that in the presence of challenge and hindrance at the same time, team members will appraise the situation as strongly threatening and withdraw to accomplish their task and team responsibilities, reducing their motivation, effort and emotional connection to the team. This response will further hamper the recognition and exchange of expertise- specific information within the team as communication channels shut down and team members struggle to manage their own responsibilities and demands. 332 students from Southwestern University participated in the research and were grouped into 83 four-person teams. Teams had to operate an integrated, computerized, multi-person Distributed Dynamic Decision-making (DDD) simulation task. The results supported the use of the challenge hindrance framework at the team level as well as the central role of transactional theories of stress. That challenge stressors and hindrance stressors stimulate different forms of coping. The results also imply that team members’ adoption of a collective coping response signifies the team-level techniques underlying the differential effects of challenge and hindrance stressors on behavioral, cognitive, and affective outcomes.

The aforementioned line of investigation supported the study conducted by Umiker (1992) which illustrated that “Individuals who feel that they are in control of their jobs and their futures, are better able to handle stress. Also that these empowered workers become more productive out of being in control”.

Results of another study presented by Bushe & et al. (1996) authenticate the positive and encouraging affects of employee empowerment which were congregated from increased customer satisfaction and innovation regardless of occupational grouping. Further he says that stress was reduced when a person did no longer have to report to someone daily. When employees are empowered, they take the control over their work which gives them a higher sense of accomplishment. The purpose of empowered work teams in Bushe et al. (1996) research was to reduce costs through fewer overheads and to speed up problem resolution. The organizational outcomes were increased productivity and efficiencies mainly because of quicker response rates through empowerment and removal of organizational barriers. The research also concluded that automation has left workers virtually on call 24 hours a day and has shortened the turnaround time from project conception to completion. Many workers work ten hours a day and corporate restructuring makes them anxious about their job security. Symptoms of these stressed workers included drops in productivity, changes in work attitude, low morale and increased absenteeism.

Reese (1997) Stress is a mental and physical condition, which have an effect on an individual’s productivity, effectiveness, personal health and quality of work. Job stress’s victims go through lowered quality of work life and job satisfaction. The harmful and costly consequences of stress demonstrate the need of strategies to limit stressors within the organization. Organizations that do not adopt strategies to alleviate stress may find their employees looking elsewhere for better opportunities. The impact of stress from overwork, long hours at work and work intensification has had a major and often devastating effect on organizations of developed nations. In America job stress alone costs American business an estimated $200 billion annually, the UK £63 billion and Australia $15 billion. This is the cost for compensation claims, reduced productivity, absenteeism, added health insurance costs and direct medical expenses for stress related illnesses. A recent American Management Association survey of 292 member firms revealed that per capita disability claims tend to increase when positions are eliminated. The survey, which dealt with layoffs between 1990 and 1995, found that the illnesses disabled workers sought treatment for gastrointestinal problems, mental disorders and substance abuse, hypertension and the like were stress related.

Shahu & Gole, (2008) have conducted a study to examine the effect of job stress and job satisfaction on performance. The participants for this study were those managers who either currently or previously held a manager’s post at different manufacturing companies. In total 100 managers from 15 private manufacturing companies completed assessments. The tools for this study were two different assessments. The first tool is job satisfaction instrument (developed by Mishra, R.S., Tiwari, and Manorama). The second tool is occupational stress index. The scale consists of 46 items with 5 alternative responses. The other instrument was a current (2005) performance evaluation that was completed by the executives of the each company. The participants were asked to fill the questionnaire and performance evaluation form. The analysis was conducted through multiple regression analysis and ANOVA. Results showed that job stress is negatively correlated to performance. He found working conditions and role overload to be major agreed upon stressors in various organizations and business sectors and low stressed employees tend to give maximum output as compared to high stressed groups. He laid great stress on organizations to seek remedies and work in this particular area in order to improve productivity.

According to Melissa Bushman (2007) the common causes of low morale include stress, negativity and gossip within the workplace along with lack of incentive programs. The projected solutions to deal with low morale is increasing employee attitudes and improving attendance. Stress is the most frequent cause of low employee morale. Numerous factors may increase the stress levels of employees, but the major reason that employees experience stress is their relationship with their manager, and it has been proved that highly authoritarian managers are likely to cause an increase in level of absenteeism. Therefore, when absenteeism rates are high in a certain department of company, poor employee relationships with the manager or bosses should be considered. For this purpose management training could be used resolve the issue and avoid problems.

Jamal (2005) observed the relationship of job stress and Type-A behavior pattern with employees’ personal and organizational outcomes in Canada and mainland China. It indicated that job stress is significantly related to burnout, low morale, health problems, job satisfaction, organizational commitment and turnover motivation. Findings also replicated the findings that job stress is related to personal and organizational outcomes. The results also indicated that job stress factors such as work overload, ambiguity and conflict were significantly related to overall burnout.

The economic aspect of job stress was studied by Leontaridi & Ward (2002). They discussed the factors that can have impact on the performance of employees in an economics context by bringing together all the relevant personal and socio-economic variables while working environment and employment conditions were considered to be contributing to work-related stress resulting in absenteeism, intentions of quitting behavior and turnover. Particularly, the stressful impact of occupation, hours of work and workplace relations on worker with focus on the labor market costs of stress by estimating the importance of work-related stress as a predictor of individuals’ quitting behavior and rate of absenteeism. The respondents were from 15 OECD countries. Results identify that certain physical and psychological job characteristics such as working hours, physical demands of the job, non-pecuniary advantages of the job, and working relations have an important role to play in determining work-related stress. Females report higher stress levels than men. Stress is significantly increasing with working hours, income, educational level, when married, when managing people, being a trade union member, but decreasing for public sector workers for all country groups and for both men and women while significant evidence exists that experienced stress levels vary by occupation. Those individuals reporting to undergo as a minimum some stress in their existing position are 25 percent more likely to hold intentions to quit and have taken periods of absence from work than those without, with the probability increasing with successively higher job stress.

Bakker, A. B. and et al (2004) explored the relationship between job characteristics, burnout, and performance by using a theoretical model. The main purpose behind was to investigate how exhaustion may be related to other ratings of performance that integrates the core dimensions of burnout and by employing adequate measures to capture in-role and extra-role performance. The participants were employees of several different sector and job position. A total of 274 questionnaires were distributed but 146 employees filled out the questionnaire. Than researchers performed structural equation modeling (SEM) analyses using the AMOS software package. The results supported their hypothesis and showed that job demands and job resources initiate two psychological processes, which eventually affect organizational outcomes. Therefore jobs with high demands and limited resources can increase fatigue and detachment among employees that is, burnout.

Khan, M.A. & et al. (2007) investigated the stress and job satisfaction level of Pharma’s at Korangi, Karachi. They also investigated the mechanism adopted by the individuals to cope the stress. They examined five potential workplace stressors (Task Demands, Role Demands, Interpersonal Demands, Organizational Structure and Organizational Leadership). The sample was of 93 supervisors from 17 pharmaceutical companies situated in Korangi and other industrial areas of Karachi. All the respondents completed a questionnaire to provide information regarding the research issue. They brought out the fact that people who try to improve their quality of life have high job satisfaction level and tend to be under low stress. They also found that supervisor’s job is tougher and cause high level stress. The researcher concluded that pharma industry should redesign the job, improve the organizational structures and interpersonal demands in order to prevent the stress among employees.

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Siu & Cooper (1998) found how locus of control affects job stress, quitting intentions and job satisfaction. The target population for the study was employees in Hong Kong industrial firms owned by different nationals. 170 questionnaires were distributed to employees of several trading firms. They found that there can be many causes of stress that can also effect job satisfaction. They further discuss that those who think that the reason for the problem is out of their control, they don’t approve interpersonal relationships. Similarly they will get direct effect from the stressors which can be seen from their outcomes. So we can say internal locus of control helps cope with stress. It was also found that people with low locus of control are mostly dissatisfied with their jobs but not with their employer.

CHAPTER 3

PTCL ANALYSIS

With the birth of Pakistan In 1947 Pakistan’s Telecom sector inherited the British Post, Telegraph & Telephone [PTT] Departments with a miniscule base of 7000 telephone lines. For 30 years, this entity lumbered and slumbered with its old mechanical, analog ‘Stronger” switches and analog telephone lines, protected in its monopoly, both local and global. By 1962 this PTT Department was split up into the Telephone & Telegraph Department and the Postal Departments. By 1991 this was further re-organized thorough the PTC Act 1991 opening this public sector to the private sector companies. These were Data Network Services, Paging, and Manufacturing of Small Telephone Exchanges.

PTCL became the company limited (Pakistan Telecommunication Company Limited) in 1994 by six million vouchers issued exchangeable into 600 million shares of the PTCL in two separate placements. The par value for each of the share was Rs. 10. In mid-1996 these vouchers were converted into PTCL shares.

In 1995, Pakistan Telecommunication (Reorganization) Ordinance shaped the basis for PTCL monopoly over basic telecommunication sector in the country which paved the way for the founding of an independent regulatory regime.

The year 2006-07 in the telecom sector was marked by the exceptional growth in the mobile sector in Pakistan, which doubled its subscriber base to 60 million. The teledensity increased from 26% to 40%, helping to extend the benefits of communication technology across the country. PTCL’s mobile phone subsidiary Ufone’s subscriber base grew by more than 87%, from 7.49 million to 14 million. The year also witnessed the entry of major telecom companies, most notably China Telecom and Singtel, into market.

The privatization of the company was completed in the FY06 following the purchaser of 26% ‘B’ class ordinary shares by Etisalat International Pakistan L.L.C. EIP took over management control on 12th on April 2006.

In short PTCL has been working energetically to meet the dual challenge of telecom development and socio-economic boost up of the country. This is characterized by a clearer approval of ongoing telecom scenario wherein convergence of technologies continuously changes the profile of the sector.

A measure of this understanding is progressive measures such as establishment of the company’s mobile and Internet subsidiaries in 1998. As telecommunication monopolies head towards an imminent end, services and infrastructure providers are set to face even bigger challenges. Pakistan also entered post-monopoly era with deregulation of the telecom sector in January 2003. PTCL is in full awareness of the same, and future policies feature a strong conviction of healthy competition

TECHNICAL AND OPERATIONAL MILE STONES

PTCL is continuously growing by improving its set of networks. Comparing with the year 2007 PTCL installed capacity (4940154) has increased by 100% digitalization in current year.

Computerized Fault Management System

This feature of PTCL is used to improve network & is being used to register & repair land line defects in a computerized way. Before, this system was working only in few cities but now it is accessible all over the Pakistan.

Launch Of IN Platform

To expand the capacity and bring in additional value added services PTCL launched a new Intelligent Network (IN) Platform in October 2003. The main benefit of this feature is that it has higher capacity for prepaid calling cards and provision for introduction of new services.

Optical Fiber Junction Access Network

To further hold the launch of new latest services the optical fiber junction access network has been in the phase of implementation. This system further provides supports the future upcoming project of PTCL WLL (wire less local loop), Broad Band Services & IPTV.

Products and Services

PTCL is in a perfect position to redefine the conventional boundaries of the telecommunication industry and is shifting the productivity boundary to new heights. Due to increase in technology and innovation millions of people demand instantaneous access to new products and ideas. PTCL is going to be first and foremost choice for its customers in the upcoming years as well, just as it has been over in the last past six decades.

PTCL is retaining and enhancing its customers’ satisfaction by providing them with innovative features and services which include proper network coverage, better performance, validity, reliability & security at their respective locations. It is providing services to two types of clients including customer as well as corporate services.

For clear and timely communication the first choice of big business circles is PTCL telephone for not only local but also nationwide and international calling. In today’s world businesses can have 10-100 lines with up to date services to meet the needs and requirements of customers. Now, customers get variety of services like call-forwarding, Call Barring, Caller-ID and call-waiting, to name a few. Other business related services include Digital Phone Facilities with Modification Charges, 0900-Preminum rate services, UAN, Virtual Private Network (VPN), Digital Cross Connect (DXX), ISDN (Policy), Teleplus (ISDN/BRI), 0800-Toll free number, Audio Conference Service, UIN.

Carriers Services

As carriers-carrier, PTCL provides all type of carrier services, starting from telehousing and inter-connects to a range of DPLC and IPLC connectivity. It provides the main core infrastructure services to the LDIs, payphone operators, Local Loop operators, cellular, mobile and call centers. Its interconnect services are provided from exchange locations of 3200 that connect carriers networks domestically. For connecting internationally it provides IPLC bandwidths through its four different international gateways.

Broadband Pakistan:

The largest and the fastest growing Broadband service in Pakistan is PTCL Broadband. The company initiated to open up a broadband culture in Pakistan by establishing this service in the market. This is because almost a couple of years back there was very little responsiveness and awareness in the country about broadband & high speed internet products and services. This broadband technology was made affordable to customers by minimizing the barriers to entry and also by bringing and offering the service within the reach of general public across Pakistan by continuous improvements and developments in customer care for the service.

IPTV Service (Smart TV)

Using its Broadband network, PTCL entered the media sector on 14th August 2008, by successfully introducing a digital interactive television service for the first time. Employing the IPTV (Internet Protocol TV) technology, PTCL brought in the list of a few countries across the globe that offers this kind of interactive TV service to its users.

V-fone

PTCL also continues to be the largest CDMA operator in Pakistan with approximately 1.25 million V-fone customers. It provides fixed wireless telephone for both homes & business. The system is already enabled for Voice, Dialup-Internet access (153.6kbps) and EVDO Broadband.

PTCL Landline

Since the deregulation of the telecom sector, a large number of foreign investors opted for licenses in LL, LDI and cellular operations, identifying Pakistan as an emerging market. Investors entered the market forcefully in the cellular segment, introducing heated competition for PTCL. In this situation PTCL’s counter strategy for landline service, during the year 2007-08 was aimed to increase ARPU, acquire new subscribers and contain churn.

Being well aware of the challenges put forward by other cellular companies, PTCL shifted from its conventional duration based charging system to value based options, like ‘Pakistan Package’ that offered 5,000 minutes for on-net nationwide calls at Rs. 199/month. PTCL also launched ‘International Plus’ package to facilitate cost effective international calls at unmatchable rates alongside offering Voice messaging and Phone n Net services, adding more value to the landline service. To increase customers’ base, ‘order on phone’ was introduced, allowing customer to apply for a new connection by simply calling 0800-80800. To tackle the churn, PTCL established an outbound call center to reach out to potential customers with an objective to attain higher level of brand loyalty.

Ufone

(Pakistan Telecom Mobile Ltd) a wholly owned subsidiary of PTCL commenced its operations on 29th January 2001 as a GSM 900 service provider. Since the outset, it has expanded its coverage and customer base at a rapid pace and established itself as one of the leading cellular service providers in Pakistan. Ufone is now considered to be one of the most active, aggressive and innovative players in the mobile sector of Pakistan. Ufone managed to improve its revenue and operating profit by 35% and 47% respectively, as compared to the last year through aggressive policies and exercising strict control over expenses.

Consumer Services

Corporate Services

PSTN (Public Switch Telephone Network)

UAN (Universal Access Number-111)

PTCL Calling Cards

DPLC (Domestic Private Leased Circuit)

V Fone

Audio Conference

IPTV (Ptcl Smart TV)

UIN (Universal Internet Number-131)

Voice mail Service (VMS)

IP Connect

Broadband

V-Connect

Kehdo SMS

VPN (Virtual Private Network)

Evo Wireless Brodband

Co -locations

Business DSL

Payphones

ISDN BRI (Integrated Services Digital Network Basic Rate Interface

International IP services

DXX Connectivity

Premium Rate Service (0900)

ISDN PRI Integrated Services Digital Network Primary Rate Interface

Call Centers

PTCL Web hosting


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(275 words)