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Project Report
Group Members:
Haroon Ashraf Hafiz Usman Ali Haider Absham Mehboob Nabeel Atiq Tabish Mujahid 08-0108 08-0442 08-0176 08-0014 08-0141 08-0051
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Contents
Company Overview ....................................................................................................................................... 3 Company Profile............................................................................................................................................ 4 Vision......................................................................................................................................................... 4 Mission Statement analysis ...................................................................................................................... 4 Business Status.......................................................................................................................................... 4 Organizational Structure ........................................................................................................................... 4 Departments of PIA................................................................................................................................... 5 Human Resources Department................................................................................................................. 5 Employee Relations Strategy ........................................................................................................................ 6 Organizational Structure: .......................................................................................................................... 6 Recruitment and hiring procedures: ......................................................................................................... 6 Salaries ...................................................................................................................................................... 6 Employee training and attitude enhancement ......................................................................................... 6 Employee satisfaction or dissatisfaction measures .................................................................................. 6 Conflict resolution:.................................................................................................................................... 7 Culture Existing between Employees and Management .............................................................................. 8 A General View.......................................................................................................................................... 8 Employee Attitude .................................................................................................................................... 8 Influence of Groups on Decision Making .................................................................................................. 8 Team works Role ...................................................................................................................................... 8 Centralized System.................................................................................................................................... 9 Multiple Power Sources ............................................................................................................................ 9 Lack of Unity.............................................................................................................................................. 9 Nepotism ................................................................................................................................................... 9 Communication ......................................................................................................................................... 9 Rules and Regulations ................................................................................................................................. 10 Violation of Code of Conduct (COC)........................................................................................................ 10 Disagreement among Employees ........................................................................................................... 10 Unions and Workforce ............................................................................................................................ 10 Resolving Conflict .................................................................................................................................... 11
Page |2 Recommendations ...................................................................................................................................... 12 Delegation of Tasks ................................................................................................................................. 12 Job Rotation ............................................................................................................................................ 12 Monetary Rewards.................................................................................................................................. 12 References .................................................................................................................................................. 14
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Company Overview
Pakistan International Airlines, Pakistans national flagship airline, has been a pioneer since its inception in 1955. PIA was the first airline from a non-communist country to fly into the People s Republic of China and, in 1962 PIA set out to break the record for the fastest flight between London and Karachi. PIA has a fleet of young airplanes and a crew dedicated to providing the highest standards of in-house service. However, recently, the profitability of PIA has been witnessing a downside. The year end 2010 did not bring any significant improvements to the financial performance of the airline. The ignored problems of the past recurred and compounded and resulted in a higher net loss for the company. The company is at a tip over stage and is wearisome to salvage itself from further crises. Imposition of operating restrictions by European Union in 2007 caused considerable disruption in the PIA schedule as well as significant curtailment in capacity. While the financial division of PIA was in difficult situation, the human resource problems were not far from dreadful. In the past year several conflicts have come to pass. People with influence or power control the recruitment and appraisal process. PIAC has a autocratic structure so has a traditional top down hierarchy, also being a public limited company, PIA like another public sector company is not immune from bureaucratic control. With the airline brand severely hurt, PIA lost market share as well as growth in business, which made the circumstances still more difficult. The record hike in oil prices adversely impacted PIA. Apart from the fuel cost, increases in pay to certain categories of personnel and depreciation of the rupee vis-a-vis the US dollar also adversely affected the financial results. The airline is not immune to ever-increasing competition due to an over supplied capacity environment including entry of new operators in certain key markets.
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Company Profile
Vision
PIA has a vision to be a world class airline, meeting customer expectations through excellent services, on-time performance, innovative products and absolute safety.
Business Status
PIA is capitalized (publicized) and its the only airline in Pakistan to be in stock market. Though its full privatization is announced by the GOP but it was never implemented due to Union power. Currently 89.1% shares of PIA are with government. Several steps towards outsourcing of non-core business have been initiated. Catering units (starting with Karachi Flight Kitchen), Ground Handling (starting with Ramp Services) and Engineering, are to be gradually carved out of the airline and operated as independent companies.
Organizational Structure
The organizational structure of PIA is centralized, therefore decision-making is a time-consuming process and delays occur in downward communication. Though, it is believed that the management is inclined towards a decentralized system, the implementation will be a major challenge. The decentralization process becomes difficult because of problems and concerns of the majors stake
Page |5 holders which include government officials and politicians who value their own agenda rather than focusing on overall organizational efficiency.
Departments of PIA
Human Resource and Administration Marketing Corporate Planning Information Services Finance Flight Services Flight Operation Engineering Procurement and Logistics Customer Services Training and Development
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Salaries
Salaries of all the employees including operational crew have been considerably enhanced in an effort to align PIA salaries with regional airlines over a period of time.
Page |7 Employees at PIA can express dissatisfaction through the Suggestion Boxes located at various sites of PIA. Furthermore, quarterly employee co-ordination meetings are held where all employees can share their views with their bosses and subordinates.
Conflict resolution:
Its also a part of ER strategy, which is discussed in detail in following pages under rules and regulations.
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CHARACTERISTICS INNOVATION AND RISK TAKING ATTENTION TO DETAIL OUTCOME ORIENTATION PEOPLE ORIENTATION TEAM ORIENTATION AGGRESSIVENESS STABILITY
The chart shows that management at PIA focuses more on the goal rather than means to achieve it. Therefore, employees are not highly valued.
Employee Attitude
At PIA, every employee is expected to show complete responsibility through their attitudes and avoid behavior which clashes directly with the organizations interest. In case of deviant workplace behavior, administrative action is taken against the employee according to the standing rules of PIA.
Page |9 operations. Considering the diverse nature of employees PIAC has, it is difficult to make team work efficient so it is major challenge for them.
Centralized System
PIA is a highly centralized organization. Decision making rests with the high authorities. Employees have almost no involvement in the decision making process. This has created a lack of trust and disorientation among between management and employees.
Lack of Unity
PIA human resource has a serious lack of unity. Individuals and groups have their personal agendas. They dont have a common goal to achieve. Often people are loyal to their specific groups instead of the organization.
Nepotism
One reason of disunity and non professional attitude of the PIA employees is a growing trend of nepotism. Government appoints its favorites at the key posts.
Communication
The organizational structure of PIAC is centralized, therefore decision-making is a time-consuming process and delays occur in downward communication. Though, it is believed that the current Chairman is inclined towards a decentralized system, the effectiveness of such an approach in PIAC remains to be seen. Effective communication is essential in all organizations and it becomes even more essential in an organization like PIAC due to its large size and expanded network. It is necessary that people from various departments communicate between each other to have an overall uniformity. Previously fax was widely used to transmit information, however, with the technological advancement e-mails are used for this purpose. Another mode of communication is through letters.
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P a g e | 11 When there are more than one registered trade unions in an establishment, the collective bargaining agent is to be determined by the registrar of trade unions by secret ballot. Workers have the right to join trade unions.
Resolving Conflict
For resolution of issues of work unions and possible conflicts of interests the PIA policy states.The points raised by the Union in the Works Councils meetings shall be examined and every effort shall be made by the sectional heads to expeditiously resolve these points. General Manager Industrial Relations shall prepare and circulate a booklet containing relevant information on the current Labor Laws, obligations of the Employees and Employers in the accomplishment of the common goal and hold periodic meetings with the Departmental Heads with a view to assist them in the amicable and expeditious settlement of all Union matters. Union Activities in the Corporation were suspended in 2001, later restored in 2007.
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Recommendations
Delegation of Tasks
This diagram breaks down major skills needed to be introduced at PIA in three categories Top level management Middle level management Functional level management
power of person Paternalistic style of management forward looking broad minded intelligent
power of person and position honest tactfull loyalty power to align teams adaptibility
Job Rotation
At PIA, employees are not rotated amongst various departments unless they request for a rotation.
Monetary Rewards
Amid a highly competitive environment, PIA needs to motivate its employees. For this purpose, Promotion Boards are held twice a year. Extra-mile Awards are handed over to the competent employees. An Employee Suggestion Scheme gives employees an opportunity to be vociferous
P a g e | 13 regarding their issues. The three best suggestions are given monetary awards ranging from Rs.5000 to Rs. 20,000. Apart from the basic salary, fringe benefits are in the form of Medical Entitlement, Free/Rebated Air Tickets, Utility Allowance, Rent Allowance and Meals at discounted rates.
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References
http://www.piac.com.pk/PIA_About/pia-about_History.asp
http://findarticles.com/p/articles/mi_hb092/is_n5_v22/ai_n28603065/
http://www.scribd.com/doc/23738166/Chap4-Departments-of-PIA