Transfo Power is a firm at its prematurity level. The firm has to face many challenges and the tough competition ahead in the field of transformer productions. In this report, we gathered information and analyzed the current Human Resource Management activities of the firm by conducting interviews with the firm's employees. After a complete analysis, we figured out the HRM needs of the firm. We tried to formulate a well organized and practicable HRM plan for Transfo Power which if implement would bring profits to the firm in the long run.
INTRODUCTION
TransfoPower industries (Pvt) Limited is a private firm that grew from a tiny seed to a gargantuan tree. Its roots were laid by three friends who all belonged to Engineering backgrounds. One of the friends, namely, Fawad Shamsi was the initiator of this idea. His father belonged to the very successful "Waves Refrigeration" company and it was he who encouraged his son to come up with a company that belonged to roots of engineering.
Transfopower Industries (Private) Limited was established in 1993 to manufacture distribution transformers (Pole Mounted & Kiosks), power transformers and special purpose transformers to meet the requirement for the local market i.e.: WAPDA, KESC, AJK and Private Sector as well as export markets.
Presently, the firm is manufacturing Transformers from 5KVA to 5000KVA for WAPDA Area Electricity Boards, KESC, AJK and the Private Sector like Housing Societies, Shopping Plazas, Fuel Stations and Industries (Sugar, Textile, Cement, and Engineering etc.). Also Furnace Transformers have been manufactured for steel mills in Pakistan and Africa.
They also manufacturer Special Purpose Transformers designed for Specific Application.
Their transformers are designed by a team of qualified engineers. The manufacturing process is supervised by experienced engineers and a strict quality control is assured at all stages. Tests accordingly to relevant standards are carried out before dispatch. Transfopower is ISO 9001:2000 Certified Company.
The company produces products such as distribution transformers, power transformers, furnace transformers, dry type transformers, and non-flammable transformers. They also provide for special needs of the customers by manufacturing transformers according to the requirements of their clients.
The company consists of three members at the top. They are the pioneers of the firm and also the three main board members are equal shareholders as well. This is mainly due to the fact that they were equal investors at the start of the firm.
The organizational structure of Transopower is a fairly simple one. Top management includes three CEO's of the company to which the middle managers directly report to. They are ultimately responsible for the entire organization. Under the top managers lie the middle managers who are also department managers e.s general manager, functional manager, project manager. These managers also perform as first-line managers it is a small firm and they are directly responsible for the work of the operating employees. They control the entire workforce that works under them. There are a total of 350 employees, out of which 256 are low-line laborers, 2 are managers and the rest of the 3 are the CEO's.
The firm's mission is to provide maximum satisfaction to its customers through satisfying products (transformers, generators etc). Initially, the firm started by just providing repair and maintenance facility for customers but later it expanded and started producing transformers. This operation expanded further and Transfopower culminated into a proper, registered firm. In 1993, the firm started with a factory area of 3 kanal only and a workforce of 10 employees. This was because the company had just started and wasn't financially very strong. Presently, it is working at a factory area of 73 kanals and a labor force of 350 employees.
METHODOLOGY
The sources of information used in this report are the internet, our text book and the interviews. Mostly the information is obtained from the interviews that we conducted from the CEO and General Managers of Transfo Power. No articles, library material or any other form of literary material was used for the formulation of this report.
Analysis of the firm's current Human Resource Management plan:
Transfo Power is not a very large scaled firm due to which it does not have too many specified and organized departments. During our research we found that the company does not have a separate Human Resource Department but they have merged it with their Administrative department. So they have a Human Resource and Admin Department which works as a single unit. Another reason that we were told for not having a unique HRM department is that the company does not have to deal with hiring and managing of thousands of employees like most of the multinational firms do. There are approximately 350 employees working in the firm from which 250 employees are the low line workers. As we entered to the Transfo Power's headquarters with our reference letter, we were entertained by the administration and were given cards at the entrance after which we were guided towards the GM's office. The card read "Visitors". This showed that the employees perform their duties in a systematic manner.
Mr. Shoaib Dar is the GM Finance of Transfo Power. His job description includes handling and managing accounts of the firm. He has to report to the CEO of the firm about the profits or losses that occur in a particular month. Accounts include expenditures like travelling, food, fuel, machinery maintenance and repairing. He interviews the applicants of managerial level.
We also interviewed GM works of the company, Mr. Ahsan Islam. He is responsible for the maintenance of the machines and assures that they are in a proper working condition. Furthermore he assigns day to day jobs to the employees working in the factory.
The final decision making authority lies with the CEO of the firm, Mr. Fawad Shamsi. The CEO and his partners recruit, interview, hire and appraise executive level candidates.
We interviewed the above Personnel and gathered some information to analyze the current system of Human Resource in the firm. As mentioned above, the company has a so-called Human Resource and Admin department but most of the Human Resource management is done by Executives and CEO's. What we found by interviewing these persons is that their Human Resource and Admin department is only responsible for keeping the record of attendance of the low level employees who work in the factory. It caters some other minor administrative responsibilities like accepting or rejecting the leave applications and facilitating the employees with their needs and demands accordingly.
A formal job description is given to all employees on the very first day of their job though it is not very strictly followed by the employees. These job descriptions are not updated timely. Foremen are appointed for every unit in the factory who ensures that each worker performs his job correctly. The workers can interact directly with the foreman who reports to the supervisor of the respective department. These supervisors are responsible for assisting the managers and assistant managers.
Personnel Planning
The company holds a meeting of the senior level staff members with the CEOs after every two years. Every aspect like company's performance is discussed in the meeting. They carry a trend analysis which includes the analysis of the employees entering and exiting the company.
The number of job vacancies, the recruiting method and the skills required for the vacant job are defined in the meeting.
The process of Personnel planning is carried out by the company executives. The GMs make monthly reports of number of employees working under their departments which are then forwarded to the CEO. The GM themselves are responsible for recruiting and hiring employees of their respective departments. They write a report after analyzing candidate's file and interviewing him and send the final documents to the CEO with his recommendations. Finally it is the CEO who decides whether to accept or reject the application.
Employee Hiring/Recruitment:
The hiring process is systematic. Usually the hiring is done on the basis of references, that is, a new employee is hired for the vacant post at the low level by the reference of an older employee already working in the firm. Direct applications are also a main source of candidates applying for the job. These Walk-Ins are supposed to leave their files in the office. The files are entertained further by the administration. The company only calls back the candidates for the interview who they think is eligible for the job. They don't answer the applications that they don't call for the interview. Usually the company doesn't advertise for the vacant jobs in any newspaper nor in any website, but they advertise for very crucial posts and for executive jobs. Last time they advertise in 2009 for the post of "Assembly Manager". The person who was eligible to apply for this job was supposed to be a mechanical engineer. A formal job description was published in the newspaper. There is also a section of job vacancies on the official website of the company.
Interviews:
Every employee has to go through a formal interviewing process before being a part of the firm. At the low level the interviews are carried by the supervisors of the respective department which is not a well prepared interview. The supervisor asks random job related questions, makes a file, and then sends it to the GMs. The interviews for the executive jobs are panel interviews. The panel consists of the company owners who have to decide and make plans for attaining the future goals and objectives of the firm. These are well structured interviews and the panel is already prepared with the questions they want to ask from the applicant. According to the interviewee the applicant's first impression on the interviewer has a great impact on making the decision of accepting or rejecting him. He said that a candidate must be well dressed and show an adequate confidence level to impress him and make him feel that he is responsible enough to take the vacant position in the firm. Transfo power doesn't take the interview from the employees leaving the firm.
Employee testing and Selection:
The selection of employees is done after checking their previous performances by contacting the companies where he has worked previously. A background check is also carried out before hiring which does not include checking the criminal record of the applicant. The company thinks that background checking is time consuming and costly. They keep the copy of their identity card, birth certificate, testimonials and everything needed to trace him if he leaves unreported. Employees who are selected to work for the company are first tested. The first week of their job is crucial as they can be accepted or rejected on the basis of their performance. After this there is a six months of provision period in which the performance of the new employees is judged by testing them on the job. The technique the company uses in testing the employees is work sampling. In this the candidates are given the actual basic job tasks.
Training and Developing:
All the training in the firm is done on the job. New employees are usually trained on the job for six months with their salary being paid to them. The firm does not pay much attention on the training of their employees. They distribute the user guides or books to the workers who operate machines in the factory and to the Engineering staff.
Appraisal:
No formal employee orientation is practiced with the new employee entering Transfo Power, though the employee is felt comfortable and at ease by the friendly environment of the company. The interactions between the same line workers are rather very informal and with the high level staff it is a bit formal. There are situations when the employees are given tasks which were not the part of their job description. For these tasks and extra work the employees are not paid yet they are paid for the extra time they work for their own job. Promotions are given on the basis of performances and seniority of the employees.
Pay plans and Retirement:
Transfo power has not experienced any worker strikes yet. They claim that they take precautionary measures to avoid unsatisfied employees. The precautionary plan is to give pays to the workers on time, by paying for the extra hours they work and by granting them leaves. For an employee, 30 absences are allowed in a year. Absences more than 30 become a serious matter to be noticed. The board decides whether to excuse or refuse the employees application depending on the situation. The minimum salary of low level factory workers is same that the government has set. According to the interviewee, salary of the Engineering staff and the upper level employees is decided by the market, on which an annual increment of five percent is made due to inflation in the country. The employees from low level to CEOs are provided with the "Group life Insurance" which is a part of their pay plans. Transfo Power has well defined retirement and pension plans. Ten percent of the salary of each employee and ten percent from the company, both added together, is transferred to a separate account called Staff Provident Fund Account. This account is a separate entity with has now nothing to do with the company. The summed up percentage amount of the employees in the account is invested in stocks. The profit incurred is also transferred to the fund account. This account works as an alternate to the pensions given to the employees after their retirements. The retired employee withdraws his share from this provident account which is the only amount he gets after leaving the company.
The HRM plan for Transfo Power
Job Analysis:
Transfo Power does not have any formal method of job analysis. After analyzing Some cost effective and not so complex methods, are given below:
Observation method: (low line workers)
For low line workers, like transformer assemblers and Transformer winders, observation method should prove really useful. The supervisors can take notes while observing these workers. Then to clear out the points noted, the supervisor should interview the workers about their activities and duties. And in the end compile everything.
Diary LOG (engineers and designers)
For engineers and designers working in the firm a diary log, will actually allow to know what do they actually do? What are their job duties? What are activities they did all they?
PAQ: (useful for pay purposes)
They should definitely use PAQ for job analysis. As this is a quantitative method so it should really help the firm determine pay .The analysis form are available on the website. From The website1 of PAQ.As the firm is all about production of transformers. We have taken out a job analysis form for Transformer assembler.
The rest of the form is attached in appendix.
Job Description & Job specification:
By using the methods above to collect the information . A job description should be developed in such a way that if a new employee reads it. He or she should understand what the job actually is . What is required of him/her? A job description should be able to answer basic questions of what the job Is and who is right to perform it.
For instance the job description2 of a transformer assembler should be like this
Job Title: Transformer Assembler
Department: Production
Reports to: Assistant Manager assembly
Prepared Date: April 02, 2010
Approved By:
Approved Date: April 02, 2010
Personnel Planning and forecasting:
Transfo Power does not have any formal personnel planning process. Personnel planning really important to lower the cost. It allows the firm to know whether a certain position needs to be filled and how. Considering technological changes, upgrading or downgrading of product, tranfo power really needs to forecast the personnel needs.
Trend analysis being the most basic and cost effective should really help the firm forecast the need for personnel. Just by studying the past record of employment needs forecasting can be done. But knowing the need is not enough Transfopower needs to find ways as how will these needs be fulfilled. For engineers, designers, supervisors, managers POSITION REPLACEMENT CARD should be used. It will allow Transfopower to hire fill in the position from inside. This not only will reduce the cost but also save time. Replacement chart3 from the book by Gary Dessler has taken and could really be really useful for Transfopower.
For the low line workers like transformer winders, electrical component handlers, and assemblers most of the job should be filled by outside candidates. To attract the outside candidates Transfopower should definitely use advertising
As the firm is currently operating in the local Lahore region. So local newspaper should be the best and most cost effective medium. Also because Transfopower lacks a formal human resource department they could use the help of employment agencies. Currently in Lahore there are employment agencies 4 which provide manpower to firms. Such as on the next page.
Referrals:
Transfopower uses referrals as the major source of recruiting . It should continue this approach as it is not only cost effective but also saves a lot of time. The current employees usually provide good applicants because their own reputation is on the line. It's a good practice and they should continue it.
Application Form: Application form is one of the most useful tools for recruiting. Transfopower uses application form (attached in appendix II). But improvement is needed to get all the four types of information it should provide.
1. Provide substantive information about candidates
2.draw conclusion about progress and growth
3.Applicant Stability from previous record
4.Predict the success of candidates
This improved complete application form 5 is attached in Appendix III.
Employee testing and selection:
As discussed in the analysis section Transfopower does not use any testing method before hiring. There is provision period of six months. Transfopower should incorporate some before hiring testing method. This should really increase their productivity and also reduce cost of hiring and firing.
Test of mechanical comprehension:
This is a must for a firm like transfopower. All the 250 workers have to have this basic mechanical comprehension test. This test is really useful not only to increase productivity but also to reduce any on the job accidents. A mechanical comprehension test 6 is attached in the appendix IV
Q .Which is the most suitable tool for bending any deformities?
sample mechanical reasoning question 7
A
B
C
D
E
None
1
2
3
4
Q. Which tool or combination of tools would be most useful for checking flow of current?mechanical reasoning test question 9
1. 2. 3. 4. 5. 6. 7. 8. 9.
Test of motor and physical abilities:
Test of physical strength should also be used.Becuase a lot of lifting of heavy tools and instrument is done. The static strength test should measure abilities such as lifting weights. While Dynamic strength test should measure pulling abilities of the workers.
Work sample:
Transfopower has a lot o do with handling of machine, equipment and instrument. Testing the candidates on work related sample test should help to predict the success of the worker on the job. Work samples also have one of the highest validity when it comes to assessment. The candidates can be then marked according to their actions.
Q. Did the worker check coils before installing the magnets in the transformer?
Yes 1 pt
No 0 pt
Integrity Test
During our analysis we mentioned that the supervisor like assistant assembly manager do have trouble dealing with the workers. Integrity test can really help to solve this issue. Not only will it reduce difficulties in dealing with supervision, but can also reduce business costs by identifying individuals who are likely to be absent, or engage in other counterproductive behavior.
Q1. Does it bother you when your tools are out of place?
Q2. Do you waste time at work?
Q3. Do you get annoyed when following safety precautions gets in the way of your work?
This face to face integrity test has been attached in Appendix V.
Interviewing Candidates
As explained earlier, Transfopower follows an informal interview for the hiring of employees at low levels of the organization. It is highly recommended that they use structured questionnaires to conduct interviews even at low levels. This will give them a fair comparison of the applicants at the time of hiring.
Transfopower should also implement the use of Appraisal interviews in the firm. This is important because the firm should know whether each employee's performance meets the goals of the organization or not. This will also provide feedback to the employees and make it easier to improvise remedies that need to correct mistakes.
As the company uses no Exit interviews for current employees, they should make it a part of their current HR plan. This will enable the employer to extract information about the job or related matters that might give the employer an idea about why a particular employee is leaving their firm when nothing wrong has happened in the past or present times. It will also give them an idea about the rights and wrongs of the firm.
The firm should also use a set of other interviews to judge the abilities and behavior of the applicants. For this purpose, we suggest them to use interviews that include situational interviews, behavioral interviews, job-related interviews and stress interviews.
Training and Development of employees
The company currently uses instruction manuals or guides for the employees to perform their jobs i.e. they use job instruction training method. The firm doesn't use a formal training process for its employees, it is highly suggested that they should follow a proper training process. This will help increase the productivity of the employees which will increase output and ultimately total revenue for the firm will rise.
They should make use of proper on-the job training methods which include coaching/understudy method. This coaching could be done by an experienced worker or a supervisor himself. Job rotation is another method that they could use which will expand the knowledge of the employees at Transfopower and provide them with skills of the other jobs as well. This is a method which isn't only easy to follow but is practically possible and inexpensive as well. Informal learning could also be used. This provides more positive results than formal learning or training.
After the training process, it is very important to evaluate the effort of the training. If this isn't done, the whole purpose of training the employees goes in vain. It is important to see whether the time and resources spent on training the employees has produced positive results or not, did the trainees learn something from the program or otherwise. For this purpose, a controlled experimentation should be implemented to compare data before and after the process of training.
Play Plans
The company's current HRM plan follows fair pay plans. But we would like recommend them to establish pay rates that are in line with the rest of the prevailing wage rates in Pakistan. For this purpose, they should carry out salary survey frequently to see if they are paying the employees according to the prevailing wage rates. They should also take into account any inflation that takes place and should follow up to change their wages accordingly.
They should pay employees on the basis of the competencies they entail, not according to the job title. This means that they should pay them according to the skills and knowledge that they hold and the time, effort and hard work that they put in to complete their task. This offers a more strategic reason for setting pay rates.
Conclusion
Transfo Power is a small firm with more or less 350 employees working in it. After analyzing the current practices of the company regarding the management of Human Resource we came to know that the Executives feel that a separate Human Resource Department is wastage of money. Usually all HRM practices are done by the Executives like hiring, firing, compensating and appraising. We were told that 350 is a small number of employees and for this they don't need a specific HRM system. In our project we tried to develop a Human Resource Management plan for the company which will increase their costs a little bit, but applying this to their firm will definitely profit the firm in a sense that it will grow faster. This is a general trend in Pakistan that companies usually don't pay much attention on HRM due to which the growth of the companies in Pakistan is not appreciable. But in today's changing trends, Globalization and Technology, Human Resource Management plays a very pivotal role in the growth of firms. So a firm, no matter big or small, must have knowledge about how they can systematically manage their "people" and use those HRM practices to add more strength to the company.
References
http://www.transfopower.net/homepage.html http://www.paq.com/index.cfm?FuseAction=SCO.DspReportPage http://www.hrvillage.com/hrjobdesc/Assembler.htm
Gary Dessler 11e http://www.directpk.com/search/?reg=Punjab&cat=Employment%20and%20Recruitment%20Agencies&city=Lahore
http://www.hooverwebdesign.com/free-printables/sample-job-employment-application-form.html http://www.psychometric-success.com/faq/faq-free-mechanical-aptitude-test.htm
Appendices
