Agri-Bi-Con is a public limited company. The company was a government-owned corporation which was converted into the public limited company in 1995. Initially, all the employees of the company have the same status; they were regular employees of the company, and all the salaries of all the employees were similar to the government employees. They were running the business as government ran its departments. For many years, Agri-Bi-Con enjoyed the monopoly in the country. This situation did not last for long; the other companies started to target the extraordinary talent of the company. The company also faced the market pressure of drop of revenue and profits. The management of the compensation of the company was a big challenge.
Non Competitive Pay Package of contract employees increase turnover rate of contract employees
Company introduced the contact employment in 2002. Initially, these contact employees were hired for fixed terms of two to three years on permanent positions of the company. There were different issued were observed:
Renewal of the contracts of employees
The contract renewal process of the company was not the employee friendly, the employees himself had to initiate the process of renewal with the help of his supervisors. The contracts were renewed after performance appraisal, some contract of average or below average employees were not renewed, and most of the renewed contacts issued after the expiry of contract. This process created the anxiety in the contract employees. Some employees left the company on the expiry of contacts; this enhanced the turnover of the employees and affected the business of the company. The company converted all the contact employees' contract into open ended contacts.
Increments of the contract employees
There are three phases of increments of contract employees. First, prior to 2005, the increments were part of the contract. The contact employees normally got the salary increase from five to ten percent. The second phase was from 2005 to 2007; the increment clause of contact employees was changed, and employees were entitled for performance-based salary increases. Generally, contact employees did not get any salary increase during this period. The third phase was from 2008 and onwards; the company gave salary raises to contact employees after ranking these employees in five categories. In last two phases, the contract employees were upset, first they were not getting any salary increase, and their cost of living was affected by inflation. In last phase, they were getting the salary increase, but they were ranked and one 10% top performers were satisfied but remaining 90% employees were upset on their increment and performance appraisals.
The study also suggest that the company pay package are not competitive to the
Golden Hand Shake Scheme did not reduce the compensation cost of the company.
It is normal perception that the Golden Handshake Schemes reduces the employee cost. The literature review suggested that the Golden Handshake did not reduce the cost in long rung. The talent available in the market is costly and whenever company initiates golden handshake scheme, the employees who are taking less or nominal amount of salaries left the company and takes the big severance package. Secondly, the new employees who are required to run the company affairs correctly, they are hired from the open market and paid market salaries, which were higher than the salaries of employees who left the company. Eventually, it is concluded that the golden handshake scheme did not help a company to reduce the overall compensation cost of the company.
The Productivity of contact non management employees was compromised due to inappropriate revision of pay scales.
The main objective of hiring CPG employees (Contract non management employees) was to reduce the compensation cost of the company. Furthermore, the productivities of the regular employees were reducing as they considered themselves as permanent employees of the organization. The company declared the CPG employees equal to regular employees. They became similar to regular employees. On hand, the compensation cost was increased, and their productivity was also compromised. It affected the revenue and profits of the company. The main reason was the performance was not upto the mark. Company must have forecasted this inappropriate revision of pay scales. Regular employees are permanent employees of the company. They do not focus on work because they are having no risk of losing their jobs. The CPG employees were indirectly categorized with them.
Performance Pay introduced more adverse effect among employees than the perceived benefits.
The company adopted the performance base pay increase system based on Bell curve. It resulted that majority of employees fall under average category and only 10% of employees fall in category of exceptional employees. This system adversely affected the overall morale of the employees. As lots of employees were putting their efforts in work with full dedication but if one out of ten employees was selected as the employee outstanding employee. The other felt that this is injustice with them. The difference in performance appraisal was marginal. The remaining ten employees got frustrated and demoralized that what was the weakness in them that they were not ranked outstanding. This frustration affects the atmosphere of the organization very much and it is the major reason for high turnover of the company. The employee working in the company was also frustrated. In other words, the performance based salary increases affected company adversely as compare to perceived benefit.
Introducing other allowances to organization employees contribute as effectively incentive tool.
The company introduced many different allowances from time to time and most of such allowances. Most of these allowances were depending upon the difficult nature of the job. The Regional General Manager (RGM) duty is considered as tough as he has to supervise the whole region. An RGM Allowance was introduced; the RGM were entitled to take this allowance. People volunteered to work as RGM, previously it as hard to find a person working for this position.
Like RGM allowance there are instructional and cable jointing allowance also, it has been observed that very less amount of people got interest in these two activities and company found people to work on these positions. Overall, the introduction of these allowances was beneficial for the company.
Effects of External equity is more pronounced in determining pay and benefit package of employees as compare to internal equity determines.
Contract employee is hired on the basis of their last salary. Sometimes, the internal employees have more experience and they are not satisfied.
Regular and CPG employees, they look towards government increase. The think the government increase is their right. They do believe in performance.
CHAPTER 9: CONCLUSION
The salary levels offered to Agri-Bi-Con employees, like every company across the globe, are governed by the internal and external forces that drive pay structures. The present chapter has identified the hindrances for change in pay practices over last decade in Agri-Bi-Con.
AGRI-BI-CON accountings and financial system for planning and controlling the activities are satisfactory. But it needs the strict implementation of its policies.
Privatization of company would improve the working of organization and its overall efficiency. New partnership is trying to enhance AGRI-BI-CON status in the market and further strengthened the existing strong bands of friendship between Pakistan and other countries.
To keep the leadership position in the market, it is important that AGRI-BI-CON continue to set high standards for others to emulate. AGRI-BI-CON have come a long way and have a long way yet to go but it is committed to" making it possible", and now trying to give the feelings of "feel the difference.
For AGRI-BI-CON, re-branding initiative can only have any sort of meaning if it is aligned with proper rationales and concrete change. An image cannot be purchased, it must be built. Without a constructive attitude, change, AGRI-BI-CON goals will become meaningless.
It is not about making superficial changes, but the need of today is for substantial reform. This change must be followed by superlative services, good customer service, and dedicated people. Otherwise the re- branding initiative will be reduced to meaningless slogans, images and sound bytes. So for authenticity to be deeper than promotional claim, brands cannot solely be the preserve of the marketing department.
AGRI-BI-CON must have to introduce automation in its processes and improve MIS system. In wake of change of corporate orientation from engineering to commercial each employee will have to change his attitude the way he works accordingly. AGRI-BI-CON will have to open up to reality and the changed world outside to grab business share. New challenges require new approach from AGRI-BI-CON. Everyone will have to gear up to achieve better customer satisfaction.
So AGRI-BI-CON has to do is to bring about a positive change in attitude and mindsets of each and every employee. Improved customer services and launch of new products is the only way to survival for AGRI-BI-CON. Every employee of AGRI-BI-CON is its Marketing person and ambassador of the Company. By changing in attitude it can contribute to company in particular and to the society in general.
Recommendations
There should be screening of employees because the no. of employees working is more than required
Company should emphasize on after sales services since it is necessary to compete its competitors and to retain its leadership in telecom sector
The HR department of the company is not playing an effective role. Proper arrangement should be made for professionals by issuing detailed job description and job specification to get maximum profit from them.
Company should decrease its service prices because in present competitive environment company can retain its customers through this strategy.
Overall system should be computerized to save time, money and resources of company. AGRI-BI-CON must have to introduce automation in its processes and improve MIS system
The customer services should be improved and must be provided to customer in time. It will take long time to have new product lines. The salaries of workers should be reasonable so that customers can get the services without any trouble.
The technical and installation team is insufficient; the need is to have more experts to satisfy the customers' requirements.
Strong emphasis on marketing to compete with competitors. Marketing of same line of business companies is much stronger than AGRI-BI-CON. Features provided by the company to its customers should be recognized which is possible only through strong marketing efforts.
Exploration of new areas, not having connections, is required. Most of other companies are trying there best to occupy those regions where their major services are not available. So to increase the number of customers and to avoid the decreasing profitability, to increase the EPS and regain the image in the mind of Consumers Company should emphasis on the exploration of new areas.
