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Human resource management practices

1. Introduction

1.1 Scope of Study:

The subject of our report is the core Human Resource Management practices at two telecom companies, Mobilink and Warid Telecom. Our focus is to briefly outline the basic practices such as recruitment, training and performance management etc at both the companies. After giving this overview, our analysis portion will highlight the main differences between the practices at both companies. At the end of our project, we will give our recommendations on the how the companies may develop their practices further.

1.2 Objective of the Study:

The telecom sector has undergone intense changes in the past two years due to the entrance of new players in the market. Our objective here is to analyze the differences between the HR practices of the oldest player in the market, Mobilink, with the newest, Warid Telecom. Our emphasis is on the areas where both companies differ and we have attempted to determine the reasons behind these differences. In addition we have also attempted to highlight the areas where both companies are on common ground.

1.3 Methodology:

For basic data collection, we used the following tools

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For the analysis portion of our project we consulted a variety of textbooks to establish HR models which we could then use as benchmarks. In addition we also compared the information from both companies against one another to obtain a comparative analysis.

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2. Introduction to Telecom Sector1

2.1 Telecom Sector in Pakistan

Telecom sector has emerged as the fastest growing sector in Pakistan. After moving at a snail's pace, the domestic telecom sector took a turn for the better few years ago when it threw its doors open to private sector. Competition brought in lower tariffs and cheaper handsets, which saw Pakistani people jumping on to the mobile bandwagon with vengeance. From a mere 2.3 percent in 1999-2000 the country's teledensity currently stands at 10.2 percent with the gross subscriber base of fixed as well as mobile subscribers touching 15.4 million. Realizing the growth potential of telecom sector in Pakistan, various international big players have already entered the country to take advantage of a rapidly growing use of cell phone. Realizing the benefits achieved from the telecom deregulation around the world, Pakistan has moved from the monopolized structure to the deregulated one. The year 2004 witnessed enormous growth in Pakistan telecom sector with huge investments, which brought momentous changes in socio-economic scenario of the country. This was, however, made possible with initiatives taken by the present government and the regulator - the Pakistan Telecom Authority (Box-2).

1 Economic Survey of Pakistan

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The PTA was established in January 1997 under the Pakistan Telecommunication (Re-organization) Act, 1996 to regulate the establishment, operation and maintenance of telecommunication systems, and the provision of telecom services. It protects the interests of telecommunication service providers and users, ensuring that the consumers get high quality services at competitive prices, with a reasonable range of choice.

2.2 Liberalization of Telecom Sector

Government of Pakistan announced deregulation policies for both fixed & cellular and made PTA responsible for the award of the licenses. Mobile licenses were awarded to two companies namely Telenor Norway and Warid Telecom against auction winning price of US$ 291 million each. Similarly, the PTA auctioned spectrum for award of Wireless Local Loop (WLL) licenses. The PTA collected a sum of Rs. 14.12 billion from the auction of WLL spectrum. The PTA also awarded Local Loop (LL) and Long Distance & International (LDI) licenses in accordance with the laid down criteria to various companies. With the licensing of LDI and LL, a sum of Rs. 1.7 billion was received as initial license fee.

Table 14.5 shows that the PTA issued 92 WLL licenses to 17 telecom companies for operations in different telecom regions. Similarly, a total of 76 licenses were issued to 35 companies for provision of Fixed Local loop services. Also, PTA issued 12 licenses to 12 telecom companies for provision of Long Distance & international services in the country.

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3.4.1.1 Preliminary Considerations for Job Analysis9:

For any organization, the activities involved in collecting, analyzing and recording data must not be taken lightly. Among other reasons, it is a process which may potentially cost the organization a lot of monetary resource. Before undertaking this process, it is important to consider the following two factors

Senior Management Support: What kind of support can be expected form the senior management? Does senior management understand what is involved in performing a job analysis? Have the time and cost considerations been fully explored? Are they understood and explored? Have the implications of the kinds of changes that may be recommended because of the analysis been considered? Etc. Such questions must be asked before a job analysis process is started to avert a potential court action claiming intentional discrimination if management fails to fulfill

8 John Bratton & Jeffrey Gold, Op.cit p 133

9 Ibid p 128

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implied or actual promises that will result in compensation related changes that could have been made.

Work Force Cooperation: What kind of cooperation can be expected from all employees? Have past job analysis programs resulted in no action, or possibly worse, actions contrary to job security or best interests of employees in all kinds of jobs at all levels? Because of past actions, the work force may demonstrate attitudes to a new analysis that range from apathy to hostility. This will certainly influence the success of any analysis program. The means of overcoming such behavior must be considered either before or during the design of the program.

3.4.1.2 Purpose of Job Analysis10

The purpose of Job Analysis is to establish and document the 'job relatedness' of employment procedures such as training, selection, compensation, and performance appraisal.

a) Determining Training Needs

Job Analysis can be used in "training needs assessment (TNA)" to identify or develop:

10 http://www.hr-guide.com/data

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b) Compensation

Job Analysis can be used in compensation to identify or determine:

c) Selection Procedures

Job Analysis can be used in selection procedures to identify or develop:

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d) Performance Review

Job Analysis can be used in performance review to identify or develop:

3.4.1.3 Methods of Job Analysis:

Some key methods used for job analysis are

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18.6 The Fombrun, Tichy and Devanna Model of HRM21:

This model basically depicts the relationship between core HR practices and the optimal sequence in which they take place. In the context of our companies, Mobilink follows this process precisely. The appraisals, rewards and the development opportunities at Mobilink are generally performance based. Tenure is only a small factor of the employee development. The Staffing function coordinates with the Organizational Development function, which is in turn linked to compensation. Warid on the other hand does not follow this sequence. For them, the biggest hitch comes from lack of a proper feedback system for 21 John Bratton & Jeffrey Gold, OP cit, p 18

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performance appraisal results. In addition, most of the compensation activities at Warid are tenure based rather than performance based.

18.7 The Harvard Model

This model is considered to be more comprehensive than the Fombrun, Tichy and Devanna Model of HRM as it incorporates a wider arena. It takes into account various factors which affect the HR policy formulation of a company and the interlink between all these factors. Although both companies do not officially utilize this model, the factors mentioned here affect both companies equally. To consider a factor, both companies are required to follow government regulations. Therefore each respective companies HR policy is formulated within

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government regulations. The development of a new process technology will be equally incorporated by both companies but the extent to which the impacts become prominent on their policies is up to the management. This holds true for all factors. For example, increased turnover in the industry has caused more concern for Mobilink than it has for Warid, which is why the older company is taking initial steps to revamp its motivational policies. Warid however has made no such attempts.

Culture

Warid has a centralized structure, but it enjoys an open culture. Warid being a foreign company and a relatively new one is quite modern in its general environment. Since they consider their employees an important asset, providing them with a comfortable working environment is very important. That is where the culture comes in. A company needs to form a compatible culture, which favors both the employees and the organization. In order to motivate the employees, the company has kept an open door policy in its culture. The employees are repeated told that they should feel free in entering the office of a manager at any level and say whatever they feel like saying. The management even applies this open-door policy whereas suggestions are concerned. They feel that an employee feels involved if they are allowed to give open and free suggestions. It is quite famous about Warid that they keep incorporating change in their policies, practices, working methods etc. That is why it is very important for them to make sure that their employees do not resist change. In order to avoid any conflict they have thought their employees that the culture at Warid is to: "Embrace the change" and "Accept consistent change". Since they have already made change a part of their culture and trained their employees accordingly, Warid does not have to face much resistance from employees. Besides this Warid ha also made it a part of their culture to make sure that all employees are respected, no matter what their gender or status. This makes employees in general and females in particular feel more secure. They know that they are respected by their coworkers and hence give respect in return. Warid even goes to the extent of changing some of their working practices to accommodate their employees to show that their privacy and work is valued.

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5.4 Decision-making

This point has been explained many times earlier as well that Warid insists on a centralized structure. That is why their decision-making is also centralized. Most of their corporate level strategies are made in Abu Dhabi that is the main head quarters. However some of the business level decisions have been delegated to the headquarters in Lahore. In Lahore again the main decisions reside here only and only the decisions related to operations management is delegated to the other regions. Warid remains centralized because it is a foreign company that does not want to lose its main control over the way things are done.

19. Conclusion

Being mobile companies serving the same target market, Mobilink and Warid can be compared as direst competitors. By our extensive research we have drawn a general conclusion about the two companies.

Mobilink is by far a more established company since it has been in the market for a long time. But that not change the fact that Warid is proving to be major a competitor for it. Warid is working hard to improve its policies and keep its employees satisfied. Even though this strategy at the moment keeps changing and requires a lot of work but Warid is succeeding with this. Satisfied employees can prove to be a major asset for Warid, and hence a threat for Mobilink. Mobilink is a more focused company, they wanted to establish a wider coverage area they have achieved that, they are focused in their policies and training methods. They even know what they want from their employees and how to get it. However it is also true that their quality ahs overall decreased which could prove to be a problem in the future as many competitors are coming up in the market. Hence Mobilink in order to maintain their market share, they should revise their policies and quality control.

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20. Recommendations

At the conclusion of our research and analysis, we have formulated the following recommendations both companies may use to further enhance their respective HR policies.

20.1 Warid

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20.1 Mobilink

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21. References

  • Economic Survey of Pakistan
  • John Bratton & Jeffrey Gold, Human Resource Management Theory and Practice, second edition
  • Noe, Hollenbeck, Gerhart and Wright; Human Resource Management Gaining a Competitive Advantage
  • Richard I. Henderson, Compensation Management in a Knowledge Based World, 7th Edition
  • http://en.wikipedia.org
  • http://www.hr-guide.com
  • http://humanresources.about.com
  • http://www.cgap.org/direct/docs/tot/tot2
  • http://www.hr-survey.com/360Feedback
  • http://www.unixl.com/dir/business_and_economy/human_resources
  • www.waridtel.com
  • www.Mobilinkgsm.com
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