Understanding The Pso At A Glance Commerce Essay

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'PSO' a short abbreviation of Pakistan state oil began its functioning in the year 1976. From the start, it was under the complete influence of government. On 1st January 1974 Federal government took over the management of PNO also known as Pakistan national oil and DPL known to be as Dawood Petroleum limited, renamed into POCL (Premier Oil Company Limited) under Marketing of Petroleum Products (Federal Control) Act, 1974. On June 3rd 1974, government incorporated "Petroleum Storage Development Corporation" (PSDC). In addition, on 23 August 1976 changed the name to State Oil Company limited, then on 30th December 1976, Government merged ESSO and POCL into SOCL and named it as PSO (Pakistan State Oil).

PSO has a complete corporate government model in which officials are included from different segments of the market. The chairperson belongs to the members board of IF or WEBCOP. The members of the committee are 8 in number and belonging to various categories.

One member is the managing director of PSO. One member is the D.G Oil Ministry of P&NR. One member is the Fin. Advisor ministry of P&NR. One member is the CEO of Saif group of companies. One member is the CEO of Uch Power (Pvt.) Ltd. Rest of the members are selected by the government.

There are various others committee incorporated with the PSO.

Management committee: There role is discuss all new upcoming projects or proposals with the relevant department

Core leadership team: This team comprises of the managing director, executive director, and general managers of the company. This team main discussion is to take company initiatives and progress on different assignments.

Employee leadership team: The role of this is to control all matters regarding compensation, organization, and development of the employees.

Executive committee: They do discussion on all-important current issues. All the heads belongs to this committee. Managing director is the head of this committee.


We are committed to leadership in the energy market through competitive advantage in providing highest quality petroleum products and services to our customers based on:

Professionally trained, high quality, motivated workforce, working as a team in an environment, which recognizes and rewards performance, innovation, and creativity, provides for personal growth and development.

Lowest cost and operation and assured access to long term and cost effective supply sources.

Sustained growth in earning in real terms

Highly ethical, safe, environment friendly and socially responsible business practices.

We value excellence, cohesiveness respect, integrity, innovation, and corporate responsibility

The vision of PSO is

"To excel in delivering value to customers as an innovative and dynamic energy company that gets to the future first"

PSO today

Now PSO is the largest company of Pakistan with turnover of over 877 billion rupees. PSO is the oil market leader with a share of almost 71.1%. It is the only Pakistani company with leading role on global task forces and work streams of world economic forum and world business council for sustainable development and has received a gold medal from UK for HSE. PSO has been rated as the AAA Company by PACRA and won many awards of ICAP/ICMAP.

PSO is known for its corporate social responsibility activities in the country and contributed 20million rupees for the earthquake victims. PSO`s remarkable performance and turnover is cited in various case studies local as well as international.

PSO has a total number of 3620 outlets across the country and in 2010 had a dividend payout ratio of 30%

PSO is the largest oil company having 12 + depots, 9 terminals, 8 airports, 4 LPG plants. 3 lubricants blending plants and has 14 division offices.


It is true that if you want that your company should have a customer's trust and high market share then you have to take care of your employees and for that, you need to have a department, which is completely dedicated towards the wellbeing of the employees. Here comes the concept of HR department. PSO has a very strong HR department and all the main functions of the company are relying on this department

The mission statement of HR department is

We value people of PSO as our greatest resource. As a partner in business, we undertake to achieve business goals through people. We aspire to create a good working environment for our people where they are motivated to reach PSO goals.

HR philosophy is to consider human asset, the only asset that appreciates with the passage time. It is important to have the right person at the right place. It is necessary to continuously re-align organization in the line with contemporary business practices. Transparency is one of the important things that has to be present in the HR department.

Strategic initiatives are provided by various meetings of Executive committees, Managing committees, and employee leadership teams. Developing team works and group dynamics while inculcating a sense of ownership through empowered cross-functional teams.

HR department has the following policies:

Transparency through documentation and updation of HR manual circulated throughout the organization

Strict adherence to laid down policies

Continuous reviews of policies by employee leadership team

Hr planning

Basically, there is no true HR planning done in the PSO because of the total impact of government policies on PSO. There is complete over sizing in the PSO. Recommendation and names are provided by government officials for hiring. Number of workers and total placement is according to the quota system.

Therefore, there is no concept of current assessment of shortage or surplus case in PSO. Hence market conditions has impacts a very little on PSO. The process of HRM hence then starts from the recruitment to onwards. HR department also contains several other sub-departments functioning and performing for the betterment of human resource.

These sub-departments are:

Medical department

Requirement department

Compensation department

Government and Ministry

Leave and policies


Auditing department

SAP is considered to be the backbone department of whole PSO. This department is total regulatory department and contains each and every second and transaction information. From hundred percentage SAP shares a percentage of 40. At three different locations in Pakistan, the data backup is maintained to overcome any breakdown.

Job analysis

The human resource in PSO is basically divided in TWO different segments.



The permanent are those, which are selected either by the internee program or by the help HR firms. These are primarily the employers and the employees.

The contractual are primarily designated to the high posts and their names comes from the government and ministry department of HR.

The job description comes from the hierarchy and is also planned by the HR officials. In the recent years the Job analysis is done because in the past every description and specification was described and implemented by the government. Now it is adopted so that there will be description and specification and a base for each employee to follow. Here in PSO, the case of shortage does not exist but case of surplus is always there.


As because PSO comes under the influence of Government so several of its decision are predescribed by the government. The advertising for the hiring is done on yearly basis but the selection decision is totally influenced by the political parties that are in ruling stage. There are total 28 departments in PSO and each year in all departments, people are recruited.

There is no planning for the capacity. Permanent contracts are made and mainly for the recruitment, the help is provided by the HR firms. Contractor's contracts are revised after each fiscal year. Different types of searches are not experienced and the referrals are not that much appreciated.

When it comes to the terms of selection, complete rules and regulations are followed. Those internees which are given the rank of best internee of the term are given the proposal to join the organization as a permanent employee. In addition, people generally does not deny such opportunities.

This helps a lot to save them from the cost of recruitment. Comprehensive approach is totally followed and each and every one is given full information about every negative and positive points. Comprehensive interviews, background investigation, and medical tests of everyone is done to insure that the new employee will face no hindrance. This is necessary to be done because the reputation of the organization is at stake and predescribed rules of the law are to be followed.


The right word for the Decruiment will be right sizing. In PSO there have not any case of decruiment ever existed. Government influenced organization are free from decruiment and the employee is totally free from the fear of being layed off. Contractors have a contract of one year, which is revised under conditions.

Audit department of HRD mainly keeps this in order. Those who have a poor behavior are usually removed from the organization and audit department work is to keep in view each and every action of all the employees. Whether it is the head or the security guard, audit department has the complete power to judge him.

Overstaffing completely exist here but it is made sure that every employee should be doing a task. No one is paid for being free.


In PSO, the requirement and the selection decision are not completed under the management but when it comes to the orientation program there is no leniency. Till 2007, the orientation program was for 1 week but now its range has been increased to 3 months. All the new employees have to go through these programs and have to follow all the instructions that are provided to them. Sub department rotation and fields work are the main parts of this orientation program. ELT and CLT decides the orientation program. There are complete presentations by the heads of the departments, managing directors, executive directors to increase the motivation and decrease the anxiety of newly appointed employees.

Important decision-making and learning the problems of the field workers are the main things that the new employees have to know. Because this will affect their decision making a lot.

All the employees are sent to field visits on the oil terminals to know how the work is done. The selection is done on the major's subject's basis but here when you are hired you are given complete information of all the departments that how the work is done. You can be transferred to any of the department regardless if your desire and if you wish a transfer then it is also granted. However, you cannot deny a transfer. It has completely made sure that everyone learns the culture of the organization and socialization helps a lot in that. Orientation programs is completely organization oriented and it is done formally.


HR officials are totally oriented toward how to make the employees skills more developed for the present and for the future. They look for several indicators, which will help them to access whether the particular employee needs to be trained, or not. Performance measurement is one of the tools that helps them to know about the concerned worker. If there appears a need then they make a plan for the training and development. The plan may not as defined as the 5steps of training but it is generally a three-staged program. First, they look for where there appears a need, then they implement a predesigned program and then evaluate. For training, they go for job rotation, assisting, and relevant assignments. The predesigned program of training and development is totally towards achieving the goals and maximizing the production.

PSO also has a training and development program for those employees, which are sent abroad for certain assignments. In an average period of 2 year, two to three employees are sent abroad and its totally based on the technicalities if the project. When an employee is sent abroad, there are some value added incentives for him and for his family so that his departure can have no hindrance.

Performance management

There are 35 people in the HR department of PSO. They are divided in groups and are then given different assignments. Majority of the groups that are made are assigned the performance management. There are certain standards in which workers have to fall to be eligible for the compensation. They follow the basic standards.


Employees have to fall in these categories to be eligible for compensation and incentives. The eligibility depends upon the performance that an employee has shown in the certain period.

In the normal category there are five people and in the rest categories one person each. Each time a ten people group is made for the compensation and incentives programs and many ten times groups are formed to make it a lot easy for deciding. In the recent years the performance management is done on a large scale but before it wasn't that much focused and the compensation that one should get were predescribed as to by job description. But now the better you are the more you receive. At the top level there is not that much concept of performance management, it is mainly done for the middle and the low-level management. For training and development of the employee's different survey and field trips are organized to make the PSO a learning organization. HR consultants are hired for the training of the employees and the hiring is done when there appears a need and also when the HR officials feels it is time to train. A group is made to evaluate the pre and post results of the training process to find the feasibility of the training and to find out how much the training was helpful for the employees.


On the basis of the performance standards on becomes eligible for the compensation and the benefits. From the past, it has been seen that whether the PSO was at a loss but its employees received full benefits as according to their performances.

This is one of the things that attracts now people to come and join PSO. There are internal as well as external awards for the employees. There is complete administration of the compensation to make sure that who has done the best should receive the best. Here the government influence comes again and in compensation terms, there is no leniency.

According to the rating employees receives performance pay. Rating method also describes the pay structure but it is also predefined by the government and the ministry sub department of the HRD. In the compensation concern, PSO seeks help from planning firms, which makes it easy and a lot transparent for the employees to look for what they have and for their doings how much they are receiving.

A minimum pay for a fresh MBA including the benefits is Rs. 50,000 and can exceed to 1-lakh rupees. For the contractual there are as no such compensations. There contracts are yearly revised and as they receive a handsome amount so the company does not includes them in the category of compensation and benefits. PSO also shares his profits among the employees in the form of bonuses. Management as well as non-management, both receives the bonuses and the benefits.

On the ground floor of PSO, building there is a small hospital just for the employees. A 24hrs ambulance service is provided to overcome any accident. Medical benefits are provided to employees and their family too. The employees who joined PSO before 94, their parents also receives the benefits of medicals.

Government labors laws are implemented in their full condition. Old workers also receives benefits as lifetime pensions, retirement plans and contracts jobs etc. Only non-management staff receives the overtime pay and management staff are given holidays for their overtime. But these holidays are announced by the general managers.

In PSO, the employees experience complete job security because of the zero percentage of layoffs. There is never a single case of racism in the PSO.


People are usually looking for a job that they can join on long-term basis. PSO is one of that places where you can go on long term. PSO has one of the best mid career stage and people there on an average are working there for over 18 years.

There is also a fast track in PSO and competent employees have reached the spot of manager in just a period of three years. Per year promotion are also happening in PSO. Rotation of the jobs is the most helpful thing in career enhancing. In concise PSO is one of the best places to join.


PSO is one that organization which have devoted themselves towards the betterment of their customers and towards their employees. It is a key element for the success. Beside it is under the complete influence of government, still it has made his name in the global market and competed with the well-known brands and due to that today PSO has the largest market share. The adaptation of the transition in accordance to the conditions has helped PSO a lot in achieving these goals. PSO has benefited from the technological advantages at various stages. PSO has a prime location and the structure of the building is totally remarkable.

It said whatever you do even its bad, if you work at a good desk then you do well.

Price, place, promotion are the three important factors for a success and for complete motivation and here in PSO, you get them in bulk form.









For our visit, we went to the PSO head office, which is located on Teen Tilwar, Clifton. There we meet Senior Office of Human Resource MISS AYESHA MANSUR. It was indeed a very helpful visit for us and the hospitality was truly remarkable. We had a delightful question and answer session and the majority of the data present in this report came from her answers. She also gave us a presentation on the history of PSO and gave complete information about the departments.

In this report, there is not a single segment of data taken from the internet and we required no information on the history or the introduction from the internet. All the data is the primary data and we got it from our research and visit. We are thankful to MISS HINA MUBEEN for this opportunity and also to MISS AYESHA MANSUR for giving us her precious time