HRM Practices & Problems in ICI

Naila Ansari 154452015HRM Practices & Problems in ICI

Submitted to Sir Shah SaadNaila Ansari 15445Institute of Business ManagementMHM

ContentsLETTER OF TRANSMITTAL3history of ici6human Resource Organogram25HUman resource Department26human resource problem26problem analysis30Rationale:30Methodology30Result Analysis30employee-employer relation30recruitment31job analysis31performance management32training & development32compensation & benefits33financial benefits33Employee Questionnaire Analysis33employee job satisfaction33Job Specification and Job Description been Revised34job passion & self evaluation35

LETTER OF TRANSMITTALMr. Shah M. Saad HussainLecturerHuman Resource ManagementIoBM, Karachi

25th April 2015

Subject: Report Transmittal of Human Resource Problem in an Organization

Dear Sir

This is to transfer the Term Report given to apply our theoretical knowledge of Human Resource Management in finding out a problem of an Organization and then doing the root cause analysis of the problem and giving recommendations and Action Plan.The Report gave us a thorough experience and practical knowledge of the Course Contents and gave us Practical Learning by interacting with the Organization too.

Kindly accept the Term Report based on the structure you provided.

Thanking you in anticipation

RegardsNaila AnsariStudent Human Resource ManagementIoBMStudent ID: 15445

iNTRODUCTIONICI has consistently developed new and innovative areas of businesses, since its formation in December 1926, by the merger of four of the largest chemical companies in the UK. ICI today is a collection of world class businesses, many of them leaders in their sectors. They are strongly led, technologically sophisticated with healthy and sustainable long-term growth prospects.ICIs paints brands are some of the most successful in the world. Its starches and adhesives find their way into everything from foods to building materials and from sports shoes to medical electronics. Its lubricants make vehicle transmission and fridges run smoothly, and the vital ingredients in many personal and household care products come from ICI.ICI brings together a family of businesses with an impressive record of innovation and an ability to meet the changing needs of an increasingly global marketplace. The Company has a range of over 50,000 products, more than 38,000 employees and over 200 manufacturing facilities in 55 countries worldwide. ICI Pakistan Limited is a 75.81% owned subsidiary of ICI Plc, UK. It was set up as a public limited company in Pakistan in 1952. ICIs presence in this part of the world, however, predates the formation of the public limited company and indeed, Pakistan itself. The Khewra Soda Ash Company, a predecessor of ICI Pakistan Limited, set up a soda ash manufacturing facility in Khewra in 1944 with a capacity of 18,000 tons per annum. This facility was sited next to the salt range as rock salt and limestone; two key raw materials for manufacturing soda ash were available here in abundance

Naila Ansari 15445Page 39history of iciThe history of ICI Pakistan predates the formation of Pakistan. From a small trading concern with a single manufacturing unit, over the decades, the company has transformed into one of the largest industrial conglomerates of the country enjoying an iconic stature.

Company InformationBoard of Directors

Organizational structure

Products

PolyesterOne with the Fiber of Life

Being manufacturers of Polyester Fiber weaves us tightly into the fabric of your life.

Our Polyester Staple Fiber (PSF) is spun into yarn, which is then woven or knitted into fabric used to make clothing, bed sheets and other textile products that each one of us uses.

This man-made fiber is a key substitute and complement for cotton, making it a highly critical raw material in a textile-intensive country such as Pakistan. We introduced this wonderful product to this country over 20 years ago. As one of the pioneers of the PSF technology in Pakistan, we enabled the cotton-rich textile industry to diversify their products and be more competitive in the international arena where growth of man-made fibers has been phenomenal.

Our high quality product has set the trend and the PSF industry inPakistan now competes internationally with comparable output and production rates.

One with the Essentials of LifeDid you know that every time you pick up a glass, read anewspaper or do your laundry, you experience the use ofsoda ash?

Without soda ash, the manufacturing of necessarycommodities such as glass, paper and detergents wouldnot be possible. Most people are probably not evenaware of the importance of this basic raw material, still,we as a company know that we touch practically everylife in the country in some way through the use of theseessential everyday products.

Our Soda Ash Plant in Khewra was established in the1940s, even before the creation of Pakistan! Weremarket leaders for this key ingredient and are proud tobe the largest producers of it in the country.

Our remarkable growth over the years has enableddevelopment and enhancement of the industries wefurnish thereby providing you with a wider array of quality products to enhance your lifestyle.

One with the Colors of LifeEverywhere you go, you will find the colors of your life enhanced by our paint products. We have been coloring Pakistan for 44 years, and through the decades weve worked hard to provide you the right backdrop for life by transforming your homes and your workplaces with our paint solutions. But its not just about adding colors through the assortment of our palette; our products touch your life in many different ways.

We offer industrial coatings that help protect everything from refrigerators and radios to boiler plants and manufacturing facilities while our refinish paint products maintain and extend the life of your vehicles. Being able to influence so much makes us a direct part of your lives, and this is a responsibility we take very seriously.

Being the largest provider of paint solutions in Pakistan, delivering results is a part of our DNA, and we strive to ensure that our customers have access to a broad range of high quality products.

Of course, we now have the added advantage of being part of the largest global paints and coatings company.

Life Sciences One with the Sanctity of Life

Our name says it all; ours is the science of life your life.Helping you maintain and improve the quality of life is a role we are proud of and take very seriously.

Whether you need advanced pharmaceuticals for your healthcare needs, superior seeds to improve the quality of essential crops or solutions for livestock management, we work hard to ensure you get the best.

We market some of the leading drugs available today, geared to address life threatening ailments like cardiovascular disease and cancer as well as providing veterinary and agricultural brands, so that you have a range of options for improving the quality of your life.

Being entrusted with such a serious responsibility, we are even more committed to innovation and keeping ahead of the curve with products and services that draw on the newest research and latest advances.

We want to make sure our customers trust in us remains solid and that our brands remain synonymous with quality and consumer confidence.

Chemicals One with the Ingredients of Life

Our chemical ingredients translate into hundreds ofproducts that you use in daily life.

Were not stretching the truth when we say we servicepractically every industry in the country!

Our productsare essential in all kinds of manufacturing processes andin products from adhesives to paint, and from insulationfor housing and refrigeration to textile auxiliaries thatdetermine the finish of fabrics we use.

Where chemicals are involved, we know we have to beextra careful about our impact on people and the worldaround us.

Our strong emphasis on health, safety, and environment means we incorporate the best practices from around the world, providing full safety information to customers, a safe workplace for employees, and care for the environment through many of our projects focusing on sustainability.

HR highlightsIn ICI Pakistan, one can find a unique workplace with a diverse mix of personalities and expertise. ICI people have talent, creative drive and enthusiasm. And thats reflected in an atmosphere where theyre encouraged to achieve full potential in their area of business.Their ambition, Tomorrows Answers Today is reflected in ICI people. Theyre entrepreneurial in their thinking and pragmatic in solving problems. Everything they do is done with integrity and responsibility. Most of all, they have the courage and curiosity to question accepted wisdom and provide answers others havent even thought of.

Talent FactoryOver 1,300 people are a part of ICI Talent Factory, and are proud that these employees are the ones who shape the future of our company. They want their employees, and those thinking of joining them, to see ICI as a place where they can grow. Talent Factory aims to develop strong leaders, who can make a real impact on ICI performance and market value, and be noticed.In line with ICI company value Developing the talents of people, provide development opportunities through cross-functional exposure. Capability groups within the company have been formed to ascertain bench strength in each functional area and plan future career roadmaps for our key talent. This ensures a strong line of succession within the organization, in areas of commercial, technical, finance and HR.For many years, the ICI Graduate Recruit Program has been primary source of hiring and attracting new talent. In fact, several of senior executives today joined ICI through this channel. In 2009, ICI added seven Graduate Recruits from different leading universities of Pakistan. While ICI talent pipeline is steadily augmented by a stream of young recruits, it also has employees who have been part of ICI family for over twenty years. For the Talent Factory to really take shape, ICI concentrate on these three building blocks:

Diversity & InclusionICI have a very strong commitment to diversity and inclusion. ICI is an equal opportunity employer and this is practiced in all aspects of business activities, including recruitment and employment. Combined with state of the art technology and HR Information systems, the result is a high performance environment within which individuals can achieve their professional and personal aspirations. ICI take pride in demographically diverse workforce that works together to create synergies and produce results.

human Resource Organogram

HUman resource Department

ICI has a well established and fully functional HR department and it performs all the functions of human resource department. The HR department conducts Job analysis, Job description & Job specification practices annually , recruitment & selection according to vacancy available, orientation of new hire, training & development of current employee in regards to succession planning , placement & promotion, career planning, performance evaluation & compensations, staff welfare & medical policies, procurements and employees relationship.

human resource problem

The problem faced by the company in terms of HR is Employee Retention and High Turn Over after the acquisition with Akzo Nobel. ICI lost their most beneficial human capital after the acquisition, because most of the employee felt insecure about their job.

impact of problem

From the perspective and view of organization, employee turnover is very expensive. When employee leave an organization, it has become imperative for that specific organization to make a costly replacement as soon as possible. These replacement costs include for example, search of the external labor market for a possible substitute, selection between competing substitutes, induction of the chosen substitute, and formal and informal training of the substitute until he or she attains performance levels equivalent to the individual who quit.

Hiring Cost

High turnover is overall a financial loss to a company. According to ICI hiring process costs a company an average of Rs.35,000 per employee, including separation costs, paperwork, unemployment; vacancy costs, including overtime or temporary employees and replacement costs including advertisement, interview time, relocation, training and decreased productivity when colleagues depart.management time Cost

Managerial concern on employee turnover has suddenly become heightened, the cost of the internal recruiter's time to understand the position requirements develop and implement a sourcing strategy, review candidates backgrounds, prepare for interviews, conduct interviews, prepare candidate assessments conduct reference checks, make the employment offer and notify unsuccessful candidates covers the 50% cost of total recruitment processproductivity loss

Each time an employee leaves the firm, ICI presume that productivity drops due to the learning curve involved in understanding the job and the organization voluntary turnover incurs significant cost, both in terms of direct costs (replacement, recruitment and selection, temporary staff, management time), and also (and perhaps more significantly) in terms of indirect costs (morale, pressure on remaining staff, costs of learning, product/service quality, organizational memory) and the loss of social capital.engagement lossTurnover burdens the employees as they have to take over the work as the company has job enrichment too in the policy and continuous additional burden leads to employee frustration. This also unbalances employee work-life relationship and causes engagement loss in their respective jobs due to work load.Customer service loss

Employees are important in any running of a business; without them the business would be unsuccessful. Employees are seen as major contributors to organizations competitive advantage and as such for the competitive advantage to be maintained, labor turnover should be discouraged by management. Research estimates indicate that hiring and training a replacement worker for a lost employee costs approximately 50 percent of the workers annual salary. It can sometimes take months, or even years, to find qualified employees to fill the positions in our company. Losing top level talent from within the company lowers the quality of work the company can do, affects customer service by removing employees that customers trusted and negatively affects the ability to be competitive in the marketplace

Training Cost

Employees with less knowledge and less experience in your business and with their jobs won't produce as well as those who know more about what they are doing. As new employees take time to settle in the organization and with the work so initially the performance remains low and company has to bear with that. In sales, the sales results are affected. The major challenge that high turnover contributes to a downward spiral that is tough to get out of and takes time.

problem analysisRationale:The purpose of the study was to find out the reasons leading to high turnover in ICI Pakistan. As the high turnover problems are like vicious cycle which eventually will cause low employee morale, poor performance of employees, management frustration, financial loss to company and eventually higher turnover. The problems need to be identified which are causing high turnover and need to be rectified.Methodology To find out the causes of high turnover, the relationship between the Employer and Employee should be healthy. Problem in this relationship will lead to problems like employee dissatisfaction and employer loss and high employee turnover. To study the relationship, a questionnaire was asked from the employer and the employees.The Questionnaire A was asked from the Assistant Manager of the HR Department which is attached at the end in the Annexure and Questionnaire B was filled from the employees of the company through online survey site. Only 10 samples could be collected from the respondents due to strict policy of the company to fill any survey questionnaire.Result Analysisemployee-employer relationICI Pakistan started as a Multinational Company but recently has merged with national, Younus group of companies and has its standard Human Resource Practices. But the department consists of 3 HR employees and 5 admin employees which makes of about 8 people in HR and Admin Department. Overall there is only one office in Karachi which is Corporate Office. The Training of the Employees is conducted by the HR department with recommendation of line manager.

recruitment

The recruitment is conducted by Assistant HR manager. It is done on need basis. When the employee need is felt and there is no one eligible for internal recruitment or for promotion then the requisition form is filled by line manager. After that HR Department follows the whole recruitment process which includes getting resume and the channels followed for this are;1. Candidate pool available on website2. References3. Placement Agencies4. Linked InAfter getting Resume, HR Department does the reference checking and then conducts the interviews of the candidates and transfers the short listed candidates to the line manager and Department finalizes the candidate after conducting further interview. Senior positions interviews are finalized by Managing Director himself.After selection, the orientation process takes place by HR department and socialization is taken by the respective department itself.job analysisThe job analysis is conducted under the supervision of HR manager on yearly basis. Annually job description & specification is updated, which provide relevant performance measurement key points and help in building up the morale and satisfaction of the employee. It provides factual job size which builds employee engagement and help in achieving organizational goalsperformance managementThe performance appraisal is carried out twice a year, 1st in January thats the performance measurement conducted by the line manager with consent of the position holder. 2nd is conducted in June, which involves midyear review and bonuses for the respective employees. The problem that is analyzed, performance appraisal of ICI contains 5 grading spectra;1. Not performing2. Below performing3. Average performing4. Good performing5. Excellent performing

The grading sheet should be of 3-grades to better allocate the resources involved in employee development & recruitment1. Not performing2. Performing3. Out standing

training & developmentICI Pakistan believes in developing their employees. They have Internal Trainers through which they arrange different training sessions and often invite Guest Speaker also for the Guest Speaker Sessions. Trainings are given on need basis, on recommendation over performance management and some by HR Department itself when they arrange it. Succession Planning is also done By Line Manager and HR Manager but its accordingly on the employees Performance and most of the employees who enter as a Management Trainee reaches a higher level position in respective years.ICI has 2 years of Management trainee program which help in developing new talent for their organization, and after the respective time period best trainee for the organization is offered with employment. The problem observed in this section is there is no transparency of career planning with employee due to which employee is unaware of management strategy and vision involved in his growth & performance.

compensation & benefitsICI Pakistan wants to attain the Competitive Advantage and wants to attract the best resource of skills and knowledge. To maintain this, they have maintained Compensation and Benefits as per the market level after analyzing through market surveys and able to maintain External Equity and to maintain Internal Equity, they have grade level classification, 1-40, and annually update their job size, description and specificationICI is giving only financial benefits to the employees. financial benefitsICI Pakistan stands at 75th percentile among competitive market hence provide better financial benefits as compare to others. The benefits of ICI includes1. Annual Bonuses2. Health insurance3. Life insurance4. Provident fund5. Child education6. Travel allowancesEmployee Questionnaire AnalysisThe questionnaire covered all functions of Human Resource Management to know the employee feedback. The remarkable and relative results have been heighted in this. employee job satisfactionThe job satisfaction survey reveals that 80% f the employees of ICI are satisfied with their job and work responsibilities. The dissatisfied employees lie within range of less than 1% which shows that employee are motivated towards their job and agrees with management policies and procedures.

Job Specification and Job Description been RevisedThe majority of the employees told that their job description and job specification have been revised after joining the organization. But this was revised by HR Department and no consultancy was outsourced. The responses of candidates can be seen in the chart below. 20% employees said that they dont know which shows that employees are not taking interest in the company and this is the sign of employee dissatisfaction

job passion & self evaluationThe self evaluation and passion survey reveals that most of the employees are satisfied with job and are passionate about their work to accomplish organizational and individual goals. It shows that organization has positive image about them and rewards them according to their performance and supervisor leadership helps them in achieving goals. Employees also believes that their job help in creating difference among lives of other and especially in solving customers problem

employee retentionThe employee retention reveals that no discrimination is observed within organization whether or gender basis, racial or etc. The flexibility within organization helps employee in achieving work life balance and keeps them motivated and satisfied towards organization.Motivated and satisfied employee helps in achieving organizational goals and is the main factors for the growth and success of employee.

RecommendationsIn order to decrease the turnover rate, the company should implement retention strategy. Such strategy calls for strengthening exit interview and developing employee surveys to ascertain the reasons for leaving the organization and then that problem should be directly targetedSuccession PlanningAt the time of Interviews, the employee should be selected after thorough analysis in all aspects and should be assured that employee will remain loyal if given a good career growth. Then after his entrance, his line manager should have his career plan for five years and should do Promotions on Performance Management accordingly and also on the basis of performance and behavior. The abrupt promotion and rewards only on the basis of performance only will make the employee reach its ULTIMATE POTENCIAL within the company very early and will create boredom for himEmployee Feedback SurveyQuarterly employee feedback Survey should be done via third person or very fair system which gives the employees feedback and highlights if there is any grievance and it should not come out only at the time of resignation. This feedback will help the management to develop the better strategy plan for employee satisfaction, motivation and Retention.Induction/Initial Training

It is critical that a new employees introduction to an organization is a positive experience that reinforces their decision to accept the employment offer.How a new employee is inducted has a major influence on the perception that employee has of the organization, its people and its level of professionalism. It is not uncommon for a new employee to leave within days and weeks of starting. So the new employee should not be just introduced to the family but should be socialized for the couple of days to get comfortable to the culture and environment.Performance ManagementEmployees who feel mistreated by management are more likely to pack their bags. The HR department should conduct Performance Management Biannually to review the progress of performance of employees. This will help the department identify the potential candidates who have the ability to learn and lead in the future and take the company in new direction of market leadership. Such employees should be given training and a proper development plan should be prepared, highlighting their career path and according to the future positions that they will be holding, they should be given training in those areas in particular.Reward and RecognitionEmployees are more willing to stay with a company if they feel a sense of pride and success in their work. When employees meet or succeed employers expectations, show appreciation for a job well done .Provide an employee-friendly work environment.Provide career advancement opportunities. Whenever possible, provide opportunities within the company for cross-training and career progression. Employees are seeking to develop themselves, and offering that opportunity to them may provide the satisfaction and stability they are seeking. Provide efficient career planning and development programs.Employers who offer awards and incentives for a job well done are also more likely to retain their employees. Although ICI gives recognition to the employees through Employee of the month and other monetary rewards but the recognition words and titles are more valuable then monetary bonuses. Simple emails of praise at the completion of a project, monthly memos outlining achievements of your team to the wider division, and peer-recognition programs are all ways to inject some positive feedback into a workforce. Also, consider reporting accomplishments up the chain.ACTION PLANReasons Action Plan

First QuarterSecond QuarterThird QuarterFourth Quarter

MonthsJanFebMarAprMayJunJulAugSeptOctNovDec

RecruitmentAnalysis of Net Human Capital Requirement and not only on need basisRe-evaluate the requirementRe-evaluateRe-evaluate

TNAEvaluation of the employees according to their career path and decision of trainings that will be neededObserve and coachingObserve and coachingObserve and coaching

Performance ManagementPerformance Management Survey and rewards and also targets for next surveyObserve and CoachingPerformance Management Survey and rewards and targets for next surveyObserve and Coaching

Compensation & BenefitsCompensation and Benefits Survey within Employees to measure satisfaction level and also according to job sizesCheck motivation through Job EnrichmentObserveMarket Survey of Compensation and Benefits of the Competitors

Employee Feedback Employee Feedback Survey should be done and resolving issues highlightedManual Coaching and Grievance handlingEmployee Feedback SurveyCoaching and Grievance Handling

Individual ProblemsCompensation & Benefits

No involvement of employee in training programNo non-financial benefits

After merger no clear growth performanceOrganizational CultureNo communication of Career developmentJob SecurityIndividual High Employee TurnoverTNA