MUGHALSTEELBYMR.IRFANAMIN

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Internship Report on Mughal Steel Group of Industries

INTERNSHIP REPORT ON

MUGHAL STEEL

(HUMAN RESOURCE MANAGEMENT)

PRESENTED TO: CHAIRMAN MBA DEPARTMENT

ALLAMA IQBAL OPEN UNIVERSITY

ISLAMABAD

PRESENTED BY: MR. IRFAN AMIN

ROLL NO. Q-579544

REGISTRATION NO. 05-PSP-0098

ADDRESS St. No. 5, House No. 2

Mohallah Farooq

Nagar, Sheikhupura

PHONE NO. (Cell) 0333-4534380

(Off.) 042-7970226-7

DEPARTMENT OF BUSINESS ADMINISTRATION

ALLAMA IQBAL OPEN UNIVERSITY

ISLAMABAD

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Acknowledgement

All praises to Almighty Allah, the one and only, the Merciful, Beneficent and

Compassionate. Billions of Darood-o-Salam upon Muhammad (PBUH) Last Prophet

of Allah who is the savior of humanity.

Great tributes to my beloved late parents who taught me to strive for Rizq-e-Hilal and

always trust in Almighty Allah!

I extend my heartiest thanks to my seniors, colleagues, and subordinates who assist

me on every occasion to enable me to write this report.

I pay special homage to the following persons.

Mr. Muhammad Azeem (MBA Tutor)

Mr. Amjad Bashir Bhatti (Manager HR, Mughal Steel)

Miss Afshan Khan (Assistant Manager HR, Mughal Steel)

Mr. Waqas Ahmad (Assistant Manager HR, Mughal Steel)

Mr. Sohail Anjum (Class fellow, MBA)

“Salute to the marvelous management of AIOU, to have such a thought provoking

activity in form of this compulsory internship report.”

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PREFACE

This report is one of the necessary elements to get the Master of Business

Administration Degree from the Allama Iqbal Open University.

As a part of my MBA studies I went through three months internship at Mughal Steel

Group of Industries, where I am working since six months. During the internship

period I went through various sections of Human Resource Department. I hope that

this report will give a detail and true picture of the company and what I did and learnt

during my training program.

I also try my best to write this report in such a way that gives more information about

the recruitment & Selection Process, Training and Development, Performance

Management, Employee compensation and Benefits and Organizational Career

Management systems. I have also tried my level best to obtain complete information

about HR Process and present all what I have learnt in the following pages.

I hope that this report will be a true representative of my efforts and will satisfy the

purpose, which I was meant to achieve.

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TABLE OF CONTENTS

S.NO DESCRIPTION PAGE #

00 Title Page 01

01 Acknowledgement 02

02 Preface 03

03 List of contents 04

04 Objectives of studying the organization 06

05 Introduction to the Organization 08

06 Overview of the organization 09

1) Organizational Structure 12

2) Organizational Structure of HRM department 13

07 Function of HR Department 14

08 HRM Process in the organization 15

09 Human Resource Planning and Forecasting 17

10 Forecasting HR requirements 18

11 Employee Recruitment & Selection 19

12 Sources of candidates 19

i) Internal Sources 19

ii) External Sources 19

13 Employee Selection Process 20

14 Training and Development 24

15 Training Need Assessment 26

16 Employee Development 28

17 Performance Management 29

18 Probation Performance Appraisal & Procedure 30

19 Annual Performance Appraisal & Procedure 31

20 Increment Policy 33

21 Employee compensation and benefits 35

22 Types of compensation and benefits 35

23 Organizational Career Management 38

24 Employee job changes with in the organization 38

25 Promotion 38

26 Transfer 39

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TABLE OF CONTENTS

S.NO DESCRIPTION PAGE #

27 Demotion 39

28 Separations 40

29 Lay Off 40

30 Termination 40

31 Termination Policy 41

32 Termination Request Form 43

33 Resignation 44

34 Retirement 45

35 Labor Management Relations 46

36 Critical Analysis 47

37 Conclusion 49

38 Recommendations 50

39 List of Annexure / Appendices 51

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1-OBJECTIVES OF STUDYING THE ORGANIZATION:

� To identify the HRM Process in the organization.

� To view the operational activities of the HR department in the organization.

� To do a comparative analysis of the organization with the other in the same

business and capacity.

� Finding out the weaknesses, short comings, strengths and beauties of the

Human Resource Department.

� To look into the special assignments carried out by HR team like preparation

of Job Descriptions for all field positions and conduct TNA research program

to detect gaps in KSQ (Knowledge, Skills and Qualities) of employees.

� To put suggestions and recommendations to improve the HR department.

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2-INTRODUCTION TO THE ORGANIZATION

Mughal Steel is a pioneer steel manufacturing industry of Pakistan. In 1940, Mr.

Bashir Ahmed commenced steel manufacturing on a very small scale by installing a

furnace at Badami Bagh in Lahore. At that time, Muslims had very few opportunities

to grow and progress because British and Hindu were the rulers. In spite of the

circumstances, he worked hard and continued with his struggle. When Pakistan came

into existence, there were hardly any industrial units. The country was in need of

such industrialists and capitalists. Who would invest their capital for the advancement

of the country? Being a true patriot, Mr. Bashir Ahmed made tireless efforts to

expand his business and meet the requirements of the newly established country. By

the grace of Allah Almighty, this business soon turned in to a limited company to

contribute towards the strengthening of the economy.

At present his three sons, Mr. Javed Iqbal Mughal, Mr. Tariq Iqbal Mughal and Mr.

Jamshaid Mughal successfully carry on with their father’s business. All of them are

highly skilled in their respective fields. They have been groomed by their prudent

father and received official training from various foreign and local institutions.

Following their father’s golden principles of diligence and commitment to the set

goals, they have established Mughal Steel Mills as the second largest steel

manufacturing industry of Pakistan. Mughal Steel produces 219,000 tons of steel per

annum, which is the next highest output after Pakistan Steel Mills.

The durability and quality of the Mughal Steel is equally appreciated on national and

international level. Maintaining their tradition of serving the country, Mughal Steel

Mills started the manufacturing of stainless steel for first time in Pakistan. It is the

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only company in the private sector that possesses the facilities of re-rolling and steel

aligning. Mughal Steel is also manufacturing alloy metal and carbon steel.

All the products of Mughal Steel Mills are produced according to the standards of

ASTM, AISI, SAE, DIN and SUP.

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3-OVERVIEW OF THE ORGANIZATION

Brief History:

The Mughal Steel was founded over three decades ago by Mughal family and is

headed by Chairman M. Javaid Iqbal Mughal and Vice-chairman M.Tariq Iqbal

Mughal and Director M.Jamsheed Iqbal Mughal. The Mughal family has been in

business and trading since the 1900s.Far back in the middle of last century, when this

newborn country was struggling for its stand in the economics & industry, few

courageous people with a solid mind devoted themselves entirely for the uplift of

trade & industry. Mr. Bashir Ahmad Mughal, the founder, is one of them. In 19_ he

commenced steel manufacturing on a very small scale by installing a furnace at

Badami Bagh, Lahore. Mr. Bashir made tireless efforts to grow up the business and to

fulfill the local market needs through his single local furnace. Because of his

dedication, the business soon turned into a progressive position in -------------- and

steadily progressed to become one of the major companies to contribute towards the

strengthening of the economy.

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The minds behind the success of this company of unique caliber, Mr. Javaid Iqbal

Mughal the versatile genius Chairman of the company, having knack technicalities as

well as financial matters, Mr. Tariq Iqbal Mughal, (Vice Chairman) having foresight

of Management & projects, Mr. Jamsheed Iqbal Mughal, (Director) Financial & Sales

Management Expert and Mr. Shakeel Ahmad, Marketing expert. With great

professional Dedication and zeal to produce congenial quality of steel products, the

company is reaching on the peak success. The most qualified and well equipped staff

has made splendid efforts to attain this marvelous success.

Overview of the Mughal Ferro Alloys is as under;

DESCRIPTION OF THE PLANTDESCRIPTION OF THE PLANT

MUGHAL MUGHAL

FERRO ALLOYSFERRO ALLOYS

Laboratory & OfficesLaboratory & Offices

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PRODUCTS:

Stainless Steel

Mughal Steel has taken the lead to produce stainless steel for the first time in

Pakistan. Our in-house fixture allows us to come up with 200, 300 and 400 series of

AISI specification, which caters the needs of Kitchen ware, Surgical and other highly

sensitive industries.

Alloy Steel

Mughal Steel has taken a leaf out of the book from the leading steel manufacturers

world wide to provide big and small Alloy Steel Billets in conformance with

international standards with specification i.e. ASTM, BSS, AISI, JIS, SAE, and DIN

etc. our clientele has ever acknowledged our expertise for developing, producing

metals as per their own specific needs with a high degree of confidence.

Industrial Steel

High quality, in conformance with ASTM, BSS and ASHTO, industrial section i.e. I

Beam, Tee Section, H Section, C Section, L Section, etc are re-rolled. Our re-rolling

fixtures allow us to re-roll the section in 400 mm sizes.

Steel Bars

Deformed Steel and TOR Steel bars of G-40 and G-60 having size range from 6mm to

50 Dia are produced by prime quality steel billets. Samples of these bars are regularly

checked during hot rolling to ensure that shape and size conform to the requirements

of American and British standards.

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4-ORGANIZATIONAL STRUCTURE

OF

HUMAN RESOURCE DEPARTMENT

Manager Human Resources

Assistant Manager Recruitment & Selection Training & Development

Assistant Manager Performance Management Compensation & Benefits

H R Officer Recruitment & Selection

Performance Management

H R Officer Incharge Time Office

Compensation & Benefits

Time Keeper

Time Keeper

Assistant Incharge Time

Office

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FUNCTIONS OF HR DEPARTMENT

Following are the major functions of Human Resources Department at Mughal

Steel:

1. HR Planning

2. Recruitment, Selection and Orientation

3. Training and Development

4. Compensation and Benefits

5. Performance Appraisal

6. HR MIS, HR Policy Manual and System Development

7. Internal and External Communication

8. Industrial Relations

• Labor-Management relations

• Disciplinary actions, Show Cause Notice, Inquiry, Terminations etc.

• Dealing with external agencies such as Labor Department, PESSI,

EOBI

• Dealing with Health Department ad periodic medical check up of

workers

• Time office function – recording of daily attendance and overtime

etc.

• Maintenance of leave record and personal files

• Liaison with Legal Advisor, follow up and attend the Courts of law

• Daily updating the attendance record in ERP system.

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5-Human Resource Management Process in the Organization:

Objective:

The main objective of HRM process in the organization is to design and develop

Human Resource Planning procedure for both permanent and contractual staff.

Scope:

The HR Management Process is divided into the following major stages;

(a) Human Recourse Planning and Forecasting

(b) Employee Recruitment & Selection

(c) Induction & Orientation

(d) Training & Development

(e) Performance Management

(f) Employee compensation and benefits

(g) Organizational Career Management

The whole process is carried out through HR department and Respective HOD’s. It is

the responsibility of the HR Manager to implement all the above mentioned functions

in a proper way. Now we will discuss these processes one by one.

HR Planning and Forecasting:

Human Resource planning is the first function of HRM. HRM planning is related with futures

proposed business strategies imply with respect to Human Resources. How we will settle the

issue of internals (Collective Bargaining) as well as externals (New Recruitment).

Employee Recruitment & Selection:

Recruitment and selection is a next step to HR planning. This is a practical situation in which

we analyze the positions and requirement of organization as per business objectives.

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Sources of Candidate

Internal Sources:

• HRD gets advance information regarding manpower requirements at the

bidding stage from the proposal department for various key positions.

• HRD receives the workforce hiring request from the various departments of

the organization.

• HRD searches the suitable candidates from the manpower data bank.

• The availability of candidates is checked after reviewing and discussing the

requirements with the concerned staff.

External Sources:

• If the required candidate does not exist in the manpower data bank, then

applications are received through different sources i.e. advertisement in the

news papers, professional organizations and employee referrals etc.

• Relevant HOD, in charge or Managers short lists the applications, where

necessary

• HRD held interviews of the short listed applicants.

Induction & Orientation:

• On joining the HR department gives orientation to the new employee about

his/her job responsibility in coordination with concerned HOD.

• JD of the employee is prepared by the HR Department and provided to the

staff.

General Training:

If it is necessary to provide the training to the new employee then basic training

regarding his/her job is given to the new employee.

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Performance Appraisal:

Performance is an effective tool to find the balance between the JD as well as the

assigned task in relation to achieved results. The details regarding performance

appraisal are available in the “Performance Management” section.

Exit:

At the time of retirement/ termination or resignation of employee, HRD arranges exit

interview of key persons and records the information on exit interview form.

5.1-Human Resources Planning and Forecasting in Mughal Steel:

Human Resource Planning is the first step and important function of HR department.

In Planning we have to see the future targets regarding production and recruitment. In

Mughal Steel management has decided to install a new plant first Plant of its nature in

Pakistan. It is Mughal Ferro Alloys. This plant will be used to produce Ferro

Manganese and it will be used in the production of steel alloys. We have a furnace of

about 3 tons. In HR planning management has to decide the following;

a) What will be the future benefits after the installation of Ferro

Plant?

b) What will be the strength of that Plant?

c) How much will be the profit from this plant?

d) Who will be the exporters of the Ferro Maganese?

Forecasting Human Resource Requirements

Mughal Steel is now enhancing its business volume and they are installing a Ferro

Alloys plant in their premises. This is the single plant of its nature in Pakistan. Now

all the steel industries importing the steel alloys form other countries but after the

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installation of this plant we will be able to export the Ferro alloys and other chemicals

to other steel industries.

Method to Forecast HR Needs:

In Mughal Steel there is no proper method is used to forecast HR requirements. The

HOD of the division just write down the vacant seats and then forward to the HR

department. Then HR department plans how, to recruit the technical and official

persons. They take the next step and take approval from the top management to hire

the employees. If the management grant the permission to hire new talent then they

advertise in the Newspaper and select the required employees.

Mughal Ferro’s

With a capital investment of around Rs. 700 million, the facilities to convert country’s

rich deposits of ore of Manganese and Chromites into value added and highly

demanded commodities of Ferro Manganese and Ferro Chrome started production by

July 2005(first phase). The plant produces 25000 tons of finished Ferro annually.

This is the first plant of its kind in Pakistan.

Recruitment of Mughal Ferro’s:

For the induction of Mughal Ferro’s, they advertised in Jang for new employees and

they selected some employees for their plant. Following is the Manpower Strength

Chart for the Ferro’s Alloys plant. (Annexure 01)

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5.2-Employee Recruitment & Selection:

Objective

To recruit & retain capable, qualified and experienced human resources. The

Objective is to Place right person on the right job that is willing to contribute their

best efforts to accomplish objectives of the organization.

Policy

We are an equal opportunity employer. The overall requirement of the job (relevant

qualification and experience of the individual) will be determining in the selection of

employees. The policy of the company is to develop its own employees and fill in the

vacancies from within the organization, whenever possible. In the case of non-

availability of qualified personnel from within the organization shall recruit qualified

& experienced personnel in the respective discipline from outside. New employees

will be inducted only on the basis of a personnel requisition against a specified

function within the approved manpower strength.

Sources of Candidates:

There are two sources of candidates while recruiting;

1) Internal Sources.

a) A method of informing employees of job vacancies by posting a notice in

central locations and giving a specified period to apply for the job.

b) Intranet

c) Employee references are also used in internal recruitment.

2) External Sources:

External sources are also used at Mughal Steel while recruiting the neo

employees. Following are the main external sources that are used in factory.

a) Direct Sourcing

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b) Advertisement in News Papers

c) Job posting in different Educational and Technical institutions

Employment Selection Process:

The human resource department of Mughal Steel has adopted a very simple and

effective method of recruiting and selection .A direct but very keen and purified

approach has been adopted by the HRM Department of Mughal Steel for performing a

sensitive and important function of recruiting and selection. The step by step

procedure of recruiting and selection is given below.

1 Forecasting for the vacant positions to be filled

2 Advertisements for vacant positions

3 Receiving application and complete Data bank

4 Building a pool of candidates

5 Short listing the candidates and building a secondary and purified pool

6 Written test

7 1st Interview

8 2nd

Interview

9 Final interview

10 Telephonic confirmation for joining

STEP-1

Forecasting for the vacant positions to be filled

The first step in recruiting and selection process is to forecast the requirements of

persons for performing the required functions. Job analysis and actual requirement

proposal is prepared for making the plan of recruiting and hiring the persons in the

respective areas of fields. Trend analysis is used for predicting the actual needs of the

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persons in future with respect to the past. The number of employees is increasing day

by day in Mughal Steel.

STEP-2

Advertisement for vacant position

2nd step in the process of recruiting and selection is to advertise the position for

getting more and more candidates to appear in competition so that the quality person

can be drawn for the purpose of achieving organizational objectives.

Advertisements are made in the newspapers “THE JANG” . The advertisement

contains details about the requirement of the company for a favorite candidates and

this is one of the most important steps of recruiting and selection of the candidates

which leads towards hiring the right men for right place

STEP-3

Receiving application and complete Data Bank

After advertising the process of receiving application and enter in data bank starts.

Applications are received by mail and often by online application system now. A

comprehensive application form is attached as appendix. A database is developed on

computer for analysis and short listing of candidates automatically.

STEP-4

Building a pool of candidates

After receiving applications a primary pool of candidates is developed to observe the

the quality of persons applied for the post.

STEP-5

Short listing the candidates and building a secondary and purified pool

A pool of candidates is developed after short listing the eligible candidates according

to the predefined criteria of selection and recruiting. A standard of education,

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experience and skill is maintained or set according to the requirement of the position

vacant or to be filled.

STEP 6

Written test

After short listing the candidates are called for a written test for selection purpose

which is mandatory and is used to check the intellectual capability of candidates.

Written test involves generally the knowledge about the job or relating to their

education.

STEP 7

1st interview

The candidates who have passed their test for selection are called for interview for

testing the experience related or not for the post. The first interview is taken by

manager HR and the HOD of the concerned department of Mughal Steel.

STEP 8

2nd interview

2nd

interview is conducted for the selected candidates of 1st interview. This interview

is conducted by Director HR for testing the skills to select the right candidate for a

vacant position. This interview is the 2nd last inter view which is to be to get the

candidates for presenting to the Chairman or Vice Chairman for final inter view

STEP 9

Final interview

The candidates selected by Director HR in 2nd

interview are presented to Chairman or

Vice Chairman for final selection. This is a very formal and general interview by

Chairman for selection of candidates

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STEP 10

Telephonic Confirmation for joining

After the induction of 3rd

and final interview the management prepares a list of

selected candidates. The candidates who qualify the final interview, they are

informed through telephone about their selection and joining date is confirmed by the

HR department.

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5.3-Training and Development

Training:

A learning experience that seeks a relatively permanent change in an individual that

will improve his or her ability to perform the job.

Development:

A process designed to develop the skills necessary for future work activities.

Employee development future oriented training focusing on the personal growth of

the employees.

Scope and Purpose

Mughal Steel is committed to excellence in Training and Development of its

employees. The purpose is to impart knowledge, enhance skills, and bring forth a

professional attitude among the employee working at all levels, for the attainment of

Mughal Steel‘s Mission, quality policy and quality objectives.

Responsibilities

It is the responsibility of all Supervisors and Section / Department Heads to ensure

that the employees under their control have the necessary skills and knowledge to

competently carry out their workplace responsibilities.

The Human Resources Department shall advise all Section / Department Heads in

identification of Training Needs, prepare Training Plans, organize the required

training at Company level and maintain all training records.

Implementation

Each employee informed to attend arranged training programme (in house/external)

is bound to attend it and give feedback after attending the training. In case of any

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emergency, if nominated employee can not attend the training programme then he

will forward the application through his/her head of the department to HR

department for the approval from Director.

Human Resources

Development

Human Resources

Department

Supervisor

Trainer

Competency

Training

(HRD) is the generic name given to all actions that are part of training

and development.

HR Dept is overall responsible for carrying out

training & development activities.

To be read as Supervisor or Manager, as appropriate.

Any suitably qualified person who conducts a training program.

The demonstrated ability to carry out a task to the required standards.

A structured process to equip a person with the knowledge, skills and

attitudes to competently perform their current or future work duties.

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Standards for Trainers

Any Internal Training shall be performed by a skilled and experienced employee

(this includes members at any level within the Team). Employees in competency

level-4 for a particular task may become a Trainer to impart training for that task

Aspects to be considered when identifying criteria:

Course contents should reflect a non-discriminatory language and equal opportunity

practices. Courses may be evaluated and where necessary adjusted, as a part of

continuous improvement process.

Identification of Training Needs (TNA)

Effective training depends on clear & accurate identification of needs. Identification

of needs will permit appropriately targeted relevant training. Needs are related to the

achievement of organizational objectives and ensuring employees are adequately

trained to perform the task(s) both competently and safely.

The Department Head shall be responsible for assessing and identifying the training

needs of employees within their scope of authority. HR Dept will assist Department

Heads in this exercise. These needs will be identified through the Performance

Appraisal and Management System. Identification of training needs will be an on

going process in addition to its organized annual assessment.

Areas to be considered during evaluation should also include:

Were objectives met and competency requirements achieved?

Were participants satisfied with the course?

Was there application of the learning at the workplace?

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And were needs met and measurable gains derived from the programme?

HR Department shall be responsible for the evaluation of both internal and external

training programs.

Follow-up

Training is an ongoing process. It is successful when learning acquired is applied on

the job. Management must take care to see that an effective follow-up system exists

in the organization to help the trainees develop the required skills by putting the

knowledge they have gained in to practice on their job. Department Head will

complete the “Training Follow Up” form for onward submission to HR Dept. HR

Dept will discuss these forms with the Trainers & concerned Dept Head.

Monthly Training Report

Human resources department will prepare monthly training report of its activities

and endorse copies to all concerned.

Training Records

For the purpose of career planning, it is important to maintain the training record of

each employee. The record should contain the following information

Name of trainee

Title of the course

Duration of the course

Date when the course was attended

Follow-up reports

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Certificates:

At the end of training, a test is conducted and all participants participate in test. This

test contains the material or questions that are already told them during training.

After checking the tests, the result is compiled and the participants are given the

certificates with the achieving grades in the test. A copy of this certificate is attached

herewith as Appendix .

At Mughal Steel different trainings have been arranged by the HR department with

the help of external sources. HR department held a training course on ERP

(Entrepreneur Resource Planning) for different departments to give them basic know

how about the new computerized system. They conduct training for Sales &

Marketing, Accounts, Time Office, Procurement and Time Office department.

Following is the course plan of ERP training.

Employee Development:

Employee development is a joint, on-going effort on the part of an employee and the

organization for which he or she works to upgrade the employee's knowledge, skills,

and abilities. Successful employee development requires a balance between an

individual's career needs and goals and the organization's need to get work done.

Employee development programs make positive contributions to organizational

performance. A more highly-skilled workforce can accomplish more and a

supervisor's group can accomplish more as employees gain in experience and

knowledge.

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5.4-PERFORMANCE MANAGEMNET SYSTEM

Objective:

To design, develop an effective and transparent performance appraisal procedure for

all permanent employees of “Mughal Group of Industries” aimed at

1. Recognition & acknowledgment of excellent performance to attract motivate

and retain talent of highest caliber, while supporting the group’s charter by

creating distinguishable difference in remuneration aligned to relative

performance.

2. Identification of causes of poor performance and taking appropriate corrective

measures.

3. Aligning our total remuneration policies with the market condition and

industrial surroundings we operate.

4. Elimination of inappropriate behavior from work place.

Scope:

This procedure is applicable to whole group.

Responsibility:

• HR department is responsible to initiate performance evaluation and its result

compilation as per performance evaluation schedule.

• All concerned HOD,s are responsible to conduct evaluation in their respective

departments in coordination with HR department.

• Top Management, will conduct performance evaluation of HODs.

Types:

• Probation performance appraisal.

• Periodic/Midterm performance appraisal.

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• Annual performance appraisal.

Probation Performance Appraisal:

An employee on joining the organization in placed in his respective department on

probation for a period of 03 months. Probationer evaluation form is sent along with

probationer to the concerned HOD, where a probationer employee is being employed.

Procedure:

• An employee on joining the organization remains on probation for a period of 3

months. During this period he is accessed by his HOD/ in charge on basis of

assigned tasks/ responsibilities and over all conduct / behavior exclusively for the

following.

• Fit /not fit for retention / employment.

• Recommended for extension of probation period up to another 03 months if

assessment process warrants so.

• Assessment is based on assigned tasks/ responsibilities/ conduct/ behavior /ethics

etc.

• HR department is responsible for initiating & ensuring the handing over of

orientation and evaluation form of the new employee to each HOD/ in charge in

writing.

• Concerned HOD/ in charge is responsible for the safe custody; completion and

handing over of form to HR department in prescribed time frame work i.e. (3

months)

• On receipt of assessment report of a probationer the HR department is responsible

for the following:

1. Issuance of confirmation letter, with in one week to the employees who

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are recommended by the HOD/in charge.

2. Issuance of letter of extension, with in one week, for extension in

probation period, to the employee s recommended for extension in

probation period by HOD/in charge.

3. Issuance of termination letter to an employee within 24 hours who is

not recommended fit for retention by any HOD/in charge.

• HR department is responsible to control and maintain all relevant record generated

out of the activities under the procedure. (Soft/Hard).

Annual Performance Appraisal

It is a periodic activity, carried out for all permanent employees towards fulfillment of

the organization commitment to effective performance management, through regular,

formal feed back, review and open communication, while ensuring that each

employee receives formal, documented performance appraisal from his/her HOD/ In

charge and rewarded accordingly: -

Procedure:

The organization has developed an assessment/evaluation form generated for the

systematic and transparent transactions of the procedure based on the following

aspects.

• Suitability of assigned job.

• Identification of growth potential.

• Identification of training needs and its effects/impacts.

• Evaluation of outcome of previous trainings imported.

• Significance and effectiveness of counseling.

• Performance based compensation & rewards.

• Transparency in corporate culture.

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1. .HR department is responsible to initiate performance appraisal process as per

company policy.

2. Appraisal forms are forwarded by HR department to each HOD/ in charge as

per schedule for recording/ documenting the assessment of all employees.

3. The guidelines/ directions/ instructions required to fill performance appraisal

form are noted on the back of last page of the prescribed form. Moreover HR

department also imparts training regularly thought out the year to all HOD, s

/in charge’s and employees for better awareness about the adopted systems/

procedures.

4. All appraisal forms duly completed in all respects are returned back to HR

department as per schedule. (1st of Dec)

5. On receipt of appraisal forms, the HR department compiles the data of all (04)

appraisals of the group employees.

6. The compiled data is then presented to the committee comprising of all top

management and HOD, s. The committee then decides, annual increase in the

salary of each employee, promotions, training needs etc.

7. Annual increment, promotion, revision of grades takes effect from Ist of

January each year.

Appraisal Forms are attached as Appendix.

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INCREMENT POLICY

1-Purpose:

The Top Management of Mughal Steel wishes to reward its employees for the services they

render to organization. This policy has been designed to develop a transparent and uniform

system which relates this reward with monitory benefits to employees i.e. annual increase in

their salaries.

2-Scope:

All permanent employees of Mughal Group of Companies are entitled for increment.

3- Procedure:

Annual Increment:

a) Increments are awarded annually on basis of performance appraisal results (refer to

appraisal policy).

b) The increments are finalized in January every year which are applicable with effect

from 1st January.

c) Increments are calculated on basic salary.

d) Employees who have not completed one year service with organization at 31st

December are awarded increment with proportion to their months of service in the

organization. Proportionate increment rate is calculated with following formula:

Increment % age/12 x *Months of service

*Appointment in first half (1~15) of any month is considered one complete month for

purpose of increment calculation.

e) Employees who are on probation at 31st December are not considered in annual

increment plan.

f) Employees who are not considered in annual increments due to probation are awarded

increments in next year. However the number of months which were not previously

considered is accounted for in their first increment proportionately. The proportionate

increment rate is calculated by the formula as stated in “d”.

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Special Increment:

a) Special increment is a special reward awarded by top management on special

contribution of any employee towards organizational goal achievement.

b) Special increment can be awarded at any time during the year which depends upon

sole discretion of top management.

c) Top management also reserves the right to decide whether cases of special increment

will be considered in next annual increment or not.

_____________ _______________ ________________

Prepared By: Reviewed By: Approved By:

Atif Haleem Khurram Javed Javed Mughal

A/M HR Director Chairman

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5.5-EMPLOYEE COMPENSATION & BENEFITS

The wage and salary administration guidelines in this section apply to all employees

with the exception of faculty and some professionals designated by Chairman

Staff

Initial pay rates for employees are established at the time of hire. The initial pay rate

is determined jointly by the employee’s department head and the Chairman or his

designee.

Pay levels

Designations are assigned to an employee upon employment. Each classification

carries a minimum salary level for workers.

No employee will be paid at a rate less than the minimum for the applicable position

classification.

Overtime Pay

Mughal Group of Industries follows a 54 hour working week (09 AM To 06 PM).

Rest interval is 1 hour (01 PM To 02 PM). Workers working extra time are awarded

overtime for the extra hours they have worked.

Overtime is paid only for work that cannot be done during the normal work week.

For the purpose of computing overtime, holidays are counted as actual time worked.

Overtime may accrue only after 54 hours of actual time worked. Leave time is not

considered part of the normal work week.

For gazetted holidays i.e. Eid and National holidays, workers are paid overtime with

substitute holiday.

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If an employee is required by a supervisor to work on a day designated as a paid

holiday, the total compensation shall be the regular rate for the holiday plus the

hours worked on the holiday at the normal rate.

Working on public holidays and late hours after official timing will be discouraged

and the departmental head will require any staff member to do so only if it is very

urgent.

Salary payment

Employees will normally be paid on monthly basis on the 7th of the preceding

month. In the event that payday falls on a holiday, payment may be made on the

preceding workday.

Salaries will be paid in cash for employees with less than or equal to Rs. 10,000

gross. For employees whose salary is more than Rs. 10,000/- salaries shall be paid

vide bank account.

All such employees who fall in above category are advised to open a bank account

with in one month of their appointment. A grace period shall be awarded of only

one month to special cases after which no salary shall be paid in cash for the said

category.

Details of banks can be obtained from the Accounts department.

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Educational and professional development

Mughal Group of Industries offers educational benefits to support and encourage

professional development among employees. Chairman is the only authority on

granting such benefits to any employee. Any such approval, if given, is with the

consent of the concerned departmental head.

Courses may be approved or denied based on department needs and the effect of the

employee’s absence on department operations.

An employee with unsatisfactory performance evaluations may be denied this

educational benefit.

Employees old age benefit (EOBI)

Upon confirmation, the workers may be registered with EOBI department.

Employees contribute a portion of their total earnings as provided by law. The

amount is deducted from each paycheck. Mughal Group of Industries contributes its

portion as provided by EOBI Acts in force.

Social security

Employees of the Company are covered under Social Security Act. The Company

contributes its portion as provided by Acts in force.

Workers’ compensation

Workers are compensated for work related injuries as per law. Notification is

necessary to ensure proper medical attention and accurate processing of

compensation claims. The Company has designated the Human Resource

department to administer workers’ compensation issues.

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Employees should report injuries to the Admin Department immediately and no

later than 02 days after the injury has occurred.

The Admin Department informs and provides notice of accident report forms to the

HR department and HR department will precede the case in consultation with

Manager Administration

Employees who suffer a work-related injury are also compensated by the factory

with special leave with full pay and medical expenses as well.

5.6-Organizational Career Management:

Career Management is concerned with providing opportunities for employees to progress and

develop their careers and ensuring that organization has the flow of talent it needs. The

elements of Career Management are also maintained are the provision of learning and

development opportunities, career planning and management succession planning.

In Mughal Steel the HR department is looking forward to manage the career of the

employees. To full fill this requirement they induct different trainings to enhance the

interpersonal and communication skill of its employees.

Employee job changes:

Employee job changes means internal moves or external moves. Internal moves means

changing with in organization and external moves mean separation of job. Job changes also

including the change the position of job as per requirement of organization tasks or

responsibilities.

Promotion.

A promotion occurs when an employee moves to a new classification with a

higher-grade level. The employee’s new rate of pay must be at least the minimum

pay assigned the new classification. In Mughal Steel concerned HOD recommends

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the case on special performance of that employee and HR department finalize this

promotion with the mutual understanding of Director HR, HOD of that employee

and the employee.

Transfer.

A transfer is defined as a lateral move from a job in one location to a job with the

same grade level in a different location. A transfer does not involve a pay rate

change but may involve a change in benefits. In Mughal Steel an employee may be

transferred from one department to another, one unit to another unit due to need of

expertise of that person or due to inability of that person to perform. Transfer letter

is issued to that employee, his/her HOD, Personal File and Accounts department.

Demotion.

If an employee is demoted due to disciplinary action, the employee’s rate of pay will

be reduced as per the directives of Chairman / Vice Chairman / Director. Demotion

occurres when annual performance review report is written in negative manner with remarks

unsatisfactory or poor. The employee, which Performance Review Report is written by

Reporting Officer with negative remarks, to be reverted in previous grade. Also it could be a

disciplinary action, inability of an employee to handle the requirement level of job.

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SEPARATIONS

Its mean moving out or separating the employees from organization with different ways as

mentioned hereunder;

► Lay Off

► Termination

► Resignation

► Retirement

Lay Off:

Lay off means involuntary moving out of employees from organization. It is not pleasant for

organizations. Organizations always avoid from lay off the employees. In a very difficult

situation when organizations are facing lot of financial crisis of loss then they make a decision

for lying off the employees.

Recently Mughal Steel lay off its employees due to shortage of Gas. When there was a

shortage of Sui Gas throughout the country. Many steel industries that have there own power

housed and furnaces they have to face the problem of sui gas shortage. Here in Mughal Steel

gas is used to run the furnaces, and many employees are working there. So due to this

situation they lay off there production department and power plant department employees on

lay off for two months from 05th December, 2007 to 7th February, 2008.

When the employees were on lay off, the management has decided to give them half month

salary. These are the motivational incentives that may help to retain the employees.

Termination:

Termination of employment refers to the end of an employee's duration with an

employer. Depending on the case, the decision may be made by the employee, the

employer, or mutually agreed upon by both.

Termination refers to the employee's departure at the hands of the employer. There are

two basic types of involuntary termination, known often as being "fired" and "laid

41


off." To be fired, as opposed to being laid off, is generally thought of to be the

employee's fault, and therefore is considered in most cases to be dishonorable and a

sign of failure. In Mughal Steel termination policy is as follows;

Termination Policy

General:

This policy lays down the rules, regulation and terms in connection with Resignation

from service or Termination of service for permanent employees.

Terminations & resignations:

The following guidelines shall be applicable for permanent Employees.

• All resignations/terminations shall be routed through HRD. For this purpose.

“Termination / Release Request Form” (Annex-1) is attached. It shall be duly

filled-in and signed by the Head of Unit/ Department and sent to Head, HRD

along with resignation, if applicable, for necessary actions. No employee is to

be terminated without a formal letter duly signed and issued by HRD.

• An employee who has resigned shall continue to serve the Company till his

resignation has been formally accepted. Non-compliance to this clause shall

make him liable to pay the loss/ damages caused to the Company.

• The services of a permanent employee in any Grade (Management and non-

management) may be terminated by the management without assigning any

reason by giving one month’s notice or by paying a sum equal to one month

salary in lieu there of as applicable under the terms of appointment.

• A permanent employee may also leave service by tendering resignation and

giving one month’s notice or by paying a sum equal to one-month salary in

lieu therefore the un-expired notice period if earlier release is desired.

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• No resignation shall be deemed effective during the period of disciplinary

proceedings instituted against the employee concerned.

• The period of notice shall commence from the date on which notice was given

by the employee or the Company as the case may be.

• The Management may waive off notice period or portion thereof at its sole

discretion.

• In the event of dismissal from service the permanent employee shall not be

entitled to any Gratuity, encashment of unavailed balance of earned leave and

notice period or salary in lieu thereof.

• Accumulated balance of earned leave of an employee may be adjusted against

the notice period.

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REQUEST FOR TERMINATION OF SERVICES

Name: ________________________Father’s Name__________________

Designation: Grade:_______________________

Expected Date Of Release: Employee No:______________

Previous Experience: _____________________ Years:

Mughal Steel’s Experience In: ___________________ Years

Circumstances under which termination / release are requested:

1. Completion of work

2. Long absence

3. Misconduct: please specify ________________________________________

4. Any other: please specify _________________________________________

Please give general comments about his performance.

General comments

__________________________________________________________________

__________________________________________________________________

--------------------------------

Signature HOD

44


Resignation:

Voluntary termination refers to a decision made by the employee to leave the job.

Such a decision is commonly known as "resignation", "quitting", "leaving", or

"giving notice". Some common reasons for voluntary termination include:

• Personal dissatisfaction with job, employer, hours, or working conditions, or

in more severe cases, burnout.

• Factors in employee's personal life not related to the job that make holding or

performing the job impossible or more difficult. These may include family

obligations, education, health, or moving to a new location.

• Hire at a new job. Reasons for wanting a different job may be better working

conditions, better hours, a shorter distance to work, better pay, graduation,

career progression or preparation for entry into a new career, or a career

change.

• Feared or anticipated involuntary termination. The employee may wish to take

matters into his/her own hands in order to leave more honorably. This is also

known as mutual consent in some parts.

Exit Interview

In Mughal Steel efforts shall be made to conduct Exit interviews of the employees,

who decide to resign from company’s service. Comments/ feedback of departing

employee shall be recorded on Interview Exist Form. This form shall be issued to

such employees and be placed in their personal files reference and records, if received

back.

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The Exit interview sessions shall be conducted by heads HRD & concerned head of

department. Interview Exist Form is attached herewith;

Retirement:

This may be as a result of the employee's age (which may vary, depending on job type

and benefits available following retirement) or else an injury, disability, or other

medical condition forcing early retirement.

In Mughal Steel there are very few cases regarding employee retirement. Only two

cases are observed regarding retirement. Both were from security department and

there ages were more than 60 years. There names were registered in EOBI

department and now they are given the pension from EOBI department.

46


6-LABOR MANAGEMENT RELATIONS:

Labor Management Relation means relationship between management and employees at work

place. The overall productivity depends upon good relationship between workers and

management. It has been always the top priority policy of management of any organization

that always good relationship created at site. If the workers are motivated and satisfied with

their jobs then the productivity will be always increased. Otherwise the less motivation will

be the cause of decreasing the productivity and its results will be come in shape of loss or

reducing the profit of organization.

In Mughal Steel both direct and indirect labor Management relations are observed. Every

worker has the right to discuss his problem with the management directly. It shows that there

is no communication gap between labor and management. On the other hand the workers or

the labor discuss their problems with their Head of department and then HOD discuss the

matter with the management, which takes time and communication gap remains between

labor and the management. But mostly we observe open approach is used that is direct

relations with the management.

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7-CRITICAL ANALYSIS:

The critical analysis of the theoretical concepts relating to practical experience of my

internship at Mughal Steel in Human Resources Department is as follows.

Analysis of HR Planning and Forecasting:

As we learn in our MBA text that HR planning and forecasting plays an important role in the

planning of human resources. But, in practically at Mughal Steel HR Planning and

Forecasting is not observed instead of Mughal Ferro Alloys. For Ferro Alloys the HR

department prepares a comprehensive planning sheet for new recruitment. Here planning is

not necessary, first they take actions and then think about the action taken. So there is a need

to plan before taking any action.

Analysis of Recruitment and Selection:

After HR Planning and Forecasting, Recruitment and selection of an employee is

important. As for as Mughal Steel is concerned, Employee recruitment and selection

follows the right criterion of selection. HR department receives the requisition form

from HOD of the department then after meeting with management they take the next

step and recruit the right candidate.

Analysis of Employee Training and Development:

Training and Development plays important role in the career development of an

employee. In Mughal Steel there is a proper policy to train the employees. In April,

2007 ERP system was introduced to work properly. ERP trainings have been

conducted twice to train the workers. For new Mughal Ferro Alloys plant they sent

their Engineers to China for training of about three months. Because this is the first

plant of its nature in Pakistan. So their Engineers got training from China and now

they are serving there.

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Analysis of Employee’s Performance Management:

As we read that performance management plays vital role in the development and

motivation of an employee. Good Performance Appraisal is necessary to retain the

workers. As for as Mughal Steel is concerned they also evaluate their employees. As

it has been discussed, they appraise their workers twice in a year. There are many

attributes which have to be discussed during appraisal but practically situation is

different. The HR department evaluates their employees annually, Mughal Steel

spent lot of money on performance appraisal but the result is zero. Because there is

an error of biasness. When HR department prepare all the increment lists then

Director HR decided how much increment should be given to this person. So

Director HR recommended the amount with the negotiation with the HOD and the HR

Department.

Analysis of Employee Compensation and Benefits:

Employee Compensation and Benefit is actually related with reward Management. The

theoretically concepts define us that it is very necessary for the motivation of our employees

that the reasonable and attractive rewards should be paid to employees for their good working

and motivation. But in Mughal Steel, workers and dissatisfied regarding compensation and

benefits. New workers are paid more while old workers are paid low by the management.

There are many examples in this regard. No benefits are provided by the management of

Mughal Steel to the employees. No Social Security and EOBI cards are issued to employees

expect some special cases.

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8-CONCLUSIONS:

No doubt Mughal Steel is a manufacturing unit but the working substances are the

human being .It goes with out saying that Human resources are the most important in

the organization and so does the Human Resource Department .It integrate all the

activities and functions of the bank like job analysis, recruitment, staffing, training,

designing compensation package, employee’s appraisal system.

Human Resource Department plays the key role in the hiring, retention, motivation

and promotion of the employees. Actually it assigns the specified duties to the

specified persons in this age of specialization.

Human Resource manager should be well versed and confident in his field. He should

be humane, well natured and have go face reading capabilities .All this ensures his

success. He should be of the notion “victory is not the everything but the way of

fighting is”.

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9-Recommendations:

• The HR department of Mughal Steel is not fully authorized to take the action

against any employee. Authority should be given to the management of HR

department.

• There is a need of duly structured performance appraisal system, equipped

with proper tools of evaluation, attached with reasonable financial elements

and duly supported by the employees of the company.

• It is recommended that training and development should be given due

importance and shall be treated as regular function of HR Department.

• There is a need to prepare a comprehensive HR Policy Manual to provide the

brief information to the employees about the organization.

• Minimum wage should be paid as per law.

• Salary slip may be issued to the employees for proper communication of their

salaries.

• It is recommended that all employees who fall in the Social Security and

EOBI category should be provided this facility.

• All overtime hours may be paid at double rate of salary / wages and one

compensatory leave in case of overtime during the Gazetted holidays may be

allowed.

• There is much room to improve the reward scheme and its correct

implementation.

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10-ANNEXTURE / APPENDICES

☼ Recruitment plan of Ferro Alloys

☼ Staff / Worker Requisition Form

☼ Staff Advertisement in News Paper

☼ Employment Application Form

☼ Interview Evaluation Form

☼ Joining Report of Employees

☼ Employee orientation Form

☼ Training Certificate

☼ Performance Evaluation Forms

► For Managers and Officers

► For Workers

☼ Leave Application Form

☼ Official Duty form

☼ Application Form for loan against Salary / Gratuity

☼ Exit interview Form

☼ Clearance Certificate

☼ No Demand Certificate

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