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Executive Summary

The increasing trend of globalization in the past two decades has moved companies outside their domestic operation into the international markets. This dramatic change in international businesses require dynamic workforce, as such, challenge managers, face complex issues of managing people to gain or sustain a competitive advantage. Some of key issues need heed. There will be more human resource activities involved in international operations than that in the domestic context. A broader perspective is required to manage people not only from home countries, but also from host countries and even from the third countries.

Philip Morris USA is one of the core operating companies of Philip Morris Companies Inc., the world's largest producer of consumer-packaged goods with annual revenues of over $80.4 billion. Philip Morris USA is a fortune 500 company, produces and markets some of the worlds’ most recognized and best selling brands in 76 domestic USA markets.

PTC is a subsidiary of British American tobacco (BAT) group, which is the second largest international tobacco group and has its business in 180 countries all over the world. BAT holds 94% shares in PTC. Pakistan Tobacco Company was the first multinational to set up its business in 1947 in Pakistan. It took over business from Imperial Tobacco Company that was operating since 1929.

The study is limited to comparison of HR practices of Philip Morris USA with PTC in general and Recruitment, Selection and Performance Management in particular. A detailed analysis of the HR practices of both the companies has been conducted by the group to highlight the salient features of the HR policies practiced by both the organizations.

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i want project on HRM.can any1 help me

4. Adaptability:



Is flexible and responds positively to changes.



• Accepts changes enthusiastically



• Is willing to learn/change



• Is open to new / other ideas



• Is able to perform under pressure





Positive Indicators Contra Indicators













































  • Will rise to challenges - accepts them enthusiastically




  • Will avoid to take on new challenges




  • Adapts well to changing circumstances




  • Doesn't accept change positively




  • Demonstrates willingness to learn new things




  • Panics under pressure




  • Prepared to change - will have a go and try things out




  • Is negative about new / other's ideas and is not willing to take them on board




  • Open to new ideas




  • Doesn't have a go - try things out




  • Is willing to take other people's ideas on board




  • Resists change




  • Is flexible in response to changing work demands




  • Will avoid doing things differently




5. Initiative:



Uses initiative and seeks improvement



• Is curious and inquisitive



• Generates ideas



• Develops and makes improvements



• Learns from experience



• Is able to work with minimum supervision / direction





Positive Indicators Contra Indicators













































  • Interested in finding out more about things - looks beyond the surface




  • Takes things as read - is not interested in finding out more




  • Generates varied solutions to problems




  • Makes similar mistakes more than once, on a number of occasions




  • Comes up with ideas, makes suggestions




  • Accepts systems and procedures even if they appear to be inefficient




  • Is proactive




  • Fails to learn from mistakes




  • Works with minimum direction, using own initiative




  • Tends not to perform well if left to own initiative or without close supervision




  • Looks for possible improvements to increase efficiency




  • Lacks interest and curiosity in what going on around them




  • Learns from past successes and failures




  • Will not volunteer opinions / ideas


6. Relationships:



Has good working relationships with others, both within and outside the organization.




  • Builds informal working relationships



  • Co-operates with others, is a team player



  • Understands and is sensitive to the needs of other people



  • Persuades and negotiates - is able to gain commitment



  • Confronts problems and is assertive when necessary



  • At supervisory level:



  • Is able to supervise and motivate others






Positive Indicators Contra Indicators























































































  • Able to build and maintain relationships with people at all levels




  • Has problems in gaining other's commitment




  • Develops a network of contacts




  • Doesn't change his approach according to the audience




  • Is friendly whilst behaving in a business-like way




  • Has an unprofessional image to others




  • Works well with others and in a Team environment




  • Takes constructive criticism personally




  • Will offer help and support to others




  • Is not assertive when required - tends not to stand up to people, gets walked over




  • Is open and approachable




  • Avoids confronting/dealing with problems




  • Is aware that different people may need to be approached in a different way




  • Lets problems go rather than confronts them




  • Has an appreciation of people's needs




  • Unwilling to admit to problems/mistakes




  • Able to persuade and convince others




  • Will not ask others for help




  • Is able to be assertive




  • Unconvincing in discussion with others




  • Prepared to say 'no' when necessary


 


  • Admits to problems and mistakes


 


  • Prepares to ask for help if in difficulty


 


  • Is able to take constructive criticism


 



7. Communication:



Communicates confidently and clearly with others



• Is clear and concise in communication



• Effectively communicates own needs



• Liaises and consults with others



• Is able to communicate effectively in writing



Positive Indicators Contra Indicators



















































  • Expresses themselves clearly and to the point




  • Unclear in communication




  • Is articulate - able to convey their needs to others - purpose, importance and consequences




  • Talks around the subject




  • Is courteous, tactful, helpful and shows sensitivity




  • Written communication can be too lengthy or ambiguous




  • Actively listens




  • Drafts letters that are not appropriate or are not well written (grammar, punctuation)




  • Has a confident manner and projects credibility both face to face and over the telephone




  • Lacks confidence in communication




  • Keeps others informed




  • Poor written communication skills




  • Able to write memo's and draft letters as appropriate




  • Tends not to listen to what others have to say








  • Fails to give others the information they need


8. Commitment:



Displays commitment and self-motivation



• Completes and finishes tasks, not giving up



• Is conscientious and takes pride in their work



• Works to high standards



• Is reliable and consistent - not letting others down









Positive Indicators Contra Indicators



















































  • Perseveres with tasks until completion




  • Lacks motivation




  • Takes responsibility




  • Demonstrates a lack of concern with their own standards and quality of work




  • Is enthusiastic and positive in approach to work




  • Loses interest easily - leaves tasks unfinished




  • Prepared to put in extra time when required




  • Poor attendance




  • Sets high standards and strives to achieve them




  • Not willing to put in extra time/effort when needed/necessary




  • Concerned in projecting a good image of the department/company




  • Pessimistic approach - only sees the negative




  • Is reliable - can be depended upon by others




  • Lack of concern for others




  • Is willing to go beyond the job if required




  • Lets others down - cannot be counted on




Disciplinary Procedure for Managers:



It is the company's policy to ensure that the required standards of performance and conduct are maintained. In some cases it will be necessary to take formal disciplinary action, which could range from a verbal warning to dismissal, and it is the company's policy to implement effective and equitable arrangements for handling such matters to ensure fair treatment of all employees.



The Disciplinary Procedure is intended only as a statement of company policy and management guidelines. It does not form part of the contract of employment or otherwise have contractual effect.



There are four stages to the Procedure for permanent employees. The company reserves the right to initiate the Procedure at any stage, or to jump stages, depending on the seriousness of the conduct/performance.



Employees may be accompanied at disciplinary meetings or at any appeal, if they wish, by a fellow work colleague, provided that their attendance is reasonably practicable. It is the employee's responsibility to secure the attendance of such a colleague, and the colleague has the right to decline to attend. Employees are not entitled to be accompanied by an individual not employed by PTC.



Employees will normally receive advance notification of disciplinary meetings and will be told of the action which could result.



At each stage of the Procedure, the employee will be informed of the nature of the complaint against him/her and shall have an opportunity to state his/her case before a decision is taken.



No disciplinary action will be taken against an employee until the matter has been fully investigated and the manager involved in taking the action has considered any explanation given by the employee.



Disciplinary action at stages 1 and 2 of the procedure may be taken by the employee's immediate manager. Disciplinary action at stages 3 and 4 of the procedure may only be taken by the Head of Department or a manager of equal or higher organizational level.



The Human Resources Department is the reference point on questions of consistency or interpretation of the Disciplinary Policy and Procedure and must always be involved prior to dismissal action.



The Head of Department should maintain direct control of all disciplinary records. A copy of all records must be placed on the employee's personal file in the Human Resources Department. All warnings will remain upon the employee's personal file indefinitely, but will normally be disregarded for disciplinary purposes after the following periods:

  • Stage 1 - Verbal warning: 03 months




· Stage 2 - Written warning: 06 months




  • Stage 3 - Final written warning: 12 months



  • Stage 4 - Dismissal




These time periods may however be extended in appropriate circumstances taking into account the nature of the offence.



The time period will commence from the date of the letter/memorandum confirming the warning, even though any specified time for improvement has expired.



Required Performance for Workers at PTC:



At PTC, workers are mainly judged on their skills and the roles that they need to exhibit during a job. As most of the jobs at the worker level are repetitive, that management has a clear analysis of the job and the expected outcomes. So at the worker level, a simple grading criteria is maintained and workers are appraised according to that criteria.



Given below is the rating system to judge the performance of the workers against the core job areas.

  • Stage 1 - Verbal warning: 03 months




· Stage 2 - Written warning: 06 months




  • Stage 3 - Final written warning: 12 months



  • Stage 4 - Dismissal




These time periods may however be extended in appropriate circumstances taking into account the nature of the offence.



The time period will commence from the date of the letter/memorandum confirming the warning, even though any specified time for improvement has expired.



Required Performance for Workers at PTC:



At PTC, workers are mainly judged on their skills and the roles that they need to exhibit during a job. As most of the jobs at the worker level are repetitive, that management has a clear analysis of the job and the expected outcomes. So at the worker level, a simple grading criteria is maintained and workers are appraised according to that criteria.



Given below is the rating system to judge the performance of the workers against the core job areas.

List of Misconduct for the workers:



The following acts come under the category of misconduct by the workers:



i. Willful insubordination or disobedience, whether alone or in combination with others, to any lawful and reasonable order of a supervisor.



ii. Theft, fraud, or dishonesty in connection with the employers business or property.



iii. Willful damage to or loss of employers’ goods or property.



iv. Taking or giving bribes or any illegal gratification.



v. Habitual absence without leave or absence without leave for more than 10 days.



vi. Habitual late attendance.



vii. Habitual breach of any law applicable to the establishment.



viii. Riotous or disorderly behavior during the working hours at the establishment or any act subversive of discipline



ix. Striking work or inciting others to strike in contravention of the provisions of any law, or rule having the force of law.



x. Going slow.





Performance Appraisal:



Reviewing performance and taking positive steps to develop employees further is a key function of management and is a major component in ensuring the success of the company through effective employee performance.



A review is about ensuring people know what levels of performance are expected of them and then taking action to ensure they are trained and developed to perform effectively.



Performance Review at PTC:



At PTC a review is intended to be an open and frank discussion between an employee and their Team Leader/Manager. Generally there are two elements: first is the element in which discussion takes place over the strengths and areas which need to be developed as displayed by the job holder over the past 12 months. The performance is of course judged comparing the performance against the core indicators of Job. The second element is concerned with discussing the training needs/inputs activities that are considered to be appropriate to help the jobholder overcome some of development areas discussed in the review and also those activities that are deemed appropriate to build upon their current strengths.



o Competences:



At PTC, effective performance is considered necessary if the worker is deemed to be working at optimum effectiveness. The initial discussions on strengths and development areas provide a ‘benchmark’ on how the worker is performing at the moment against the competences. Only by carrying out this exercise is it possible to plan what training needs/inputs are necessary to help them develop further.



o Will to Work:



PTC considers a person, an enthusiast who works at his own with initiative and resultantly inculcates a sense of ownership in him, which is always considered a basic facet for an individual performance. Despite the expertise in his area of work, company does not expect optimum effectiveness from a person without his will to work. Willingness is an efficient/effective response of an individual towards his work, which could not be achieved without interest and initiative. Will to work is basically related to “attitudes” of an individual towards work and his relationship with peers, colleagues including seniors. Someone who removes faults of the machine at his own without waiting for instruction is considered to be an individual with positive attitude. The one who awaits call/order of his seniors or colleagues looking for excuses is considered an individual with not very good attitude and is not a willing worker.



o Using the Behaviors to Aid Assessment:



The reviewer uses the behaviors identified in the competences as a guide to measure the job holder’s actual behavior. The final grade given will be derived from the balanced view of the reviewer after taking into consideration whether the jobholder behaves more or less like the behaviors expressed in the competences. The assessment is based upon evidence of skills and behavior relevant to each competence and evaluation is made against an ‘ideal standard’. These are only indicators so if one feels that company does not take account of a specific behavior he has observed it is acceptable to grade accordingly as long as one is confident to justify it.



o Allocating the Grades:



Allocating grades to indicate the level of performance/competence of jobholders is probably one of the most important aspects of the review process. All reviewers have a duty to ensure that the grades allocated are as objective, accurate and fair. The areas in which, the worker requires most development and his will to work should be addressed first in the sheet, so that the grades should support this view.



The reviewer should have an idea of the grades he will award prior to the interview using the behaviors and the rating system to measure actual behavior against.



Sources of Performance Appraisal:



At PTC the primary sources of performance appraisal are the managers and secondary sources are employees themselves. Though the peers also give their opinion but it usually does not have any weightage unless a conflict arises between the manager and the employee.



Feedback:



Workers at PTC are informed of their performance and given the opportunity to express their opinion over their own level of performance against each competence. This serves the following two main purposes:



· It enables the reviewer to redefine whether the initial assessment was correct, as circumstances may exist that the reviewer is unaware of.



· By asking the worker what he sees to be his own strengths and development areas often help to reduce negative responses and makes planning training needs/inputs activities easier if the person is able to express for himself the areas in which he feels he can improve.



Following the review the final grades are allocated and the issues/points that were discussed at the review are included in the sheet. When the sheet is complete, at the first instance it is sent to the immediate manager who if required adds his comments, and then it is sent to Employee Relations Department.



All jobholders are entitled to have a copy of their sheets if they so wish and this is encouraged to ensure that the system is perceived as being ‘Open and Fair’.



Performance Measurement System at PTC—Strengths:



Though the management claims that their Performance Measures are congruent to strategies, reliable and acceptable but they emphasized that the main strengths of their systems are the validity and specificity.



Validity:



The performance measurement systems used at PTC are valid. As stated by the management, the core job areas extensively. They are not only aligned with the company’s strategic objectives but are also free from deficiency. Contamination is acceptable as a few things extra from the actual job requirements are expected.





Specificity:



The performance measure used at PTC has a very high specificity because it guides the employees as to where they lack and how can they improve.



Chapter 5



Analysis:



Philip Morris USA is “Fortune 500” company. It is one of the leading tobacco products organizations in the US market. It has been rated Number 1 in the tobacco industry for three consecutive years. PM USA was one of the 50 employers selected for outstanding contributions to the economic growth of USA.



PTC is a subsidiary of BAT group and is one of the largest multinationals operating in Pakistan. PTC’s continual investment in people, brands, technology, innovation, and the communities in which it operates has transformed the company into one of the best organizations in Pakistan.



It is important to keep in to consideration the environments in which these two companies are operating. PM USA has a large production capacity as compared to PTC. PM USA has plants spread all over the USA whereas PTC has only two production facilities in Pakistan.



The US and Pakistani market vary in sophistication and number of consumers. The consumer market in USA is very huge representing a large number of cultures as compared to Pakistan. Other than that, the consumer preferences of the US market are in no way comparable to those of the Pakistani consumers. This is mainly because of the vast cultural differences between the two countries. Cultural differences across the two countries have an impact on the usage of the product. However, the consumption of cigarettes in Pakistan is relatively higher than that in USA keeping in view that fact that the USA is a country spread over a vast area whereas Pakistan is not and the population of USA is double that of Pakistan. The culture of a country is displayed in the organizations operating in that country and so, PTC and PM USA exhibit cultures which are not comparable to each other.



Comparison of Human Resource Practices:



Another facet of this study is that organizations working in the US environment have to abide by stringent laws in each and every respect of the organizations working. Whereas in Pakistan, there is no strict legal adherence for organizational practices and so companies form shortcuts along their way and can influence the governmental policies for their own gains. PM USA is fully aware of these legal implications and ensures that the organization complies with the legal requirements.



In contrast to PM, PTC does not have to bear heavy litigation charges due to the absence of rigorous legal monitoring on the organization’s working.



The relation between the management and unions at PM USA is congruous and there is an atmosphere of mutual trust. The management ensures that due regard is given to the interest of the union.



In the past, the management of PTC faced a lot of resistance from the union which led to high employ turnover and lack of productivity. There was a divergence of interests of the management and that of the union. In late 90s, PTC realized the importance of the role played by the union for growth of the organization and worked hard to build compatibility between the union and the management. Presently, PTC is known for its exemplary union-management relations and it serves as a benchmark for the other organizations. This transition to harmonious relationship has led to higher levels of productivity for PTC.





Training and development of employees is a key feature at PM USA. Every employee of the organization has equal opportunities for training and development programs. The organization places emphasis on training and development of its employees for not only training them for their job related tasks but also for the development of future opportunities.



Although training is given due focus at PTC, the organization needs to enhance opportunities for development of its employees. Training programs focus primarily on jobs rather than on development of employees. Development programs should be implemented to help employees manage their careers.



The benefits system of PM USA is one of the best and is known all over the USA to attract employees towards it. These benefits extend to a wide range of facilities provided by the company to retain its human resource which the company thinks is its biggest assets. One of the best features of the employee benefits is the consultation services provided to all the employees in all walks of life. These not only motivate the employees to work hard but also serves as a means to retain valuable personnel and develop their careers at PM USA.



If we compare the benefits system of PTC with other Pakistani organization, then it is worth mentioning that it is one of the best. PTC also makes sure that their employees get the best for their abilities while working in PTC. When compared with the benefits system of PM USA, it falls short in a lot of categories but here, one thing should be kept in mind is that it is difficult to compare them as the labor supply in the US and Pakistan differ. The per capita income of the Pakistanis is very little and PTC is still one of the best employers in Pakistan by giving very little benefits as compared to PM USA.



PM USA employees enjoy competitive salaries and so, the organization has been named #1 by Money magazine in 1999, 2000 and 2001. Attractive salaries are one of the key strengths of Philip Morris USA. The employees of the company get compensated for what they are and what they do for the organization. PM USA is one of the market leaders in compensating its employees in the tobacco industry and with this attracts new talent everyday. This pay-leader strategy of PM USA has contributed a lot towards the success of the company.



At PTC, pay policies and programs are used as an important human resource tools for encouraging desired employee behaviors. The company’s compensation is above the market average and by doing this it tries to attract new talent and motivate its employees to fulfill the strategic goals of the company. PTC maintains the point that the advantage of paying above the market average is the ability to attract and retain the top talent available, which can translate into highly effective and productive work force.



PM USA is the US subsidiary of PM International but it recruits employees from all over the world. The main reason for doing this is to attract new talent wherever it is available in the world. For doing this, the company is engaged in a lot of programs such as university recruitment fairs, independently run recruitment events, and specialist events such as IT job fairs. The recruitment procedure at PM USA is well defined and is aligned with the strategic goal of the organization resulting in attracting the best of the talents towards it.



 



The recruitment procedure of PTC is also well defined and is aligned with the strategic goal of company. PTC is also engaged in different programs around the country to market its image as the top employer. The difference between PTC and PM USA is that PM USA recruits all over the world where as PTC only recruits in Pakistan. There are some foreigners working in PTC but they are only high level managers or directors which have been transferred to PTC by BAT.



PM USA places great emphasis on performance management of employees. Frequent job analysis is carried through out the company at all levels. Job requirements are established and employees at all are made fully aware of their job requirements. The company then commits resources, institutes appropriate management systems, accountabilities, monitoring processes and regular reviews to assure progress against the set objectives. The performance management system at PM USA is used not only to make sure that the employees are working to achieve the strategic goals of the company but also to give feedback to the employees about their performance and give them chances to improve on the areas where they lack.



Performance appraisal at PTC is used to evaluate the job performance of employees. HR department uses the information gathered through performance appraisal to evaluate the success of recruitment, selection, orientation, placement, training and other activities. Formal appraisals are needed to help managers with placement, pay and other decisions. The appraisal system of PTC is one of the best in Pakistan and it also serves as a benchmark for other Pakistani Organizations.

References:



“Human Resource Management”, 8th Edition, John M. Ivancorvich



“Managing Human Resource”, 12th Edition, Bohlander, Snell, Sherman



“Readings in Human Resource Management”, Noe, Hollenbeck, Gerhart, Wright



“Human Resources and Personnel Management”, 5th Edition, Werther, Davis



“Human Resource Management”, Raymond J. Stone



“Compensation Decision Making”, 3rd Edition, Bergmann, Scarpello, Hills



“Human Resource Management Gaining a Competitive Advantage”, 3rd Edition, Noe, Hollenbeck, Gerhart, Wright



www.philipmorris.com



www.philipmorrisusa.com



www.vault.com



www.fortune.com



www.nytimes.com



www.economist.com



www.hoovers.com

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