Introduction of the Company

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Firstly we are thankful to Allah Almighty who has given us the ability
and courage to complete the course and preparing the report.

We thank personally to Miss.Nazia Mumtaz Hr Manager at Lakson
Tobacco, who took time from her busy routine to help in preparing the
report. And to Mr. Adeel Jafri Finance Manager At Lakson Tobacco
who helped in contacting the personnel for the report.

Last but not the least to our course coordinator Mr. Maqsood Ahmed
who have given us the opportunity in experiencing what we have
learned with him in last four months.

Thankfully yours,

Maliha Adil
Rabab Sajjad

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The report is prepared about the major activities conducted by the
Human Resources Department at Lakson Tobacco.

The covered activities are Planning and Selection, Training and
Development and Compensation.
The report helps in understanding how the HR department motivates
and trains the personals of the firm in meeting the goals and challenges
faced by the company.

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Lakson Tobacco Company Limited is a part of Lakson Group which was
founded in 1954. Portfolio of Lakson Group consists of detergents &
soaps, toothpaste, food products, fast food restaurants, insurance,
internet services, software, paper & board, printing, powdered
beverages and tea, packaging, textiles, surgical instruments, and


     The Company was establish in 1971
     Mr. Hassan Ali Karabai was the founder.
     First Brand of the Company was Lakson Kings
     Merger with Premier Tobacco Industries in 1997


Lakson Tobacco has four Cigarettes, Manufacturing Units located at:

  •   Karachi.
  •   Kotri.
  •   Sahiwal.
  •   Mandra

  Lakson's Leaf Division is situated in Mardan, the capital of the
  tobacco growing areas of Pakistan's North West Frontier Province
  (NWFP). Lakson provides direct employment to over 5000
  individuals of whom approximately 1500 work at its Leaf Division
  during the leaf buying and processing seasons.

  The company manages 28 Cigarette Depots all across the Country,
  which receives supply from the above production units. From these
  28 depot, the stock is supplied to Companies authorized distributors,
  who have their own supply chain in the market. The company is
  bound by its charter not to sell its product directly to any consumer.

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•   Total Market Share 50 %
•   Yearly turnover of 16 billions
•   500 permanent employees
•   2000 temporary and contractual employees
•   Company been recipient of Top 25 Companies’ awards from Karachi
    Stock Exchange (KSE).


To exceed the expectations of our customers by producing and
supplying high quality products while executing with strong ethical
standards, total transparency and complete fairness in all areas of our


We maintain transparency in our financial practices towards
shareholders and institutions by assiduously following the laws of
business, while working for continuous increases in share holder value
to extent allowed by macro-economics environment.

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We enact high ethical values while implementing all our management
policies and procedures, internally and in our interaction with our
suppliers and distributors, with a view to fostering long-term


  •   Morven Gold
  •   Diplomat
  •   K2
  •   Red & White
  •   Royals Filter
  •   Park Lane
  •   Marlboro

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1971   The company commenced its commercial production
       through its first Cigarette Manufacturing cigarette
       Manufacturing Factory established in Kotri with an annual
       production capacity of 3,600 million cigarettes.

1976   Second Cigarette Manufacturing Factory established in
       Karachi with an annual production capacity of 1,728
       million cigarettes.

1982   Processing Industries Limited – Mardan, a wholly owned
       subsidiary and 1st Tobacco Threshing & Re- drying
       Company, was merged with the Company.

1983   Punjab Cigarette Industries Limited – Sahiwal, another
       wholly owned subsidiary, was acquired by the Company
       bringing our total annual production capacity to 10,428
       million cigarettes.

1988   The Company acquired 19% equity shares of the listed
       company, Premier Tobacco Industries Ltd.

1992   Best Export Performance Award for non traditional items
       was awarded to the Company for the three consecutive
       years upto 1994.

1996   Lakson became the First Pakistani Tobacco Company to be
       ISO 9002 Certified, for its Leaf Division as well as Central
       Analytical Services Laboratory.

1997   Premier Tobacco Industries Limited, a listed company
       with annual production capacity of 10,500 million
       cigarettes, was merged with the Company, bringing the

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       total annual production capacity of the Company to 27,000
       million cigarettes.

1999   State of the Art Green Leaf Threshing (GLT) plant was
       established in Mardan with a processing capacity of 10,000
       kilograms of tobacco per hour in the year.

1997   Top 25 Companies Awards from Stock Exchange was
       conferred on the Company for four consecutive years up to
       2000 and for the years 2002 and 2003.

2000   GLT’s processing capacity is doubled, bringing the total
       hourly output to 20,000 kilograms.

2001   Central Analytical Services Laboratory upgraded its ISO
       9002 Certificate to ISO 9001 (2000).

2002   Company’s Leaf Division achieved ISO 14001 Certification
       for Environmental Management System.

2003   The Company’s Leaf Division’s ISO 9002 certificate
       upgraded to ISO 9001 (2000).

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     Administration
     Corporate Affairs
     Human Resource
     Purchase Production
     Technical
     Tax & Payroll
     Internal Audit
     Finance
     Research & Development
     Quality Assurance
     Marketing & Sales
     Information System & Technology



Lakson is customer driven. We strive to provide products and services
of superior value to meet the expectations of our internal and external


Lakson constantly strives to be creative and innovative in all its
endeavors. All Lakson employees are encouraged to bring forth new
and better ideas for improved performance, whatever our


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Lakson demands openness and honesty throughout its operations to
engender trust, and integrity underscores everything we do. We believe
that every activity must be able to pass the test public and internal
scrutiny at all times.


Lakson employees are all partners, working together in the pursuit of
the mission and strategy. We strongly value teamwork, and we want
every employee to be motivated to succeed.


Lakson is performance driven. We continuously aim to improve in all
that we do.

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   To grow fast continuously in tobacco industry

   To provide quality products

   Employees work recognition.


   To reduce the turnover.

   Career development.

   Thorough training program.

   Job evaluation for right head count.

   Right placement.

   Implementation of policies and procedures.

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   Recruitment.

   Selection.

   Orientation, Placement and Separation.

   Training and Development.

   Career Planning.

   Career Development.

   Performance Appraisal.

   Compensation.

   Employee relation and Assessment.


   Recruitment

   Compensation

   Training and Development

   Appraisal

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    Since there are a lot of foreigners in the higher management so
     there is a challenge to manage diversity.

    To place the employee with respect to his/her capabilities.

    Being in Pakistan, firm is unable to get skilled personals.


“Globalization continues to bring the people of the world closer

Globalization of business continues to grow because of such forces as:
    Population changes;
    Economic interdependence;
    Regional alliances; and
    Global communications capabilities.

Lakson also cares a lot for its employees who come from abroad
to provide them different services. The international employees
are provided accommodation. The company actively manages
health and safety risks associated with the manufacturing
process and legal and political environment.


  “All progress is precarious, and the solution of one problem
          brings us face to face with another problem.”

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 Diversity is a broad concept that recognizes differences among people;
equal employment opportunity (EEO) holds that individuals should
have equal treatment in all employment-related actions. Affirmative
action requires employers to identify problem areas in the employment
of protected-class members and to set goals and take steps to overcome
them, but concerns have been raised about “reverse discrimination”
Employers may be required to develop affirmative action plans (AAPs)
that identify problem areas in the employment of protected-class
members and initiate goals and steps to over-come those problems. As
more women have entered the workforce, sex/gender issues in equal
employment have included discrimination in jobs and careers and
sexual harassment, which takes two forms: (a) quid pro quo, (b) hostile
environment. Employers should develop policies on sexual harassment,
have identifiable complaint procedures, train all employees on what
constitutes sexual harassment, promptly investigate complaints, and
take action when sexual harassment is found to have occurred.
Employers are recognizing the value of attracting and retaining older
workers and individuals with disabilities. Employers are making
reasonable accommodations for individuals with disabilities, including
with mental life-threatening illnesses, and to deal with the religious
diversity of employees.


 “Ability will never catch up with the demand for it.”

Recruiting is the process of generating a pool of qualified applicants or
organizational jobs through a series of activities. Recruiting must be
viewed strategically, and discussion should be held about the relevant
labor markets in which to recruit.

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The most common methods of internal recruiting are job posting,
current employee referrals, and re-recruiting former employees.
Internet recruiting has grown in use through job boards and various
websites, but it can generate more unqualified applicants and
frequently may not reach certain groups of potential applicants.
The most common external recruiting sources include colleges and
universities, schools, labor unions, employment agencies and media

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Recruitment Process at lakson

                              Employee Required
                                Line Manager




      Database                    Advertising        Head Hunter

                                Screening HR

                                   Short listing

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In Lakson, recruitment is done both internally and externally.

 The process of external recruitment begins when advertisement is
given in the newspaper for the vacant positions by the HR department
of the company. These want ads of the company describe the job and
the benefits, identify the employer, and tell those who are interested
and how to apply. Recruitment represents the first contacts that
accompany makes with potential employees. It is through recruitment
that many individuals will come to know a company, and eventually
decide whether they wish to work for it.

Whereas the internal recruitment seeks applicants for positions from
those who are currently employed, promotion and transfer of such
employees becomes a source of internal recruitment. The HR manager
of the company believes that promotion to higher position has several
advantages like it builds morale, encourages competent individuals
who are competent, improves the probability of good selection, and is
cheaper than going outside to recruit.

Besides promotion and transfers, the company also makes use of
employee referrals, former employees and previous applicants for the
purpose of internal recruitment.

Recruitment Website:

Lakson also follow the application procedure online within its
recruitment site.

Applicants can review current job openings by running a search using
the job finder tool. Once they have identified positions of interest,
complete and submit the online resumes. If their qualifications and
experience are found to be suitable for the position applied, they will be
contacted for interview within 6 weeks.

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Applicants can also post their resume to explore other job
opportunities, which have not been publicized, on the web page. Their
skills can also be matched against future job openings and they will be
notified if their skills and qualifications matches the requirements for
these openings.

All applications will be treated in strict confidence. Submitted resumes
will be kept for a period of six months and will only be used for
recruitment purposes.


    Print Media.

    Head counts.

    Data Lakson maintained by the company’s HR department.

    Educational Institutes.


  “Selecting qualified employees is like putting money in the

Selection is the process of differentiating between applicants in order to
identify those with a greater likelihood of success in a job.
The role of selection in an organization’s effectiveness is crucial for at
least two reasons. First, work performance depends on individuals. The
best way to improve performance is to hire people who have the
competence and willingness to work. Second, cost incurred in recruiting
and hiring personnel speaks volume about the role of selection. Cost of

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wrong selection is much greater because even good training doesn’t
make up for bad selection.

                      “Hire hard, manage easy”


   Mostly the Skilled (fresh graduates) personals leave the company
    after 6 – 7 months of experience.

   An expensive activity.


   Resume to be submitted personally to the HR department or
    through mail.

   Application form to be filled by the personals designed by the HR

   Tests are conducted.

  1. IQ Test.
  2. General Knowledge Test.

   Initial screening done by the HR department of the personals
    who have passed the tests conducted.

   Short-listing of the personals on the basis of tests conducted and
    initial screening process.

   Short listed personals called for the interview.

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 The respective department interviews of the short listed

 References are checked

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The department make sure that all personal selected are comfortable
with the assignments given to them.



A promotion occurs when a personal is being upgraded with respect to
his/her rank or given additional assignment.

Merit based promotion

Promotion based upon the working experience of the personal.

Seniority based promotion

Promotion based on the performance of the assigned task.



   On the basis of the need of the personal in the department /region

   On the basis of the personals skills.

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 The company does not believes in demotions as it de motivates the
employee, so they either take back the assignment or restricts the
authority or may even transfer the personal


     “Training is something we hope to integrate into every
                      manager’s mindset.”

Training is a learning process whereby people acquire capabilities to
aid in the achievement of organizational goals. The integration of
learning, training, and job performance enhances organizational
competitiveness. Performance consulting compares desired and actual
results in order to identify both needed training and non-training
actions. A strategic approach to training links organizational strategies
and HR planning to training efforts.

The training process contains four phases: assessment, design, delivery
and evaluation. Assessment of training needs can be done using
organizational, job/task, and individual analyses in order to set
training objectives.

Lakson’s Philosophy of Learning & Development:

Our approach to developing people’s strengths is simple. We believe:
 Everyone is uniquely talented.
 People are most effective when they are able to identify and develop
 their individual strengths.
 People thrive when they take ownership of their own development

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  and are provided with the right support and encouragement to do so.

This strengths-based approach lies at the core of the firm’s
development philosophy. Managers are encouraged to help employees
identify and develop individuals’ strengths to help themselves and their
teams to deliver sustainable performance. A large percentage of
employees have benefited from formally identifying their strengths
using an on-line self-assessment system. This is supported by our
trained in-house experts, or Strengths Coaches, who facilitate the
development of action plans to help individuals and teams improve
their effectiveness.

After the personals are selected and oriented, they may lack the skills,
knowledge and abilities needed to perform successfully. Most personals
require training to do their jobs properly.

HR Department prepares individuals for future job responsibilities. At
the sometime, it attempts to contend with employee obsolescence,
technological challenges and employee turnover.


    Management Development

    Attitude Development

    Skill Development


    In house Training programs

    Training Institutes

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 “Nothing is more important than growing your A players and
            promptly dealing with your C players.”

Performance management systems attempt to identify, encourage,
measure, evaluate, improve, and reward employee performance.
Performance provides the critical link between organizational
strategies and results.

Job criteria identify important job dimensions, such as teaching for a
college professor, runs batted for major-league outfielder, or orders
completed by a warehouse shipping worker. Relevance, contamination,
and deficiency of criteria affect performance measurement.



   The HR Department prepares a chart for each individual on
    which the employees are ranked on the basis of their

   The graph is marked between numbers 1- 9.This shows where
    they stand.

   If the personal performance is marked between 1-4 this means
    his performance is not unto the standard, needs training program
    and can not move further.

   If the personal performance is marked between 5-7, he/she may
    be given some training programmes and promotion is given

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   If the employee performance is marked between 7-9, his/her
    performance is of excellent level. Promotion is given.


 “Maximizing performance is a priority for most organizations

Compensation provided by an organization can come directly through
base pay and variable pay and indirectly through benefits.
Compensation responsibilities of both HR specialists and managers
must be performed well. Compensation practices are closely related to
organizational culture, philosophies, strategies, and objectives.
A continuum of compensation philosophies exists, ranging from an
entitlement-oriented philosophy to a performance-oriented philosophy.
More companies are using competency-based pay, which focuses on
individual capabilities.

When designing and administering compensation programs, behavioral
aspects must be considered. Equity, organizational justice, pay
openness, and external equity are all important. Administration of a
wage and salary system requires the development of pay policies that
incorporate internal and external equity considerations.

Job evaluation determines the relative worth of jobs. Several different
evaluation methods exist, with the point method being the most widely
used. Once the job evaluation process has been completed, pay survey
data must be collected and pay structure developed. An effective pay
system requires that changes continue to be made as needed.
Developing a pay structure includes grouping jobs into pay grades and
establishing a pay range for each grade.

Broad banding, which uses fewer pay grades with wider ranges,
provides greater career movement possibilities for employees and has
grown in popularity.

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Individual pay must take in account employees, placement within pay
grades. Problems involving “red circled” jobs, whose rates are above pay
range, and “green circled” jobs, that are below pay range, may be
addressed in a number of different ways. Individual pay increases can
be based on performance, cost-of-living adjustments, seniority, or a
combination of approaches.
Performance appraisal is a critical activity of HR management. Its goal
is to provide an accurate picture of past and / or future employee
performance. To achieve this, performance standards are established.
The standards are based on the job – related criteria that best
determine successful job performance. Where possible, actual
performance is measured directly and objectively.

The appraisal program is usually designed by the HR department,
Often with little input from other parts of the organization. When it is
time to implement a new appraisal approach, those who do rating have
a very little idea about the appraisal process or its objectives. To
overcome this, the HR department may design and conduct appraisal
workshops to train managers


   Performance improvement. Performance feedback allows the
    employee, the manager and personnel specialists to intervene
    with appropriate actions to improve performance.

   Compensation adjustment. Performance evaluations               help
    decision makers determine who should receive pay rises.

   Placement decisions. Promotions, transfers, and demotions are
    usually based on past or anticipated performance. Often
    promotions area reward of past performance.
   Training and development needs. Poor performance may indicate
    a need for retraining. Likewise, good performance may indicate
    untapped potential that should be developed.

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   Career planning and development. Performance feedback guides
    career decisions about specific career paths one should

   Staffing process deficiencies. Good or bad performance implies
    strengths or weaknesses in the personnel department’s staffing

   Job design errors. Poor performance may be a symptom of ill –
    conceived job designs.

   Equal employment opportunity. Accurate performance appraisals
    that actually measure job-related performance ensure that
    internal placement decisions are not discriminatory.

   Feedback to human resources. Good or bad performance
    throughout the organization indicates how well the human
    resource function is performing.


The biased behavior of the supervisor in evaluating the personal.

The supervisor may not be having cordial relationship with personal
and as a result may not be willing to present the correct report of the

   Management by objective.
   Experience of the supervisor.
   Personality traits of the employee being evaluated.
   General access of the supervisor.

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    Annually.
    In crucial period half yearly.


The head of the department is given the responsibility of the activity.


    Circulation of the form by the HR Department to all the

    The department heads are given one-month duration for the
     completion of the process.

    The evaluation is done with mutual consent of the personal
     being evaluated.

    The HR Department on its basis prepares a summary
     individually and then discusses with respective department

    On the basis of the evaluation further action is taken.

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“Organizations need to be fluid to move as market move. That
  necessitates a more flexible approach to compensation.”


   Acquire qualified personnel. Compensation needs to be high
    enough to attract applicants. Pay levels must respond to the
    supply and demand of workers in the labor market since
    employers. Premium wages are sometimes needed to attract
    applicants already working for others.

   Retain current customers. Employees may quit when
    compensation levels are competitive, resulting high turnover.

   Ensure equity. Compensation management strives for internal
    and external equity.

   Reward desired behavior. Pay should reinforce desired behaviors
    and act as an incentive for those behaviors to occur in the future.
    Effective          compensation            plans            reward
    performance,loyalty,experience,responsibility      ,and       other

   Control costs. A rational compensation system helps the
    organization obtain and retain workers at a reasonable cost.

   Facilitates understanding. The compensation management
    system should be easily understood by HR specialists, operating
    managers, and employees.

   Further administrative effectively. Salary programs should be
    redesigned to be managed efficiently.

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Other firm may be offering higher incentives.


   Basic:        64.516%

   House Rent: 45%

   Utilities:      10%

   Conveyance

   Petrol for the management level


   Budget.

   Profit of the Company.

   Inflation in the market.

   Fixed amount of the promotion.


Both Financial and Non Financial incentives are given to motivate the

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   Salary adjustment.

   Change in designation.

   Monetary award.


   Medical

   Welfare Fund

   Canteen

   Recreation activities (sports)
    Have maintained their own gym


   10 Sick leaves

   30 Casual leaves

   Leaves encashment not before 2 years of work experience with
    the company

   Leaves cannot be accumulated for more than 45 days.

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   Performance Award.

   Management Assignment Award.

   Service Award – 5 years,10 years,15 years.


   “The new world of work demands employee performance
 instead of loyalty creativity instead of compliance, and earned
                rewards instead of entitlements.”

Piece rates, wage incentives, profit sharing, bonuses, gains haring are
all forms of variable pay system. With variable pay, earnings fluctuate
up and down with the measure of performance. It is precisely the
fluctuation in variable pay that has made these programs attractive to

Variable Pay Programs:

A portion of an employee’s pay is based on some individual and/or
organizational measure of performance.

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Four Variable Pay Programs:

 1. Piece Rate Wages: Workers are paid a fixed sum for each unit of
     production completed.
 2. Profit Sharing Plans: Organization-wide programs that
     distributes compensation based on some established formula
     design around a company’s profitability.
 3. Gain Sharing: An incentive plan in which improvements in group
     productivity determines the total amount of money that is
 4. Bonuses: Bonuses can be paid exclusively to executives or to all

Flexible Benefits:

Employees tailor their benefit program to meet their personal needs by
picking and choosing from a menu of benefits options. The three most
popular type of benefit plans are:
   Modular Plans
   Core-Plus Options
   Flexible Spending Plans

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  “While the right to talk may be the beginning of freedom, the
   necessity of listening is what makes the right important.”

Employer should maintain good and friendly relations with its
employee. Employees should try to meet the expectations of the
employer so that both the organization and the employee prosper

Employee Relationship:

They strongly believe that the interests of the lakson and employee are
inseparable. The lakson promotes the “we culture” where there is
mutual trust and respect for each other. The skills and capabilities of
employees are developed and enhanced through extensive in-house and
external training programs and job rotations

Types of employees:

Apart from selecting the employees in the permanent cadre, Lakson
also hires employees on contract basis.

Permanent Employees:

Lakson focuses multi-talent hiring professional grooming, requisite
training and meritocracy based reward system. Fresh graduate must
clear a written test, and then they are interviewed by the board of
directors. After that they are sent on a training program known as
“Millennium Training Scheme”. On the completion of the training
program they are evaluated and then they become permanent
employees. 1 ½ to 2 years are taken for this procedure.

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Creating a healthy and safe place to work:

We are determined to provide our employees with a healthy and safe
place to work, wherever they are in the world. Although local
legislation varies between countries, we are increasingly applying our
efforts to ensuring consistently high principles of Health and Safety
across our operations. Our aim is to provide the Lakson’s community
with the structures, systems and support to ensure the Health and
Safety of all employees, customers, visitors and contractors. To achieve
this, we aim to facilitate, guide and encourage management and
employees to create a work environment where hazards are kept to a
minimum and safety is seen as a core value. The different local Health
and Safety legislation in the many countries make this a challenging
task. Health and Safety for us is not just about legislative compliance,
it       is      about       creating       the      right       culture.

We are therefore in the process of creating a Health and Safety
Management System using the British Standard 8800 as the
framework to improve our safety culture and performance. Health and
Safety coordinators have been appointed and trained in each of the
countries we operate in. In addition, our Health and Safety training
will also be extended through all members of staff using an online
training program.

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