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.
Institute Of Business Management 1
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.
Institute Of Business Management 2
INTRODUCTION OF THE COMPANY
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
ABOUT LAKSON TOBACCO COMPANY LIMITED
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
PRODUCTION UNITS – FACTORIES & LEAF DIVISION
Lakson Tobacco has four Cigarettes, Manufacturing Units located at:
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.
Institute Of Business Management 3
• 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.
Institute Of Business Management 4
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
• Red & White
• Royals Filter
• Park Lane
Institute Of Business Management 5
Institute Of Business Management 6
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
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
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
Institute Of Business Management 7
total annual production capacity of the Company to 27,000
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).
Institute Of Business Management 8
MANAGEMENT HIERARCHY – FLOW CHART
Institute Of Business Management 9
NUMBER OF DEPARTMENTS IN THE COMPANY
Tax & Payroll
Research & Development
Marketing & Sales
Information System & Technology
APPLIED PHILOSOPHY & CONCEPTS
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
Institute Of Business Management 10
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.
Institute Of Business Management 11
OBJECTIVES OF THE COMPANY
To grow fast continuously in tobacco industry
To provide quality products
Employees work recognition.
OBJECTIVES OF THE HUMAN RESOURCES DEPARTMENT
To reduce the turnover.
Thorough training program.
Job evaluation for right head count.
Implementation of policies and procedures.
Institute Of Business Management 12
ACTIVITIES AT THE HUMAN RESOURCES DEPARTMENT AT
Orientation, Placement and Separation.
Training and Development.
Employee relation and Assessment.
Training and Development
Institute Of Business Management 13
CHALLENGES FOR THE HUMAN RESOURCES DEPARTMENT
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 OF HR MANAGEMENT
“Globalization continues to bring the people of the world closer
Globalization of business continues to grow because of such forces as:
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.
MANAGING DIVERSITY AND EQUAL OPPORTUNITY
“All progress is precarious, and the solution of one problem
brings us face to face with another problem.”
Institute Of Business Management 14
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.
RECRUITING IN LABOR MARKET
“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.
Institute Of Business Management 15
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
Institute Of Business Management 16
Recruitment Process at lakson
Database Advertising Head Hunter
Institute Of Business Management 17
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.
Lakson also follow the application procedure online within its
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.
Institute Of Business Management 18
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
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
Data Lakson maintained by the company’s HR department.
SELECTING AND PLACING HUMAN RESOURCES
“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
Institute Of Business Management 19
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
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.
Institute Of Business Management 20
The respective department interviews of the short listed
References are checked
Institute Of Business Management 21
The department make sure that all personal selected are comfortable
with the assignments given to them.
TYPES OF PLACEMENT:
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.
TRANSFERS AND DEMOTIONS
On the basis of the need of the personal in the department /region
On the basis of the personals skills.
Institute Of Business Management 22
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 HUMAN RESOURCES
“Training is something we hope to integrate into every
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
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
Institute Of Business Management 23
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
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.
TYPES OF TRAINING:
In house Training programs
Institute Of Business Management 24
CAREERS AND HR DEVELOPMENT
“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.
CAREER PLANNING AT LASKON
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
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
Institute Of Business Management 25
If the employee performance is marked between 7-9, his/her
performance is of excellent level. Promotion is given.
PERFORMANCE MANAGEMENT AND APPRAISAL
“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
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.
Institute Of Business Management 26
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.
Institute Of Business Management 27
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.
Institute Of Business Management 28
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
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.
Institute Of Business Management 29
COMPENSATION STRATEGIES AND PRACTICES
“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.
Institute Of Business Management 30
Other firm may be offering higher incentives.
House Rent: 45%
Petrol for the management level
BASIS FOR THE INCREAMENT IN THE SALARY:
Profit of the Company.
Inflation in the market.
Fixed amount of the promotion.
Both Financial and Non Financial incentives are given to motivate the
Institute Of Business Management 31
EXAMPLES OF INCENTIVES:
Change in designation.
Recreation activities (sports)
Have maintained their own gym
10 Sick leaves
30 Casual leaves
Leaves encashment not before 2 years of work experience with
Leaves cannot be accumulated for more than 45 days.
Institute Of Business Management 32
Management Assignment Award.
Service Award – 5 years,10 years,15 years.
VARIABLE PAY AND BENEFITS
“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.
Institute Of Business Management 33
Four Variable Pay Programs:
1. Piece Rate Wages: Workers are paid a fixed sum for each unit of
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
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:
Flexible Spending Plans
Institute Of Business Management 34
“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
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.
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.
Institute Of Business Management 35
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
Institute Of Business Management 36