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- Selection is the process of choosing from a group of applicants the individuals best suited for a particular position.-

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The acquisition function also encompasses activities related to recruiting workers, such as designing evaluation tests and interview methods. Ideally, the chief goal is to hire the most-qualified candidates without encroaching on federal regulations or allowing decision makers to be influenced by unrelated stereotypes. HRM departments at some companies may choose to administer honesty or personality tests, or to test potential candidates for drug use. Recruitment responsibilities also include ensuring that the people in the organization are honest and adhere to strict government regulations pertaining to discrimination and privacy. To that end, human resource managers establish and document detailed recruiting and hiring procedures that protect applicants and diminish the risk of lawsuits.

4.1.2 Training & Development

In Pakistan companies have started realizing the importance of continuous learning and development of their people. Consequently, their spending on enhancing technical and managerial skills has risen, in order to further improve the quality of performance. As many as 56 per cent of the organizations have increased their training and development budgets by over twenty per cent. This increase is driven by their expectation that a more competent, knowledgeable, motivated and inspired workforce, working as a team, will be better able to face future challenges. Companies have awakened to the fact that if they intend to remain competitive and move forward with speed, they must focus more on enhancing the capacity of their employees. For this reason they are aligning their training and development initiatives with their strategic business objectives. Even though companies are now more willing to invest on training and development, they are beginning to establish precise learning needs critical for process improvements to measure the actual benefits. The survey established that companies are less willing to invest in people who look likely not to benefit the organization in the long run. As a result companies have registered improvements in performance in terms of reduced wastage, better efficiencies and higher quality, through skilled and competent people. Motivation is spiralling upwards; which in turn is improving customer satisfaction and profitability. Ref:(By Adil Naqvi, Daily Dawn) http://www.dawn.com/weekly/folio/folio.htm

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Training and development activities include the determination, design, execution, and analysis of educational programs. Orientation programs, for example, are usually necessary to acclimate new hires to the company. The HRM training and education role may encompass a wide variety of tasks, depending on the type and extent of different programs. In any case, the HRM professional ideally is aware of the fundamentals of learning and motivation, and must carefully design effective training and development programs that benefit the overall organization as well as the individual. Training initiatives may include apprenticeship, internship, job rotation, mentoring, and new skills programs.

4.1.3 Compensation and Benefits

-In Pakistan, compensation policies have been revised to reflect the

comparator norms and align closely with the market practices. Although as a public sector organization, cannot pay as much as the private sector does. A reward and recognition system has also been put in place, which ranges from a simple thank you note to a monetary reward for innovative ideas, product development and process reengineering(By Case Study of Dr. Ishrat Husain) http://www.sbp.org.pk/about/speech/2003/HRM-in-Practice(18102003).pdf Compensation, the third major HRM function, refers to HRM duties related to paying employees and providing incentives for them. HRM professionals are typically charged with developing wage and salary systems that accomplish specific organizational objectives, such as employee retention, quality, satisfaction, and motivation. Ultimately, their aim is to establish wage and salary levels that maximize the company's investment in relation to its goals. This is often successfully accomplished with performance-based incentives.

4.1.4

Performance Appraisal individuals or teams job performance-

-Performance appraisal is a formal system of periodic review and evaluation of an

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(Armstrong, 1999) said,

-A structured formal interaction between a subordinate and supervisor, that usually

takes the form of a periodic interview (annual or semi-annual), in which the work performance of the subordinate is examined and discussed, with a view to identifying weaknesses and strengths as well as opportunities for improvement and skills development-

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-In Pakistan, Performance Management System (PMS) has been

completely revamped Incorporating competencies based model in which achievements, behavior, professional growth and assessment of potential are the essential ingredients for measuring performance and career progression path. Supervisors on the basis of an objective scoring model carry out the appraisal and the findings are discussed with the staff member. The PMS is utilized for the individuals development plan in which the training needs are identified and planned(By Case Study of Dr. Ishrat Husain) http://www.sbp.org.pk/about/speech/2003/HRM-in-Practice(18102003).pdf Why Performance Appraisal? This performance appraisal is a formal process to assess the following major issues. On the job performance Training need assessment Decisions regarding promotion transfers Succession planning Compensation and benefits

4.1.5 Health and Safety

In Pakistan, at present, like many developing countries of the world, does not have comprehensive occupational health and safety laws. The incidence of injuries and illnesses is probably very high in Pakistan because thousands of workers are routinely exposed to hazardous chemicals and many more work in hazardous industries such as

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construction, agriculture etc. However, there is no reliable data on occupational safety and health injuries and illnesses because a majority of accidents are not reported to the regulatory agencies. The regulatory agencies do not have an effective enforcement policy nor strict requirements for reporting injuries and illness at workplaces. Laws/regulations related to occupational safety and health shows that there are several laws on the book, such as Factories Act, 1934; Provincial Factories Rules; Hazardous Occupations Rules, 1963; Mines Act, 1923; West Pakistan Shops and Establishments Ordinance, 1969; Provincial Employees Social Security Ordinance, 1965;Workmens Compensation Act, 1923 and Dock Laborers Act 1934. Ref: (http://www.aiha.org/1documents/Committees/iac-pakistan.pdf)

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5. Finland Company Wrtsil in Pakistan:

In order to be able to answer our main problem and research questions, attention had to be turned to company today operating in Pakistan. We have therefore interviewed HR specilalist and other department employees at Wrtsil, in Pakistan. (Mr. Junaid Ahmed, Mr. Haroon, Miss Gull Afshan). We are going to look at Wrtsil, as a reference company in order to be able to draw conclusions later on in order to answer our research problems.

5.1

Wrtsil

Wrtsil Corporation is a global engineering company focusing on marine propulsion, power generation and industrial applications. The corporate headquarters are located in Helsinki, Finland, it was established in 1834. Wrtsil has its own worldwide service network in 90 countries. Wrtsil is the Ship Power Supplier for builders, owners and operators of vessels and offshore installations. Our own global service network takes complete care of customers' ship machinery at every lifecycle stage.

5.1.1 Wrtsil In Pakistan

Wrtsil Corporation is a global engineering company focusing on marine propulsion, power generation and industrial applications.

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The corporate headquarters are located in Helsinki, Finland. Wrtsil Pakistan (Pvt) Ltd was established in 1994, as a network company, fully owned by Wrtsil Corporation. The company markets and sells all products of Wrtsil Corporation in Pakistan. The company is organized in business units, Power Plant and Service, which are supported by Finance and Administration deptt. The company has its head office, workshop and warehouse in Lahore, with a branch office in Karachi.

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Wrtsil will be strongly present in the markets that provide the best opportunities to grow. Wrtsil is one of the largest engineering companies in Pakistan. Wrtsil strength lies in its 150 employees whose devotion and commitment has brought the company to a position of excellence 5.1.1.1 Mission Statement

-To provide life cycle power solutions to

enhance the business of our customers, whilst creating better technologies that benefit both the customer and the environment. Continuous enhancement in the quality objectives for customer satisfaction operational efficiencies5.1.1.2 Vision Statement

and

-To be the most valued business partners

all our customers. To be dynamic, profitable growth oriented company. 5.1.1.3 Values

of and

-To have faith in our vision, to work with honesty and integrity, to
develop sustainable business relationships, to be innovative, to respect, motivate, and care for our employees and to be a responsible corporate social citizen5.1.1.4 Objectives

-Safety
Customer Focus and Satisfaction

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Profitable Growth Quality and Productivity Attract, Develop, and Retain Qualified Employees Corporate Image-

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5.1.2 Wrtsil HR Strategy

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Up until today Wrtsil has not had a function labelled HR, instead there has been a Personnel Department, which has been the support and service function for all employees. Its overall mission has been to work with policy issues, guidelines, values and norms within different areas, e.g., work-environment and diversity. Within the Personnel Department the main areas of responsibility lay with; Wrtsil employees, Recruitment, Organization, Compensation, Training and Development, Introduction, Insurances, Pensions, Work environment, Health and Diversity etc.

Our Role Human Resources acts as a trusted partner for the businesses to continuously develop our organization and people to attain Wrtsils goals Our Task We develop, implement and deploy processes, systems and tools, which will help us to attract, develop and retain the best talent in the company Our Goal Wrtsil have energetic, competent and motivated personnel with exciting work assignments and career opportunities led by excellent leaders Our Attitude - Motto The road to success is always under construction. If you are willing and able you are ready

5.1.2.1 Hierarchy: -

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Managing Director

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arketing Manager

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Field Se rvi

IT. Manager

Technical Manager

HR Coordinator HR Assistant

TQM
Manager

F and A Manager

5.2 HR Policies and Practices at Wrtsil

5.2.1 Recruitment and Selection Objective: To recruit and retain skilled and professionally qualified employees of the highest quality, who can successfully contribute in the achievement of the organizations Strategic Plans and operational priorities on long term basis. Policy: -

-Policy of the company is to develop its own

employees through training and management development program and fill in the vacancies from within the organization, whenever possible. However in case of non-availability of employee from within, we shall recruit from external resources. Evaluation and selection shall be on the basis of abilities and qualification of the applicants irrespective of discrimination on account of race, color, religion, creed, gender, national origin, marital status or political belief to achieve the status of equal employment opportunity-

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RECRUITMENT: -It is first necessary to check the need for the new job, necessity for filling a vacant one, and the job description and competency requirements for that job or position. When a decision to fill a vacant job or position internally, then HR department takes the action necessary for finding a suitable person. Vacant jobs and positions are first advertised on Wrtsils intranet. If suitable candidate in not found then HR do external advertisement. Call letters send to the short- listed employee. Man Power Requirement Form: - The approved budget shall serve as action plan for Sections Heads to suggest employment of personnel. (Annexure I). The requesting division fills this form that contains the details of the post, job description, job specification, job title, joining date etc. SELECTION: - All recruitment is based on an agreed job description and person specification. The selection process should be transparent and free from conflict of interest.

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Short-listing: - All application received by HR and forward to the concern Manager who short-lists. HR sends call letters to the short-listed candidates mentioning day, date, time and place to appear for interview before final selection. Interview: - HR Division arrange for interview sheets of successful applicants along with their test results for the interview panel. Final Selection: - After final negotiation, HR Division inquires the candidates availability to join on. The HR Division will arrange for medical checkup of the selected candidates from hospital on company panel. And send regret letters to all un-selected candidates interviewed. Appointment Letter: - Concerned Manager select the candidate and forward the necessary documents along with Employment Application Form (Annexure IV) and

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Interview Rating Report (Annexure XVIII) to Manager HR & A for issuance of standard appointment letter. Induction: - HR prepare induction program for the new associates on the first day. It will include briefing about vision statement, company policy, rules and regulations and benefits with his grade.

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Probationary Period: - The probationary period is six (6) month from the date of joining. Probation period may be extended at the sole discretion of the company (Annexure XXI). On the successful completion of the probationary period the Employees service will be confirmed in writing. Employee will then be entitled to avail benefits medical scheme, leave entitlement, membership of provident fund. Figure 4 Recruitment and selection procedure
Business Unit Human Resources Human Resources + BU Health Station

Recruitment

proposal

Job advertisement/ internal

Job advertisement/ external

Selection of interviewees

Interviews, analysis and selection

Health examination

Contract of employment

Beginning of employment/ training

5.2.2 Training and Development To provide a framework, clarify accountabilities and streamline training and development activities within the group. Figure 5 Training Structure

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Introduction process: - Every Manager is accountable for the introduction of his newcomers. This is an important task that has to be planned properly. In addition to the task- and department specific introduction the HR department will account for arranging a Wrtsil specific introduction course. Figure 6 Introduction Course

Wrtsil has a comprehensive personal development program, the aim of which is to continuously improve the skills, motivation and co-operation of the companys employees and managers. Wrtsils training organization arranges a variety of open

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courses for employees as well as numerous courses tailored to the special needs of individual departments. Duration includes 1 to 3 months of training. It is a very comprehensive process and when the employee steps into practical work it helps him in many ways. Wrtsil provides training for senior management in co-operation with the London Business School.

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External Training: - Wrtsil also sends their more competent employees abroad for further training usually in other subsidiaries of Wrtsil such as Finland, France, Japan, India, and New Zealand etc. Duration of external training depends. The main purpose of such comprehensive training is to enable the employees to solve organizational, upgrade employees skills and satisfy personal growth. The Development is an ongoing process. It is a motivation and challenge setting discussion directed towards the Employee s improvement and contribution to the success of his/her organization. Career planning and development plays very significant role as far as the performance and efficiency of the organization is concerned. The Development Discussion is an essential part of the continuous strategy implementation process and should be held at least once a year. Wrtsil Group HR and Division HR support the Development Discussion process. 5.2.3 Performance Appraisal In Wrtsil Pakistan (PVT) Limited the performance appraisal process has a significant and critical importance as major decision regarding promotion, transfers, a compensation are taken on the basis of this performance appraisal. TECHNIQUES FOR PERFORMANCE APPRAISAL In Wrtsil Pakistan HR Division uses different techniques for assessing employees performance. HR Division appraises the employees once in a year. Their performance appraisal form is made at corporate level. They use only one technique:

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1. Management by Objective: - In this method, they compare the each employee performance to predetermined standards and expected level targets. These standards reflect normal output of the organization. They set the targets and the actual performance is judged on the basis of these standards. And those who meet the target, they get the bonuses.

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Appraisal interview: - In WPK, Appraiser also conducting appraisal interview at the end of the appraisal period. In this interview they reviewed, the extent to which objectives have been achieved. They also analyze the reasons, why the objectives have not been achieved. They have written record of this discussion. After discussion, they also discuss the targets or objectives for the next year. It assists the planning and control functions and provides motivation to employees, as well as being an approach to performance appraisal. PURPOSE OF APPRAISAL SYSTEM In Wrtsil, HR uses the appraisal system for assessing the employees performance. They focus on the concept of pay for performance. Objectives of Performance Appraisal fall into two categories: 1. Evaluation Objectives: Compensation Decisions Staffing Decisions Evaluate Selection System 2. Development Objectives: Performance Feedback: Direction for Future Performance Identify Training and Development Needs A variety of appraisal techniques are available to measure employee performance. At Wrtsil, the specific steps followed in developing an Appraisal Process include:

Determine Performance Requirements. Choose an Appropriate Appraisal Method. Train Supervisors. Discuss Methods with Employees. Appraise According to the Job Standards.

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Discuss Appraisal with Employees. Determine Future Performance Goals. 5.2.3.1 GRIEVANCE HANDELING GRIEVANCES:

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a) The company believes that the grievance of an employee should be addressed promptly and equitably in the interest of both the individual and the company and for this purpose grievance handling as mentioned below should be followed. b) Employees are encouraged to get redress of their grievances whenever they think or feel that any condition affecting the injust, inequitable, illegal, hindrance to effective performance or creates a problem. The procedure in given below 5.2.4 Compensation Program Policy: -

-It

is a policy of the company to pay employees fairly for their services with consideration for proper relationship among jobs internally, to provide incentives for improved performance, and to keep the company competitive position with other organization. In order to attract, retain and motivate the quality of people that the company needs for consistence growth and success-

The objectives of the compensation system at the Wrtsil include: To Attract Good Applicants To Retain Good Employees Motivate Employees Comply with the Laws

Following are the benefits and compensation that the company is offering to the employees in order to improve performance, retain, motivate employees. 1. Retirement program 2. Companys transport facility 3. Credit card facility

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4. 5. 6. 7. Medical facility Loan benefits Social/recreational benefits Travel allowances

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1. RETIREMENT PROGRAM: Companys Retirement age is 60 years. Following benefits are available to the retired employees. Pension Fund: All permanent management employees are eligible for membership of this Fund. The pension fund is an amalgam of monthly contributions made by both the employee and the Company. Provident Fund: - In Wrtsil Pakistan (PVT.) LTD, all permanent employee can avail this facility. Deduction of salary depends on the policy. Gratuity Fund: - All permanent employees who have rendered at least 5 years of continuous service with the Company are eligible for membership of the gratuity fund, upon the termination of their employment (either through retirement or withdrawal). Group Life Insurance (GLI): -The company has arranges Group insurance for its all permanent employees, contract employee and trainee of the company. 2. COMPANY TRANSPORT FACILITY: Car Allowance: - Company enters into agreement with an employee to reimburse cost for fuel and maintenance for vehicle used for company business. Group Transport: - The staff will be provided the facility of pick and drop from designated pick points on all working days. Pool Cars: - Pool cars shall only be use for the official business, with due approval of Section Head. Only driver detailed with a particular vehicle shall drive pool car. 3. MEDICAL SCHEME:

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WPK has a panel of doctors, dentists and hospitals where all permanent employees including trainee can obtain Medical consultation/medicines, hospitalization, emergency medication/treatment, and immunization services. 4. CREDIT CARD FACILITY: In order to facilitate employees in meeting traveling expenses during business travel and other business expenses like representation, entertainment etc., and corporate credit cards are arranged for the permanent employees.

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5. SALE OF COMPANYS ASSETS TO EMPLOYEES: As an incentive, permanent employee of WPK shall have a first right to make offers for purchase furniture, fixture, companys vehicles and office equipments including computers. 6. CAR/MOTOR CYCLE LOAN: All permanent employees are eligible for making an application for financial assistance The application must be submitted on the prescribed form as per (Annexure XXV). 7. SOCIAL/RECREATIONAL ACTIVITIES: Wrtsil Pakistan (PVT) Ltd. encourages employees to actively participate, and help coordinate a number of exciting social and recreational activities. Cricket Matches: - Wrtsil Lahore and Karachi also have their own cricket teams that participate in inter-organizational matches. In order to give relaxation to the employees, Wrtsil Pakistan holds cricket matches with Wrtsil India after every three years. Company bears all transport and living expenses of players and their families. Indoor Activities: - Wrtsil also provides indoor activities to their permanent employees including table tennis, gym, billiard and badminton. Employees can avail this facility during lunch break i.e. 1:00 to 2:00 pm or after the office timings. Trips and Tours: - Wrtsil Pakistan also arranges trips for permanent employees at Northern Areas of Pakistan like Kaghan, Niran or Shugraan for a week once a year.

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8. LEAVES: POLICY: -

-It is a policy of the company to grant different types of leaves to

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its employees in order to facilitate them to attend to their domestic and social responsibilities. The grant to leave shall not be claimed by employees as a matter of right and will be to discretion of the sanctioning authority. While exercising these discretion the predominant factor for consideration would only be the exigencies if service and interest of the organization-

Casual Leave: - Causal leaves are allowed as per Annexure- VII Leave entitlement chart. Admin and HR department will be responsible for keeping up to date record of all leaves. Sick Leave: - The company may at its discretion have the employee examined by the company doctor and the advice of the doctor shall be for the purpose of granting leave to the employee. Annual Vacation: - The employee is entitled to take the Annual Vacation during the year as per his/her entitlement. The time for taking the annual vacation shall be agreed between the employee and the employer. Annual Leave allowed as per Annexure- VII Leave entitlement chart. Leave Fare Assistance: - Leave fare assistance (LFA) is an amount paid to the Monetary employee to financially facilitate his/her during the period of annual leave. LFA will Reward be paid to the eligible employee equal to the annual leaves entitlement. LFA will be paid to the employee prior to his/her proceeding on annual leave. Figure 7 Total Compensation System

Compensation Of Employees Extrinsic Reward

1. 2. 3. 4. 5. 6. 7.

Hourly Wage Salary Benefits Bonuses, Commission Retirement program Pay Incentives Companys transport facility Credit card facility Medical facility Loan benefits Social/recreational benefits Travel allowances etc

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Intrinsic Reward

Reorganization Promotion Opportunities Working Condition Interesting Work

5.2.5 Environmental Health and Safety (EHS) The Group values and respects human life and consequently strives to provide a safe and hazard free work environment and to minimize the adverse occupational health and safety impacts of our operations and products. Its our aim to cover the whole supply chain and support our suppliers, customers and contractors in developing efficient and sound procedures for occupational health and safety management. Wrtsil Corporation management is responsible for ensuring that the OH & S management of the organizations complies with local laws and regulations, Wrtsil Occupational health and safety policy, directive and OHSAS 18001 standard. However, responsibility in OH & S issues is a matter of everyone. Responsible person: Subsidiary Vice President, Legal Affairs and Human Resources. EHS MANAGEMENT SYSTEM ELEMENTS: Figure 8 ESH Process Continual Improvement Management Review

ESH Policy Planning Planning

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5.2.6 Retention of Employees

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Appraisal & compensations are two important aspects of Human Resources Department in the company. After looking at different fundamental aspects of both recruitment and selection, the third important factor viewed by the organizations is the retention. It is mandatory that the right staff are recruited and offered training and opportunities to expand their skills to help retain experienced and skilled workers in the sector. The cost of recruiting new staff and training them can be huge and a high turnover rate can affect a services image and culture.

They attract, retain, motivate and increase the productivity of the employees by giving them different benefits. HOW TO ATTRACT, DEVELOP AND RETAIN EMPLOYEES: Figure 9 Retention of employees

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5.2.6.1 STRATEGIES OF EMPLOYEES RETENTION: Overcoming these reasons requires the implementation of five distinct categories of retention strategies: Environmental: - This strategy in Wrtsil creates and maintains a workplace that attracts, retains and nourishes good people. As in the head office there are separate cabins for each employee that are separated by fine partitions. They can paste their important documents with the walls of these partitions around them and this facility was given even to their internees.

Comfortable furniture is also available for the employees in order to work them in an ease way. Here is an example of Manager Sales Department, Mr Salman Nafees, he got pain the in vertebral column due to the uncomfortable chair, and management arranged comfortable chair for him of Rs. 20,000.

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There is good lighting system that is arranged according to the sitting position of every employee, indoor planting also facilitate employees and encourage them to work. Indoor plants are also there in the Head office, that facilities employee to work in clean and healthy environment. Relationship: -

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This strategy is also present there in Wrtsil in order to retain quality employees. All bosses and colleagues are very supportive. They motivate employees if they are performing well and admire the dedicating employees. There is no discrimination on the bases of job levels. All are treated same. Here is an example Wrtsil Cricket matches; there is a cricket team of Wrtsil Pakistan, and Wrtsil Pakistan holds cricket matches with Wrtsil India after every three years. Through balloting 10 employees with their family can go to India. Peons and sweepers are also the part of balloting. Growth: -

-At Wrtsil we give the highest priority to developing our people

because we recognize that they are the companys most important assetsThis strategy help employee to with personal and professional growth. Quality and good performers have complete opportunities of growth. In order to be able to recruit competent and motivated people, Wrtsil deeds to offer employees competitive salaries, opportunities for continuous personal development and a good working environment. Developing employee skills and competences is of critical importance both for Wrtsils business performance and for the development of the companys employees. a) Promotions b) Increments

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Compensation: - This strategy covers the broad spectrum of total compensation, not just base pay and salary. 5.2.7 MOTIVATION: -

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Motivation is a process that starts with a physiological or psychological deficiency or need that activated behavior or a drive that is aimed at a goal or incentive. Thus, the key of motivational process is the relationship between needs, drives, and incentive. Most of human actions are motivated. Motivation has a two-fold function; they direct behavior toward or away from some goal. They also serve to activate the organism, which becomes more aroused with the strength of the motives. The employees working at Wrtsil set expectations about rewards and compensation to be received if certain levels of performance are achieved. These expectations are very important, not only to the employees but also to the management because these expectations determine goals and levels of performance of the future. Examples of rewards include merit increases, promotions, and intrinsic rewards such as goal accomplishment and increased self-esteem. Employees at Wrtsil consider the relationship between their performance and the rewards related to that performance and then the fairness of that relationship. If employees see that hard work and superior performance are recognized and rewarded by the organization, they will expect such relationships to continue in the future. Therefore, they will set higher levels of performance, expecting higher levels of compensation. To safeguard this relationship, Wrtsil provides the following to its employees:

Management develops a system of accurate performance appraisal in order to distinguish between the performances of different employees, whether the employee is an outstanding, average or poor performer. Management identifies which rewards relate to performance levels and tell employees that their pay, increased benefits, change in hours or working conditions, or recognition is directly related to high performance. Supervisors give complete and accurate feedback to employees when appraising their performances.

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The job satisfaction study conducted in 2005 indicated that most Wrtsil employees are motivated and highly competent. Wrtsils aim is to create and maintain a pleasant and safe working environment for its employees. Wrtsil needs skilled and motivated personnel to reach its objectives. Employee training and skills enhancement are a central

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part of the Groups HR policy. Restructuring over the past few years has understandably affected the working atmosphere, especially in the units that were re-organized. In this process Wrtsil has placed high emphasis on frank dialogue between management and employees to ensure that the reasons for implementing these changes are understood. 5.2.7.1 Recognition Initiative: The HR department believes employee recognition is a powerful motivator that can create an environment that facilitates open communication and trust. An effective employee recognition program can help increase employee commitment, motivation, and productivity; reinforce desired behaviors; and improve employee morale. Employee recognition also is a critical component of the companys successful and innovative corporate culture. The HR departments recognition initiative was developed to provide a streamlined process for recognition and to encourage employees and management to recognize individual and team performance. In line with the initiative, a key concern for the HR department was to convey the value of recognition to managers throughout the company. Representatives from all functional areas of HR provided various levels of support for the initiative, ranging from generating ideas and benchmarking to designing, implementing, and communicating the various components of the initiative. 5.2.7.2 Recognition Criteria: The HR department established criteria for different levels or types of employee recognition. The criteria were divided into the three dimensions of delivering recognition: monetary, low-monetary, and non-monetary. Monetary recognition comes in the form of creative benefits and merit increases, stock option grants, and bonuses awarded during the companys annual review process. In order to create cost-effective opportunities for all employees, a new recognition initiative was aligned with two of the companys existing dimensions of delivering recognition: low-monetary and non-monetary.

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5.2.7.3 Employee Recognition Program: The first step in moving the initiative forward was to create the formal Employee Recognition Program. Guided by the objectives of the initiative, the program was designed to be highly accessible and easy to use, and to offer a variety of opportunities that would encourage employees and managers to recognize and applaud exceptional

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performance. The basis for the creation of the programs tools was to reinforce the positive behaviors that had made the company successful. The HR department defined these behaviors by developing a set of core values that embody the companys culture. The core values acted as a set of criteria and a guide to help employees and management in determining the appropriate recognition tool. As a means of offering unlimited accessibility to the new tools, which allowed managers and employees to access a variety of recognition tools and resources offered by the Employee Recognition Program. Non-cash Award: One of the recognition programs tools is a non-cash award, which recognizes and rewards exceptional performance for specific one-time actions or events. In the annual dinner of Wrtsil Pakistan, those employees who complete their 5 years of service company gives prize of 20 thousand whether he is from management staff or nonmanagement staff. When an employee completes its ten years of services then he can get a gift of 50 thousand rupees. Electronic Greeting Cards: Electronic greeting cards based on Flash technology recognize contributions and behaviors from employees that represent the companys culture of innovation and leadership. Similar to the popular Internet greeting cards, these electronic cards are a quick and easy way for employees to send their appreciation to co-workers. Employees access the cards through the HR Website, where they can choose a card and message based on one of the companys values and even writes a customized message within the card, if they wish. A copy of the card is sent to the recipients supervisor. Recognition Website: -

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A Website dedicated to recognition is accessible through the companys HR intranet. The Recognition intranet highlights the importance of recognition and provides detailed information about the online recognition tools, as well as weekly recognition tips, a list of learning courses related to recognition, and award presentation suggestions. All of the tools included in the Employee Recognition Program are accessible on the Recognition intranet.

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Management Education and training: The company offers management-level employees a variety of learning programs geared toward developing recognition skills and implementing retention practices. The learning topics focus on:

Developing the leadership skills necessary for managers to be successful Providing easy-to-use recognition tips and action steps to build managers skills in retaining employees in a competitive environment Offering strategies that will help managers retain individuals critical to the productivity and profitability of the organization. Company sends their competent employees for overseas assignment and trainings. Duration depends upon the nature of training and assignment. Recently team of seven employees is going to India for the training of SAP.

As the HR department continues to gather data and implement effective recognition tools and resources, it strives to maintain and improve the retention of the companys talented and top-performing employees. Although measuring the impact that the recognition opportunities have on employee retention will prove challenging, continued research and measurement will help elevate the importance of recognition to management concerned with retaining its top-performing employees. Through additional surveying, monitoring turnover, and conducting employee focus groups, the HR department can continue to improve employee recognition. 5.3 HR PRACTICES AND FIRMS PERFORMANCE: -

Employee motivation and retention

Workforce Alignment

Firm Performance

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Family like community Interesting and rewarding job Fair compensation Workforce Alignment and Firm Performance: -

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Do people contribute to the success of Wrtsil? When addressing this question to HR coordinator she said,

It is necessary to point out that the strategic human resource goal of any business is workforce alignment.

A company with an aligned workforce has 1. The right types of people 2. In the right places at the right times 3. Doing the right things right. A company with the right types of people has employees with the knowledge and skills necessary to help the firm achieve its goals. A company with people in the right placesat the right times effectively utilizes its people and, thus, gets the most out of its employees knowledge and skills. Finally, a company with people doing the right things right has employees that always act in ways that help the company succeed. The three components of workforce alignment are highly interrelated. It is tough, for example, for people to act in ways that foster firm success if they do not possess the knowledge and skills necessary to do so or if they are mismanaged (i.e., in the wrong places at the wrong times). In short, then, when all three components are present there is workforce alignment and this, in turn, should help drive company success. Does it? The results of the study suggest that the answer to this question is an emphatic YES! People appear to make a crucial contribution to the success of small businesses. More specifically, companies with aligned workforces are more likely than those with less aligned workforces 1. To develop and deliver high quality products, services, or solutions 2. To develop and deliver new products, services, or solutions 3. To satisfy customers or clients

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4. 5. 6. 7. To effectively market products or services To achieve sales growth To operate profitably To capture market share.

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5.3.1 HUMAN ALIGNMENT

RESOURCE

PRACTICES

AND

WORKFORCE

Now that we know that people matter to the performance of small businesses, the next question is: What human resource management strategies (and practices) can leaders of small businesses employ to foster workforce alignment?

5.3.1.1 Employee Motivation and Retention Practices and Workforce Alignment The most important way Wrtsil can ensure that it has people doing the right things right is to properly motivate and retain its employees. There are three different human resource strategies that company is using to motivate and retain people. 1. HR creates a family-like community, in which employees are motivated primarily out of a sense of responsibility to one another and the company. Wrtsil that foster a family-like community sponsor company social events and outside activities so that employees can get to know one another. Like Cricket matches between employees of Lahore and Karachi or Wrtsil Pakistan and India, Indoor Activities including table tennis, gym, billiard and badminton. Trips and Tours at Northern Areas of Pakistan like Kaghan, Niran or Shugraan for a week once a year. They also hold regular company-wide meetings to share information about the company with employees. 2. Wrtsil favor interesting and rewarding jobs. Wrtsil provides employees with challenging work opportunities and chances to learn and grow. 3. Of course, company relies on fair compensation. Company that uses compensation to motivate people pay higher wages than their competitors. They also use incentives to attract, reward, and retain their people.

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So, which of these three human resource motivation and retention strategies work best? The answer is: family-like community. When all three strategies are compared, family-like community is strongly and positively related to workforce alignment, and in turn, to firm performance. Interesting and rewarding jobs and fair compensation, on the other hand, are not related to workforce alignment. Thus, Wrtsil uses a family-like community to motivate people is more likely than those that favor rewarding jobs or fair compensation to have aligned workforces.

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5.3.1.2 EXAMPLES OF BEST PRACTICES Person-future Fit Employee Selection The practices that we use for selection focus on the potential long-term contribution of applicants. We will leave a positions open until we can find the best and brightest possible new employee. We look to elite sources (e.g., top universities, head hunters) to find the best available talent. Process and Procedure-based Employee Management We have a highly-formalized compensation system with predetermined pay bands, scales, and ranges. We have formal processes of performance appraisals to provide feedback to employees. Managers follow a regular schedule in providing feedback to employees. Professional Standards-based Employee Management Managers empower employees to monitor their own work and performance. Managers in this company assume that employees are experts who will get the job done right the first time without oversight. Employees in this company are given the opportunity to complete their work however they see fit. Family-like Community for Fostering Employee Motivation and Retention We sponsor company social events so employees can get to know one another. We offer employees profit- or gain-sharing pay. We regularly hold company wide meetings to share information about the company with employees. We work hard to create a strong social environment at work.

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5.4 Employee Satisfaction Survey
When the results of Wrtsils employee satisfaction survey in Pakistan were received in January, Wrtsil Pakistan units jumped into action. The result reviewed with the entire supervisory staff, and the supervisors were assignment the task of representing the results of their own subordinates and to work is small groups to come up with improvement suggestions. Team work, motivation and commitment to Wrtsils values were the strength at Wrtsil Pakistan. Room for improvement was found e.g. the awareness of business strategies and objectives, in the quantity and quality of communication between management and employees, in the working conditions, and in work load. In the discussions, employees also called for the units to take steps to improve the work atmosphere.

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