ahsan compensation

8/3/2019 Ahsan Compensation

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D

Analysis Report on

Compensation and

Performance Management of

Submitted To:

Maam Qudsia Shahid

Date: 26-12-2011

Submitted By:

Anum Nasik (01)

Sumbal Ashfaq (22)

Ahsan Bilal Saleem (52)

Institute of Administrative Science,

University Of Punjab Lahore

Compensation, Incentives and

Corporate Governance


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Table of contents

1.0 Introduction.6

1.1 Purpose.6

1.2 Scope..6

1.3 Sources and methodology7

1.4 Definitions8

2.0 Company Profile9

3.0 Performance management at A1 Auto Solution Company..15

3.1 Appraisal Process15

3.1.2 Clarifying and Communicating Consequences19

3.1.3 Supervisors role..21

3.2 Appraisal Methods and tools at A1 Auto Solution Company.22

3.3 Appraisal Interview in appraising employees27

3.4 Major problems in appraising employees28

3.5 Legal and Ethical Issues in Appraising Employees..31

4.0 Management of compensation and Benefits.33

4.1 Establishing pay rates..33

4.2 Traditional bases for pay34

4.4 Organization wide incentives40


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4.5 Benefits at A1 auto solution

4.5.1 Pay for Time not worked..41

4.5.2 Insurance benefits43

4.5.3 Retirement benefits47

.5.4 Services to employees47

5.0 Conclusion and Recommendations49

6.0 Reference list

7.0 Appendix


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ACKNOWLEDGEMENT

WE would start this report by saying that ALLAH Almighty has graced

us with enough energy to work in this period and complete this report.

First of all we would like to acknowledge our parents who encouraged

us to do MHRM. Their prayers enable us to complete this report.

We would really like to acknowledge our teacher Maam Qudsia Shahid,

who has provided us opportunity to work on this report. She really

encourages us. She has provided us helpful knowledge regarding this

project.

At the end, we would like to acknowledge the people who provided us

help to get this information on compensation and benefits program,

especially Sir Junaid Jahangir.


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Preface:

This report is based on the implication of the concepts of compensation and

rewards used by the organization A1 Auto Solution which is a car manufacturing

and spare parts making company in America, also serving the employees of

Pakistan online. This report is based on the introduction of the company A1 Auto

Solution and the information about policies, procedures, and compensation

packages that are provided to the employees. It also covers the areas such as

management improvement procedures, appraisal processes, methods, rewards,

and benefits offered to the employees of A1 Auto Solution. In the explanation of

all these points, working procedures of both Pakistani and American employees

are considered. In the end conclusion and some recommendations are also given.


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1.0 Introduction:

1.1 Purpose:

This project has been undertaken in order to highlight the compensation and

performance evaluation practices of A1 auto solution. The main purpose of this

project report is to see the real world implications of compensation and

performance evaluation practices which are different from objective material of

book writings. The process of this report prepares us to better understand the

human resource functions related to compensation systems specially. This report

also enhances our ability to analyze the current trends being used in private

sector companies.

1.2 Scope:

The overall scope of this report is broad because it addresses the motivational

level, moderating variables and application of compensation practices in Pakistan

and America. This report tends to cover the variables by which performance of

employees is affected and compensation rewards are given according to their

performance standards.

To some extend its focus of attention also becomes limited in its approach

because it covers the information about compensation policies only in private

sector organizations.


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1.3 Sources and methodology:

The methodology by which data and information is gathered for this report

consists of both quantitative as well as qualitative strategies. We tend to use

both open ended as well as closed ended questions in order to get focused but

detailed information on the selected area. Closed ended questionnaire is

comprised of25 questions and open ended questionnaire consists of23 questions

(attached in appendix). These questionnaire were solved by both employees as

well as by employer of the company

Information is collected by engaging in online calls in America. CEO of the

company A1 auto solution, Sir Junaid jahangeer gave us special favour in

providing constructive information details about this report.


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1.4 Definitions

Abbreviations:

A1= A1 auto solution company

PA= Performance Appraisal

COLA= Cost of Living Adjustments

T&D= Training and Development

PTO= Paid time off

Description of technical terms:

y Performance appraisal: The process of evaluating employees on the basis

of their performance.

y Compensation: Component of HR system in which rewards are given to

employees for performing their jobs.

y Intrinsic rewards: Internal satisfaction that the employees derive by

performing their jobs.

y Extrinsic rewards: Monetary and non-monetary rewards given to

employees.


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2.0 Company Profile

Name of organization: A1 Auto Solution Company

Mission Statement

To provide personal vehicle and enthusiasts with the vehicle related

products and knowledge that fulfill customer wants and needs at the right

price. Our friendly, knowledgeable and professional staff will help inspire,

educate and solve problems for our customers. We are concerned not only

with Cars, but with satisfaction of our honored customers.

Vision

To sustain profitable growth by providing the best customer experience

and dealer support.


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Slogan / Motto

Work Hard

Our Values:

Inspire and build the self-confidence and success of every Team

Member.

Serve our customers better than anyone else

Grow the business and profitability with integrity

Promote the friendly relationships with employees

Working for well being of the environment


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History

A1 Auto Solution ("Automobile Parts Co., Ltd.) was established on December 26,

1952, near about 60 years before taking over all the operations for Wheel Covers

ofall types of models, present in the state of America (Virginia, New York, Greens

Boro),It was Started by Mr. Alferdand after having a successful business for more

than 30 years , due to his death , this setup was bought by Mr. Scot. But this

person sold this business after running it for 5 years, this was sold to a Pakistani

named Mr. Zulfiqar and he ran this business. Now this business is being run by

Mr.Junaid Ahmad Jahangir. By his intellectual capabilities, and his intelligent

mind, he first learn this field, and he did focus on innovative work, he made

expansion in his business into four areas

1. Auto Part Sales

2. Auto Repairs

3. Recycling

4. Auto Body works and Paints

After that he involved his partners, and ran his business. Its being run by him

from last 16 years and this business is now in mature stage.


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Structure of organization:

Organogram

Board of directors

CEO

HR department

Auto partssales Dep.

Auto repairsdep.

Recycling dep. Auto bodyworks & paints

IT dep.

Admin

Dep.

Accounts

dep.

Finance

dep.

Marketing

dep.

Sales dep.

Admin

Dep.

Accounts

dep.

Finance

dep.

Marketing

dep.

Sales dep.

Admin

Dep.

Accounts

dep.

Finance

dep.

Marketing

dep.

Sales dep.

IT

Pakistan

IT

America

Admin

Dep.

Accounts

dep.

Finance

dep.

Marketing

dep.

Sales dep.

Note: Approved by board of CEO of the company:

Junaid jahangeer Ahmed

____________________


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Board of directors

1. Atiq Qadri

2. C.T Hinjra

3. Ijaz Hussain

4. Babar Hussain5. Junaid Jahangir

CEO

Junaid Jahangir Ahmed

Sales Manager

Muhammad Al Abdi

Accounts Manager

Kamran Khan

Regional Manager

Erica Galvez

Finance Manger

Michel Morris

IT Head

Iftakhar Ahmed

Pakistan Manager

Ahsan Bilal

Mechanical head

Edger Romiruiz


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Auto Part Sales:

In this report we are dealing and presenting the information just about one

department of A1 auto solution which is Auto Part Sales. The organogram of

this department is as follows:

Board of directors

CEO

HR department

Auto parts

sales Dep.

Admin

Dep.

Accounts

dep.

Finance

dep.

Marketing

dep.

Sales dep.

G.M

G.M

G.M

G.M

G.M Supervisors

Supervisors

Supervisors

Supervisors

Supervisors

IT Dept.

Inventory

control

Website

control

Pakistan

dep.

Data entry


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3.0 Performance management:

A1 auto Solution Company mainly focuses on performance management system

in which it tries to manage the performance of all the employees, groups and

projects assigned to the employees. Feedback component of performance

management addresses the performance improvement criteria in order to make

their employees as well as company competent in the market. Jobs and

employees are evaluated on the basis of their performance.

3.1 Appraisal process:

The appraisal process at A1 auto solution includes following steps.

1. Defining a job

2. Setting performance standards

3. Clear communication about standards

4. Measuring performance against standards

5. Feedback and corrective actions

For new employees:

At the time of recruitment and selection, A1 auto solution defines the job

descriptions and specifications that clearly explain the employees that what tasks

are expected from them. These expectations are also formally communicated

with them at the time of orientation. This process enables employees to become

aware of their jobs. A1 also communicates the performance standards with the

employees that the employees are supposed to achieve. On the basis of these set


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of performance standards, their actual performance is objectively measured. As in

A1, the primary consideration is given to employees work performance, the

higher the performance they will demonstrate, the good the performance

appraisals they will receive. In the end feedback is given to them in order to make

improvements in their work.

For current employees:

For the employees already working with A1, specific goals are identified for them

by the company which serves as performance standards. After this activity of

setting goals, a complete job analysis is done in which employees actual

performance is matched with the desired one. Performance gaps are identified

and then employees are given the opportunity to participate and present their

perspectives and suggestions for feedback.


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Figure:

Defining a job

Setting performance

standards

Clear communication

Measuring performance

Feedback/corrective

actions

Training & DevelopmentOptional

A1 auto solution also emphasizes on personal grooming, trainings and

development. After feedback process, it identifies that is there any need for T & D

for the improvement of work as well as workers knowledge. If the need arises, it

also arranges training sessions and classes for its employees to make them more

productive in working environment.


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The appraisal process is reviewed on monthly basis in A1 in which performance of

employees is evaluated on monthly basis. Board of directors arrange a meeting

along with CEO and managers to provide them constructive feedback on their

performance. This activity helps the sub ordinates to increase their work

performance.

In A1 auto solution, performance of employees is evaluated in two steps;

1. Short term performance evaluation

2. Long term performance evaluation

y In short term evaluation, performance appraisals are reviewed for

consecutively 8 months in which performance of employees is evaluated

very frequently. Feedbacks are given to them so frequently so that it

enables them to work efficiently and effectively. This really becomes

helpful when employees are newcomers and in learning phase.

y After short term evaluation process of monthly review, there comes a

break in revising performance appraisals. This break period approximately

remains for 6 months in which employees long term efforts, performance,

and loyalty with company is evaluated.Both evaluation processes (short-

term & long-term) leads towards performance based salary increment of

the employees.


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3.1.2 Clarifying and communicating expectations

and consequences:

A1 auto solution, both in Pakistan and America, provides open communication

system to employees. By this employees develop reasonable expectations and

trust the system and those who operate it. Effort-reward relationship is clearly

communicated with employees to make them aware of what is expected of them

and its consequences.

In A1 auto solution, expectations are communicated with the help of three type

of relationships which are as follows

1. Individual effort- performance appraisal relationship

2. Performance appraisal-organizational rewards relationship

3. Organizational rewards-personal goals relationship

y The first relationship shows the link between individual efforts and

performance appraisals. In A1 Auto Solution, primary focus is given on

individuals efforts and performance. And there is a use of objective

performance appraisals. When employees perform well and put their

maximum level of efforts, these are also demonstrated in their

performance appraisals. Its clearly communicated that there is positive

relationship between individual efforts and performance systems. If the

employees will perform well, they will receive good PAs and vice versa.


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y In the second phase of relationship, employees are communicated that

their good performance appraisals leads the employees towards

organizational rewards. If employees will perform well they will get merit

pay increments in their base pay which is also an indication of the positive

relationship between performance systems and organizational rewards.

y In the third relationship, A1 ensures that individuals personal goals will

ultimately be achieved when organization will give rewards. Because these

rewards provide them intrinsic as well as extrinsic satisfaction.

Individuals

effort

Performance

appraisal

Organizational

rewardsPersonal goals

Effort-performance

appraisal relationship

Performance appraisal-

rewards relationship

Rewards-personal

Goals relationship


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3.1.3 Supervisors role:

The role of supervisors in A1 is mainly concerned with following activities:

y Objective evaluation of employee behavior.

y Considering overall on the job behaviors of the employees.

y Assisting in counseling effort as it relates to employees poor performance.

y Promoting open communication in the organization.

y Providing constructive feedback to employees regarding their performance.

y Answering the queries of the employees problems.

y Builds the relationship between individual goals and corporate strategy.

y Another important role being watched in A1 auto solution is that

supervisors try to make good relationships with their employees in long run

to make the employees their loyal company assets.


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3.2 Appraisal methods:

Effective performance appraisals drive effective merit pay programs. And

administering successful merit pay programs depends on the appraisal

approaches used by the supervisors. A1 uses different performance

appraisal methods according to its employees. As its employees are in

Pakistan as well as in America, so the performance appraisal methods also

vary for them.

America Pakistan

y 360 performance appraisal

y Goal-Oriented (MBO)

y 360 performance appraisal

y Behavioral systems


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America:

There are two types of appraisal methods used by American supervisors in

order to evaluate the employees of America. These methods are as follows:

360 performance appraisal: American employees are evaluated on the

basis of 360 performance appraisal in which there evaluation relies on

many appropriate sources of information such as supervisors keep on

examining their overall activities at all the time. There is concept of closed

supervision over there.

Goal-oriented: another method used by American supervisors is

management by objectives method in which goals are set by participative

behavior of employees. Employees set goals for themselves with their

supervisors and try to achieve those targets.


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Hierarchy:

In America, all the individuals have to report to a single person (known as

CEO of the company). This shows that there is high centralization and

because of high centralization, appraisals are also evaluated by that single

person or supervisor.

Supervisor/CEO

Employee 4 Employee 5Employee 3Employee2Employee 1


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Pakistan:

The appraisal methods used in Pakistan are as follows

360 appraisals:

Employees of Pakistan are evaluated by their immediate supervisors

as well as by their CEO at the same time. They can be evaluated at anytime

doing any on the job tasks.

Behavioral systems:

A1 rates the employees of Pakistan to the extent as they display

successful job behaviors. Employees are evaluated on the basis of their

objective work related behaviors. In behavioral systems, BARS

(behaviorally anchored rating system) technique is used in which they

appraise their employees on the basis of the behaviors expected by them.

BARS examines the actual observable job behaviors so there is close

supervision of employees by their immediate boss.


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Hierarchy

In Pakistan, sub-ordinates reports to their immediate supervisors and are

evaluated by them. While these supervisors have to report themselves to

the CEO of company.

Supervisor/CEO

Immediate

supervisor

Employee 1 Employee 4Employee 3Employee 2


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3.3 Appraisal interview:

In A1 auto solution, as it is mentioned before that performance appraisal is

a monthly reviewing activity, employees always know that their activities

are being watched all the time. So their appraisals are always informed one.

After the completion of their appraisals, employees are communicated with

feedback about their performance before documenting it formally. If they

feel any injustice or discrepancies in the performance evaluation, they can

solve it by addressing to their supervisors.

The feedback is provided to the employees to increase

their productivity and to reduce the gaps between actual and desired

performance.


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3.4 Major problems in appraising

employees

Pakistan:

y In the context of Pakistan, the major problem faced in appraisal

process is hallo error. As all the procedures, work activities and

employee appraisals go online rather than physically interacting,

supervisors sometimes generalize an employee good or bad behavior

on one aspect of the job to all the aspects of the job. And because of

this they are sometimes under appraised or over appraised.

y Supervisors have to trust their employees that they are performing

their jobs honestly because of no physical interaction with the

Pakistani employees.

y There is also contrasting error because supervisors compare the work

of employees with the other one.

y Closed supervision increases the stress level of the employees which

sometimes generate inaccurate responses.


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America:

y Strictness error is considered as a major problem in America because

there employees are treated very strictly and they are supposed to

be very much punctual, disciplined and regular etc. over strictness

sometimes de-motivate the behavior of the employees which

ultimately effects their appraisals.

y Closed supervision increases the stress level of the employees which

sometimes generate inaccurate responses.

y Sometimes employees are inflated or deflated because of work

behaviors they demonstrate

y Another error being faced while appraising the employees is recency

effect error and also contamination.


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Comparison:

America Pakistan

y Strictness error

y Inflating employees

y Deflating employees

y Recency effect

y Closed supervision

y Hallo error

y Trust problems

y Contrasting error

y Closed supervision


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3.5 Legal and Ethical issues:

y Sometimes role of politics is seen in the process of appraisals which

should be reduced as performance appraisals are the important part

of employees career.

y Legally and ethically inflating and deflating employees appraisal is

considered as wrong that is avoided as much as it is possible.

y Discriminating behavior with employees is considered as unfair and

all the employees are treated equally.


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Performance appraisal with 5 Ws and 1 H:

Performance appraisal is itself a non-productive activity but it acts as a

guideline or support that indirectly achieves the overall goals of the

corporate.

y What: performance appraisal process

y Who: supervisors, managers, CEO

y When: monthly and quarterly

y Where: A1 auto solution

y Why: rewards/compensation, training & development, performance

improvement

y How: formally and informally, documentary/ verbally


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4.0 Management of compensation and

Benefits

4.1 Establishing Pay Rates:

Hourly or Monthly salary of an employee which is given by its

company is known as pay rate.

Market Survey:

A1 auto solution do market survey for deciding pay rates in order toanalyze that what their competitors offer for the same job. But basically at the start

level they offer minimum wage to the employees which is the rate decided by

Government of Pakistan and America state. The pay rates structure for both the

countries are as follows.

America:

In context of American A1 Auto solution pay 7 $ 15 cent per an hour which

is minimum salary rate decided by the state of America in which A1 auto solution

operates.

Pakistan:

In context of Pakistan, minimum salary offered by A1 auto solution to

employees is 8000 Rs per month which is legally required by Pakistan law.

Generally employees cannot get less than this pay rate. Their salary gradually

increases as the length of their tenure and with the performance they demonstrate.


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4.2 Traditional Base for Pay:

Seniority pay is designed to award job tenure and set base pay with time whereas

merit pay is based on performance, rewards, excellent effort . In A1 auto solution

focuses on merit pay structure to compensate and motivate employees. The

increment in base pay varies in context of both Pakistan and America.

Pakistan:

The basic pay that is offered to Pakistani employees is Rs.8000 on performing

their jobs. According to the length of tenure and performance outcomes, there

salary is incremented byRs.500 on monthly basis till then a specific level of pay is

reached. E.g. the pay rate reaches the level ofRs 12000. At that point A1 auto

solution takes a little break to judge the behavior of employees by not giving any

increment.

Actually the purpose of it is to know how loyal and committed

employees with company are. By this they analyses the long term behavior

of the employees with the companies terms and conditions. And their

performance is also analyzed on the basis of which they get rewards.


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Flow chart shows Increment in Merit pay

Basic Pay 8000 Rs

After Increment of 500

RS Monthly

Pay is 8500

After Continuously

Increment in Merit pay

is 9000

And so on its reached its

maximum level

Pay is 12000

Break Period is to judge the loyalty and commitment of employees with

company. After 4 months the increment again carries on.


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After Break increment

goes on from 12000

Then Pay after further

increment will be 12500

Continuously increment

Pay will be 13000

Again a maximum level

before break point

Pay will be 15000

America:

In American context the basic pay is 7 $ 15 cent and this pay level is

incremented according to the performance of the employees. As the employees

spend time with the company, they become more loyal and more committed with

it. Because of this its seen that the turnover rate in A1 auto Solution Company is

very low which is approximately 0%.


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Rather than merit pay, company had also focused on seniority pay system but this

system is not being used now-a-days and therefore the main focus of company is

on goal achieving strategy and merit base pay. Revision of performance appraisal

is done on monthly basis. Normally organizations revise their performance

appraisal on yearly or semi annually basis and then according to performance

appraisal, their pay structure is revised.

A1 auto solution revises its performance appraisal on monthly basis .The

main purpose ofrevising Performance appraisal in company is to make COLA and

Inflation adjustments as well as to energize and motivate the behavior of

employees. These make employees more committed to company.

There are two folded advantages of this monthly based revision of Performance

Appraisal.

y Advantage for Company

y Advantage for Employees

Basic Pay of Employees is

7$ 50 cent

Increment is done according

to Performance


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Advantage for Company:

Organization performance is based on employees performance. When employees

demonstrate good performance then organization performance automatically

increases because they both have direct relationship. Good organizational

performance becomes helpful in achieving the goals of organization which turns

into profit later.So, this works like a chain of circle. All the factors depend on each

other.

Employee

Performance

Profits

Organization

Goal

Organization

Performance


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Advantage for Employees:

Personal goals achievement basically depends on

employees own effort. When employees put their whole effort in their work whichis based on their motivation level that how much they intensively do their work as

well as on their direction. After persistent effort their performance level increases

which cause in increasing their merit pay. And at last they succeed in achieving

their personal goals which satisfy them internally.

Employee

Effort

High

Performance

Achieve

personal

goals

Increase

Merit pay


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4.4 Organization Wide Incentive plans:

Organization wide plans are offered on the basis of success of organization over a

specified time of period.

America:

In context of America A1 auto solution offers organization wide

incentive plans on the basis of the performance of the company as well as the

profits it earns. The earned profits are distributed among employees on the basis of

profit sharing scheme in which they are given a particular portion of net profits to

their employees.

The purpose of using this profit sharing scheme is mainly to strengthen the

relationships and the loyalty of employees to their company.

Organization wide incentives plans are useful for A1 auto solution because it

creates a sense of belongingness, corporation and team work among all employees.

Pakistan:

In Pakistani context, its not applicable because they assign online tasks and

works to their employees and profit sharing is not possible in this type of work.


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4.5Benefits:

4.5.1 Pay for time not worked:

Paid time off is earned by employees even when

they dont work. There are type of leaves such as holidays, sick leave and

vacation leaves, offered to employees to make working conditions comfortable

for them. Some terms and conditions came into existence such as uninformed

offs by them.

I. Leaves schedule for Permanent and Contractual

Employees:

Paid leaves vary from permanent to contractual base

employees in A1 auto solution. For contractual employees, uninformed holidays

become a reason of their pay deduction. Like these leaves, there are some other

benefits which are given to the permanent employees rather than contractual

employees.

Rules and Regulations for Leaves in A1 Auto solution:

In A1 auto solution regular employees working 40 hrs a week are eligible to have

paid time away from work. Eligible employees hired by A1 auto solution

participates in the paid time off program. This program allows employees to take a

total of 30 days of annual paid Vacation, sick and personal days time off.

This time includes sick days, religious holidays and vacation time. It is

important to note that an employee cant take more than 2 days of sick time in a


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month. In case of sickness, an employee must send an email to his/her manager to

request sick day/time. Employees have to submit vacation plans to their manager

at least four weeks prior to the requested vacation date.

Then company analyzes the vacation request but management reserves the right to

designate when some or all of the vacation must be taken, keeping in view the

work schedules. Vacation time may not be taken without prior management

approval. PTO days are to be taken within the year earned, except in case of illness

or emergency, PTO days must be arranged, scheduled and discussed in advance

and are subject to approval by the employees manager. Vacation cant be in

cashed. An advance notice of 3 days must be given for any planned vacation/time

out of work. For sickness and other emergencies, local team leaders must be

advised and at your earliest send an email to head.

America:

Employees have to follow all the rules and regulations for paid leave by the

Company. In America extra leaves which are offered to the employees for their

benefits includes some occasion leaves like Christmas day, New year etc

Pakistan:

In context of Pakistan, Pakistani workers also have to strictly follow all the rules

and regulations to take a leave from company but as compare to American

employees A1Auto Solution does not grant any type of holidays and the entire

local, religious and schedule holidays must be taken by using the PTO.


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4.5.2 Insurance Benefits:

A specific area of cover that offers protection against financial loss or

damage, eg.For Death or Personal Accident. Insurance benefits are money paid to

someone holding an insurance policy (or their beneficiaries) upon a predefined

condition being met.

Insurance benefits are given in three forms basically

Life Insurance

Term life Insurance

Whole life insurance

U

niversal life insurance

Health Insurance

Medical Insurance

Disability Insurance

The core benefit of A1 auto solution is to provide safety, health, disability

benefits to their employees in case of any mishap but according to terms and

conditions which are necessary for both.


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Life Insurance:

A contract between employees and its organization that specifies to

paid a stated sum or a periodic income to employee designated beneficiaries

upon His / her death.

y Term Life insurance is used to protect employees beneficiaries only during

a limited period based on a special number of fixed years subject to the

maximum age. After that insurance automatically expires.

y Whole Life insurancepays an amount to the designated beneficiaries of the

deceased employee, but unlike term and policies, whole life plans do not

terminate until payment is made to beneficiaries.

y Universal life insuranceprovides protection to employees beneficiaries

based on the insurance feature of term of life insurance and a more flexible

savings or cash accumulation plan than found in whole life insurance plans.


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America:

A1 Auto Solution basically does not give any type of Life Insurance to their

employees not even any kind of it. Life insurance of employees is basically done

by the state Government. And it is also applicable if Government provides it.

Pakistan:

In context of Pakistan no Life insurance is given. Because they are using electronic

media to contact with their employees and just work with them on basis of trust.

They are mostly contractual based employees so this is also a reason for providing

no insurance to them.

Medical Insurance:

Medical insurance offers by companies helps to recruit and retain the best qualified

individuals , and employees tends to be more productive when they can afford to

take care of health problems that could interfere with job performance.

America:

Medical fees / allowances covers the cost of Physician, surgeon fees and

basically room allotment. These all benefits are covered by the Government of

U

SA. Therefore company does not provide any type of Health insurance to theirEmployees by its own self.


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Pakistan:

As mentioned above Pakistani Employees not have such these facilities

because of their contract based jobs and trust based work.

Disability insurance:

Disability insurance replaces income for employees who become unable to work

because of sickness or accidents. In A1 auto solution disability insurance replace

all or part of income that is lost when worker is unable to perform his job due to

injury.

America:

In American context Government has to deal with them because its already paid

by employee from his monthly income. Unemployment benefit is given to the

employees of A1 auto solution for two years in case of long term disability or

illness.

Pakistan:

In context of Pakistani employees, no benefits are provided.


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4.5.3 Retirement benefit:

Retirement programs, which are often referred to as pension plans provide income

to employees and their beneficiaries during some or all of their retirement.

America:

A1 auto solution gives retirement benefits in form of pension when the employees

end their careers. A1 auto solution gives Provident fund at the end of the services

of employees. Provident fund which is given on basis of 6% from person salary

and 6% contribution of Company.

4.5.4 Services to Employees:

Services are provided for the ease of employees. A1 auto solution provides

many facilities to their employees.

America:

A1 auto solution gives allowances to employees in case of any travel from

outside the country or traveling from one state to another. Company bears all the

expenses of the employees which travel for the work of their Company. Whereas

local traveling expenses are bear by the employee its own self.

Pakistan:

No services are provided to Pakistani Employees.


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Summary of benefits provided to American & Pakistani

Employees

.

Benefits America Pakistan

Life insurance benefits Not by Company.By Government

Not provided

Medical insurance

benefits

Not by Company.

By Government

Not provided

Disability insurance

benefits

provided Not provided

Retirement insurance

benefits

provided Not provided

Note: Company pays a fixed amount to USA Gov. and Government allocates

all benefits.


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5.0 Conclusions and Recommendations:

Every organization seems to have some strength and some weaknesses.

What we have concluded is that, this organization has a very strong relationship

among the top to low. By asking question from Pakistani and American

employees, it was seen that they were extrinsically and as well as intrinsically

satisfied and motivated. There competitive advantage is there trust on

employees, and there strength is the friendly relationship with their employees,

they are fairly paying their employees, turnover is 0 % in context with Pakistan,

and about 2 % in case of America.

There prices, quality, customer relation is strong, they have built a high

level of good will due to their interaction with the needs of their customers. In

spite of mentioning the strict rules and regulation, they always welcome any

query by any employee, they assist employee where he/she is in need of that.

During the interview Mr. Jahangir emphasized on the environment, he

mentioned that we keep this thing at the high priority that environment must not

be harmed due to their any step.

One more strength of this organization is brainstorming, they never took

decision on their own, they always take ideas, consult the problems of employees,

and get their opinions, and decide to take other steps.

Some flaws we observed during our keen observations were that, that the

policies of PTO were not so attractive, employee is concerned with the relief,

what he/she is going to achieve from the Boss. It was mentioned that no extra


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benefit would be given if someone have worked on the leaves, which he/she was

allowed to attain, if someone doing so, it must be compensated. Although

Americans movement policies have a good structure for employee benefits,

some benefits must be allocated to the Pakistani employees.

They must use couple of different ways to appraise their employees,

instead of choosing only one, because they can be deceived by doing so, and they

can even lose their trust worthy employee.

As the A1 is growing very fast and rapidly, they have opportunity to take

this business throughout the America, they can expand horizontally and as well as

vertically. They can come up with new ideas; they have opportunity to hire the

staff from Pakistan (which they are doing) by this they can come up with cheap

labor.

As far as threats are concerned, they have many competitors, which are always

trying to compete them, their trust based structure is so complex, that if any of

the employees try to deceive them, they may face a huge loss, so they must take

some steps to cope with this.


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6.0 Reference listy www.A1autosolution.com

y Martocchio.J, strategic compenstion, sixth edition, A

human resource management approach


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7.0 Appendix A

Questionnaire

Name of institution: --------------------------Date: ----------------------

Answer all the questions carefully.

Q1: What Appraisal methods and tools recently being used in your organization?

Q2: How frequently Performance Appraisal is revised?How frequently Salary structure is revised?

Q3: Do Employees get feedback from Performance Appraisal?

Q4: What traditional base for pay system?

Q5: Is there any Quota for Merit pay increases given to all branches?

Q6: Are working condition difficult or easy?Has their any impact on Salary?

Q7: Does your Organization do market survey on deciding about Salaries?

Q8: Whats minimum wage on levels?

Q9: What incentive plans are used?

Q10: What type of Incentive system do you currently have in your place?

Q11: The criteria which is used by your organization to offer Bonuses and Incentives?

Q12: In case of Medical insurance, after how much time they can avail it? Is it totally paid byOrganization or some part of it paid by Employees?

Q13: When do your employees become eligible for Life Insurance or it is not offered?

Q14: If your organization compensates the Employees in case of short time Disability then whatpercent of salary is paid?

Question 15: What job related service benefits are provided to Employee's?

Q16: What type of legally required benefits offered by Government?

Q17: Are there any inflation or COLA adjustments in base pay of Employees?


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Q18: Are there behavior encouragement plans for Employees?

Q19: How much allowances your organization pay for car travel, as well other facilities used byEmployee in case of Sales and services as telephone bill, laptops, Fax machine, and Cellularphone?

Q20: How much sick time, vacation time and holidays are provided by your organization? At whatlevel these benefits start to accrue?

Q21: Are there any person focused pay?

Q22: Is there any difference between permanent and contractual employees?

Q23: What makes your organization different from others? Why it's attractive for others?


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Appendix B

Website of A1 auto Solution Company


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Appendix C

Performance appraisal forms used in A1 auto solution


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ahsan compensation

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