Compensation at ali akbar group

7/28/2019 Compensation at ali akbar group

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Final Project Report | Compensation 1

Acknowledgement

In the name of ALLAH the most Beneficent and Merciful

Praise is to ALLAH ALMIGHTY, the one testing us all at all times and making decisions

about what we dont know and cant know. Writing this report appeared to be a great

experience to us. It added a lot to our knowledge while we were working on this report. If we

say that this report is one of our memorable experiences in student life, then it would not be

wrong. When first we were given this project, it seemed very difficult to be completed but by

the grace of ALMIGHTY ALLAH today it is accomplished.

Without the help of our friends and teachers we would never have been able to successfully

finish this strenuous project. Firstly we would like to mention the name of our instructor

Mam Samia jamshed whom we bothered the most and without whose assistance the

completion of our project was not possible.


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After discussing about different National and Multinational Companies, and the factors

related to those companies, the company that we have selected for our Final Project is a

National Company and that is ALI AKBAR GROUP PAKISTAN. It is one of the well

reputed companies of Pakistan and is playing a very positive role in different fields, by

providing different quality products and services, for the betterment of the country. In a short

span of time, Ali Akbar Group has achieved the top position among multinational and

national companies of Pakistan. Today, with the largest infrastructure and human resource

base, Ali Akbar Group is second to none in quality and quantity of products

Company Background:-

Agriculture is the backbone of Pakistan's economy. Keeping in view the ever increasing

demand for quality agricultural inputs, the company was established in 1993. Initially, the

core business of the company was manufacturing and marketing of agrochemicals.

Purpose

Enhancing quali ty of l if e for the betterment of tomorrow

Vision

To become internati onall y recognized company, deliver ing excellence to all stakeholders

through innovation and human capital
http://www.aliakbargroup.com/


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Values

Customer First(Going Extra Miles, Keep Promises)

Act Responsibly(CSR, Ethical Behavior, Ownership)

Quality(Products/ Services, Practices)

Togetherness(Team Spirit, Mutual Support)

Ali Akbar group comprises a number of companies today, Ali Akbar Group is a leading crop

protection company in Pakistan and comprises of a diversified group of companies having its

Head Office in Lahore, including:

Pak China

Chemicals

Dada Jee

Corporation

Ali Akbar

Seeds

Ali Akbar

Enterprises

Links

International

Pak China

Polymer

Ali Akbar

Textiles

Pak China

Manufacturing

Agrimall

Zarai Markaz

Organizational Website:

http://www.aliakbargroup.com
http://www.aliakbargroup.com/http://www.agrimall.com.pk/http://www.aliakbargroup.com/page.aspx?page_id=33http://www.aliakbargroup.com/page.aspx?page_id=75http://www.aliakbargroup.com/page.aspx?page_id=9http://www.aliakbargroup.com/page.aspx?page_id=34http://www.aliakbargroup.com/page.aspx?page_id=13http://www.aliakbargroup.com/page.aspx?page_id=14http://www.aliakbargroup.com/page.aspx?page_id=15http://www.aliakbargroup.com/page.aspx?page_id=8http://www.agrimall.com.pk/http://www.aliakbargroup.com/page.aspx?page_id=33http://www.aliakbargroup.com/page.aspx?page_id=75http://www.aliakbargroup.com/page.aspx?page_id=9http://www.aliakbargroup.com/page.aspx?page_id=34http://www.aliakbargroup.com/page.aspx?page_id=13http://www.aliakbargroup.com/page.aspx?page_id=14http://www.aliakbargroup.com/page.aspx?page_id=15http://www.aliakbargroup.com/page.aspx?page_id=8http://www.agrimall.com.pk/http://www.aliakbargroup.com/page.aspx?page_id=33http://www.aliakbargroup.com/page.aspx?page_id=75http://www.aliakbargroup.com/page.aspx?page_id=9http://www.aliakbargroup.com/page.aspx?page_id=34http://www.aliakbargroup.com/page.aspx?page_id=13http://www.aliakbargroup.com/page.aspx?page_id=14http://www.aliakbargroup.com/page.aspx?page_id=15http://www.aliakbargroup.com/page.aspx?page_id=8http://www.agrimall.com.pk/http://www.aliakbargroup.com/page.aspx?page_id=33http://www.aliakbargroup.com/page.aspx?page_id=75http://www.aliakbargroup.com/page.aspx?page_id=9http://www.aliakbargroup.com/page.aspx?page_id=34http://www.aliakbargroup.com/page.aspx?page_id=13http://www.aliakbargroup.com/page.aspx?page_id=14http://www.aliakbargroup.com/page.aspx?page_id=15http://www.aliakbargroup.com/page.aspx?page_id=8http://www.agrimall.com.pk/http://www.aliakbargroup.com/page.aspx?page_id=33http://www.aliakbargroup.com/page.aspx?page_id=75http://www.aliakbargroup.com/page.aspx?page_id=9http://www.aliakbargroup.com/page.aspx?page_id=34http://www.aliakbargroup.com/page.aspx?page_id=13http://www.aliakbargroup.com/page.aspx?page_id=14http://www.aliakbargroup.com/page.aspx?page_id=15http://www.aliakbargroup.com/page.aspx?page_id=8http://www.agrimall.com.pk/http://www.aliakbargroup.com/page.aspx?page_id=33http://www.aliakbargroup.com/page.aspx?page_id=75http://www.aliakbargroup.com/page.aspx?page_id=9http://www.aliakbargroup.com/page.aspx?page_id=34http://www.aliakbargroup.com/page.aspx?page_id=13http://www.aliakbargroup.com/page.aspx?page_id=14http://www.aliakbargroup.com/page.aspx?page_id=15http://www.aliakbargroup.com/page.aspx?page_id=8http://www.agrimall.com.pk/http://www.aliakbargroup.com/page.aspx?page_id=33http://www.aliakbargroup.com/page.aspx?page_id=75http://www.aliakbargroup.com/page.aspx?page_id=9http://www.aliakbargroup.com/page.aspx?page_id=34http://www.aliakbargroup.com/page.aspx?page_id=13http://www.aliakbargroup.com/page.aspx?page_id=14http://www.aliakbargroup.com/page.aspx?page_id=15http://www.aliakbargroup.com/page.aspx?page_id=8http://www.agrimall.com.pk/http://www.aliakbargroup.com/page.aspx?page_id=33http://www.aliakbargroup.com/page.aspx?page_id=75http://www.aliakbargroup.com/page.aspx?page_id=9http://www.aliakbargroup.com/page.aspx?page_id=34http://www.aliakbargroup.com/page.aspx?page_id=13http://www.aliakbargroup.com/page.aspx?page_id=14http://www.aliakbargroup.com/page.aspx?page_id=15http://www.aliakbargroup.com/page.aspx?page_id=8http://www.agrimall.com.pk/http://www.aliakbargroup.com/page.aspx?page_id=33http://www.aliakbargroup.com/page.aspx?page_id=75http://www.aliakbargroup.com/page.aspx?page_id=9http://www.aliakbargroup.com/page.aspx?page_id=34http://www.aliakbargroup.com/page.aspx?page_id=13http://www.aliakbargroup.com/page.aspx?page_id=14http://www.aliakbargroup.com/page.aspx?page_id=15http://www.aliakbargroup.com/page.aspx?page_id=8http://www.aliakbargroup.com/


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Ali Akbar Group has following products and services:

Products:

Agro Chemicals Seeds Fertilizers

PET Bottle MFC LPG Distribution Mirage

Services:

Ali Akbar Group is also providing services for Farmers. There are currently three types of

services Ali Akbar group is providing which includes:

Farmers Education

Mobile Testing Labs

Ali Akbar Group's latest initiative to help farmers get expert advice and medicine from

our Target Mobile Labs that visit different villages.

Spray MachinesTarget Centers provide spray machines to farmers.


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Compensation & Reward strategies:

Ali Akbar Group also gives value to their employees and cares about them by using both

techniques intrinsic and extrinsic rewards system

Giving discount cards which give them a discount of 25% on all medical expenses which areaccepted at Chugtai lab as we believe that health is a very important factor to increase the

performance of an employee. If any employee wants to avail clinical lab services they dont

have to worry about the expensive checkups.

There are employees who remain on long tour duties / field duties on survey

sites as in the HR Department, you have to do performance appraisals quarterly in Ali

Akbar Group across Pakistan so the company care for their employees and travelling

allowances are given to employees to travel and work for the organization .

As education is very important for any individual, Ali Akbar Group has a contract with some

universities which include UMT, COMSATS, Superior University, through which our

employees can get discounts on fee for programs they are interested to do. If any employee

wants to study for example: if an employee have done bachelors and wants to do masters

he/she can avail that service. Following is percentage of discount they can get in universities:

COMSATS 25% off

UMT 20% off

Superior university 25% off


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They also give bonuses to their employees at different occasion .e.g. Eid, Christmas etc.

Rewards are also deemed fair employees take part in making decisions and the supervisors

try to be supportive with them this helps employees to believe that we value their

contributions and cares about their well-being.

Process of salary budgeting:

There are two Approaches to Create a Budget

1. Top down2. Bottom Up Approach

According to Mr. Awais Ali Akbar Group does not have formal decision making process

while salary budgeting, he says that at Ali Akbat Group we have an general assumption for

salary budgeting according to the market value for that position. There is no specific

percentage distribution of that budget at different levels.

Methods and techniques of determining core compensation:

The Term Base pay is used in the western world, in Pakistan this term is known as Gross pay.

Base/ Gross Pay:

The total of an employee's regularremuneration including allowances, overtime

pay, commissions, and bonuses, and any otheramounts, before any deductions are made.

In Ali Akbar Group Gross pay is paid on monthly basis. 66.7% of total gross pay paid to an

employee is the basic pay remaining 33.3% includes (pay adjustments).
http://www.businessdictionary.com/definition/employee.htmlhttp://www.businessdictionary.com/definition/remuneration.htmlhttp://www.businessdictionary.com/definition/overtime-pay.htmlhttp://www.businessdictionary.com/definition/overtime-pay.htmlhttp://www.businessdictionary.com/definition/commission.htmlhttp://www.businessdictionary.com/definition/amount.htmlhttp://www.businessdictionary.com/definition/deduction.htmlhttp://www.businessdictionary.com/definition/deduction.htmlhttp://www.businessdictionary.com/definition/amount.htmlhttp://www.businessdictionary.com/definition/commission.htmlhttp://www.businessdictionary.com/definition/overtime-pay.htmlhttp://www.businessdictionary.com/definition/overtime-pay.htmlhttp://www.businessdictionary.com/definition/remuneration.htmlhttp://www.businessdictionary.com/definition/employee.html


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For Instance an employee is being paid 20,000 rupees a month, 13,340 rupees is the basic

pay and remaining 6,660 is pay adjustments (COLA, Merit pay, etc.)

Base Pay Adjustments:

There are six types of monetary or core compensation.

1. Cost of living allowance2. Seniority pay3. Merit pay4. Incentive pay5. Pay for knowledge plans and6. skills based pay

Ali Akbar Group encourages Merit pay the more an employee performances the more he/she

going to get paid, Mr. Awais told us that increments are given to employees at the end of the

fiscal year. If an employees gets 10% increase in his pay that 10% is given on Gross pay that

employee is getting.

Compensation philosophy

Philosophy of the Group

H igh employee satisfaction through hassle free envi ronment and promote performance

baseculture.


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Retention strategies/ career Progressions

Retaining a positive and motivated staff is vital to an organization's success. High employee

turnover increases expenses and also has a negative effect on company morale. Implementing

an employee retention program is an effective way of making sure key workers remain

employed while maintaining job performance and productivity.

In Ali Akbar Group retention strategies are used only when the organization feels that if an

employee leaves the organization and due to which the department will collapse and

organization has to suffer high financial damages then they compensate that employee by

increasing 50% of his pay. If an employee is leaving the organization just because of

financial problem (the pay he is getting is less as compared to market value) they do not force

them to stay. Mr. Awais justified this statement by saying that if the company profit has not

increased this year so how the company can increase the pay of the employee.

If an employee has some family issues say that some medical issues due to which employee

is leaving the organization then the company retain that employee by compensating with the

medical allowance.

Role of Labor unions / Grievance Handling:

Unions are formed if the management fails to solve the problems and issues of labor

workforce and for employees rights and benefits. In Ali Akbar Group there are no unions

because they make sure that their labor force is completely satisfied and taken care off.

Employees cannot even think of having a union in their workplace because their problems aresolved.

Advantages:

o The advantage of not having a union force is that our employees are more focused ontheir work and conflicts are very rare.


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Disadvantage:

o I believe that there is no disadvantage of having no union in our organization becauseemployees problems are completely taken care off.

Methods to deal with equity issues

All these methods are used by Ali Akbar Group:

1. Salary surveys To monitor and maintain external equity.

2. Job analysis and job evaluation To maintain internal equity,

3. Performance appraisal and incentive pay To maintain individual equity.

4.

Communications, grievance mechanisms, and employees participation To help ensure that employees view the pay process as transparent and fair.

When people work together in groups conflicts always arise in the workplace. We make sure

that our employees deal with these conflicts and disagreements in proactive, productive ways.

The following are the steps we at ALI AKBAR Group follow when any conflicts arise in

between the work force within the organization.

i. Identify the problem: -We try to make sure everyone knows exactly what the issue is and why they are

arguing. Employees are given the right to clarify their perspectives and opinions and

given time to express their thoughts.


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ii. Plan to Achieve Everyone's Goals: -We try to figure out what can be done to achieve everyones goals. If action is taken,

how will this affect the organizations performance, objectives and projects?

iii. Find an area of compromise: -Conduct a meeting with the employees who have the conflict and try to find a solution

where everyone agrees.

iv. Favoritism:-Its the human nature to like some people more than others so we try to make sure that

there is no favor given to anyone who does not deserve.

v. Internal Lobbies:-We do not allow our employees to form any unions or to make internal lobbies and

any sort of gang ups.

We try to be genuine, take preventive measures to solve the conflicts and remind

everyone that be in your best behaviors because manners matters.

Compensation surveys/ Employee satisfaction survey:

Ali Akbar Group Use satisfaction surveys to build a positive, productive workforce by

focusing on the following:

Management development

Team development


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Paying people fairly is good for business. Underpay, and employees will eventually look for a

better offer. Overpay, and the payroll budget and profitability will suffer. That's why

companies use market data to research the value of their jobs

Ali Akbar Group practice different types of surveys within the organization by their

employees and outside the organization (market data, competitors analysis)

Job grades & Pay structures:

In Ali Akbar Group there are also job grades like MG1 MG2 JB1 these are the different

levels of job in Ali akbar Akbar group

Pay structure, refers to the array of pay rates for different work or skills within a single

organization. The number of levels, differentials in pay between the levels, and the criteria

used to determine those differences create the structure. Ali Akbar Group have one in-house

compensation consultants who set up a pay structure consistent with the company's pay

philosophy or either train someone in how to set up a pay philosophy, in early years they use

to outsource this service.

Comparative ratio of the company:

Compa ratio (CP) is a salary that is expressed as a percentage of or indexed to the salary

range midpoint / market rate (salary / midpoint or market rate = compa ratio). The CP may be

used as an indicator of how an individual is doing against plan. If the CP = 1, the salary of the

individual is equal to the midpoint / market point (MP / MR). This may also be used to assess

incumbents in a job, job family or entire organization by dividing the collective salaries by

the collective MP / MR.

It was unable for us to calculate the compa ratio of entire organization so we have calculated

for few job levels and we will assume the result as the compa ratio of the company


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Job Level Current salary Market rate

Sales executive / sales man 20,000 18-20,000

Team Leader Performance 50,000 55,000

Hr Manager 80,000 100,000

Franchise Manager 50,000 45,000

Total 200,000 220,000

The compa ratio of Ali Akbar Group is less than 1 so they are on the below side as compared

to the Average market value of these job levels.

Critical analysis / findings and recommendations

The company is fairly doing well but there is always room for improvement after compiling this

report we have seen some problems of Ali Akbar Group these are as follows:

1. The company has no formal process of salary budgeting.2. Retention strategies are not practiced in the organization that much


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Annexure

Compensation at ali akbar group

Documents

Transcript of Compensation at ali akbar group