Siemens Pakistan – Study of Management Practices

Company profile

Siemens Pakistan is the subsidiary of the Siemens Aktiengesellschaft (Siemens AG) which was formed in October 1847. Siemens was first known in this sub-continent in 1870, with the construction of Indo-European telegraph line, almost 11000 km long from London to Calcutta by Siemens.

 

In the part of the sub continent which is now Pakistan, the first Siemens office was established in 1922 in Lahore. Siemens Pakistan Engineering Company Ltd. Was founded in 1953 as a private limited company. In 1963, the company was converted into a public limited company and in 1978 it enlisted itself with Karachi and Lahore stock exchanges.

 

The company manages its business and manufacturing activities through its head office in Karachi and two regional branches at Lahore and Islamabad, contributing to the local economy through substantial indigenous content and transfer of state of the art know how in several engineering fields and in many other ways.

 

Siemens Pakistan is the largest manufacturer of the electrical equipment that includes a wide range of products. Its product line includes electrical motors of the different kinds and capacity, transformers, both power and distribution, Switch gears, includes low, medium, & high voltage and Diesel Generating sets.

 

Besides manufacturing certain electrical equipment Siemens Pakistan also provides a wide range of engineering and construction services, which includes undertaking of mega projects on Turnkey basis.

 

The Siemens Pakistan also has a very strong presence in the field of the telecommunications and data transfer. T.I.P. Haripur and C.T.I. Islamabad are few of the joint ventures with Govt. of Pakistan, were  Siemens has transferred their state of the art telecommunication technology for the development of the country. Siemens Pakistan is the leader in the production of the power and telecommunication equipment with its net profit for the current year after taxation is Rs, 21.9 million.

 

Siemens Pakistan also played major role in the introducing high tech medical equipment the hospitals in Pakistan they include Shoukat Khanum Hospital Lahore, Hayat Medical complex Peshawar, Children Hospital Quetta.

 

Siemens Pakistan keeps abreast of modern technology in several engineering fields of activity by sending engineers abroad for training and by drawing upon the tremendous expertise of Siemens Worldwide. The diverse aspects of industrial projects require advance planning with experience and technical competence, which the company provides as borne out by the large number of projects successfully implemented in the country. Siemens has thus been able to make a significant contribution not only in the field of engineering in Pakistan but has also lent a helping hand in the industrialization of the country and in improving its infrastructure.

 

Executive Summary

This report consists of two portions namely Organization at Siemens Pakistan and Human Resource management at Siemens Pakistan.

 

In the first section of this report corporate structure and organization at Siemens Pakistan is explained in detail. In this part of the report different fountains of the organization are discussed keeping organizational structure in focus.

 

The other part of the report consists of the Human Resource management at Siemens Pakistan. In this section the HR function is discussed in detail with regard to its definition that is the activities to attract, develop and maintain an effective workforce.

 

At the end of the report a questionnaire is attached. This questionnaire along with the interview with Mr. Naeem Uddin Wajid Manager HR Siemens Pakistan is used to gather information regarding H R management at Siemens Pakistan

 

 

Corporate Structure

 

Siemens Pakistan is a well-structured organization. The organization is basically divided into the different divisions based on the basic product and services offered by the Siemens Pakistan. Thus Siemens Pakistan is organized into the different divisions using Divisional Structuring Approach. According to the divisional structuring approach the different departments providing the similar output are group together to make a division.

 

The main divisions into which the Siemens Pakistan is divided are Telecommunications, Systems & projects, Power Engineering, Product & Services and Finance & Business Administration. These divisions are further subdivided into the different Business Units.

 

The organization of these divisions into the business unit follows the same approach of grouping together on the basis of similar output. The detail of the structuring is as follows.

 

Telecommunication Division

 

It has a solid position in the field of communications. To date more than 60% of 3 million telephones lines in Pakistan have been supplied by Siemens. More than half of these belongs to the state of the art digital EWSD systems. The EWSD switching system, which was first installed nationwide in 1987, is produced locally at Haripur Hazara by Telephone Industries of Pakistan (TIP) which also manufactures product of Siemens private communication technology like telephone sets. Similarly almost all the digital microwave equipment installed in the country is from Siemens. This equipment is produced in Carrier Telephone Industries ( CTI) an ISO 9002 DQS certified company. (first in telecon. sector in Pakistan) which also produces sophisticated, state of the art, optic fiber transmission equipment.

 

 

Systems and Projects Divisions

 

This division has a wide variety of the products and services to its credit. The business units that comprise this division indulge in different projects and services concerning Industrial and Medical projects. This division has been contributing to better health of the populace through supply and installation of medical equipment to government and private hospitals and clinics through out the country.  Some of the projects under taken by this division are SKMT Hospital, Children Hospital Quetta.

This division has also successfully completed the Automatic block signaling project in 1996. Work on providing Pakistan Railways with track circuiting at 94 stations is still in progress.

This division consists of the business units such as Medical Engineering, Industrial Projects, Rail Transportation System, and Solar

 

Power Engineering

 

This division provides the output in that is mainly concerned with the electrical power engineering. Some of the products and Business units are Power Generation, Transmission and Distribution, Transformers, Switchboards.

This division has played a significant role in enhancing the country’s capacity for generation, transmission and distribution of electric power. It has to date contributed to the addition of over 2,000 MW to the country ‘s generation capacity (over 15% of the country’s installed capacity), with another 500 MW under construction. Its contribution embraces engineering, manufacturing, erection, testing and commissioning of generation projects ( which include power plants based on hydro , steam, gas,diesel fuel and combined cycle technologies) as well as high voltage substations.

 

Products and Services

 

This division consists of business units that are engaged in producing the services and products that cover a wide range. Some of the main products of this division are Motors and alternator and DG sets etc. This division is also engaged in the rehabilitation of certain industrial complexes such as Putlam Cement in Srilanka.

Some of the business units this division is divided into on the basis of similar output are Diesel Generator sets, Motors and Alternators, Standard Products and Engineering & construction Services.

This division has played a vital role in the industrialization of the country through active association in the engineering, supply and installation of equipment, mostly locally produced and also, in many cases, in the planning and complete electrification of government, semi – government and private industries and enterprises like cement, fertilizer, textiles, chemicals, sugar, paper, steel, ship building, aviation, hotels, hospitals etc.

 

Finance and Business Administration

This division consists of all the central departments that are involved in providing services to the organization in the field of finance and Accounting. This division consists of the departments that include Finance and Accounting, Audit and Central Comm Services. These departments are called Central Departments.

Corporate Departments

In addition to profit generating centers Siemens Pakistan is also organized into some corporate departments. These departments provide support activities to the entire organization, such as planing, security, and human resource management. These departments are Planning & Development, Security & Industrial Relations, Human Resources, Quality, and Communication.

 

 

Regional Organization at Siemens Pakistan

The Siemens Pakistan is also organized on the regional basis it has its offices at Karachi, Lahore, Islamabad, Quetta, and Peshawar. These regional offices are organized in such a way to provide the services to the customer across Pakistan.

 

 

Management Hierarchy at Siemens Pakistan

The Siemens Pakistan has a very well defined hierarchy of management. This hierarchical setup divides the different responsibilities to different managers at different levels.

 

The organization chart depicts that Siemens Pakistan has relatively narrow structure in the top levels but towards the lower end that is towards the operation level the structure is quite broad, which indicates more managers close to operational level.

 

The structuring at Siemens Pakistan starts at the top with a Managing Director, who is the Chief Executive Officer. The CEO is followed by a number of General Managers, these GMs are basically the heads of the major divisions. The managers that are in charge of different business units follow these GM’s.

 

The managers on technical as well as commercial side assist each manager heading business unit. The Production and Planing Managers report to Technical Manager, while the both Sales Managers dealing with industries and dealers report to Commercial Manager.

 

The Production Manager is responsible for completing and executing an order on schedule. While the commercial manger makes sure that sales are on the right track

The division of the labor streamlines all the tasks, and this is one of the most significant factors in the organization of Siemens Pakistan.

 

Like any top of the line organization Siemens Pakistan has also chalked out a complete strategy for managing human resources, and applying these resources for the development of the organization.

 

Many factors has come to play the role while forming the human resource policies some of these factors are, Unionization, and Federal Legislation, etc. For instance a Federal Law requires all multinationals to have special persons (disabled people) to be atleast 1% of their total employees. Similarly other social and economic factors are also considered while forming human resource policies at Siemens Pakistan. These policies are made to keep the organization in harmony with the social and culture bounds of the employees, so that they feel comfortable at their work place.

 

The policies were thus framed in order to tackle different aspects of human resource management, keeping in view the emerging trend in technology and rapidly changing work force requirements.

 

Basic Aims and Objectives

 

The basic aims and objectives set by the management of Siemens Pakistan with regard to the human resource management are as follows.

 

  • To hire a work force that that suits the needs of the organization

 

  • To make the hiring and recruiting process transparent and standardize, so that only needed personnel is hired.

 

  • To maintain the required work force through a system of hiring and retiring.

 

  • To encourage work force through rewards and bonuses.

 

  • To take care of the diversity in order to obey social obligations of the organization and maintain the harmony among the diverse employees.

Recruiting and Hiring

 

 

Hiring and recruiting are the basic features of human resource management and as such are regarded one of the most important aspects of human resource management.

Siemens Pakistan has streamlined its hiring and recruiting procedures.

 

Work Force Requirement

 

As Siemens Pakistan is basically an engineering oriented organization it not only has to hire the talented and skilled engineers and technicians, but also has to recruit MBAs and business and commercial experts to conduct its business in a competitive environment.

 

Selection and Recruiting

 

Siemens Pakistan hires and recruits employees on the basis of the demand, which is determined while budgeting annual requirements.

 

Siemens Pakistan has well defined selection procedures. These procedures include paper and pencil test, an interview with the top manager alone and then the panel interview.

The selection process starts with the application form. Which are required to be filled and delivered to Siemens Pakistan before a due date. Then the applicants are required to give a written test; the candidates that clear the written test are further considered for the interview either with a panel or with a respective manager. If a candidate clears this interview he or she is appointed.

 

Training

 

The successful candidates are then subjected to a through training program, which makes them completely familiar with the practices followed by the company.

During the training the trainees are sent to the different departments of the organization in order to expose and familiarize them to the business environment of the entire organization. The training period for different employees varies according to the nature of the job they likely to handle. The different periods for different trainees are listed below.

  • Engineering Trainee will take 18 months on training.
  • MBAs will take 6 months on training..
  • BBAs Training lasts for 8 to 12 months.
  • Electrical and Mechanical Technicians will take 8 months on training.

During the training the performance appraisal for each trainee is made after each quarterly. After completion of the training a performance review is made and if the performance is satisfactory then the trainee is appointed as permanent employee.

 

Training Old Employees

 

In order to keep its employees at par with the technological and business development Siemens Pakistan arranges for the adequate training of its employees.

The different modes adopted by Siemens Pakistan include, sending employees abroad mostly to the Federal Republic of Germany, or arranging for the training of the employees at home, as and when need arises. One such case is the training of employees to use SAP application for data automation.

 

 

Retaining Effective Work Force

 

Siemens Pakistan has a total of 1500 employees on its payroll, out of which 800 are included in the office staff that is white collar workers, while there some 700 technicians and mechanics.

 

Wages and Salaries

 

Siemens Pakistan has a well-defined structure of wages and salaries. This structure depends upon nature of the job and seniority of the employee.

The following table depicts salaries of trainees and newly appointed employees.

 

 

Category of Trainee/EmployeeSalary During Training

Rs

Salary After Appointment

Rs

MBAs8000                  14000
Engineers800014000
Masters in Commerce600010000
Bachelors in Commerce/Business45007000
Diploma Holders40007000

 

The salaries offered by the Siemens to its new employees is comparatively less but as the employees climb up the organization ladder their salaries increase with a even pace. The employee turn over is relatively less, indicative of the fact that the employees at Siemens Pakistan are satisfied.

 

 

Rewards and Bonuses

 

In order to encourage the employees and give them the feel that they have the rightful share in the company’s profits. They are rewarded with the bonuses and other benefits.

The outstanding employees that help company generate profits are also rewarded through promotions or special bonuses.

This system of rewards and bonuses is very helpful in motivating the employees, as they are assured that their hard work is being noticed and will be appreciated.

 

Compensation

 

The rights of the employees are very much ensured by a complete package of compensation, chalked out by Siemens Pakistan. Incase of a workplace accident the employee is entitled to the a fund called Hospitalization fund. And God forbids that if any worker dies his family is supported by the company and his dues are released as quickly as possible.

 

All these practices are aimed at creating the sense of safety and belonging among the employees that they matter a lot for their company and as such they are motivated to work hard for the success of the organization.

 

The Siemens Pakistan has an elaborate plan for the benefits of the retiring employees. They are given a reasonable amount of money on retirement and sometimes given other assignments to work for. The maximum age set for retiring an employee is 60 years.

 

Work Place Diversity

 

Siemens is basically a German company. It has a number of employees belonging to different nationalities and cultures. As far as Siemens Pakistan is concerned most of the employees working here are Pakistanis but there are also some Germans working for Siemens Pakistan.

 

As Pakistan is a multi cultural country consisting of four, basic ethnic groups that is Pushoon, Punjabi, Baloch, and Sindhi. So it becomes very necessary for any organization working in Pakistan to keep harmony among its employees. And if the organization consists of a larger operational base with many blue-collar workers, the maintaining of diversity is a big challenge.

 

In order to create congenial and friendly environment an the work place Siemens Pakistan has a variety of programs.

 

Female workers are an active part of the work force at Siemens Pakistan. All the necessary arrangements are made for the female workers in conformity with the social and cultural values of the Pakistani society, so that they feel secure while working at Siemens Pakistan. Few such steps in this regarded include providing transport facility to them and allowing female workers to lunch at executive mess.

 

The special persons are given the tasks that they can easily accomplish. One such special person is a telephone operator at Siemens Pakistan. Another is an engineer working for design department of business unit motors and alternators.

 

 

 

Creating Congenial and Friendly environment

 

In order to create a friendly and congenial environment at the workplace the management has chalked out different plans. Some of these plans include going out on picnics and having lunch together. Also to inform the employees about the current events taking place in the organization Siemens Pakistan has a periodical by the name of “SIEMENS KI DUNYA”.

 

 

Questionnaire

 

In order to gather information for this report a questionnaire was prepared. Mr. Naeem Uddin Wajid who is the manager Human Resource Department at Siemens Pakistan was kind enough to answer this questionnaire.

 

The questions are as follows:

 

  1. What is the total number of employees at Siemens Pakistan?

 

  1. Total number of managerial staff

 

  1. Is hiring subject to work demand or any other criteria?

 

  1. Does Siemens Pakistan have a recruiting policy state its main features?

 

  1. What are the methods (selection procedures) employed to select new employees?

 

  1. What is the policy for maintaining workforce diversity?

 

  1. Is there any arrangement for maintaining a cordial relationship among employees?

 

  1. How outstanding employees are rewarded?

 

  1. Is there any system of annual rewards and bonuses?

 

  1. Incase of work-place accident how an employee is helped?

 

  1. Is there any retirement policy state its important features?

 

  1. Is there any post retirement benefit program state its main features?

 

  1. Is termination used as tactic to check work force efficiency and effectiveness?

 

 

 

 

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