Al-Abbas Sugar Company: MBA Report 



Labour Unions


The labour unions through initally introduced for the benefit of the owrkers and society have them regative aspents they can be really disruptive for the organization at times beacause of their own politican motives and the failure to understand the expendieney of business.


The labour unions at Al-Abbas Sugar Mills showed a good example of how disruptive union can be at times. Initally during the early years of the organization the unions were formed and  were quite strong. they sparted praying to get their own way everywhere, and generally being a headache for the management end the owners. They  started  demanding a lot of things that were quite unreasonable. they were supported by an injumential local politican they ings readed disastous propertiong when the union people closed the Mills down and locked the managers etc. single then offices for a couple of days.


This was where the owners, who are seths decided to take action against the union people.  regotiated with the political leader supporting the union and through some pressure got him out of the way. After that  went to courts and spread a lot of money around. This way  were able to disohe the union and fire a lot union trouble makes. Through these people tried to fight back through the courts, the  seths handed everyting by spreading more and more money around without the support of their political badengs,  were sefeated.


After this, the owners held new election’s and got their own people elected from them owanwards the labour union is effectively hentralized and all the top people in the union are in the owners’ product with earch new election,  get their own people elected and in this way keep the union totally ineffictive. This is also called a pocket union.


If any of the workers tries to ereate any trouble, the owners policy is simple suspend the guy at the spot and spart proceedings to five him. Even though some of then actions are outright illega,  handle it by brings the related officials and couts. This way the fired people cannot do anything, because in the end, the seths have more money. Currently, all the workers are totally under the control of the management, and nobody dares to take a step out of line.


Organization’s Structure


Another thing that  have done to counter the threat of the unions is evident in the organizational structure of the company. What  have done in that  have made a lot of officers. People are a great many levels of officers. A lot of the people who were originally, workers, and still work on mercial jobs, are called officers. As a result nearly half of the company’s strength is made up of officers and, as we know, officers cannot from unions and can be fired on the spot. This means there a lot less people now who are eligible to from unions. Also, the management has increased the strength of its side by increasing its numbers.


Current Situation


The current situation is that the unions are totally under control of the management. Alobody can dare get out of line as we would be fired immediately. The owners have been a firm stance in this respect. One very noteable thing was that the management people we talked to were not willing to let us interview any worker or helper as  are called. they  simply could not be presuaded about in even through we tried very hard in this respect. Phere is a general atmosphere of jear on the workers which can be get in the plae. The place is in with an iron fist by the seths and even any  officer sympathetic to the unions is fired on the spot.


The Security Force


Another thing quite related to union angle is the structure of the security fore. I here are a lot of security personnel all around the place and secuity is very strict. The security function however is contracted out to a security time. this was very relevant imphications for the union problems. Unlike other companies, the security people here cannot from the union (because  are on contract) so,  are the managements frusted right  as. This eliments the us of having union people in security and at the same time is an additional help for the management.


These secuirty people are completely separate from the other employees of the organization. They can be trusted by the management the security head in fact, responsible directly to the General Manager.


Profit Shaming


The very importance benefit at Al-Abbas Sugar Mills is profit shaming. This can actually serve as incentive for the workers because this is really ependent on profit and that would make the workers work for it. In case of a profit under units scheme a total of 5% of the profit would be districbuted among the employees the percentage is divided upon by the management, but the profportions remain the same normally. The allocation is based in pay categories.


Category                                             Basic Pay                                Profit Share

  1. 1800 3224
  2. 2200 1612
  3. 3000 800


As can be seen from this the people with lower pays are gien more share in the profit. This can serve as a motivating factor among workers, assuring them of euqlity. Employees with basic pays over Rs. 3000 are not eligible for sharing in the profits.


Even though the orgnaization is ISO 9002 certified and granted that it s much better in most fields that the average units, Al-abbas Sugar Mils still a few every important things that were expected after the ISO 9002 certification.


Performance Appraisals


Any formal practice of such appraisals could not be found in any of the Mills that we visited. However, Al-Abbas seemed the most likely candidate in this regard. We were to be dissaponited even here as. We could find no formal presence of performance appreaisals. Each department head does keep abroast about the performance of all in people with the help of their immediate superiors. These inormal appraisals can head to newards  or punishment too. But the back of any procedures in this regard ineams that the practice would be in a very haphazard manner. And, in their way, it is very difficult to treat all employees fairly and majority and at the same time reward excellene.


Job Design/Redesign


Another notable omission is the practice of job design & redesign. This was specially expected after learning of the ISO 9002 certification, because a lot of employees is given on procedures and work how in the ISO. The job in normally designed by the immediate supervisor in conunction with workers in similar jobs and approved by the head of the department. Any redesign also takes the same route.


Employee Relations


In the content of the labour union problem, this aspect is very different than it could have been otherwise. Currently through the workers are totally at the mergy of the management, there are still some attentions by the owners to provide a good environment for the workers and initiate positive employee relations. This incidents provision of various benefits and incentives to the workers, which I have to accept are quite fan and reasonable. But at the same time, the owners are not wiling to give a single  inch about thediscriptine angle.




Khoski Sugar Mills




Khoskhi Sugar  Mills is a project of the Fauji Foundation Pakistan. It is one of the oldest Mills in the area of traditionaly has enjoyed a very strong positon. The Mills wre established inin the beginning they had almost a sort of monopoly in the area with no other competition. They had agreements with all care produce can in the area came to the first.


Currently the capacity of the Mills is              althoughit can still get enough came to satirly its capacity, its monepoly has been broken these days. It, along with the other Mills, has to tight for care in the area  however, its repintation for payments is very good, and therefore payments care rowers prefer to deal with it.


The Mills are situated at Khoskhi, a small own near Badin, which itself is around & honouses drive from Kakshi to the eat of it the roads in the area are really good because of the oil well divilling and the  presense of union taxas Pakistan . This helps a lot in the trnsportation for the Mills, as otherwise the area is quite indevelopment.


The Company has a very old plicy of giving loans to its supplies so that they can visit in their crops and come up with better crops. The problem here assis where these loan takes do not pay back the money they have borrowed the mills currently have millions and millions of rupees in outstanding loans.


The procurement area of the mills is generally around Khoski and Badin, but they also go as far out as Naurkot in tharparuar district. The Mills reputation for dependability is a big asset and people from all over normally do not have any  qualnr about giving their came to the mills even if they are very far away.


The Mills central command is with  the Fauji Foundation head office in Rawalindi. However the General Manager carries a lot of authority and handles the summaring of the  mills by univrsly.


The Colony


Khoski Surgar Mills have  a range housing colony at the premises. The colony has all kinds of facility for the employees living these. The colony is really huge even bigger than that of the Bawany Sugar Mills. All the permanent and retaince employees and given housing inside he Mills colony. Besides that some of the seasonal employees are also given residential facilities at the Mills colony.


The colony spans over a large area right besides the Mills, and has a lot of facilities  of every hand for he employees. This includes sports facilities like footbal grounds basketball courts and even a jodfit tennis court. All these facilities are provided to provide the employees with some limit of recreation and enjoyment because the lawn of Khoski in just a bazaar and offers no facilities of any type.


All the basic amemities are provided for free in the colony plan includes water, gas and electricity. There are also generators in case of electricity break downs, which are quite frequent in nural areas. Besides this, another important thing in the education of children. The colony has its own high school for children of the employees and the management in always trying to improve the standards of the school and the quality of the teachers despite the limitation that they face due to the backwardness of the locality. In addition if any employee wants to edueate his children in Badin, school  buses take the children there n the Mills expenses.


The management of the Mills has gone a long way to provide all types of facilities to notivate the employees and take up for the location problem. The employees are even provided reliclss at very cheap rates. A recent addition was the provision of a cable television network for the Mills. Around 8-10 chanels are provided to every house on cable. The Mills have made special arrangement with a Karadn based company for this.


The Personnel Function


The personnel department at Fauji Sugar Mils Khoski is very well organized and handled if we courpare it to the other Mills that we visited the personnel department is headed by the personnel manager lt. col. (Retd.) Gul Azhar, and comes directly made the Deputy General Manger. The personnel function follows a lot of practices that are considered necessary in modern orgnaization, as well as a lot of pracatices to make up for the different circumstances of the mills. A very interesting thing here is the seasonabity of the sugar industry, and how the employees are handed during off season.


Off Season activities


All the permanent and retaince employee are still  on the payroll during the off-season and need to be assigned some kind of work. Actiraly, the off-season though way less busy than the main crushing season, still has a lot of work to do for the employees and is not activally idea, as some might think. During the off-season there is only one shift as congared to there in the on-season the shift is from 7:30 am to 2:30 p.m. and all he workers attend the shift. so, in fact this is first like any routine day job in any office.


The work done during the off-season is manily maintenance work. All the machinery has to be owrked over and repaired to prepare it for the next season. That is why most permanent employee are in the mechamical /electrial and chemical departments. The maintenance work goes on right though the off-season.


The works in the quality control or chemical department are also working during the off-season. They have to be in then labs during  the office homes, and the of work they normally do is analytical and research oriented. They have to analyze all the previous years data and try to find ways to improve sugar recovery etc.


The came department is obviously very busy during the off-season they are going around the area prospecting and locating came growers for the working season. They have to build relationships with the growers so, their job earries on the year round.


Seasonal Workers


A lot of workers in the Mills are seasonal as explained in the table. There reasonal workes are normality working for the mills for previous seasons too. During the season, just a couple of weeks before the customing is due to start these workers arrive at the mills and rejister thenselves for the coming season The seasonal workes are converted from daily wage workers too in some cases.


Daily Wage Workers


A lot of daily wage workers are hired during the season to fuifill the demand for manpower. Most of these are in departments like loading unloading, sugar cane feeding, packaging etc. The advantge of these to the managemment is that they can be fired at will anytime they get out of live so, it is very easy to beep them disciplined the current wages rate for the daily wage workers is Rs. 80/- per day. Mostly, the incentives given to them are informal like for example they can go on unreported leave without in couring on them reords. The disbusinenment of their wages is done on a seeling basis.




Selection is a very imortant function of personnel management and in case of Fauji Sugar Mills they have their own dos and don’t based on their function weeds and the demands of the job. The selection is discussed below:-


Selection of Officers


The selection of officers is handled by the head office. They send out advertisemnts for any required posts and them take intenvents of the candiate. The head of the redevant department has to aprove of the selection. Some of the officers recruitment is also done form the addils but they have to be approved by the head ofice in Rawalpindi.


Selection of Workers

The selection of workers is a completely  different  thing al together all t he workers are lived at the Mills. There is in advertisement repaired as the people are lining up for jobs a long time before the season sparts. All recruitment is through informal channels like current employees word of month.


A notice is part ups about the job here the job be comes available. This is parked on the notice board at the entrance gate of the mills. Any prospections are then inteviwed by the personnel manger and in head of the velated department. The interview fasts the practical know ledge of the appliant and sperating them tips attitude expensions, and mental level are also observed during the interveiw. Another thing that is very important is rejecences. Almost us employee is were hired without good dependable rejerences.


All have hires are on probation for the first utree months. Another thing that very told is was that all whres are lired as daily wage workes at first. The after observation, and based on their performance they are given & seasonal or permanent statress. These serves as a safeguard in the seletion process.




Training  is another important  aspects of human resource management that is given due importance at the Khoski Sugar Mills. As soon as a worker is hired his training starts. The training is on the job and in carried out by an experienced worker in at same field. At the initial stages the performance of the worker in observed to see if he is doing all right and ot judge if he is lacking in any respect.




Apprenticipships are also used on a training foot as wall as a way to locate talent for the future. These apprenticeships last or around three months to seven a whole year depending in the type of job. If the appreciate performs well during the supprenticeship and is eazer to lean than, he is hired.


Salary Promotions


The salary structure is normaly decided in advance according to the agreement with the labour unions. The salaries are based on pay scales. There are eight pay scales in total and when a person meadres a certain pay scale he is paid the salary related to that pay scale.


The pay increases yearly for all pay sales by on amount known in the incrcent. This incenent in decided in an agreement b/w the labour union and the mills management. The labour union are always trying to get the increnent increeased.


Promotions at Khoski sugar mills are almost always granted on the basis of senority very rarely can you find any exception to union rate. The company follows a very strict promote from within policy and try not to have people from outside The exception to us is the top management which is sent directly by the lead is sent directly by the head office and are normally for tennures of two to three years.




The main incentives used at Khoski Sugar Mills are bounses. There are two kinds of bounses used here; the project bouns and project bounss is evidently a type of project shaming. This is discrtioany and can be decided by the manageemnt if it wants to share the projects with the workers.


The other termed of bounus is the prodeuction bouns. These bounus  is strpulated in the agreement between the management and the union and has to be declared regardless of project. The first bounus is paid at the total production of 5500 bounes of sugar. Theis is reard to one month bave salary and is paid to worker only. The ment bounses is at he production of 11000 tonnes or a differences of 5500 tonnes. This bounes is paid out to offiers as well as workers. All this next bounus are for the additional productuion of 5500 tounes of sugar and are paid to both workers and officers.




Khoski Sugar Mills provide a lot of benefits to within employees some of uses are the usual or reguried benefits while othrs are not required and may be umigee to these mills. First of all, they have a provident fund for the workers. This is at they rate of 10% of basic salary and is payable at the time of retirement. There is also life insunance for all employees. The medical expenses of all types of all employees one borine by the Mils too.


Another benefit that is not so common is a gratuity. Khoski Sugar Mills gives gratuity to its empoyees. This guaantity to its employees. This guantity is paid out as the pay for 53 days per year of service for each employee. The years of service through are limited between 5 and 15 the maximum \qantity tht an employee can get is for 15 years. The Mills also provide accomdation to all the its workrs including the season worker which is very rare.




Termination at Khoski Sugar Mills me handled by the personnel department. The General Manager has the absolute authority to terminate any workere. For officers autorization from the head office is required. Termination mostly owner due to disciplianry reasons. For workers, the personnel manager issues a showeause notice to the employee concerned. The employee has to respond to the notice. An in giving is ordered into the rderant incident after which if required a serval showcasue notice is issued. If the worker cannot reply to that one a satisfiactorly than e can be terminated. However, in most cases the worker go to and the union is able to get a stay for them. The management loses  out in then cse because they have unles of ethincs and do not bibe the concets.


For officers the procdure is very simple companied to this. They can be fired at will and they cannot manage thin in court because they he no union agreements to back them.




Discipline is maintained by the personedl manager and the general manager. They can give small punishments for smal officers to keep the owrkers in line. This can be in the from of a good talking to by the personnel manger or we can actually punish him like making him stand in pont of the ofice for the aftession. The basic worked follow is that of the angry . However with a lot of limitation. The personnel manager can keep on pressuring the cutprit after the incident so that it does not occur again in the sjucture. Another menthod may be to draw incentives and micremnts as a punishment.




Morale and intaltion is a very inportant factor that is given due important at Khoki sugar Mills. The ersonel manager takes care to keep all his employees in good spirits. For this purpose he can give anyone he meets words of eocouragement good working relations with the union re a unit in this care because it is against the under for the management to gather the employees and address them.


Doing with favours for the workers is also a way to keep them happy. /the management tries to accomdate the owrkers in this repect. The can also assange social events to keep the workers in good spirtits. For example they regulry arrange council evenings with people like Abida parveen etc.


Labour Unions


The labour union is prettey strong at Khoski Sugar Mills. The personnel manager deals with the union people. These are periodic meeting with the unin people usually after three months where they meet with the General Manger and the heads of departments and the heads of departments. At there meetings the union agenda is dicouned by point and decision taken with regards to any problems that they might have the labour unions current general security is Mr. Aziz Ullah Afghani who is also the GS of the Sindh Sugr Mills Labour Union. The has been in the game for a long time now. He was even inssued a warrant for in the tenure. Later he got himself indirected into the Mills by through pressure from the PPP government. We interivewed him and a lot interviewed him and lot of interesting rights came out of start meeting.


First of all owrkers are members of the union. The membership fees in a mnthly donation of Rs. 3/- to the union the general secretary is the real power in the union and the president is just synbothic the genral ecretary is generally resposible





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