Contents

Brief overview of PIA

Recruitment and selection in PIA Eligibility Criteria Selection Procedure Recommendation and conclusion

Training and Development in PIA Functions History of PIA Training Centre Courses offered at training Conclusion Recommendation

Performance Management System of PIA Performance in view of PIA Performance Measures and Standards Recommendation Compensation in PIA Conclusion Recommendation

Brief Overview Of PIA

Pakistan International Airlines Corporation, more commonly known as Pakistan International Airlines or PIA, is the flag carrier airline of Pakistan, based in Karachi. It is the 31st largest airline in Asia, operating scheduled services to 35 destinations throughout Asia, the Middle East, Europe and North America, as well as a domestic network linking 23 destinations. Its main bases are Jinnah International Airport, Karachi, the Allama Iqbal International Airport, Lahore and the Benazir Bhutto International Airport, Islamabad/Rawalpindi. The airline's secondary bases include Peshawar International Airport, Faisalabad International Airport, Quetta International Airport and Multan International Airport, from which it connects the metropolitan cities with the main bases, the Middle East and the Far East. The airline is owned by the Government of Pakistan (87%) and other shareholders (13%). It employed 18,043 people as of May 2008.

Mission Statement

“As a symbol of national pride, we aspire to be a choice airline. Operating profitability on modern commercial concepts and capable of competing with the

best in the International as well as the domestic market”

PIA’s Vision “To be fiercely competitive, consistently exceeding customer expectations and be

the choice employer that embraces modern technology in all spheres of its activities.

Privatization in PIA PIA is owned by the government of Pakistan. In the late 1990s, the Government of Pakistan considered selling the airline to the private sector due to the persistent losses suffered by the airline. The Government announced the privatisation plans but they were never implemented. Several steps towards outsourcing of non-core business have been initiated.

Financial Performance During the first quarter of 2007, the airline achieved a 5% growth in overall revenue mainly due to increase in passenger traffic. The revenue growth was lowered by a 10% reduction in cargo revenue. The EU ban on PIA in March 2007 reduced the revenue growth because only the Boeing 777 was allowed to fly to Europe. Many of the European routes were put on hold until the airplanes were repaired and brought up to EU standards. The impact of the 2006 salary rise, increased cost of leased airplanes, and higher maintenance cost of the PIA fleet increased the overall operating expenses by 19%.

Marketing and Sponsorship

Pakistan International Airlines (PIA) supports a first-class cricket team that plays in the ABN AMRO Patron's Trophy in Pakistan.

PIA is also sponsoring the Pakistani team for the A1 Grand Prix. PIA also promotes the Shandur Polo Gala, that takes place every year in the

Chitral and Gilgit regions of northern Pakistan during the summer period. PIA is one of the official sponsors of the "Destination Pakistan 2007"

festivals.

PIA also has its own Boy Scouts Association (PIA-BSA) working in partnership with Pakistan Boy Scouts Association. After the earthquake, PIA-BSA was working in partnership with other charity organisations to provide relief help.

PIA Planetariums located in Karachi and Lahore are owned by PIA, which enable the public to see static aircraft as well as astronomy shows.

PIA Horticulture, set up in 1996, provides flowers for display in PIA's offices and for a range of events, winning several awards and accolades at flower exhibitions across the country.

PIA also supports non-profit organizations within Pakistan such as; Al-Shifa Trust, Zindagi Trust, The Citizens Foundation and Sindh Institute of Urology and Transplantation (SIUT).

Achievement and Recognition

First airline from an Asian country to fly the Super Constellation. First Asian airline to operate a jet aircraft. First Asian airline to be granted maintenance approval by the US Federal

Aviation Administration (FAA) and the Air Registration Board, predecessor of the British Civil Aviation Authority (CAA).

First non-communist airline to fly to the People's Republic of China, and operate a service between Asia and Europe via Moscow.

First airline in Asia to induct the new technology Boeing 737-300 aircraft. First airline in the world to induct the Boeing 777-200LR, the world's

longest range commercial airliner. First airline in the world to take delivery of the Boeing 777-200LR

Worldliner (Longer Range Variant). Pakistan International Airlines Flight Services Department was awarded the

ISO 9001:2000 certification award during May 2006. First airline in Pakistan to operate a flight with an all female crew at

command and in the cabin. First airline in the world to operate the Boeing 777-200ER, 777-200LR and

777-300ER altogether - all the three variants available on the market. PIA Flight Kitchens in Karachi were awarded the HACCP Certification.

RECRUITMENT AND SELECTION PROCEDURES

Recruitment and selection in PIA

Applications are invited on the prescribed Form available (free of cost) in PIA Recruitment & Placement Office at Karachi and in PIA Offices at other stations and also on PIA website. www.piac.com.pk. Vacancies are announced on all the local news paper and the PIA official website.

Eligibility Criteria

Qualification

The qualification that is compulsory for applying in PIA is started from intermediate degree and end up at to graduate degree and this very from job to job. As one of the employees Amir told us in his interview. “PIA have dropped the required level of education from a graduate degree to an intermediate degree”

Age Requirement

Requirement for the age is also very from post to post and its most probably depend upon the experience required for a specific job. But generally the age requirement for PIA is ranging from 19 to 24. “The age barrier has also shifted upwards, meaning that a candidate must be a minimum of 19 years old and a maximum of 24,”

Physical Requirement

Physical requirement for the candidate of PIA is also differ from gender to gender. The minimum required height is 5 feet, 6 inches for men and 5 feet, 2 inches for women, with proportionate weight.

SELECTION PROCEDURE

Candidates want to join PIA are go through a strict selection procedure before being allowed to become the part of the PIA. Normally three types of the tests are conducted by PIA for selecting a candidate. Following are the tests that are conducted

1-Physical Test

Physical test is considered the first selection test in which the interviewer determines that either candidate is full filling the physical requirement for the job or not. “Their skin quality, height and weight are noted in the first interview session,”

2-Grooming Test

If candidate selected in the first interview, the hopefuls take a grooming test. Here, men and women present themselves in a manner, both physical and behavioral, befitting the job while women’s make-up skills are also checked.

3-General Test

Once the grooming test is cleared, the candidates’ general knowledge is tested in written and oral tests. These tests are some times based on brainstorming. Now days this selection tests are administered by NTS.

The selected candidates attend an intensive three to four week training course which is organized by the airline since there are currently no institutes in Pakistan offering training courses for flight attendants. During this period, the selected candidates are trained to handle emergency situations such as evacuation and hijacking. They are also given basic training in first aid and are taught to deal with problematic passen.

Recommendation and Conclusion

Employment opportunities would be on non-discrimination bases. Means hiring decisions must be made without regard to race, gender, marital status, religion, age, national origin, disability, or other prohibited factor.

Encourage all qualified candidates to apply for employment but select only those who fulfill the requirements of the given job; but the selection should be honest.

Organization should not have inflexible quota system at the expense of quality.

Diversified the staff for the betterment of an organization.

Qualification or criteria given consideration in the hiring process may include education, training, experience, skills, aptitudes, and general ability, as well as qualities such as motivation, ability to work with others, etc.

Do have temporary hires, i.e., when the position is for a term of twelve months or less with no expectation of the possibility of renewal.

Use the rank and regular or non-regular title that is most likely e.g., if you think you will hire an assistant professor on the professional practice track but want to leave open the possibility that you might find someone perfect for tenure track, enter the job code for professional practice assistant professor, as it better identifies the position you are likely.

Committee that is composed should have reasonable representative of hiring unit. In most instances the Committee should have three to seven members. Membership may include faculty, staff, and students from any department, as well as alumni or other outside constituents when desirable. Optimally, the Committee will include persons of both genders and where practicable minority group members as set forth. All members of the Committee must be provided the opportunity to participate fully in the search and screening activities.

Advertising of a position is generally required in order to make sure that access to information about the vacancy is widely disseminated. Ads which

merely refer readers to a Web site or ask the reader to telephone for a full job description should not be used. Before a position is advertised or re-advertised, the ad and/or job announcement must be approved by the authorities.

Minimum qualification must be clearly stated. Preferred or desired qualification beyond those minimally acceptable may also be specified.

TRAINING & DEVELOPMENT IN PIA

Training and Development in PIA

PIA has a leading Airline Training Institution. It is the mother organization to develop the career in Airline Industry. PIA offers Airline Training in all areas of the Airline Industry. PIA has one of the most advanced Airline training infrastructures approved by local and international regulatory authorities such as CAA, ICAO and IATA. The PIA training center’s courses are based on unique standards-based curricular designed to impact knowledge and best practices in all over air line industry. From pilot to air traffic control personnel, the PIA training centre has been instrumental in providing training to professional from over 30 airlines and associated global agencies.

Functions

To develop and conduct quality training as per the requirements of user departments and regulatory authorities

To maintain centralized training database of all PIA personnel for organizing HR activity

To maintain regular contact with vendors regarding new functionalities, modifications and additions to update training programmes and train the instructors

To formulate criteria which will enable the training of PIA personnel to achieve excellence in their respective fields/functions

To conduct courses, workshops, seminars, workouts, conventions, and to present papers so as to make PTC prominent in aviation training, particularly in this region

History of PIA Training Centre

PIA Training Centre, Karachi-an institution of comprehensive instruction dedicated towards imparting quality training in all the major areas associated with civil air transport. The centre is housed in a three-storied spacious building, essentially self-contained in facilities and centrally air-conditioned. It is situated about 300 yards from the Corporate Head Office building of PIA.

The prestige and esteem that the Training Centre enjoys has been a result of tireless efforts expended, since the very inception of PIA in 1956, in making the programs of study worthy of its name. Training has been offered for PIA employees as well as for other airlines' staff intending to work, or already working as members of the cockpit and flight service crew, as passenger service and marketing staff, and as mechanics and engineers, etc. It was in 1960 that all training was amalgamated under one roof at the Hotel Midway House, Karachi. The Centre was moved to its present premises in October 1975.

Specialist instructors are assigned at the Centre for imparting rigorous training to those who fly, and to those who service and maintain various types of aircraft (B-747-200, A-310, A-300, B-737, F-27, Twin Otter, B-777). The training aids and equipment used are the latest. The methods of knowledge and skill transfer, adopted at the PIA Training Centre, are varied all pragmatic and useful. Classroom lectures are augmented by group discussion, observations, experiments, simulations, case studies, etc. Study tours to a number of PIA facilities are regularly conducted and seminars on topics of general interest are frequently convened.

Training facilities available within the airline also include flight simulators which are used in the Transition and recurrent Training of pilots and other operational crew. The equipment here includes: a cabin service procedures trainer, A310 Flight Simulator, 747-200 Flight Simulator and B743 FFS with RB211 Engines also A-310 Video & Audio Computer Based Instructions (VACBI ) Systems. These are largely supplemented with apprentice workshops and laboratories for new entrants.

During the past, for many years the PIA Training Centre has also been instrumental in rendering training to a large number of pilots, engineers, flight stewards/stewardesses, traffic and sales personnel from over 30 airlines and associated agencies worldwide, mostly from Asian and African countries.

Courses offered at training

PIA offers the highest standard of aviation training at very economical terms and even the stay in Karachi is in-expensive. The courses offered to the trainee are depending on the need and the requirement of the employees. Broadly speaking there are five types of training available for the employees .

1-Customer Service

This type of training is provided to the employees who are directly dealing with the customers like air hostess, customer service staff, marketing staff etc. training is compulsory for the newly joined employees as well as need based employees. Following training comes under the umbrella of the customer services.

Flight Service Marketing Passenger Service

2-Engineering & Maintenance

In engineering & Maintenance shed, following types of training exist. Such training is provided in the technical school of PIA by the engineers. Latest equipment and procedure are being used to train the employees.

Apprentice Aerospace Avionics

3-Flight Operations

Such training is provided to the pilots in virtual environment so that risk may be reduced while making real time operations.

4-Information Technology (CBT)

PIA provides training to their employees so that they can run properly the information system based on oracle and SAP.

5-Management

Management staff plays a key role in PIA. Stress Management, Team work, leadership, skill building and other such traits which are necessary for a good manager, PIA arrange seminars and workshops to train their staff.

Conclusion Theoretically speaking, PIA provides one of the best platforms for training and development but in reality things are little bit contradicting. As far as technical training is considered since the start of PIA there are four major incidents which are due to the technical mistakes by the employees. In the same way if we talk about the interpersonal skills there are a lot of annoyed customers due to the unsatisfactory services of customer services representatives. Same there are late flights, cargo problems, which are commonly held to the mistake of the staff. But as I have told earlier in general all the things are well written and documented.

Other things which I come to know that employees at management level don’t take the training serious just took it as a formality and pay little interest towards training program.

Recommendation Orientation of the new employee is very much necessary in this session management should tell him about the background of the organization and about the future goals. First of all PIA should introduce training and development programmes consist of five steps:

Need Analysis

Instructional Design

Validation

Implementation

Evaluation

It should focus more on technical training. Technology can be one of the competitive edges for PIA. Just introduction of Boeing 07 are not enough, personnel should also align to achieve the strategic goals.

Emphasis on the customer care department should be made. It is the department which can create the good or bad image of that particular company. Apparently in PIA case it looks like that the customer representatives are not train enough that’s lead to the annoyed customers. Individual training program should introduce beside this 360 feed back will also work well for the good name of PIA.

Management should make realize to the employees that the training programs are for their betterment as well as for the company beside this a proper feedback should be there after training.

Training should not take as a formality; it should be on need based by proper evaluation of the employees.

There should convene an achievement test in which management can analyze that the capability of the employee that how much training effective for employee.

PERFORMANCE MANAGEMENT SYSTEM OF PIA

Performance Management System of PIA

After conducting web-assisted interview of HR manager regarding the evaluation of employee’s performance, how they measure, how they set standards and when they are evaluated. We were guided about PIA management. According to them, they responded that preliminary their was no proper system regarding employee’s evaluation and performance. But now we are improving and changing our strategy and focusing on employees’ performance and their task respectively. The effectiveness of any appraisal system depends on the cooperation and ability of the immediate supervisor. Performance appraisal is an ongoing process of communication between the supervisor, who is trained and assisted by human resources staff, and the employee. It’s too much difficult to measure the employee actual performance. Compare the performance of the employee being appraised with the performance of all individuals who have performed the same job, keeping in mind the requirements of the job. We assess employee’s performance by seeking time, situation and behavior of employee by performing their task: like Graphs Rating scale and Paired comparison methods. We do not focus only one method because one method can’t be so appropriate for evaluation. When an employee is performing well, we do appreciate him/her to motivate and to improve their performance.

Following are few simple guidelines that will help facilitate constructive discussions during the actual appraisal meeting.

1. Put the employee at ease. Begin the meeting with positive general friendly conversation. Describe the purpose of the meeting. 2. Focus the meeting and discussions on objective job-related behaviors. 3. Actively listen to the employee’s feelings regarding his/her performance. 4. Do not argue with the employee. 5. Ask open-ended questions to stimulate discussion. 6. Close the session on a positive note if at all possible

During the evaluation every organization faces some problems that effect employee’s performance. Some of them confer with you are:

1. The Halo Effect

Allowing one highly favorable (or unfavorable) employee behavior or characteristic to affect judgment about the entire appraisal ignores other employee strengths and weaknesses.

2. Not Knowing Employees

Unfortunately, many supervisors don't really know their employees or the quality of their work. Such evaluations aren't credible.

3. Overemphasis on Isolated Events

A particularly recent or significant event may skew overall judgment of an employee. Take informal notes about employees (both good and bad things) throughout the year to ensure your evaluation is based on the entire appraisal period - not just what happened last week.

4. Appraisal of Potential Worth

When managing a new or inexperienced employee make sure you rate her on actual job performance, not on what she might become. Evaluate the employee based on current results and action. You can use comments to address her potential.

5. Evaluating Attitude

While we all are forced to deal with employees' attitudes (whatever that means!), attitudes are basically impossible to evaluate and even harder to change. Focus on results and objective, observable actions. They're easier to complete and much more readily justified.

6. Ignoring Employee Feedback

Asking employees for input only to ignore their comments can be very damaging. It makes evaluation meetings much less effective, and communicates to employees that while their ideas may be asked for they're not listened to or acted upon.

Performance in view of PIA

Performance Management should be an ongoing activity consisting of regular, timely, productive feedback and active coaching.

Performance Review is an annual process that formally documents performance and identifies ways to help employees continue to contribute to achieving PIA’s mission and to provide staff with personal and professional growth opportunities.

There are essentially two components to this program:

Look Back

reviewing the past year, discussing how the staff member performed and giving constructive feedback .

Look Ahead

Identifying specific ways in which the staff member could improve performance, build skills and competencies, and/or take on additional responsibilities and setting goals and objectives for the coming year.

Setting up a good performance management system doesn't happen overnight or by calamity. You need to consider its design and carefully plan how it will work before managers begin using it to evaluate employees.

A performance management system should provide employees with these four basic benefits:

1. A clear understanding of job expectations

2. Regular feedback about performance

3. Advice and steps for improving performance

4. Rewards for good performa.

Updated Job Descriptions

Job descriptions should clearly describe the employee's current duties and performance expectations. Position descriptions should be specific, clearly defining the job function, required skills, deadlines and goals, and should delineate expectations for the employee's relations with peers and customers. Keep job descriptions current, especially during times of organizational change. Rapid growth and downsizing inevitably add new responsibilities and shift employees' workloads.

Performance Measures and Standards

Once you have job descriptions in place, you need to establish performance standards that describe what constitutes below-average, average, and above-average performance. Start by thinking about the best- and worst-case scenarios until you reach realistic standards for measuring performance.

Next, determine how you're going to measure the expectations outlined in the job description. This requires both objective and subjective methods of assessment. In some situations it's easy to gauge performance by looking at the numbers: for example, how many new accounts an employee brought in or how many products an employee assembled. Quantifying an employee's coping skills, customer service skills or attitude is much more difficult. Some managers also have biases or poor evaluation skills. Establish clear guidelines and measures that eliminate potential bias and prevent evaluators from subjectively determining what constitutes excellent and unacceptable behavior.

Evaluator Training

Research shows that managers with poor communication or interpersonal skills are often the downfall of a company's otherwise sound performance management program. All managers need training on how to communicate and how to conduct fair, nonjudgmental and consistent appraisals. An effective performance management system will administer training to managers before they conduct their first reviews.

Guidelines for Improvement

Institute basic policies to cope with employee weaknesses and poor performance. Decide if you'll provide training or mentoring for employees exhibiting subpar performance. Set guidelines that outline how long it should it take an employee to improve and what steps will be taken if the employee fails to show improvement.

Employee Input

Seek and evaluate staff suggestions for your performance management program. Incorporate employee input into your program or system as needed.

Recommendation

Appraising employee performance is an important component to the human resource management function. The performance appraisal is a formal meeting between a manager and employee. Its purpose is to improve the employee’s performance by discussing and documenting these three areas:

• Recent performance (that which has occurred since the last appraisal) • Improvement objectives (to target future performance) • Development objectives (also to target future performance)

Recent Purpose

Using performance standards to appraise recent performance gives consistency to the entire management process. It works like this:

You and your employee establish the standards before measuring. You measure their performance according to the standards. Based on what you find, you praise or correct (coach) your employee by

comparing their behaviors to the standards. You summarize their work for the year by rating their recent performance

according to the performance standards.

Improvement Purpose

Identifying improvement objectives starts when you list several areas that need improvement. From this list, you and your employee agree on the top one to three priorities. Then together you write:

• Each objective.

• Then list specific actions the employee will take to meet each objective.

• Then list a deadline for each action.

Development objectives

A development objective is created in the same way as an improvement objective. The development objective is designed to help the employee cultivate skills beyond those required to meet the performance standards. Its purpose is to develop the employee’s career path and prepare the person for promotion. To identify a development objective:

• Make a list of several areas the employee can cultivate.• Then list specific actions the employee will take to reach each objective. • Then list a deadline for each action.

There are some useful tips if followed in the right manner, will be fruitful to every organization. It can be said that it is only performance appraisal which can help an organization to design better strategies and so train and motivate the employees to effectively work towards it.

Communicate the performance appraisal. Conduct meetings before the performance appraisal. Take feedback after the completion of performance appraisal process. Conduct performance appraisal from the perspective of training employees. Performance appraisal should be a measurement of motivation.

360 Degree Feedback

360 degree feedback, also known as 'multi-rater feedback', is the most comprehensive appraisal where the feedback about the employees’ performance comes from all the sources that come in contact with the employee on his job.

360 degree respondents for an employee can be his/her peers, managers (i.e. superior), subordinates, team members, customers, suppliers/ vendors - anyone who comes into contact with the employee and can provide valuable insights and information or feedback regarding the “on-the-job” performance of the employee.

Self appraisal gives a chance to the employee to look at his/her strengths and weaknesses, his achievements, and judge his own performance. Superior’s appraisal forms the traditional part of the 360 degree appraisal where the employees’ responsibilities and actual performance is rated by the superior.

Subordinates appraisal gives a chance to judge the employee on the parameters like communication and motivating abilities, superior’s ability to delegate the work, leadership qualities etc. Also known as internal customers, the correct feedback given by peers can help to find employees’ abilities to work in a team, co-operation and sensitivity towards others.

Self assessment is an indispensable part of 360 degree appraisals and therefore 360 degree Performance appraisal have high employee involvement and also have the strongest impact on behavior and performance. It provides a "360-degree review"

of the employees’ performance and is considered to be one of the most credible performance appraisal methods.

360 degree appraisal is also a powerful developmental tool because when conducted at regular intervals (say yearly) it helps to keep a track of the changes others’ perceptions about the employees. A 360 degree appraisal is generally found more suitable for the managers as it helps to assess their leadership and managing styles. This technique is being effectively used across the globe for performance appraisals. Some of the organizations following it are Wipro, Infosys, and National Bank of Pakistan etc.

If PIA will use the modern techniques of the appraising the employees they will get maximum output of the employees. And PIA can reward its employees very well.

COMPENSATION IN PIA

Compensation in PIA

PIA believes that they can use compensation as a key tool to recruit and train employees, increase and maintain morale/satisfaction, reward and encourage peak performances, achieve external and internal equity, reduce turnover, and modify practices of unions.

According to the Interview conducted, PIA employee believes that compensation and retention of employees is a common goal shared by everyone. Morale and job satisfaction are affected by compensation. In an attempt to save money, employers may opt to freeze salaries or salary levels at the expense of satisfaction and morale. Conversely, an employer wishing to reduce employee turnover may seek to increase salaries and salary levels. He also added that compensation may also be used as a reward for exceptional job performance. Examples of such plans by PIA includes: bonuses, commissions, stock, and profit sharing, gain sharing.

We do have a clear picture of the compensation components that our PIA organization has discussed in many meetings yet we have to consider their full implementations with time. These include

Job description Job analysis Job evaluations Pay structures Salary survey

A critical component of both compensation and selection systems, job descriptions define in writing the responsibilities, requirements, functions, duties, location, environment, conditions, and other aspects of jobs. Descriptions may be developed for jobs individually or for entire job families. Job analysis techniques include the use of interviews, questionnaires, and observation. A system for comparing jobs for the purpose of determining appropriate compensation levels for individual jobs or job elements. There are four main techniques: Ranking, Classification, Factor Comparison, and Point Method. Useful for standardizing compensation practices. Most pay structures include several grades with each grade containing a minimum salary/wage and either step increments or grade range. Step increments are common with union positions where the pay for each job is pre-determined through collective bargaining. Collections of salary and market data. May include average salaries, inflation indicators, cost of living indicators, salary budget averages. Companies may purchase results of surveys conducted by survey

vendors or may conduct their own salary surveys. When purchasing the results of salary surveys conducted by other vendors, note that surveys may be conducted within a specific industry or across industries as well as within one geographical region or across different geographical regions. Know which industry or geographic location the salary results pertain to before comparing the results to your company.

As said by one of the employee;

“Principles of Compensation Discussed Compensation will be perceived as fair if it is comprised of a system of components developed to maintain internal

and external equity.

After questioning about the types of compensations the PIA employees are getting, one person replied that we do know many types of compensation aspects but those we receive include:

Base Pay Commissions Overtime Pay Bonuses, Profit Sharing, Merit Pay Stock Options Travel/Meal/Housing Allowance Benefits including: dental, insurance, medical, vacation, leaves, retirement,

taxes...

PIA follows a proper compensation plan for its employees by having a proper outline of the budget, target and the objectives to be met. It than design the compensation program including: whether the position will be permanent or temporary, who will oversea the program once it is established, and the cost of consultant reviews. The compensation philosophy is also considered essential part of PIA compensation programs. It defines the pay structures for all level of employees and whether to set pays above or below market level. PIA holds a

proper job analysis of all employee levels; and evaluates jobs on the basis of above mentioned results. Jobs are ranked and the grades are determined; resulting in a appropriate salary structures and compensation objectives. The program is then monitored through feedback from managers. If their exist any flaw, it gets revised by the good authorities of PIA.

CHAIRMAN PIA’S ADDRESS ON VITAL POLICY ISSUES OF BUSINESS PLAN, INDUCTIONS, SALARIES AND REVENUE MANAGEMENT SYSTEM

Karachi, 20th March, 2010: Chairman PIA Mr. Tariq Kirmani has addressed following Annual Message to all PIAC employees as regular feature of established HRM practices and team-based output in public interest. The text is listed below for information of our values readers since it touches vital policy issues:

“I feel privileged to lead an organization of such a hard working and variously skilled human resources that you are. With this strength that you provide PIA, I can say with a great deal of confidence that PIA has a bright future that will certainly be evident in reality in a very short span of time, provided we remain focused. Please consider, had it not been for the rise in fuel prices, the highest ever in history, and had the fuel prices remained at 2007 level, your airline would have made a massive Rs. 4.8 billion profit in the last two years. We are indeed well on our way, as slowly the system and processes that we are setting up with your help, begin to bear fruit. It is well worth recalling some of these initiatives that are now in place and focus on our vision and our 3C’s policy of convenience, comfort and competitiveness, with a smile!

I would like to take this opportunity to brief you on the numerous things and events that have taken place since my last communication with you, so that you are aware of PIA’s point of view on all matters of concern to PIA.

The first most important thing that has happened is that the human and material resources of PIA have both been enhanced and restructured organizationally. Finally, we have a fleet plan that is the basis of any airlines business plan and determines the human and material resources that will be required to implement it. The Board of PIA has approved the 2010 Business Plan and the five year (2010-2014) Strategic Plan also stands approved. Meanwhile, the Government has

recently approved PIA’s proposed comprehensive Financial and Operational Restructuring Plan, which now ensures that PIA is and will be a viable and going concern. You will be glad to know that the Board of PIA has also approved PIA’s proposal to attain and maintain the average age of the fleet to be 10 years. This translates into year round activity of the Corporate Planning Department to ensure that it happens and automatically heralds the beginning of a new airline with a young fleet.

The Human Resource Department is now fully functional and policies and procedures are now in place. New recruitments with clearly defined levels of skill and competence in all areas are being made. New inductions both on the management side, and specifically the operational side of cockpit crew, cabin crew and ground engineers, have now taken place and will continue to be inducted at regular intervals so that the shortages we experienced in these areas are fully taken care of and do not occur again. Our policy is to promote people from within the airline at all levels.

In all this I assure you of a clean working environment, better facilities such as the upgraded offices and cafeterias, better health care, and safety, both yours and our passengers. Safety has been, is, and shall continue to be PIA’s forte. In all of our sixty years of existence we have an enviable safety record, certified nationally and internationally like in CRM, EASA JAR 145, IOSA, ISO and other certifications. We will only fly safe and airworthy aircraft.

Outsourcing and joint venture agreements with Swissport and Singapore Airport Terminal Services (SATS), have already been signed and joint venture formation is in progress.. Lufthansa Tecknik have been contracted to help us in acquiring Enterprise Resource Planning (ERP), system. We are partnering ourselves with the best of the breed in the world, in order to enhance PIA’s capabilities and skills.

You are all well aware of the unfair, unjust and discriminatory treatment meted out to PIA by the European Union. You will also recall that PIA had already, on its own initiative and, as early as February 2009 i.e. much before the EU restrictions began to be applied, started refurbishing our ageing fleet in the context of appearance, both interior and exterior. We had agreed with the EU to further comply with their requirements in the form of an action plan mutually agreed upon

by the PIA-CAA and EU, which also defined a clear timeline. We exchanged numerous emails and faxes along with three meetings with them from October last year to February, 2009. Throughout this period they never even once hinted to us that our progress had not been satisfactory nor did they give us anything in writing about our discrepancies, if any. The restrictions, therefore, came as a complete surprise to us. When I visited the EU Air Transport office on March 02, 2009 the decision to restrict PIA had already been taken.

Thanks to the Revenue Management System, we got an opportunity to critically review and rationalize our network structure. We were able to reevaluate our unprofitable routes and create hubs for the maximum convenience of our passengers to overcome this EU limitation. Starting March 25, 2009, we will be back to normal again with only minor adjustments of frequencies into UK, Europe and North America. Hidden in all this was also a silver lining, for whereas this restriction has a negative impact on PIA revenues of 1%, the cost to PIA will go down almost 6%.

Unless we acknowledge our limitations and weaknesses in each area we will not be able to move forward towards progress. We are a team and we are on the same side, the side of PIA. Let us give it our commitment, our hundred percent and thereafter, reap the harvest of benefits that will most certainly accrue to all.”

Conclusion

As mentioned by the Chairmen of PIA, Mr. Tariq Kirmani, unless we acknowledge our limitations and weaknesses in each area we will not be able to move forward towards progress. We are a team and we are on the same side, the side of PIA. Let us give it our commitment, our hundred percent and thereafter, reap the harvest of benefits that will most certainly accrue to all. In all of PIA’s sixty years of existence there have been an enviable safety record, certified nationally and internationally like in CRM, EASA JAR 145, IOSA, ISO and other certifications. We will only fly safe and airworthy aircraft. Hence, compensation rather the HR department is running to its best. The room for improvements is always welcomed by PIA.

Recommendation

Not all the above mentioned details about compensation are being properly implemented due to many factors that this Public limited company is facing. Secondly, there is no proper check and balance for the proper implementation of the HR practices and policies that need resources as well as the human mind to cater problems and lead the corporation to the road of success.