Analysis of PMS Attock Refinery Ltd.

Submitted By:
Group 7 (Blended)
Alistair Colaco - 1502
Avril Ferreira - 1507
Janet Palliparambil - 1521
Rhyecs Gaike - 1538
Rohit Biradar - 1540
Sarah Pasanna - 1545
(XIMR MMS 2020-22)

2nd Semester
Subject- Human Resource Management

Under The Guidance of -

Prof. Ravindra Dey

Xavier’s Institute of Management and Research

Summary

Morgah, a small Petroleum Products Company with an initial capacity of 2500 bpd was set up in
1922 in Pakistan. In 1940, two new plants with an increased capacity of 5500 bpd were
commissioned, as Pakistan was experiencing an increase in indigenous crude oil. In November
of 1978, Morgah took over Attock Oil Company and renamed itself as Attock Refinery Limited.
By 1980, ARL expanded and installed two new crude distillation units and started producing low
lead premium gasoline products instead of just regular-grade gasoline. Also, it decided to close
down some of the old refinery plants from 1940 and install new upgraded plants with state-of-
the-art facilities. With this upgradation, ARL was producing 35000 bpd of crude and 150000 tpa
of Paving Grade Asphalt.
The ARL organisation had 8 departments with 155 employees in Management staff and 550
employees in non-management staff. Out of total 155 management staff employees, 60% were
Engineers, 2% were from Management and Accounting background respectively and 36% had a
degree in General Education.
In 1999, the Petroleum Industry in Pakistan was experiencing a major strategic shift due to
internal and external environment changes. Due to these changes, ARL was forced to come out
of its shell and develop a fresh strategy and support system in order to compete effectively with
the changing scenario. Mr Raziuddin, the current CEO observed that the progress of any
company depends on its Human Resources. It was clear that he was emphasizing the HR
department to step up and help the organisation in its transformation. In doing so, Mr Adik
Khattak, Assistant General Manager of HR and the senior management were evaluating the
Performance Appraisal System of ARL which was criticized for its subjectivity, inadequacy in
differentiating between high and low performance. This was a serious issue in the organisation
and needed immediate action.

Problems Statement

1. The appraisal system was qualitative and subjective.

The 32 traits mentioned in the appraisal form were meaningless and were overlapped.
They were not clear and precise. The appraisal system was subjective and inadequate in
differentiating between high and low performers. It had no proper benchmark for
evaluation. Also, there was a discrepancy between the 5 point number scale and remarks
given by the appraisers. The managers were unable to justify the remarks that they made
on the appraisal because the marks given do not support the comments being made.
 Solution - The behaviour of an employee and individual task outcomes should be
evaluated rather than the traits that an employee possesses as traits such as loyalty,
initiative, dependability, and self-expression may not be directly related to the job
performance and are hard to be defined in a work context.
Behavioural attributes such as helping others, making suggestions for improvements, and
volunteering for extra duties make workgroups and organizations more effective.
Whereas individual task outcomes such as productivity of an employee or consistently
achieving sales targets are more reliable than evaluating employees based on traits.

2. The appraisal system was bureaucratic in nature.

The Managers had no idea what was written in their appraisal and their bosses would
share it on the last day. There was a lack of formal feedback to the employees regarding
their performance because the appraisal was written by the manager then given to a
committee and then signed by the employees. As a result, when everything was done
there was no point in asking employees at the point- commented by the manager. There
was no choice to alter appraisal because doing so initiates arguments if an employee
disagrees. Managers were given a limited amount of time to express their thoughts.
Solution - Multiple evaluators should be used to evaluate the employee as the number of
evaluators increases, the probability of attaining more
accurate information increases. For this purpose, 360-degree appraisals such as feedback
from co-workers, customers, and subordinates, these organizations are hoping to give
everyone more of a sense of participation in the review process and gain more accurate
readings on employee performance. Also, appraisers should evaluate only those areas in
which they have some expertise. If raters make evaluations on only those dimensions on
which they are in a good position to rate, the evaluation process becomes more valid.

3. No proper training was provided to the appraisers for the appraisal.

No training was provided to appraisers. The appraiser’s behaviour was careless, they
were not analyzing the efforts and hard work that were put in by the employees.
Solution - Appraisers should be trained in workshops in order to effectively complete the
appraisal process. We have to make sure they know the evaluation process and the best
 way to complete forms. They need proper training sessions by specialists and get
acquainted with metrics. It is often observed that the effects of training do appear to
diminish over time. This suggests the need for regular refresher sessions.

4. Performance appraisals were carried out annually.

Performance data was gathered only once a year and performance evaluation was only
done on an annual basis. Due to this, it was observed that some employees who had
worked hard throughout the year missed out on getting good appraisals if a task at the end
of the year was not adequately completed.
Solution - Regular employee rating should be done on a semi-annually or quarterly basis.
Appraisals should be carried out twice a year so that the employee is aware of his current
performance status and can make improvements in his performance before the final
yearly appraisal. Appraisals should be based on overall performance and not on the time
of appraisal. Their performance for six months should be evaluated rather than on their
recent performance.

5. No formal feedback was given to the Employees related to their performance.

There was no proper feedback given to employees on the basis of which they could
improve their performance. The appraisal forms were written by the managers and then
passed on to the committee. The employees had to accept the performance appraisals
given by the committee and there was no use in providing feedback once the complete
process was over.
Solutions- There should be a reinforcement of the expectation that employees deserve
feedback, and that a primary function of supervisors is to help employees be successful.
A post-appraisal discussion should be arranged between employees and immediate
superior to exchange feedback. This helps the organization to learn about the problems
and difficulties the employees are facing and find appropriate training. Employee
feedback should be implemented to promote mutual trust between the employees and the
management.
6. The Appraisal system was remotely linked to promotions.
The appraisal system was not reliable and accurately linked to promotions and
increments. There was no separate assessment of promotional capabilities and the current
system depicted that past performance was not an indicator for future promotion and
there was subjectivity involved in it. They were not sure of how increments were decided
and on what basis promotional recommendations were made.
Solution - There should be a clear and transparent method for promotion and raise based
on predefined targets. The promotion policy should exist based on performance and
should have certain benchmarks for evaluation. There should be a proper criteria on the
basis of which promotions and increments should be offered so that the employees can
assess themselves based on the criteria. This also ensures that the promotions and
increments offered are free from bias and favoritism.