GUNA TRADING HOUSE PRIVATE LIMITED COMPANY

ORGANIZATIONAL STRUCTURE AND SALARY SCALE

STUDY

FINAL REPORT
OCTOBER 2016

P.O.Box-2569 Addis Ababa, Ethiopia

Tel. 011-661-03-61/011-661-09-00
Fax 011-661-02-98
E-mail: projects@ethionet.et

PROJECT NO OM-062/098-2008

TABLE OF CONTENTS
 SECTION PAGE

SECTION ONE BACKGROUND OF THE STUDY ………………………………… 1

1.1 INTRODUCTION ……………………………………………………. 1
1.2 ORGANIZATION OF THE REPORT ……………………………… 3
1.3 THE RATIONALE AND NEED FOR THE STUDY……………….. 4
1.4 TASKS, OBJECTIVES & SCOPE OF THE STUDY………………. 5
1.5 STUDY APPROACH AND EXPECTED RESULTS………………. 6

SECTION TWO BUSINESS OBJECTIVES, HISTORICAL BACKGROUND &

PROFILE OF THE COMPANY ……………………………. 9

2.1 ESTABLISHMENT & BUSINESS OBJECTIVES OF THE 9

COMPANY………………………………………………………
2.2 VISION, MISSION AND VALUES ……………………………. 10
2.3 THE PERFORMANCE OF THE COMPANY OF THE LAST FIVE
BUDGET YEARS (2011-2015)………………………………………. 12

2.4 THE PERFORMANCE OF THE COMPANY OF THE LAST FIVE

BUDGET YEARS (2011-2015)……………………………………. 12

SECTION THREE ORGANIZATION STRUCTURE OVERVIEW………………….. 14

3.1 ORGANIZATIONAL TASK COMPONENTS………………………. 14
3.2 ORGANIZATION STRUCTURE DEFINED……………………….. 15
3.3 METHODS OF ORGANIZATION DESIGN ……………………….. 16
3.4 THE ORGANIZATION DESIGN METHOD SELECTED BY THE 19
CONSULTANT………………………………………………….
3.5 THE RELATION BETWEEN STRATEGY AND
20
ORGANIZATION STRUCTURE…………………………………

SECTION FOUR DIAGNOSTIC APPRAISAL OF THE EXISTING

 ORGANIZATION STRUCTURE AND SYSTEM………………. 21
4.1 GENERAL…………………………………………………………. 21
4.2 THE MANAGEMENT STRUCTURE…………………………… 21
4.3 THE EXISTING ORGANIZATION STRUCTURE………………. 22
4.4 MAJOR DIAGNOSTIC FINDINGS AND OBSERVATIONS ON
THE EXISTING ORGANIZATION AND MANAGEMENT
SYSTEM OF THE COMPANY………………………………………. 23
4.5 APPLICATION OF TECHNOLOGY AND OTHER ENABLERS … 33
4.6 MAJOR CHALLENGES OF ORGANIZATIONAL EFFICIENCY… 33
4.7 WAY FORWARD…………………………………………………….. 34

SECTION FIVE CONCLUSION AND RECOMMENDATION……………………. 36

5.1 GENERAL…………………………………………………………… 36
5.2 MAIN FEATURES OF ALTERNATIVE I ORGANIZATION
STRUCTURE………………………………………………………… 37
5.3 MAIN FEATURES OF ALTERNATIVE II ORGANIZATION 42
STRUCTURE………………………………………………………….
5.4 MAIN FEATURES OF ALTERNATIVE III ORGANIZATION 45
STRUCTURE…………………………………………………………
5.5 APPRAISAL AND RECOMMENDATION OF THE PROPOSED
ALTERNATIVE ORGANIZATION STRUCTURES …………… 47
5.6 FUNCTIONAL DESCRIPTIONS OF THE COMPANY’S MANAGEMENT &
MAJOR FUNCTIONAL UNITS BASED ON THE RECOMMENDED
RGANIZATION STRUCTURE (ALTERNATIVE I)…………………………. 53
5.7 BRANCHES PROPOSED ORGANIZATION STRUCTURE……… 134

SECTION SIX PROPOSED JOB DESIGN & STAFFING PLAN………………… 142

SECTION SEVEN PROPOSED JOB SPECIFICATION……………………………. 169

SECTION EIGHT PROPOSED JOB EVALUATION & GRADING…………………. 248

SECTION NINE SALARY SURVEY & SALARY SCALE………………………….. 266

SECTION TEN COST IMPLICATIONS OF THE PROPOSED ALTERNATIVE SALARY

 SCALES AND RECOMMENDATION OF THE 277
CONSULTANT……………....

10.1 THE COST IMPACT OF SALARY ADJUSTMENT ……………………. 277

10.2 SELECTION RECOMMENDATION OF THE CONSULTANT………. 279

SECTION ELEVEN IMPLEMENTATION 280

GUIDELINES……………………………………
11.1 STAFF PLACEMENT …………………………………………………… 280
11.2 SALARY SCALE ADJUSTMENT………………………………………. 281
11.4 SALARIES OF NEW RECRUITS………………………………………. 283
11.5 USING THE SALARY SCALE FOR ANNUAL PAY INCREMENT AND
PROMOTION………………………………………………………………… 283

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