HRM522 Partex Beverage Ltd PDF

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Term Paper On Performance & Compensation Management Practices of

Partex Beverage Limited

Course Code: HRM 522 Section: 1

Submitted To Dr. Md. Mesbah Uddin Adjunct Faculty, MBA Program East West University

Submitted By Serial 1 2 3 4

Name Md. Mahfuzur Rahman Khan Sumaiya Binte Ekram Esha Nafiz Al Sayem Rifat Benta Shahid

ID 2019-3-95-073 2019-2-95-081 2019-3-95-006 2018-3-95-040

Date of Submission: 20th September, 2020.

Partex Beverage Ltd. At a Glance

Partex Beverage Limited (PBL) began its commercial production in the year 1997, as the sole bottler of Royal Crown Cola Co, USA. It was the first beverage brand to enter the Bangladesh market after the commonly known Coke and Pepsi. In 1994, Mr. M. A. Hashem, Chairman of Partex Group visited an International Trade Exhibition in the US, where he happened to meet the executives of Royal Crown Cola Co. International. From then on, he started conceptualizing the idea of “RC” beverage brand in Bangladesh. With international brand name recognition and quality, he expected that it would gain acceptability in the Bangladesh market. PBL started bottling in the traditional glass bottles, but soon started bottling all their beverage products in PET Bottles. They were the pioneers of this kind of packaging in Bangladesh and hence captured a big slice of the beverage market. At present, there are more than 7 companies producing carbonated beverages Bangladesh, but PBL can proudly say that they are 2nd largest market share holder in the carbonated beverage market in Bangladesh. In the year 2000, PBL began to expand by backward integration by producing their own PET preforms and were the only bottlers doing this at that time, for a number of years. PBL now has the largest bottle blowing and preform making capacity in Bangladesh. PBL launched its drinking water MUM in the year 2001. This product instantly became the market leader in the water market, and still holds the highest market share till date. MUM has now become one of the strongest and most trusted brands in Bangladesh. Mission: “To provide value at an affordable cost, progress in diversity, and to contribute to the growth of industrialization in Bangladesh. “

Organization Structure:

All polices, guideline and strategy for the company is handled by the board of directors. The director and other top-level employee support and maintain all day to day operations. The managing director is responsible for Marketing, Finance, HRD, and other function of company. 

Finance Manager: Responsible and accountable all the day all type of financial transaction.



HR Manager: Employees evaluation, salary distribute, recruitment and other HR operations are managed.



BDM: Business Development Manager takes

all decision concerning

development of Partex Beverage. 

Sales and Marketing Manager: All functions regarding sales distribution, channel, Advertising, survey of Partex Beverage Limited.



Project Development Manager: Responsible for work that is driven through a project.

Performance Appraisal of Partex Beverage Limited Performance appraisal is very important to find out the best performance. It is a process

of

setting

work

standards,

assessing

the

employees’

actual

performance relative to those standards, and providing feedback to the employees with an aim of motivating and encouraging that person to eliminate performance deficiencies or to improve the performance level. Partex Beverage Ltd. has their own process to appraise the employees. They have two performance appraisal forms for assess and evaluate the employee’s performance. This form requires employees name, employee ID, designation, department and basic salary information. Every employee has their individual job responsibilities and duties.

Objective of Performance Appraisal: 

Assess the gap between actual and desired performance.



Help management to control organizational performance.



Develop the relation between management-employees.



Identify the strengths and weaknesses of individuals.



Determine compensation packages & salary structure.



Make feedback available to the employees.



Develop required training programs.



Improve job satisfaction of employees.

Performance Measurement: HR dept. of Partex Beverage Limited has their own assessment and performance appraisal method. Major Task Performed 1. 2.

Weight

Achievement/ Performance (Out of 10 Marks)

Point

5%

8

5*8 = 40

3. 4. 5.

To identify an employee’s performance during the month above techniques are being used. At first, evaluator gives some weighted percentage against some major duties of an employee. Employees each task will be rated out of 10 marks. After that, it will be multiplied by weighted percentage. The total score of employees will be counted as their monthly performance level. After evaluating an employee’s performance, the supervisors, department head and employees give comments about the performance of that employee. They also give their signatures in the signature box. There is a field which is used by only the Human Resource department of Partex Beverage Limited. This technique helps the manager in evaluation of the performance of the employee. As, 1. Employees will identify their strengths and weaknesses.

2. This method needs some initial goals which will be compared against actual performance. 3. The rater may assign biased weights to the task performed by employees. 4. This method also is expensive and time consuming. 5. It becomes difficult for the manager to collect, analyze and weight a number of statements about the employee’s tasks, characteristics and behaviors. The performance review process is top-down. The individual employee and his or her superior will set the Key Result Areas (KRA) targets. The KRA targets should be Specific, Measurable, Attainable, Realistic, and Time-bound. Make the target as elaborate and specific as possible. The target statement should contain enough details and broken into interim measures. Qualitative aspects of the target must be considered as well. 

An individual’s KRA must not conflict with another’s.



Both appraise and appraiser should agree on the KRAs and associated ratings.



KRA targets of all managers from grade 8 upwards must be approved by Group CEO after validation by Group HR.

Assessment and performance appraisal help to maintain record in order to determine compensation packages, wage structure, salaries raise, extra benefit, bonus and other allowances. It also helps to assess and maintain the potential, present in a person for further growth and development, the strengths the weaknesses of employees help to place right men on right job. It serves as a basis for influencing working habits of the employees and retains the promotional and other training programs. It is also the decider for all those probationary period employees as their performance history will help achieve them to be a permanent employee. They use appraisal form for actual evaluations. They have designed the appraisal form, which is filled by the employee, his/her supervisors and the head of department. They have divided the whole performance appraisal method in two sections. Two different forms, but both of the forms are designed almost in the same way but with different method patterns regarding each one’s job. The form is divided in different parts-



Appraisal Form except Sales & Marketing



Appraisal Form for Sales & Marketing Officials Appraisal Form for Sales & Marketing Officials Only

Name:

Present Grade:

ID:

Present Basic Salary:

Department:

Reporting to:

Designation:

Station/Area:

Major Task Performed 1.

Weight

Achievement (Out of 10)

Point

Target

Achievement

Percentage %

2. 3. 4. 5. Sales YTD (During Assessment Period): Supervisors Comment: For use of HR Department only:

Appraisal Form for all other Officials

Name:

Present Grade:

ID:

Present Basic Salary:

Department:

Reporting to:

Designation:

Station/Area:

Major Task Performed

Weight

Achievement (Out of 10)

Point

1. 2. 3. 4. 5. Supervisors Comment: Department Head’s Comment: Employees Comment: For use of HR Department only:

Compensation/ Benefits of Partex Beverage Limited Employee salary: Partex Beverage Limited is committed about maintaining salaries and benefits that are fair to all employees and competitive in the local market place. The management monitors changes in the economy and salary market to ensure that overall compensation package is sufficient to attract, recruit and retain high quality staff within the financial capabilities of Partex Beverage Limited. At all times the management considers long term financial implications of changes in employee compensation as well as fairness to employees currently serving the company. The compensation structure is framed with the objective to attract and retain high quality people. Partex Beverage Limited sets employees’ basic salary based on-

1. Individual’s background and Experience. 2. External pay market levels and trends (determined through compensation survey) 3. Particular skills requirements of the company. 4. Company’s affordability. 5. Company’s statutory obligations. Compensation fluctuates according to: 

A pre-established formula.



Individual or group goals because group goals are different from individual goals.



Company earnings

Incentives: Incentive schemes for Partex Beverage Limited are proposed by their head during budget preparation for the coming year. The schemes require approval from the managing director and are communicated to field force before beginning of the year. An incentive adds to base pay: It controls costs because the employee is being paid for his/ her extra effort and for the benefits brought to the organization and it motivates employees. Incentive pay categories: 

Individual.



Group.



Company-Wide.

Individual incentive based on: 

Quality of work output. (How many units produced?)



Quality of work output (What was the quality of the product or service being produced or served)



Monthly sales. (How much sales were generated)



Work safety record. (How many hazard or errors are being reduced?)



Work attendance (If the absent is reduced or attendance is good)

Group Incentives:



Customer satisfaction.



Labor cost savings.



Materials cost savings.



Reduction in accidents.



Services cost savings.

Company - Wide: 

Company profits.



Expense reduction



Market share/Increase in stock value



Sales revenue/ Revenue growth

Sales Incentive: 

Instead of performance bonus, field sales staff will the rewarded with quarterly sales incentive for their contribution to the company.



Sales Incentives are based on achievement of sales goals and may include straight commission, salary plus commission, sales bonuses, and sales contests.



Based of requirement of the business, head of business may propose and implement any change of the scheme subject to the approval of the managing director.

Benefits: Income Protection Provident fund: The company has instituted provident fund for management staff. 1. All Management employees will join the provident fund scheme after confirmation. 2. Along with the confirmation letter Human Resource Department will send a provident fund joining and nomination form to the employee. 3. The provident fund will run on contributory basis, i.e. 10% of basic salary from the employee and equal amount from the company.

4. If any employee leaves the company, he/she will be entitled to the company’s contribution only after 5 years from the date of confirmation, else, the employee will only be entitled to his/her own contribution. 5. Company has formed a trusty committee to maintain the provident fund. 6. Conditions with regard to provident fund shall be regulated as per the rules of the fund.

Gratuity: An employee shall be eligible for gratuity on leaving the company after continuous and confirmed service of at least 8 years to. Insurance: The company has instituted a fund for management staff which provides payment of death during service by any cause, except in the first twelve months of insurance. 

Group life insurance is payable under any kind of death during service except in case of suicide.



Respective business/ department will pay equivalent to the payable insurance amount

Benefits: Allowances Medical benefits: All employees of Partex Beverage will receive a monthly medical allowance as per respective grade of the employee. The allowance will be paid together with the employee’s monthly salary and for this no receipt needs to be submitted. For special case of treatment, following are the additional support extended to the employees.

Management and Other

Allowances Sales and Marketing Department

Employees House Rent allowance (100%

House Rent allowance (100% of basic)

of basic)

Medical allowance (100% of basic)

Medical allowance (50% of

Transport allowance (50% of basic)

basic)

Utility allowance (50% of basic)

Transport allowance (50% of

Quarterly/Yearly:

basic)

Yearly Leave Fare Assistance. (60% of

Lunch allowance (Tk.1100 to

basic)

Tk. 1500)

Yearly two festival bonuses. (100% of

Utility allowance (50% of

basic)

basic)

Yearly performance Bonus. (50% of basic) Yearly workers participation Fund. (50% of basic) Incentives/ Benefits

Management and Other

Sales and Marketing Department

Employees Provident fund.

Quarterly/ Yearly:

Gratuity.

Yearly Leave Fare Assistance. (50% of

Group Insurance Policy.

basic)

Medical Benefits.

Yearly two festival bonuses. (100% of basic) Yearly workers participation Fund. (50% of basic) Quarterly sales incentive. (Not fixed) Long Term: Provident Fund. Gratuity. Group Insurance Policy. Medical Benefits.

Linking Compensation & Performance Management The overall purpose of compensation strategy/ incentive plan is to ensure that the company has the right amount of money needed to encourage the forms of results

required

to

accomplish

the

market

strategy.

For

this

reason,

compensation should be related to the overall performance management. Partex beverage Limited has an embarkment on effective compensation management policies that project and promote employees’ performance. Employees are integral part of the Human Resource Management (HRM) and therefore must be properly compensated in order to effectively perform beyond expectation. Compensation management is an issue that is critical and vital for running and managing the organization. There is a significant relationship between compensation management and employees’ performance which implies that employees’ performance depends on planning, implementation and control of effective compensation management. Linking Performance and compensation management ideas that Partex Beverage Limited Company implements, include1. Pay-for-performance compensation strategy- Partex Beverage Limited creates the right compensation plan which leads to stronger job satisfaction. The right compensation program invests employees into the work being done, which gives them a stronger sense of satisfaction when the company succeeds. As they opted for pay for performance so, performance appraisal provides the mechanism for them to make sure that those who do improved work receive additional pay. It develops the spirit of work and boosts the morale of employees. 2. Setting Basic Salary by jobs tasks- Basic salary is the cash compensation that an employer pays for the work performed. This tends to reflect the value of the work or skills and generally ignores differences attributable to individual employees. Partex Beverage Limited Links basic pay levels directly to the contribution an employee makes to the organization. Here employees’ contribution means their core job duties and responsibilities that they have

to perform in their actual job and based on that the company sets basic salary or base pay. 3. Matching the incentive cycle to the work cycle- Partex Beverage Limited has incentive plans which is one kind of variable pay including specific performance targets that are set for the relevant performance period before the period begins and payouts are contingent on meeting the criteria. The criteria may also establish lower or higher payouts based on the extent to which performance targets were met. This Company follows short-term and long-term incentive plans. I.

Short-term Incentives- Short-term incentive plans are based on achieving short-term performance goals for a year or less. Partex Beverage Limited sets its short-term incentive named sales incentive plans. This plan is for sales representatives or sales management/ Marketing department. Using this variable pay the company tries to recognize outcomes that are aligned with business goals. As sales incentive is not fixed and give quarterly in a year, sales stuffs have chances and get a way to earn more, it motivates employees to perform well by extra effort.

II.

Long-term

Incentives-

Long-term incentive

plans are

based

on

achieving performance goals over a multi-year period. Partex Beverage Limited

designed

this

long-term

incentive

to

drive

longer-term

performance. There long-term incentive includes two types of benefitsIncome Protection and Allowances. a) Income Protection- Partex Beverage Limited includes provident fund, gratuity and insurance on income protection. These are for all levels of employees in that company. The company makes this incentive plan so that employees can feel that they have protection on their income and give full attention on their works. And whenever they work attentively, it will have impact on their performance. b) Allowance- Different types of allowances are offered by Partex Beverage Limited for all the employees. Employees don’t have to be tensed about their others expenses as the company gives the benefits, ...