Employee Security……It really matters. ‟People are definitely a company’s greatest asset. It doesn't make any difference whether the product company is making. A company is only as good as the people it keeps.” (Mary Kay)
This case study was written by Zubia Javaid1 and Mufliha Khalid2 students of BS (BA), under the supervision of Mrs.Komal Rehan, Lecturer of Management Department of COMSATS Institute of information & technology. The case was prepared as a subject requirement of Organizational Behavior.
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In this case study we try to highlight the issue of bomb blast near NAF. What was the impact of that on the employees’ motivation level employees’ performance. We also highlight the importance of human capital in the NAF. In this case study we also mention the steps which organization takes in order to cope with the situation SUBJECT AREA Human Resource Management
Human capital, employee’s securities, motivation, productivity, compensation
A CASE STUDY ___________National Ammunition Factories
National Ammunition Factories is huge industrial complex in public sector with diversified products which are mainly focused at providing the self reliance through indigenization within Pakistan. It employs around 25,000 to 30,000 workers in three shifts. The complex employs 25,000 people who work in three shifts. NAF is famous for its indigenous capabilities and the state-ofthe-art products of this outfit are in demand throughout the world. NAF was established in 1951.More than 50 years of continuous growth and development NAF is a sprawling industrial complex.
Khan Liaqat Ali Khan, the first Prime Minister of Pakistan, realized this imbalance and issued a directive to establish an ordnance factory in collaboration with Royal Ordnance to manufacture . 303 in.calibre rifles and its ammunition in Rawalpindi. All the factories are under the control of a Board consisting of a Chairman, a Financial Advisor and two career technical members. The factories are headed by managing directors who are quite independent in taking all actions related to the production of arms and ammunition within the framework of policy guidelines determined by the NAF Board. The engineers, technicians and work persons of NAF have acquired sufficient knowledge and experience through years of dedicated hard work. The initial products were of British origin. Later American products and standards were introduced, followed by the collaboration with the
Germans and Chinese. Now NAF produced ammunition even meet the requirement set. The amalgam of various technologies has enabled our engineers and workforce to obtain diversified experience.
On Aug 21 (2008), the terrorists have struck again and this time the victims are again the ordinary people of Pakistan, who were just ill at ease with their lives due to the mounting price hikes and the hard standards of living. Ordinary and poor people died in droves in the twin suicide blasts in the most critical region of Pakistan (National Ammunition, Factories). The suicide bombers were on foot and the first one walked into the crowd of workers who were coming out of the gate, thereafter the day shift, while the second bomber blew him up when about 200 people gathered at the scene of the first blast less than a minute apart. At least 70 people were killed and about 80 others injured in two suicide bomb blasts. It was a soft target due to the thousands of people gathering at one place rendering a gory opportunity for a hell bent suicide bomber. After this attack, the scene was unbearable there is nothing except blood and bodies parts of innocent people. CONSEQUENCES After this event, employees are dissatisfied and they are feeling themselves unsecure even in the highest security zone. They are not motivated toward their work because their basic need (safety) is not satisfied. They are expecting something more from their organization. This is the alarming situation for the organization because the work of the employees is of highly technical in nature and such type of work needs full concentration and dedication, which the employees are not able to give under such situation. This is a very complicated situation and the organization has to come up with a strong strategic plan to cope up with such situation.
STEP TAKEN BY THE COMPANY The NAF administration fully realizes that keeping in view the current international scenario and economic conditions of the country, the NAF should not make burden on the government budget and to keep the products of this institution competitive at international level is very much essential. It is the need of hour to keep the balance of production and non-production expenditure, it said, that in order to save the limited resources of the country from wastage, the organization will have to take Certain steps in right directions are inevitable so that the welfare projects could be carried on by saving the organization from the loss. Organization is not only competing to the competitors in the international market but also struggling to meet the needs of country to fight against terrorist to save the country from evil powers. In order to motivate employees there are some strategies implemented by the organization; • • • Employee security plans Employee motivation plans Employee compensation plans
EMPLOYEE SECURITY PLAN In order to secure employees a new security plan is implemented by the organization which includes;
Construction of Security Wall around NAF. Proper checking of everyone who want to enter in National Ordnance Factories. Installation of security cameras. Installation of latest security scanners.
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EMPLOYEE MOTIVATION PLAN Keeping in view the present condition of the country in terms of war on terror, it is very important to maintain the industrial peace in this sensitive defense installation and ensure mutual understanding and further strengthen the confidence of employees so that those elements involved in misleading and playing with the emotions of the masses could be discouraged. NAF employees are not only earning livelihood from this organization but also performing Jihad in terms of Holy Prophet saying that arrow maker, arrow seller and its users are Mujahid. The 70 martyrs of NAF proved their resolve by sacrificing their lives in a suicidal attack. NAF employees are ready to meet the challenges of this era. EMPLOYEE COMPANSATION PLAN During the financial year 2009-2010, Rs 625 million spent on various welfare projects. The brief description of these welfare projects is as:
Amount spent on Eid Bonus given to NAF employee Rs.224.124 million
Scholarship/concession to the employees sons/daughters in terms of admission in schools/colleges, Medical College, University and Engineering College Rs.12.11 million Marriage grant to the employees for the marriage of their sons/daughters Rs.9.21 million Concession on medicines in NAF welfare drug store Rs 0.28 million Financial aid on long illness Rs.0.264 million Financial aid in the purchase of spectacles Rs.0.379 million Financial aid in terms of blood donation Rs.0.370 million Financial aid to the widows on the death of employees during service Rs.3.850 million
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Financial aid on the death of family members of employees Rs.4.645 million Amount paid in the special medical treatment Rs.4.931 million,
Amount spent on the religions functions of Christian employees on Christmas Rs.0.328 million Loan given to NAF employees from BS-1 to BS-15 Rs.6.625 million Umra Scheme Rs.1.674 million Hajj Scheme Rs.2.450 million Subsidy in electricity bills to NAF employees residing in official accommodation Rs.144 million Medical cases sent to other hospitals Rs.110.10 million Subsidy on schools/colleges buses detailed for the employees and their children Rs.16.90 million Subsidy in the conveyance Facility in welfare trust of NAF Rs.16.60 million.
Q1. Discuss the importance of Human Capital in the context of this case study? Q2. Discuss the role played by the organization to compensate the employees? Q3. What you think, can the organization is able to compete the competitors at international level? Q4. Is the security system implemented by the organization is satisfactory? Q5. What you recommend under this situation?
TEACHING NOTES SYNOPSIS National Ordnance Factories or NAF is located in high security zone. NAF was established in 1951. National Ordnance Factories is the largest defense industrial complex. National Ammunition Factories or NAF is a defense industrial complex producing conventional arms and ammunition under the Ministry of Defense Production. The National Ammunition Factories is a cluster of about 20 industrial units producing artillery, tank, and anti-aircraft ammunition. It employs around 25,000 to 30,000 workers. NAF is famous for its indigenous capabilities and the state-of-the-art products of this outfit are in demand throughout the world. At least 70 people were killed and about 80 others injured in two suicide bomb blasts outside main military arms factory. Two men apparently blew themselves up outside the factory during a shift change. The bombers were on foot and they exploded themselves less than a minute apart. It was a soft target due to the thousands of people gathering at one place rendering a gory opportunity for a hell bent suicide bomber. After this attack, employees are not fully motivated toward their work. Employees are feeling themselves unsecure even in the high security zone. Employees are disappointed from the organization, because organization is not able to satisfy the one of the basic need of employees which is safety. In order to get the employees out of this situation, organizations come up with few strategies. The object of these welfare activities is to provide ideal civic facilities so that they can fully concentrate toward their prime responsibility of strengthening the defense of the
country. In this regard, over Rs 575.5 million have been spent on various welfare projects during financial year 2009-2010.
To highlight the importance of Human Capital. To discuss the strategies implement by the organization to satisfy the employees. To maintain and improve employee management relationship. To highlight the importance of low level needs (e.g safety).
DISCUSSION QUESTIONS 1. Discuss the importance of Human Capital in the context of this case study? Ans. National Ammunition Factories is the mother ammunition factory of the country employs around 25,000 to 30,000 workers in three shifts. The job done by the employees is of highly technical in nature needs creativity and adequate training. As National Ammunition Factories have to compete with a number of international competitors, under such social and economic situation of modern times, NAF as a modern enterprise, considered that capital is not the only source of creating wealth, knowledge can create wealth similarly. In fact, the reliance of enterprises to knowledge workers has gradually exceeded capital. Keeping in mind the
importance of human capital NAF spends a valuable amount on the proper selection and training of employees. 2. Discuss the role played by the organization to compensate the employees? In order to motivate employees there are some strategies implemented by the organization; • • Employee compensation plans Employee motivation plans
Employee security plan.
The object of these welfare activities is to provide ideal civic facilities so that they can fully concentrate toward their prime responsibility of strengthening the defense of the country. In this regard, over Rs 575.5 million have been spent on various welfare projects during financial year 2009-2010.
3. What you think, can the organization is able to compete the competitors at
international level? At the time of creation of Pakistan in 1947, these sixteen factories fell to Indian share since no one of them were located in Muslim majority areas. Newly created Pakistan with fragile state apparatus and fragmented Armed Forces, had absolutely no arms & ammunition manufacturing facility to meet the security challenges to its sovereignty. where today we have fourteen big factories which are taking care of almost 100% requirements of our more than half a million Land Forces. This modern defense industrial complex, which is the oldest & largest in Pakistan, later helped many other sister defense production set ups to flourish. Resultantly today Pakistan has a reasonably good defense production potential in which
National Ammunition Factories occupy the pivotal position. The engineers, technicians and work persons of NAF have acquired sufficient knowledge and experience through years of dedicated hard work and now they are able to face the international challenges. 4. Is the security system implemented by the organization is satisfactory? There is little limitation in the system, the system need to be more efficient in order to save the innocent employees from the attacks of terrorist. Organization should implement a modernized security system to ensure the safety of innocent employees. Because of its sensitive nature, the NOF complex is considered a high security zone and army personnel handle its security. However, police guards the road in front of the factory which is a thoroughfare and used as a shortcut to several villages on either side of the factory. 5. What you recommend under this situation? National Ammunition Factories is one of the valuable and precious asset of Pakistan.NAF not only help to strengthen the defense of Pakistan also a source of earning money by exporting a wide range of arms and ammunition. Under this situation, organization and Government have to work for the safety and betterment of the employees. The step taken by the organization is not enough to motivate employees toward their prime objective.
If you were the CEO of the NAF then what step would you takes in order to solve the current situation? If I was the CEO following step I will take
All the shortcut ways leading to the NAF should be closed for the better security. Security is the basic issue in this case study firstly I will handle this matter then the other one.
I will conduct informal meeting with the employees and I will ensure them that we will provide them better security. Future insurance plan should be offered to the employees. I will tell them that they all are the important part of the organizations and without their cooperation we cannot work.
I will recommend the hiring of security staff after proper training under the supervision of NAF.