Project Final Draft 0.11

AFAQ (Association for Academic Quality)
Consultancy Report
Topic Name:
Design the Compensation &Performance Based Reward
Management System
Course Instructor:
Mr. Salman Khan
Documented by:
Name
Class
Roll#
Designation
Mr. FaheemAzhar
BBA 8
12104
Leader
Miss. Fatima Akbar
BBA 8
12166
Member
Miss. Faryal Akhter
BBA 8
12169
Member
Preface
1 | Page
Superior University Lahore
We have prepared this final project and compiled the report for the consultancy project and
after knowing about the project and what we have to do in the project as instructed by our
teacher we needed to make a report on compensation & reward management practices that
are currently being applied in an organization. This project was totally based on a practical
study as each and every major issue is discussed in detail. We have made this project on
AFAQ (Association for Academic Quality)and have explained all the compensation &
rewardpractices. This report contains all the data of current C&B practices and Guideline and
is comprehensive enough to get insight information or a snapshot of the AFAQ working. This
report contains all the necessary information required for the analysis and at the end
conclusion is also given.
Acknowledgement
First of all we are thankful to ALLAH Almighty for giving us power to complete our final
project of Consultancy and based on a different and unique topic. After that we are most
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thankful to our respected and honorable teacher Sir. Salman Khan. He has taught us
consultancy project in an excellent manner. The most important thing is that the knowledge
which we have studied in our classes was all that same which we have to apply practically.
All the qualities in a good project and knowledge about interpersonal skills will prove to be
very essential in our practical life as well in future. We are also thankful to our parents that
due to their prayers we have succeeded in completing our final term project. We are
personally thankful to the friends that had helped us in fact co-operated with us also our
respected teachers who gave us guidelines for making the reports and allowed us to work in a
different environment. Another thing here is worth mentioning that we are also thankful to
our each group member personally as each one of us has helped each member of the group.
Dedication
We dedicate our final Project to Allah Almighty and then to our respectable Sir. Salman
Khan. As our course instructor is very hardworking teacher so we dedicate our project to him
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and wish him best of luck. We are grateful to Allah who has provided us courage and
knowledge so that we can complete our project as well as getting some new experiences for
bringing some change and development in ourselves. We hope this project helps us and
becomes successful. This is a real time work which we could add on to our CVs. This was a
great learning curve for us as studying ethics and issues related to that and we have done a
unique and effective work.
Table of Contents
Sr
Topic
No
1 Executive Summary
Page No
06
4 | Page
2
3
4
5
6
7
8
9
10
12
13
14
15
16
17
18
Organization Intro
Project Intro
Industrial Analysis
Literature Review
Industrial Survey
Intro of AFAQ HR Department
Advantages of Compensation & Reward System
Significant of Study
Methodology
Compensation & Performance Based Reward
Types of Reward
Employee of the Month
Recommendations & Findings
Conclusion
References
Appendixes
07
10
12
13
15
17
20
21
22
24
26
30
31
32
33
34
Executive Summary
We are the student of BBA and we have assigned the consultancy research based project. This
report/project is a comprehensive study of designing and recommending a guideline draft for
compensation and reward management system at AFAQ (Association for Academic Quality).
Our clientis a not for profit organization and is operating as a guarantee limited company in
Pakistan. There basic aim is the development of education especially in the under privileged
areas and overall training of the people involved in the education sector and are dedicated in
improving education in Pakistan.
Our study is mainly focusing on the reward and compensation management system which is
basic requirement of our client. Before starting this project, we have done a couple of
meetings with our client and identify their current problem in their organization. After getting
their point we have done an industrial survey and collect the data regarding industrial
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practices of C&B system. After that we also have done a literature review of different articles
related to out topic
Being a consultant it is our prime objective to give best opinion to our client. Our
recommended compensation and performance reward system has consist of different phases
designed to entertain their employees. With the help of research design and industry analysis
this system is been designed for client organization. So that the strategically and operational
goals and objectives of the clients can meet on time by keeping their C&B system in well
manner.
At the end we also prove the recommendation to our client for their future goals if the
recommendations are considered, in this report we also conclude this project at the end
Introduction of Organization:
AFAQ stands for Association for Academic Quality, it is a not for profit organization and is
operating as a guarantee limited company in Pakistan. It is not only operating in Pakistan but
in other countries as well and they are serving the education sector. There basic aim is the
development of education especially in the under privileged areas and overall training of the
people involved in the education sector. They (AFAQ) are an independent, ISO 9001-2008
certified organization and are dedicated in improving education in Pakistan. Being a
collaborative venture of six not for profit organizations working in the education sector,
AFAQ has emerged itself and has a mental picture to progress the literacy rate in Pakistan
though different services including curriculum development, textbooks and childrens
publications, model school development, teacher training, youth promotion, career
counseling and student assessment and evaluation. Under strict quality control, AFAQ is
enthusiastically engaged in realizing its superior standards. Over the years, AFAQ has
developed into an international organization provided that it services are now availed by the
people in the Middle East, South East Asia, Africa and Scandinavian countries. AFAQ strictly
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follows the Islam and observes policies related to that within the organization and its quality
Guideline also states the same thing.
Quality Guideline of AFAQ

In order to serve the cause of Islam and Pakistan, AFAQ is committed to contribute in the
holistic development of schools, teachers and students by keeping in view the global
educational standards. Therefore, AFAQ wants to satisfy their customers with the objective of
developing teachers in the mold of a Muslim. AFAQ shall achieve its aims and goals by
fulfilling quality objectives, training employees and ensuring a consistent improvement in
working system.
Mission & Vision of AFAQ

Mission
AFAQ will mediate between the future and the present and will act as a forerunner in shaping
the destiny of the nation. In the name of Allah and to serve the cause of Islam and Pakistan,
AFAQ will contribute to holistic development of schools, teachers and students. Keeping in
view the contextual framework and global standards, AFAQ will generate educational
resources, support services and learning programs employing all mediums in nongovernmental settings.
Vision
To improve the literacy rates in Pakistan though a diverse range of services.
Core Areas/Departments of AFAQ

1.
2.
3.
4.
5.
6.
7.
Research division
Training division
Educational services
MSDP
AFAQ leadership club
AFAQ counseling
AFAQ forum
Top Management of AFAQ

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1.
2.
3.
4.
5.
Mr. Dr. Shoib Hassan Murad (Chairman)

Mr. Abrar Ahmed (CEO)
Mr. ShahidWarrsi (ED)
Mr. AsifMushtaq (GM HR & Admin)
Mr. Amir Zaib (ED Training)
Total strength of AFAQ
In AFAQ, there are almost more than 400+ Employees working in their different
regions offices
There are 22 total Outsourced person of AFAQ
AFAQ is having almost 552 dealers in throughput Pakistan
AFAQ also having their offices in all provinces (with equipped conference rooms)
AFAQ Reached 124 districts in all over Pakistan
Project Introduction
Title:
Design an effective Compensation and reward management system for AFAQ
Objective
The major objectives of our project are as below
To establish and design a proper compensation and reward management system and
guideline for AFAQby giving our expertise and services that will increase the productivity
and motivational level of employees
To identify the best practice of compensation and reward system in Pakistan and
analyzing the best reward packages by doing practical research and conduct survey that
will be helpful to AFAQ
The research and consultancy project is going to be very beneficial for our client. This work
undertaken to develop and establish the guideline Guideline of compensation and reward
management for AFAQ ( Association for Academic Quality ) and also analyses the impact of
reward and compensation system on the productivity of employees in an organization though
proper research. The project will define that how this Guideline will affect the organization
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internally (All the department of AFAQ i.e marketing, Human resource, accounts and finance,
encyclopedia, Educational Service and Training) and externally (Potential Employees) as
well. It will help to eliminate the turnover rate and also improve the performance of
employee. This project (compensation and reward system) will help to enhance the
motivational level of AFAQ employees to stay in the organization with effective and efficient
productivity of organization and employee
The main reason to take initiative for this project is that our project client (AFAQ) has
implemented a compensation & reward management system in their organization but he
wants to achieve the best level efficiency of this system. For his purpose, He wantsour
services for the development and improvement in the compensation and reward system for
their company (AFAQ) that will help to achieve the organizational goal. According to him if
they dont implement a proper compensation system in AFAQ then their employees will leave
their organization and their turnover rate is increase in every year, so it is necessary for them
otherwise their motivational level will decrease day by day
As reference with the meeting of our client we identify and analyze that this project will be a
very high priority from our client (AFAQ) end and our side as well
This project will have three team member, the detail of Project team has mention as below
1. Mr. Hafiz FaheemAzhar
(Project Leader)
2. Miss Fatima Akaba
(Project Assistant)
3. Miss Faryal Akhtar
(Project Assistant)
All the major duties will be lead from our project leader and he will have all the meetings of
project with our client. He will guide other team members in this project and take their input
as well. He will also assign the duties and responsibilities to other team members
The success of this project will measure when the project will deliver and AFAQ will
implement the suggested Guideline of compensation and reward. On our end we will
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complete our project on timely basis (expected time given). We will also provide all the
necessary documents, forms, survey results, reports and material to AFAQ
In this project we just need 3 to 4 human resource who will provide their expertise and
service to develop compensation and reward Guideline for AFAQ
As concern with this project stakeholder, all those employees who are currently working in
AFAQ and provide their services are effected with this Guideline
Our project will face some different kind of major risk in future and that risk might be
effected to our project. Some project risk are Internal and external employee, Governments
laws, Political instability, Compensation practices change and Inflation Rate. So we need
minimize these risk to successfully implement our reward and compensation and reward
management system. If any risk occur after the successfully implementation then AFAQ
should revise their Guideline according to the new trends, practices and law
The top management of this project is our project leader and the client representatives by
AFAQ for this project. If any changes are required during the project from our client and
from our side as well we will generate the proper CR (Change request) and mention all the
required changes in detail. Both parties will have the detail meeting on the change request
and at the end sign the agreement from both parties
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Industry Analysis
The Educational Services Industry is composed of establishments that provide instruction and
training on a wide variety of subjects. These institutions, including schools, colleges, and
universities and training centers, are either privately or publicly owned. Private institutions
may be further classified as "for-profit" or "not-for-profit". We report on publicly traded, forprofit schools that have a focus on post-secondary education. According to the most recent
data provided. Department of Education, post-secondary education is being provided to about
18.2 million students. Of that population, some 1.4 million are receiving their education
through for-profit schools.
Educational Services is widely considered a counter-cyclical industry. That is to say,
typically, when the economy is doing poorly and unemployment is rising, more working
adults, as their career prospects start to dim, decide to upgrade their education. This, in turn,
leads to higher enrollment and increased profit at the schools. We note that traditional
undergraduate education for young students is generally non-cyclical. Culinary arts schools,
however, can be labeled as moderately cyclical. Also, certain types of educational institutions
do perform largely in sync with the broader economy. For example, providers of information
technology instruction benefit in good times, when companies are likely to boost related
investment.
There is a growth element to this industry. Education companies are reporting a trend of
rising demand from working adults. More and more employers are requiring college degrees
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for a greater range of jobs. Enrollment rates are tracking higher at most schools. To an 18year old, thinking about the future, or a 30-year old without a college degree, looking for a
career boost, diplomas are becoming the standard rather than the exception.
The vast majority of revenue in this industry comes from tuition or program fees. Gross
profits tend to range from 60-90% depending on the location and particular course, and net
profit averages out to between 2-10%. Increasing company size has helped consolidate
operations in the educational services field helping to lower fixed costs and improve overall
operational efficiency, both of which are very important to keeping businesses in the field
healthy and profitable. Finding qualified instructors in any field is becoming increasingly
challenging; it is important to inquire about this when researching potential franchises. There
is a potential danger to some areas of the field in future competition from online training
courses, which are growing more and more popular as technology spreads although
currently most online courses are geared towards ungraduated education, many expect the
field to broaden as effective programs in other areas are developed for the internet. In
addition, businesses face competition from free online resources and computer software.
Overall, however, the field is expanding educational services in the United States are
forecast to grow by 5% per year over the next five years.
Education plays a crucial role in the development strategy of any economy. International
statistics display that educated populations are positively correlated with high economic
growth rates, enhanced labor productivity, social prosperity and sustainable development.
More importantly, equalization of educational levels within a country is the key to
elimination of regional, gender and class inequalities. It combats poverty effectively by
reducing unemployment, setting good practices for womens participation in the work
environment and guiding expenditure towards most beneficial use. Similar to many
developing countries, Pakistan has not progressed adequately in the field of education. With
an adult literacy of only 57%, almost one-half of its adult population is unable to read or
write. This considerably limits the opportunity towards acquiring skills and technical
knowledge for higher productivity and better earning levels. School enrolments are low and
school dropout rates too high. The budgetary allocation to education has remained around 2%
of GDP for the past decade, with a high proportion being spent on recurrent heads mainly
salaries, leaving a small amount for quality enhancement such as teachers training,
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curriculum development, provision of school facilities and monitoring and supervision of

education
Ratio of public spending in education to GDP in selected countries Pakistan 0.3%, Norway
2.1%, USA 1.4%, Malaysia 2.7%, Thailand 1%, India 0.7%, and Brazil 0.9
Over the past decade, private sector has emerged as a key provider of education services in
Pakistan both in absolute terms and relative to the public sector. One piece of evidence relates
to the number of private schools, which increased by 69%, as compared to mere 8% increase
of government schools between 1999-2000 and 2007-08. In 2000, the private sector was
catering to the educational needs of about 6 million children. This number increased to 12
million in 2007-08 equivalent to 34 percent of total enrolment. The number of teachers also
doubled in private 1 educational institutions during this period. This massive growth has
thrown up many important questions. What has caused the private education institutions to
grow so rapidly? How is public schooling affected by this growth? Should the government
strictly regulate the private providers of education? To what extent are public-private
partnerships effective for meeting the growing demand for education? Are the private schools
providing better quality of learning than the government schools? To answer such questions
and the like is crucial for identifying the emerging challenges and formulating effective
responses and strategies at the Guideline making and implementation levels.
Literature Review
This area of project presents the literature review on the subject which is mentioned above.
It summarizes information from researchers who have carried out their research in the same
field of study. The chapter presents theoretical review, the various forms of intrinsic, extrinsic
incentives and rewards and compensation systems.
Reward presents all the tangible benefits and provisions an employee obtain as a part of
employment relationship (Milkovich and Newman, 2004); while Malhotra et al. (2007)
illustrate that work rewards indicate the benefits, workers receive from their workplace and
are considered the determinants of job commitment and satisfaction. Bratton and Gold (2003)
define rewards as all the cash, non-cash and psychological payments provided by an
organization in return of their contribution. Stone et al. (2010) found that financial incentives
are not always welcomed by all employees and material incentives generally do not tend to
satisfy the basic psychological needs and discern the individual variance.
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Gross and Friedman (2004) identified that rewards are now more than archaic concept of
receiving pay checks after a week, rather they embrace the holistic value scheme that the
employer recommend to the employee that includes compensation (consisting of base pay,
short and long term incentives) benefits (health issues, work/life, and other benefits) and
careers (training and development, career progression).
A return on investment survey has taken the feedback about the definition of rewards from
U.S employers in the former year, 46% respondents elaborate rewards as pay and benefits
whereas 21% consider rewards as pay, benefits and career. By the later year that is, 2003,
merely 35% classify rewards as pay and benefits whilst 29% more broadly define rewards
as pay, benefits and career (Gross and Friedman, 2004). Kalleberg and Buren (1996)
identified that the employees of big organizations gain higher wages, fringe benefits, and
promotion chances more than the employees of smaller organizations.
Among all types of reward, monetary pay is considered ever-present and significantly
important factor (Milkovich and Newman, 2004). Pay is not considered merely a motivator
(Gardner et al., 2004), but in addition as a way of reinforcing employee retention (Lum et al.,
1998). However, Adams (1963) pointed out that distribution of financial rewards may create
inequity issues that destabilize the possibility of positive impact of pay and leads to
negative consequences. Considering the pay issues two types of fairness considered
pertinent distributive justice and procedural justice, former refers to the degree in which
workforce perceive their amount of pay as fair, while the latter is concerned perceived
fairness of the resources and methods used in determining the amount of pay.
Hsee and Abelson (1991) argued that in provision of pay employees mostly are fretful with
velocity the direction and rate of change because they seek out and scrutinize information
about their progress. Trevor et al. (1997) endowed with evidence that pay growth has a key
negative impact on turnover. According to Chiang and Birtch (2007) the utility and
enticement entrenched in reward is revealed in a variety of theoretical perspectives. The
dichotomy of intrinsic and extrinsic rewards was initiated by Herzberg et al. (1957) who
labelled the achievement, recognition and advancement as an intrinsic reward that motivate
the employees more than the extrinsic rewards, that is, salary, job security or working
environment, etc. Zhou et al. (2009) states that the philosophy of extrinsic rewards is
originated from the term utilitarianism and suggests that peoples behaviours are
modifiable, so by providing extrinsic rewards their performance could be enhanced, while in
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comparison with utilitarianism, the term Romanticism refers to intrinsic motivation that
boosts the innovation and creativity of the employees.
These two intrinsic-extrinsic dimensions are mostly kept separate according to the
expectancy theory and dealt in an entirely distinct psychological perspective, nevertheless
according to the other versions of expectancy theory there is not any difference between the
intrinsic and extrinsic rewards and both serves the same psychological process by indulging
motivation in employees. Vroom (1964) speculates that a persons beliefs, attitudes and
perception about his behaviour prophesied the rewards or punishment that pursue his action,
while according to the cognitive theory actions only get strengthened when the expectations
change about what one does and what he receives in terms of rewards.
Vroom debates that certain behavior is determined to be initiated only if the expectations and
the consequences related to that event occurred. Porter and Lawler (1968) followed vrooms
ideas and further contended that people often determine efforts in work by judging the value
of reward and the relationship between their effort and expected reward (Chiang, 2005).
Maslow (1954) stated that only unsatisfied needs motivate for further action as it creates
disequilibrium. while instrumentality theory leads to scientific management method of Taylor
(1911) who argues that only a continuous and large amount of pay can bound people to work
hard and they are motivated only if the incentives and penalties are directly associated with
their performance. Pfeffer (1998) argued that people work for money.
Latham and Locke (1979) speculate in their goal setting theory that performance can be
enhanced only when the objectives and goals are difficult and feedback is associated to the
elevated performance for the attainment of higher goals. Adams (1963) totally negates the
notion and conduce the idea of equitable rewards; according to him people can be motivated
only if they are treated in an equitable manner. Equity theory says that reward or pay system
is considered fair if they are perceived to be fair (Jaques, 1961).
Azasu (2009) suggested the Principal-agency theory in which mostly people are
opportunist and always motivated through monetary rewards, while socioeconomic theorist
argue that people are neither inclined toward monetary reward nor they have homogeneous
approach, they might be fascinated by the cocktail of monetary and non-monetary rewards
that can be the potent to enhance their motivation and commitment (Malhotra et al., 2007).
Vandenberg he et al. (2008) links the big five personality attributes (extroversion,
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agreeableness, conscientiousness, stability and openness to experience to performance of

employee. Employees possessing the traits of Extroversion and agreeableness observed to be
more cooperative. Extroverts pay more attention towards social interaction, agreeable and
conscientious employees are more inclined towards future prospects like insurance, pension
and job security, etc.
Simply openness to experience exercises positive impact on the opportunities of career
development. Fay and Thompson (2001) has indicated several studies about the evaluation of
reward criteria in employers viewpoint, but failed to locate a single evaluating strategy that
prophases the rewards impact on employees performance. Armstrong and Brown (2005)
considered the failure of evaluationa blind spot for the management involved in reward
practices. Researchers are tentative about the standards that can forecast the success factors of
rewards because most programs identical in nature, in one situation are successful in
employees point of view, but not in another scenario present the same results (Brown, 2008).
Thus, it is evident from the empirical research of various studies that the concrete data is out
of stock and it often thwarts the evaluation of reward program in an accurate way. Despite the
critical factors involved in evaluation of rewards, numbers of surveys have come across the
effectiveness of rewards schemes in weighing the employees performance (Fay and
Thompson, 2001). Buch (2006) found in his study, the concept of six sigma that indicates the
four categories of rewards, that is, intrinsic, extrinsic, and social and the organizational
remuneration. Intrinsic rewards refer to internal feelings of satisfaction, involvement, growth,
autonomy and self-competence an individual experience during his career (Allen et al.,
2004).
Extrinsic rewards are based upon organizational participation and performance and further
categorized into direct and indirect form (Westover and Taylor, 2008). Larson (2003)
considered the direct reward as a small token of appreciation while indirect refers to the
financial security and better future prospects. Social rewards that are related to Alderfers
social, relatedness and affiliation (Alderfer, 1969) are associated with team based projects
that reinforce the employees to interact with peers in order to obtain the shared goal outcomes
(Larson, 2003). Organizational rewards refer the probability of increased profits and
productivity; extensive training that streamlined the main business processes and good
communication between the employees and management.
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Sr
No
Comp
any
Name
Annual
Bonus
Ann
ual
Lea
ves
Leave
s
Eid
Bonu
s
Marri
age
Medical
OP
D
AFAQ
2/3 of
basic
salary
Casual
7, Sick 7
500010000
15
(carr
y
forwa
rd,
no
encash
ment
Casual
10, Sick
10 with
3 years
carry
forward
Comp
any
Produ
cts
(juices
,
water,
)
lumsu
m
110k,
Bakra
allowa
nce
20,00
0 for
worke
rs +
3-4
salarie
s
14
Casual
+ Sick
18
Rs
10,00
0
EidUlFi
tar
14
Nestle
2-3.5
Salaries
approx.
(compan
y Profits
Based)
workers
3,4
salaries,
field 2-3
bonus
3
Helpin
g hand
none
UFone
sales and
operation
al staf
on their
KPIS 2
salaries
top
manage
ment ,
middle
manage
ment 1
salary
Superi
or
univers
ity
None
(minimu
m 10-20
% annual
incremen
t)
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20
18
20
Casual
10, Sick
10
none
Suppo
rting
staf
2-10
He
alt
h/
Life
Ins
ura
nce
Car
Fuel
and
200
00
Pak
Qat
ar
Taka
ful 6
lakh
per
life
Cadre 2 and
1 only
10000
80,000
Maternity
35000
Normal
Hospitaliza
tion upto
4-8 lakhs
800
00
For
Par
ent
s
50
%
limi
t is
120
00
sam
e
roo
m
rent
650
00,
100
K
80,0
00400
K
Executive
Grade
(Officer level
800cc) 80 E
(field staf
and office
staf both)
Office staf
loan 45E
AsstMngr
1000CC
Manager
1300CC
book value
20% E
none
Takafull
2500075000
100
00
Non
e
Car and Bike

from
Provident
Fund
Non
e
Executive
sales =fuel
150 liter
monthly, for
managers
company
pay 25k per
mont for car
(180 liter per
month for
fuel)
In
Proc
ess
Secretaries
and Senior
Faculty and
Managerial
sales staf
(Awarded)
8000
60000 for
employee
and 30000
for
dependent
s
cake
and
flowers
20k
(Normal),3
0k ( C
session)
100
%
10000
after 12
months of
employme
nt (3
Months
leave with
pay)
In
Pro
ces
s
Industrial Practices Survey
Introduction of AFAQ HR Department

As we have conduct the interview of Mr. Asif Mushtaq who is representing our client and he
is currently working in AFAQ HR department as a General Manager HR & Admin. As we
asked him different kind of Question regarding their organization and their HR department,
According to him HR department is the most active and hardworking department of AFAQ
which is only exist in their Head Office. The core area of AFAQ HR Department is focuses
on employees and their performance. They are utilizing all the major function of HR in their
company. He also explains that this department promotes a motivated and committed
workforce for AFAQ, for ideal productivity through efficient processes. The HR Department
has extensive experience in designing and administering relevant, balanced and practical
solutions and initiatives to achieve organizational goals by empowering employees of AFAQ
to perform at their ultimate level. This department approach is results-oriented, transparent
and time-bound, geared towards supporting organizational success in AFAQ.
The department promotes workforce excellence through recruitment, applicant screening and
employee relations. The aim of the Human Resources Department is to recruit, retain and
develop high quality staff; to promote and encourage diversity at all levels within the
company to enable the company maintain and improve its competitive advantage.
It is very well established and most active department in AFAQ according to the interview.
This department is applying all the major fountains of HR in practical way. The hierarchy of
HR and Admin department is well structured and they also mention the proper reporting
system in this department.
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Total strengths of HR & Admin:
15 employees
Employees in AFAQ HR Department

Sr. No
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
Name
Mr. AsifMushta
Mr. AbidRasheed
Mr. JavedMunir
Mr. Ayyaz Ahmed
Mr. Shaheer Khan
Mr. Salaman
Mr. Imran Khalid
Mr. Tariq Mehmood
Mr. Hafiz Umair
Mr. Ali Raza
Mr. Saud Ahmed
Mr. Ahmed Sajjad
Mr. Hassan Khalid
Mr. MusoddaqHussain
Mr. Nadeem
Designation
GM HR
Manager Admin
Deputy HR (R&S)
Coordinator PMS
AM Purchase
AM Admin
Training Coordinator
ISO Coordinator
Purchase Officer
HR Executive
Admin Executive
Admin Officer
Admin Officer
Purchase executive
Purchase coordinator
Department
HR & ADMIN
HR & ADMIN
HR & ADMIN
HR & ADMIN
HR & ADMIN
HR & ADMIN
HR & ADMIN
HR & ADMIN
HR & ADMIN
HR & ADMIN
HR & ADMIN
HR & ADMIN
HR & ADMIN
HR & ADMIN
HR & ADMIN
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Compensation and reward system advantages

A well designed compensation and benefits plan helps to attract, motivate and retain talent in
your firm (which is AFAQ).
With the help of good reward and compensation system your employees would be
happy with their jobs and would love to work for you if they get fair rewards in
exchange of their services. You have found proper job satisfaction from employee end
with this system

Another benefit of compensation and reward system is that it will increase the
motivational level of your employees. We all have different kinds of needs. Some of
us want money so they work for the company which gives them higher pay. Some
value achievement more than money, they would associate themselves with firms
which offer greater chances of promotion, learning and development. A compensation
plan that hits workers needs is more likely to motivate them to act in the desired way.
An ideal compensation system will have positive impact on the efficiency and results
produced by employees. It will encourage the employees to perform better and
achieve the standards fixed.

It will enhance the process of job evaluation. It will also help in setting up an ideal job
evaluation and the set standards would be more realistic and achievable.
Such a system should be well defined and uniform. It will be apply to all the levels of
the organization as a general system.

It will raise the morale, efficiency and cooperation among the workers. It, being just
and fair would provide satisfaction to the workers.

Such system should also solve disputes between the employee and management.
It should motivate and encouragement those who perform better and should provide
opportunities for those who wish to excel.

It aims at creating a healthy competition among them and encourages employees to
work hard and efficiently.

The proper compensation and reward system provides growth and advancement
opportunities to the deserving employees.

The perfect compensation system provides platform for happy and satisfied
workforce. This minimizes the employee turnover. The organization enjoys the
stability.
21 | P a g e
The organization is able to retain the best talent by providing them adequate
compensation thereby stopping them from switching over to another job.
SignificanceoftheStudy
The importance of this study cannot be over emphasized due to the fact that, it holds a lot
benefit to ensure continuous existence and survival of organizations, the study will be great
benefit to manager or human resource department of AFAQ regarding the identification of
effective reward and compensation, system, it cost and benefit on organizational operations.
In addition, the study or project clarifies the argument on weather effective reward and
compensation system adds value to organizational activities, which will enable organizations
take profitable side on whether to compensate employees or not. This research due to
adequate review of various up-to-date literatures is a source of material
Knowledge they say, is power this research work exposed the researcher to many practical
issues on human resource, reward and compensation system and the respective relationship
that exist between effective reward and compensation system, productivity customer
patronage as well as organization productivity and profitability.
Methodology:
22 | P a g e
This research was designed as a report on our client (AFAQ). There are two type of data used
for this research study first one is primary data which we have collect from interviews and the
2nd one secondary data which was collected from different articles, book, internet etc. The
main data source was from the interviews and that was approximately 4 to 5 semi-structured
interviews conducted with GM HR managers at AFAQ. Our main Questions aimed to
identify their problem. After getting their point of view or problem we are focusing on
rewards compensation related to our client. A second stage of research was a web-based
survey. We have selected 5 different organizations which are currently working in Pakistani
and we have conducted an interview from different resource persons who are the employees
of these organization. We asked them different kind of question regarding the reward and
compensation practices in their organization. After that secondary data was collected from
annual reports, journals, internet, books and etc.
The basic aim of this research is to identify the best solution for client to designing an
effective and efficient reward and compensation management system to their organization.
The population of this research was included management of AFAQ, Nestle, Helping Hand,
Superior, Ufone from there we have collect our data. So that after collecting data from our
sample, we analyze the industrial practice for giving the best solution for our client
As we have to provide our expert opinion to our client being a consultant. Our research was
based on the fact that the company needed a proper system that was concise, effective and
efficient. As our client company is on development phase and it is a crucial stage in any
organization, it was observed that if such a system is developed in early stages, it could prove
to be very beneficial in long term.
We are mainly focusing on only one method of research for our project that is quantitative
approach, using this approach to find out or design reward management system by analyzing
the industrial reward management system implemented in same relative industry.
23 | P a g e
Compensation & Performance Based Reward GuidelineDraft for

AFAQ
Types of reward
1.
2.
3.
4.
5.
6.
7.
Reward on Targets Achievements

Reward on Exceptional Work or Achievements
Market Based Incentives
Reward on Educational or professional Advancement
Rewards for Children of Employees
Service and Retirement Awards
Employee of the Month
Recommendation & Parameters

Scope:
This guideline is applicable on all the activities related to employee performance, cost
saving and their value addition in AFAQ (association for academic quality).
Guideline:
24 | P a g e
AFAQ recognizes its employees valuable contribution to the achievement of their

objectives.The aim of this Guideline is to motivate the employees to give their best to the
organization so that AFAQ could reward them and recognize their efforts according to
their performance.
Procedure:
General Procedure:
Annual targets at department level must be signed and a copy should be

submitted to HR Department at the start of every financial year.
Department targets must be break upped at individual level and on monthly

basis by Head of Department.
Any change in plan must be updated within 15 days after the approval and also
be submitted to HR department.
Nominations shall be submitted on the Performance based rewards form to

HR and admin department.
After receiving request from of Department, HR department shall check the

form and evidence related to request. HR will be responsible for checking the
eligibility of employee for the rewards.
HR may request additional information and / or interview as necessary.
In case of any related problem / rejection of the form the head of department
shall submit the grievance to Head HR in written form.
Mandatory Requirements
The employee has demonstrated exceptional effort or accomplishment beyond

what is normally expected on the job over a sustained period of time
Ineligibility:
25 | P a g e
The following employees are ineligible for performance based rewards
Employee who have already taken rewards/ incentives on the basis of their
performance like EPA, Training, and Sales etc.
Employees who are currently on performance improvement plan
Interns, probationers or Employees who are on notice period.
Employees who have received some sort of disciplinary warning related to

performance (Explanation, Demotion, Suspension) within last three months.
Reward on Targets Achievements:
In case of achievement of annual targets the employee will be given the reward
as per the below formula.
(Average of Percentage of Achievement * 3 Gross Salaries)
Example:
Target
Achievement
Percentage
Target 1
15
12
80%
Target 2
20
25
125%
Target 3
200
250
125%
Target 4
12
11
92%
Target 5
150
100
67%
Total
98%
98% * 3 Gross Salaries
Any individual other than supervisory position shall be entitled for performance
based reward if he has completed his targets even if overall departments targets
were not achieved.
Reward on Exceptional Work or Achievements:

If an employee has performed well or achieved something exceptional in any of the
following areas then he will be given a written appreciation letter and a cash reward
26 | P a g e
of (15%-40%) of his gross salary or leave with pay (depending upon the level of
achievement). This achievement can be both internal and external
1. Out Standing work Effort
The employee has positively exceeded normal job responsibilities and

expectations over a sustained period of time.
The employee has demonstrated exceptional effort or accomplishment

beyond what is normally expected on the job for a unique even or over
a sustained period of time.
Over and above achievements in targets with in already approved

budget.
Value addition in work which obviously effects on quality, time,

productivity and service delivery
2. Improvement in department Operations
Creative Idea generation which should be possible within available

resources.
He has positively exceeded normal job responsibilities and

expectations other than his prime responsibilities over a sustained
period of time. E.g. Cross functional working etc.
3. Cost Saving
The employee has increased productivity, generated savings within the

department or has submitted a cost savings proposal. Cost savings shall
be documented in the justification. For Example
Increased Revenue within the department
Saved significant money and/ or time expenditures
4. Community Services / Sports/ Extra Curricular Activities
Increased or improved public service/safety/health
Has done exceptionally well in sports, extracurricular activities.
Market Based Incentives:
27 | P a g e
The employee is being rewarded as part of a pre-approved incentive award.to meet

targetedhuman resource requirements in a fiscal year. These may vary from (10% 100%) of gross salary
1. Retention Incentive
For an employee who has unusually high or unique qualification that are
essential for the organization.
2. Recruitment or signing Incentive
To incentivize a qualified job applicant to work for the organization
3. Scarce Skills Incentive
To attract a qualified job candidate who has scarce skills required for
the job
4. Relocation Incentive
For a current employee who must relocate to accept a position in a

different location/ area.
Reward on Educational or professional Advancement:

If an employee completes a degree program, certification or training then he will be
given a monetary reward as follows
Completion of Degree
(Gross Salary*40%)
Completion of Certification/ Diploma
(Gross Salary*30%)
Qualifying learning and development modules
(Gross Salary*25%)
Qualifying assigned training hours
(Gross Salary*20%)
with tangible evidence of improvement
Submission of a Research paper
(Gross Salary*15%)
Service and Retirement Awards
After completion of 5 years of service and every five years after that a cash
reward of 2 Gross salaries will be given with a shield of acknowledgement of
services.
After the retirement a proper ceremony shall be conducted led by top

management and employee will be given his gratuity, Provident Fund or any
other outstanding dues. Also a cash reward of 2 gross salaries with a shield of
acknowledgement of services.
28 | P a g e
Rewards for Children of Employees:

If a child of an employee gets a position in school, college or university annual exams
and performs exceptionally in educational/extracurricular activities then he/she will
be given a cash reward and a certificate from AFAQ. The details are as follows
1. First 3 positions in Class
Scholarship up to 4 Months equal fee
2. First 3 position in Sports / Extra-Curricular activity
3. First 3 position in Province/ Country level
4. Received Distinction/ Appreciation
All the rewards shall be given in cash form and it will be ensured that these are
spent on the farewell and appreciation of child by his/ her parents.
In case if student studies in public sector school/college or university then he/

she will be given rewards as per average scholarships paid or as decided by
management.
29 | P a g e
Employee of the month Guideline draft for AFAQ:

Purpose
To appreciate/recognized the efforts of AFAQ employees to achieve organizational

goals and to fulfill its vision/mission statement. To motivate our employee for
continues their effective and efficient performance in future. Outstanding employees
deserve to be acknowledged for a reward and also a role model for other employees
ELIGIBILITY
All the permanent employees of AFAQ are eligible for the employee of the month
reward
PROCESS:
Employee of the month ( Nomination) form shall be submitted by Region to HR &

Admin department Before 25th of every month ,Nominations will reviewed by the
selection Committee (Represented By HR), the final decision will decided by the
committee and send it to GM HR & admin for approval. After the approval the
appreciation letter will send to the particular region By HR & Admin to organized
Employee of the month ceremony
Criteria for the assessment of employee of the month
Employee Monthly appraisal should be submitted by supervisor at 25th of each month

The attendance of nominated employee must be 100% (No absentees in a month)
The employee of the month form shall be submitted to HR & Admin before 25th of
each month
If the monthly appraisal of employee isnt submitted then the nominated employee is
not eligible for this reward
Awards
30 | P a g e
An Appreciation letter By HR
Employee of the month Shield with Name of employee
Picture of employees will hanged on RH Office with the title of Employee of the
month
PRs. 20,00 Cash Bonus
31 | P a g e
Results/ Finding of analysis/ Recommendations:

After the detail analysis and research which we have done at above. Being a consultant, we
highly recommended to our Client that if they implement compensation and reward
management guideline and proper system into their organotin, their employees performance
and loyalty level with organization will increase day by day.
Step1:
Our client must read our report in detail and try to understand the importance of
compensation and reward system within the organization

After that our client must re-define their current compensation and reward policies
and procedure
Based on the above facts and figure, most of the companies are properly entertain
their employee with the help of their C&B system so that keeping in view of
industrial practices AFAQ(association for Academic Quality) must provide some sort
of benefits to their employee to increase their motivational level
Step 2
On the 2nd step AFAQ has to do a deep analysis of this report and will write their own
company policy regarding compensation and reward system

After that these policy must have to communicate in their all regions, each and every
employee must know about the policy

When the policy has been communicated, AFAQ HR depart should take step to
implement this policy in the starting of their fiscal year
32 | P a g e
Conclusion:
At the end we conclude that this report will very beneficial for our client at the time of
designing and implementing their compensation and reward management system. In this
report we have done a detail research about the compensation and reward system. We can say
that if AFAQ Pakistan do adopt the purpose compensation and reward management system it
will help them not only in overcoming the performance gap it will increase the performance
of the employees and the organization as well.
The report indicated the vital importance of C&B system in an organization. The value and
benefits of C&B are very much in the favor of the organization. Our report described this if
the C&B is properly implemented in AFAQ then their turnover ratio will decrease
Additionally, it will helps to improve the departments overall performance. This system will
have impact on all the departments of the organization Marketing & Sales department,
Training Department, Educational Services and so on. With the help of this system your
employee motivational level will increase
References:
33 | P a g e

Malhotra N, Budhwar P, Prowse P (2007). Linking rewards tocommitment: an
empirical investigation of four UK call centres. Int. J. Hum. Res. Manage., 18(12):
2095-2127.
Maslow A (1954).Motivation and Personality, Harper &Row, New York Milkovich
GM, Newman JM (2004). Compensation (8th ed.). Burr Ridge, IL: Irwin McGrawHill.
Miller D, Hartwick J (2002). Spotting management fads. Harvard. Bus. Rev.,
80(10): 26-27.
ONeal S (1998). The phenomenon of total rewards. ACA J., 7(3): 6-18. Pennings J
(1993). Executive Reward System: A Cross-National Comparison. J. Manage.
Stud., 30(2): 26180.
Pfau BN, Kay IT (2002). The five key elements of a total reward and
accountability orientation. Ben. Q. 3 rd Q., 18(3): 7-15.
Leininger J (2007). Recent compensation and benefits trends in China. China.
Bus. Rev., 34(4): 28-30.
Vandenberghe C, St-Onge S, Robineau E (2008). An analysis of the relation
between personality and the attraction of total rewards components. Ind. Relat.,
3(3): 425-453.
Gross SE, Friedman HM (2004).Creating an efective total reward strategy:
holistic approach better support business success. Ben. Quart. 3rd Q., 20(3): 712.
Adams JS (1963). Toward an understanding of inequity. J. Abnorm. Soc. Psychol.,
2: 267-299.
Alderfer CP (1969). An empirical test of a new theory of human needs. Organ.
Behav. Hum. Perf., 4(2): 142-175.
Allen RS, Takeda MB, White CS, Helms MM (2004). Rewards and organizational
performance in Japan and the United States: a comparison. Compens. Ben. Rev.,
36(1): 7-14.
Armstrong M, Stephen P (2005). A hand book of employee reward management
and practice. London: Kogan Page.
Armstrong M, Brown D (2005). Reward strategies and trends in the United
Kingdom: the land of diverse and pragmatic dreams Compens. Ben. Rev., 37(4):
41-53.
Armstrong M (2007). A handbook of employee reward management and
practice. London: Kogan Page.
Armstrong M, Murlis H (1988). Reward Management: A Handbook of Salary
Administration. London: Kogan Page.
34 | P a g e

Azasu S (2009). Rewards and performance of Swedish real estate firms.
Compens. Ben. Rev., 41(4): 19-28.
Baruch Y (2004). Managing careers: theory and practice. Harlow: FT Prentice-Hall
Bratton J, Gold J (2003). Human Resource Management: Theory and practice (3rd
ed.). New York: Palgrave Macmillan.
Brown D, West M (2005). Rewarding service? Using reward policies to deliver
your customer service strategy. WorldatWork J., 14(4): 22-30.
Brown DI (2008). Measuring the efectiveness of pay and rewards: the Achilles
heel of contemporary reward professionals. Compens. Ben. Rev., 40(5): 23-41.
Buch K (2006). Employee perceptions of the rewards associated with six-sigma.
J. Organ. C. Ma., 19(3): 356-364.
35 | P a g e
Appendixes:
ASSOCIATION FOR ACADEMIC QUALITY

Employee of the Month Nomination Form
Nominee Name: __________________Designation:________________Department:______________
Supervisor Name: _________________ Designation:

_______________Department:______________
Region: ____________________________ Month: ____________________________________
Date of Joining: ____________________ Any Previous Award: ____________________________
Please fill the following areas
Why you would like to nominate this employee:
Employee Input in new task, duties, Project for the betterment of AFAQ:
Demonstration of Job commitment:
Other related qualities:
Your general thoughts about the employees:
36 | P a g e
Additional Apprication Comments:
______________
Signed By HOD
______________________
______________________
Checked By Selection Committee
Approved By
GM HR & Admin
37 | P a g e
Project Title:
Design/Develop Compensation and reward management system for AFAQ (Association for
Academic Quality)
Project Objective:
The major objectives of our project are as below
To establish a proper compensation and reward management system and policy in AFAQ
by giving our expertise and services
To increase the employee productivity and motivation level with help of this
compensation and reward system
To analyze the available reward package and how it affect employees and organizational
overall performance
To identify the best practice of compensation and reward in Pakistan by practical research
and survey that will help AFAQ
Project Scope:
This research and consultancy project work is undertaken to develop and establish policy of
compensation and reward management for AFAQ ( Association for Academic Quality ) and
also analyses the impact of reward and compensation system on the productivity of
employees in an organization though proper research. The project will define that how this
policy will affect the organization internally (All the department of AFAQ i.e marketing,
Human resource, accounts and finance, encyclopedia, Educational Service and Training) and
externally (Potential Employees) as well. It will help to eliminate the turnover rate and also
improve the performance of employee. This project (compensation and reward system) will
help to enhance the motivational level of AFAQ employees to stay in the organization with
38 | P a g e
effective and efficient productivity of organization and employee
Project Reason:
The main reason to take initiative for this project is to our project client (AFAQ) is facing a
problem to retain their employees due to not having a proper system of compensation and
reward. He want our services to develop a proper compensation and reward system for their
company. According to him if they dont implement a proper compensation system in AFAQ
then their employees will leave their organization and their turnover rate is increase in every
year, so it is necessary for them.
Project Priority:
As reference with the meeting of our client we identify that this project will be a very high
priority from our client (AFAQ) end and our side as well
Project Leader/key contact:

This project will have three team member
1. Mr. Hafiz FaheemAzhar
(Project Leader)
2. Miss Fatima Akaba
(Project Assistant)
3. Miss Faryal Akhtar
(Project Assistant)
All the major duties will be lead from our project leader and he will have all the meetings of
project with our client. He will guide other team members in this project and take their input
as well. He will also assign the duties and responsibilities to other team members
Project Outputs:
After successfully implementing this project AFAQ will face the following outputs as below
With the help of this compensation and reward policy AFAQ will retain their best
talent with effective and high motivational level

The effectiveness and efficacy level of productivity by employee will increase
Competitive advantage
Job Satisfaction of employee will increase
39 | P a g e
The turnover rate of employee will decrease
How will the success of the initiative be measured:

The success of this project will measure when the project will deliver and AFAQ will
implement the suggested policy of compensation and reward. On our end we will complete
our project on timely basis (expected time given). We will also provide all the necessary
documents, forms, survey results, reports and material to AFAQ
Resources:
In this project we just need 3 to 4 human resource who will provide their expertise and
service to develop compensation and reward policy for AFAQ
Key Stakeholders:
As concern with this project stakeholder, all those employees who are currently working in
AFAQ and provide their services are effected with this policy
Major Risks:
The major risk of this project are as below
1.
2.
3.
4.
5.
Internal and external employee

Governments laws
Political instability
Compensation practices change
Inflation Rate
Minimizing the Risks:

If any risk occur after the successfully implementation then AFAQ should revise their policy
according to the new trends, practices and law
Governance:
The top management of this project is our project leader and the client representatives by
AFAQ for this project. If any changes are required during the project from our client and
from our side as well we will generate the proper CR (Change request) and mention all the
40 | P a g e
required changes in detail. Both parties will have the detail meeting on the change request
and at the end sign the agreement from both parties
41 | P a g e

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AFAQ (Association for Academic Quality)

Miss. Fatima Akbar

Miss. Faryal Akhter

AFAQ (Association for Academic Quality)

AFAQ (Association for Academic Quality)

AFAQ (Association for Academic Quality)

AFAQ (Association for Academic Quality)

AFAQ (Association for Academic Quality)

AFAQ (Association for Academic Quality)

Quality Guideline of AFAQ

Mission & Vision of AFAQ

Core Areas/Departments of AFAQ

Top Management of AFAQ

AFAQ (Association for Academic Quality)

Mr. Dr. Shoib Hassan Murad (Chairman)

Total strength of AFAQ

AFAQ (Association for Academic Quality)

2. Miss Fatima Akaba

3. Miss Faryal Akhtar

AFAQ (Association for Academic Quality)

AFAQ (Association for Academic Quality)

AFAQ (Association for Academic Quality)

AFAQ (Association for Academic Quality)

curriculum development, provision of school facilities and monitoring and supervision of

AFAQ (Association for Academic Quality)

AFAQ (Association for Academic Quality)

AFAQ (Association for Academic Quality)

agreeableness, conscientiousness, stability and openness to experience to performance of

AFAQ (Association for Academic Quality)

AFAQ (Association for Academic Quality)

Car and Bike

Superior University Lahore

AFAQ (Association for Academic Quality)

Industrial Practices Survey

Introduction of AFAQ HR Department

AFAQ (Association for Academic Quality)

Total strengths of HR & Admin:

Employees in AFAQ HR Department

AFAQ (Association for Academic Quality)

Compensation and reward system advantages

with this system

achieve the standards fixed.

the organization as a general system.

and fair would provide satisfaction to the workers.

opportunities for those who wish to excel.

work hard and efficiently.

opportunities to the deserving employees.

AFAQ (Association for Academic Quality)

AFAQ (Association for Academic Quality)

AFAQ (Association for Academic Quality)

Compensation & Performance Based Reward GuidelineDraft for

Reward on Targets Achievements

Recommendation & Parameters

AFAQ (Association for Academic Quality)

AFAQ recognizes its employees valuable contribution to the achievement of their

Annual targets at department level must be signed and a copy should be

Department targets must be break upped at individual level and on monthly

Nominations shall be submitted on the Performance based rewards form to

After receiving request from of Department, HR department shall check the

HR may request additional information and / or interview as necessary.

The employee has demonstrated exceptional effort or accomplishment beyond

AFAQ (Association for Academic Quality)

The following employees are ineligible for performance based rewards

Employees who are currently on performance improvement plan

Region: Month: ________

Date of Joining: Any Previous Award: ________