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Managing Human Capital

Project on KFC Human Resource

Presented By
Insha Nadir 083705026
Hajira Imtiaz 083805157
Asma Zia Ch. 083805141
Sareen Zulfiqar 083805160
Marium Noor 083805142
Aroma Qamar 083805218
Roha Musadiq 083805156

Presented to

Mr. Imran Akbar

University of Management & Technology

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Table of Contents
Executive Summary.....................................................................................................................................3

Introduction.................................................................................................................................................4

Industry...................................................................................................................................................4

Cupola Group......................................................................................................................................4

KFC Pakistan.......................................................................................................................................4

COMPANY BACK GROUND................................................................................................................6

Analysis of External and Internal Environments.........................................................................................7

External Environment..............................................................................................................................7

Company Profile..................................................................................................................................7

Opportunities.......................................................................................................................................9

Threats.................................................................................................................................................9

Competitors.......................................................................................................................................10

Internal Environment.............................................................................................................................10

Unionization......................................................................................................................................10

Theoretical background.............................................................................................................................11

HRM versus personnel management.....................................................................................................11

HR partner perspective..........................................................................................................................12

HR IT-systems.......................................................................................................................................12

Development in HRM...........................................................................................................................12

Implication................................................................................................................................................12

Problems....................................................................................................................................................17

Suggestion.................................................................................................................................................17

Logic behind the Suggestions....................................................................................................................17

References.................................................................................................................................................18

Appendices................................................................................................................................................19

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Executive Summary
KFC, founded and also known as Kentucky Fried Chicken, is a chain of fast food restaurants
based in Louisville, Kentucky, in the United States. KFC is operated by the Cupola group
operating in Pakistan. KFC was established in 1997 Cupola is a Dubai based company that
internationally owns many brands and establishes them and after that sales them. KFC is also
owned by Cupola. The main focus is customer. They want to make them delight and provide
them with quality of food and services. The organizational structure is matrix or hybrid which
has two distinct regions south and north. The staff is also divided. With the influence of political
instability and natural diseases in bird which have affected the sales and revenue of the company.
That is why their margin is low. They have their own possessions and no other way of funding.
The main problems they are facing are regarding their services and lack of marketing support.HR
department is responsible for determine the classification system. It is based on Categories and
Benefits. The main difficulties in KFC regarding the HR is acceptability like in many other
organizations in Pakistan the HR department is very week, or you can say that people doesnt
bother about the recruitment and selection, like if there is a post of marketing then marketing
head is appointing his person according to him, if there is a post in finance the finance manager
appointing it so they didnt bother to have HR department and the think that it is waste of assets
having a support department of the HR so due to that thinking the performance of the company is
not become consistent and even the one department have no idea that what is going in other
department so the organization have lost their goals and forget the vision because the people
which are hired by the department heads have no concern with the basic goal and vision of the
company which ultimately leads towards the bad performance. The hierarchy and system of KFC
is very strong. System is so good that In a total system there is 5% issue only if there is 1500
staff but not a large number because company structure is so very strong. No as such disciplinary
problem is found in KFC. And if it occurs KFC senior team portrays in such a manner to whole
company that the employees dont do it again or think to do it. Time to time employee tardiness,
absenteeism and turn over stays but not eliminated. Meeting takes place for such purpose. No
union is found in KFC. Things are very controlled in such a manner that such stuff is controlled
to a lot of extent, that no chance of developing the unionism.

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Introduction

KFC, founded and also known as Kentucky Fried Chicken, is a chain of fast food restaurants
based in Louisville, Kentucky, in the United States. KFC has been a brand and operating
segment, termed of Yum! Brands since 1997 when that company was spun off from PepsiCo as
Tricon Global Restaurants Inc. The company was founded as Kentucky Fried Chicken by
Colonel Harland Sanders in 1952, though the idea of KFC's fried chicken actually goes back to
1930.

Perfecting its secret recipe of 11 herbs and spices in 1939, KFC has come a long way, with
over 10,000 outlets in the world; KFC has maintained its title, for the last 60 years, of being The
Chicken Experts.

Industry
The industry is fast food industry.

Cupola Group
Cupola Pakistan is one of the operating entities of the Cupola Investment Group. In Pakistan the
operations focus primarily on the consumer and retail sector. The groups success has been in
creating a portfolio of franchises in the region, in sectors like food, entertainment, consumer and
business services. KFC is one of the highly successful franchises of Cupola Pakistan. Other
ventures related to food retail are Indulge, Casa and Lal Qila. Apart from food business, retail
supermarkets/convenience stores are also under this umbrella, by the name of My Super Store
and Loccitane. Diversity is what Cupola strives for.

KFC Pakistan
KFC is operated by the Cupola group operating in Pakistan. Presently KFC is branched out in
seventeen cities of Pakistan (Karachi, Lahore, Rawalpindi, Faisalabad, Multan, Peshawar,
Sialkot, Hyderabad, Murree, Abbottabad, Bhera, Sial, Sukheki, Chakri, Gujranwala, Jhelum, and
Islamabad) with 62 outlets nation-wide. KFC wore the title of being the market leader in the fast
food industry.

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In Pakistan KFC has been divided into two regions, North and South. In the South region, KFC
is serving Karachi and Hyderabad with 32 restaurants. Whereas, in the North region, they have a
chain of 30 restaurants; that are located in 15 cities. i.e. Lahore, Islamabad, Rawalpindi,
Peshawar, Multan, Sialkot, Jhelum, Gujranwala, Bhera, Chakri, Sukheki, Sial, Murree,
Abbottabad and Faisalabad.

1n 1997, Kentucky Fried Chicken entered the market under the banner of Artal, a European food
conglomerate which has invested heavily in the food sector in the Pakistan. It goes credit to KFC
that it was the first franchise to begin its operations from the densely populated area of Gulshan-
e- Iqbal. This unique step was taken out of the special concern for the middle and lower middle
class incomes groups who have so for being neglected by brand name franchises in their areas.
The first KFC restaurant opened its door in January 1997, drawing thousand of the eager
customers to enjoy quality food and friendly service in clean surrounding. Boosted by the huge
success of the first restaurant, new outlets mushroomed at prime location in both Karachi and
Lahore that continue to attract a record number of quality food lovers.

One of the major ones beings its contribution to the Pakistan economy by generating revenue and
creating employment. Each Kentucky Fried Chicken restaurant employ roughly 50 local people
which would total to near about one thousand direct employs in all- taking in all 18 restaurants in
Pakistan. Other than these there are number of indirect employs, for example, construction
workers who build the restaurant and suppliers. All direct employs have to undergo mandatory
training through extensive programs and a series of workshops in order to ensure efficient
management and services

Following info is summarized in the table below:

Type Wholly owned subsidiary

Industry Fast food

Genre Southern fried chicken

1930 (original) (North Corbin, Kentucky) 1952 (franchise) (South


Founded Salt Lake, Utah)

Founder(s) Harland Sanders

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Headquarters Louisville, Kentucky, U.S.

Key people Roger Eaton, President

Harvey R. Brownlea, COO

James O'Reilly, VP for Marketing

Products Fried chicken, grilled chicken, related Southern foods

Revenue $520.3 million USD (2007)[1]

Employees 24,000 (2007)[1]

Parent Yum! Brands

Website KFC.com

COMPANY BACK GROUND


The Government of Pakistan receives over Rs.10 million per month from KFC
Pakistan as direct taxes.

95% of all food and packing material used in KFC Pakistan is procured locally, which
sums up to a purchase of over Rs.35 million per month.

Presently KFC has provided employment to over 1200 Pakistanis, which adds up to
6000 individuals directly dependent on KFC Pakistan.

They spend 2% of its profits on advertisements

Ranks highest among all chicken restaurants INS for its convenience and Menu
variety. It generates $1B revenue each year.

KFC was losing market share as other Chicken chain increased sales at a faster rate.

KFC share of Chicken Segment sales fell from 71 percent 1999, to less than 56
percent in 2009, a 10-years drop of 15 percent. Developing countries like Pakistan
and China promises a good market and generation of demand in the future. With more

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than 70% of the markets in Pakistan being unexplored and un organized, KFC has a
good scope of expanding its operations in the country.

Total Pounds of Chicken Served in KFC Restaurant Annually = 1.914 Billion

Total KFC Chicken Pieces Sold Annually = 5.89 Billion

Total Retail Sales = $8.9 Billion

Sales Price of per Chicken Piece = Total Retail Sales / Chicken Pieces sold = $8.9
Billion / $5.89 Billion =$1.51 We assume that Fixed Cost is = $6000000000

Variable Cost = $675000000

Profit Margin is Or Mark Up = $225000000(25% of Sales) Per Unit Variable Cost =


$675000000 / 5890000000 = $ 0.115

Unit Cost = Variable Cost + Fixed Cost / Chicken pieces Sold = 0.115 +
6000000000 / 5890000000 = 0.115 + 1.02 = $1.135 Now suppose manufacturer
wants to earn 25% mark up on sale.

The manufacturer mark up price is calculated: Mark Up Price = Unit Cost / (1


Desired Return on Sales) =1.135 / (1-.25) = 1.135 / 0.75 = $1.51

Analysis of External and Internal Environments

External Environment

Company Profile

Current Products
KFC Corn On The Cob Enjoy Corn On the cob Rs.150.00

KFC Spicy Sub Enjoy Spicy Sub Rs.300.00

KFC Rice 'N' Spice Enjoy Rice Spice Rs.380.00

KFC Wings'n' Rice Enjoy Wings n Rice All Rs.380.00

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Family Members

KFC Hotshots Crispy Chicken Enjoy Hotshots Crispy Rs.400.00


Chunks Chicken Chunks

KFC Chicky Meal With Enjoy Chicky Meal With Rs.450.00


Premium Premium

KFC Twister Combo Enjoy Twister Rs.470.00

KFC Chicken Burger Combo Enjoy Chicken Burger Rs.485.00

KFC Nuggets Enjoy Nuggets Rs.490.00

KFC Rice 'N' Spice With Fish Enjoy Rice 'n' spice With Fish Rs.490.00
Zinger Zinger

KFC Zinger Burger Combo Enjoy Zinger Burger Rs.500.00

KFC Zinger Xtreme Combo Enjoy Zinger Xtreme Combo Rs.535.00

KFC Fish Zinger Combo Enjoy Fish Zinger Combo Rs.545.00

KFC Zinger WoW Meal Enjoy Zinger WoW Meal Rs.575.00

KFC Mighty Zinger Enjoy Mighty Zinger Rs.580.00

KFC Chicken Mania 3 Pcs Enjoy 3 Pcs Meal Rs.595.00


Meal

KFC Family Feats Enjoy All Family Rs.1620.00

Opportunities
New Markets

Globalization has opened doors for new markets for the company. As the developed markets are
mostly saturated, the developing countries like Pakistan and China promises a good market and
generation of demand in the future. With more than 70% of the markets in Pakistan being
unexplored and un organized, KFC has a good scope of expanding its operations in the country.

Cross Culture

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Generally there is a good acceptance of American culture of fast food in Pakistan. People are
opening up to fast foods more regularly in their daily lives and not just keeping it a once in a
month affair. Thus Pakistan mindset is fast changing.

Large Youth population

Pakistan has a very large share of youth population a compared to other countries. More than
60% of the population is under the age of 30yrs. As the young generation is more open to fast
foods and demands it more, this is good news for the company.

New variety

Company can also come up with new variety in the menu like Pizzas, garlic breads to attract
more customers.

Threats
Competition

Competitor companies like McDonalds are fast catching up with the market. McDonalds with
sales of more than 19 billion in 1999, accounted for 15 percent of the sales of the nations top
100 restaurant chains.

Organizations like PETA

People for Ethnic Treatment for Animals have given a bad name to the company which may
prove disastrous to the image of the firm. Currently, KFC is under massive attacks from animal
organizations, questioning the way KFCs suppliers are threatening the chicken, before they got
slaughtered. Anti-KFC campaigns, such as the one from PETA are affecting KFCs brand image
in a negative way and result in direct dollar losses, as less people are consuming KFC chicken

Saturated US Market

Now KFC cannot rely on just its home market to generate sales. As the US markets are already
saturated and leave no or little scope for growth, company necessarily needs to look at offshore
foreign markets to generate sales and keep up the profits.

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Competitors

KFC Mc Donalds

Spicy Product

Pakistani People like spicy food rather French Fries and Burgers
than boiled food

Arabian Rice and Zinger Burger Big Mac

Free Delivery Chargers on Home Delivery

Chicken is eaten in very community Beef is banned is some community

Local stuff and highly qualified because Its stuff is consists of simple graduates and
local stuff can better deal with customers give them training

KFC uses Top to Bottom and Bottom to Mc Donalds use Top to Bottom approach
Top approach in their Management in their Management

Internal Environment

Unionization
Their exist no unionization in KFC

Workforce Characteristics
Job Security for employees

Growth opportunity for employees

Quality Enhancement Department to ensure employees health and safety

Theoretical background
HR-management is a vast and complex field of research, and the origins of modern HRM are
also complex. HRM today stems from a broad range of theoretical fields, ranging from sociology
and psychology to management and behaviouralism, much of which originated in USA in the
early 1900s with influences from Taylorism, through to Fordismand the social work revolution
of the 1920s. The real growth of the human relations approach began in the 1920s, when Elton
Mayo and his Hawthorne experiments showed that concern and care for employees well-being

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and a focus on the social behaviors of work could actually raise production, and this approach
was seen as an opposite to the prevalent Taylorism.

With a broad background of HRM we have focus on the two main directions, Soft and Hard
HRM. We have chosen to use these as a starting point for our theoretical background as these
will then act as a fundament for our analysis, to build our theoretical platform and analysis upon
these larger backgrounds.

HRM versus personnel management


There has been a longstanding debates as to the differences between Human resource
management and personnel management However, lets suffice to say that while personnel
management is said to be more operational and focused on the workforce, HRM is more strategic
and focuses on the view of employees as assets, and is more generalist in approach than
personnel management. Guest (1987) describes these differences, and states that HRM is more
strategic on focus, but is also more focused on the individual than the collective.HRM also
focuses on obtaining the commitment from employees rather than compliance, as personnel
management would do. Storey (1992) also suggests that HRM is a strategic tool that must be
used from the top executive level.

HR partner perspective
The function of HR-management can also be as a partner. In the instance of acting as a business-
partner, HR will impact the performance of the organization by focusing on managing the
human-capital. When acting as a strategic partner, HR will be focused on both conceptualizing
the business strategy and realizing it, since the allocation and management of human-capital is
crucial in both stages.

HR IT-systems
The use of IT-systems and Intra-net is also an important part of the future of HR. Not only
because the use of such systems can handle all administrative functions of HR, but also since it
can be used by executives as a strategic planning tool, to track the HR-strategies and functions of
the organization more easily.

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This is also related to the size of the company. Larger companies are more likely to use a
decentralized and general HR-management system and implement larger IT-structures and
organizational-wide HR-systems

Development in HRM
Bogot, Colombia - April 2011 - TOTVS , leading business development and marketing of
integrated business management software, launches a new internal campaign called "All In
Balance", to strengthen its value must always be a people-based business, believe that the quality
of life at work is the basis for the success of its employees and therefore, Company.

This program is part of a new form of Human Resources. "Everything In Balance" consists of
different actions to, not only improve the internal climate, but also to promote a more balanced
between work and personal life of employees. For this, Human Relations department of the
company, not only has the conventional channels of internal communication.

Implication
KFC was established in 1997 Cupola is a Dubai based company that internationally owns many
brands and establishes them and after that sales them. KFC is also owned by Cupola. The main
focus is customer. They want to make them delight and provide them with quality of food and
services. The organizational structure is matrix or hybrid which has two distinct regions south
and north. The staff is also divided. With the influence of political instability and natural diseases
in bird which have affected the sales and revenue of the company. That is why their margin is
low. They have their own property and no other way of funding. The main problems they are
facing are regarding their services and lack of marketing support.

KFC has a formal and identifiable department for human resource management; it is very
efficient and working effectively. The software used by HR department at KFC is very effective
in achieving its objectives.HR department at KFC is related to all other departments directly or
indirectly. The employees are hired with relevant knowledge and degree.HR department gains its
run time data from all the regions very effectively that helps in decision making. Performance
management system and HRIS system at KFC are very well organized and they work very
efficiently. They need to make routine tasks better and more effective to make the department
gain its objective and goals.

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About 80 % Human resource management is integrated into strategic management of the


organization. Through their need, training need , educational need and development etc. . People
part is linked with the profit maximization of the organization. They emphasis very much on
their human resources management and make 1 to 5 years plan regarding recruitment training
and appraisals of the employees. If the people part is mature and flexible then it will positively
help in the strategic management. HR manager of North and South departments deal in human
resource planning and forecasting for the organization. They keep the detailed record of all their
employees. Moreover their intelligence system is so strong that they easily determine the staffing
needs through it. Ideally job analysis and job descriptions should be revised annually but KFC
has not updated it since two years because they are using a very defined method which need to
be updated after three years. The organization has not faced any such problem in the human
resource planning. The only hurdle is the old employees show resistance in adapting a change
and training. In order to run the HR department efficiently it is very necessary to have detailed
know how about the department. Otherwise tasks cannot be performing competently. The
organization focuses a lot on the career planning and career counseling for the employees. The
regional managers actively participate in keeping a check on the training and counseling session
of the employees. Recently KFC has given career counseling to three of their employees .Out of
three people, two gave fruitful results.They evaluate job applicants by Evaluating the CV on the
basis of Job description, initial interview by HR manger Their could be a series of interview.
Then also do the personality test. The organization always prefers to fill existing Job vacancies
from present employees. From the last two years KFC is implementing this strategy because it
proofs to be beneficial in case of KFC whereas incase of Mcdonalds and warid it is not
beneficial. The organization do support diversity in the workplace .Now KFC has hired female
staff as well. The organization is not enhancing the work and family interface on large sake but
they keep the families record of their employees.

Occupational classification system is based on the Grading System is being used by the
organization. For this they have divided the employee into two parts.

Managerial Grades includes 3, 4 and 5

Non Managerial Grades Above 8

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HR department is responsible for determine the classification system. It is based on Categories


and Benefits. The performance of classification system appropriately reflects variation in job
skills and it is effectively use as mechanism for identifying carrier path. Recently they are doing
salary survey to review and evaluate the performance of classification system in relation to
organizational and personnel goals.

Wage and Salaries level and Annual Improvements are determined on the basis of Performance,
Inflation, Govt. conditions and Food buckets. The organization is able to attract and maintain an
effective workforce because of the reliability of the organization which is the competitive edge
of the organization. So we can say that their grade reflect the skills and responsibilities.

Incentive compensation is used by organization but it is not area specific rather it is great specific
on the basis of which incentive are given to employees like Car, Mobile, House rent, Petrol and
Medical etc. Following are the Methods which are being used for employees evaluation Panel
score card, Quarter evaluation, Daily employees performance check, Trend chart and HAY
method.

Non-Wage Fringe Benefits includes following benefits Leave encashment, Hajj draw, Petrol
allowance, Mobile, Mobile cards, Five type of leave, Three type of medical, Bonus and Sale
allowance. The Change in non wage fringe benefits depends upon situations and in future they
are planned to contract with UMT and Bahria Town in order to facilitate their employees. It will
help their employee and their family to get discounted education and residence.

To ensure the health and safety conditions of their employees they have special department
which is the Quality Enhancement (QE) Department. The organization is offering good
retirement option to their employees. They need to make improvement in compensation and
employees motivation they must increase the compensation due to inflation and other factors that
decrease the motivation level of the employees in order to motivate the employees.

For the purpose of employee training and development the organization has supported programs.
These programs have been established for better performance of the employees so that the
organization could flourish. The programs that have been established cover all the skills if
observed in general terms. But in basic terms, CSL; a book on HR and Finance has been
launched by KFC that is being distributed among all employees so that they could improve their

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job skills. Moreover, the supervisors and leaders are have to give presentations on specified time
intervals, otherwise they could not be promoted. Further, KFC had made contracts with UMT,
Virtual and other such universities by giving them their logo which benefits the universities by
marketing them and benefits the KFC employees by giving them special student discounts if any
employee desires to receive higher education. The organization maintains its own training staff
for training purposes and they welcome the outside employees as well for training. But they do
not hire outside organizations for the implementation of their training programs since, all
employees have to participate so all employees have participated in training and development
programs supported by the organization. The promotion decisions are purely based upon the
measured and observed abilities of employees and are partly based on an employees willingness
to take advantage of development opportunities. Further were told that to a reasonable extent the
organizations program of employee training and development have been used in making
decisions related to promotions and transfers within the organization.

Hierarchy and structure is very strong .KFC team have develop the culture that a person should
talk to immediate boss and if he is not taking any action then move forward and so on , also
every individual posses senior contact number with whole staff even a guard can call any one
and ask for help.

System is so good that In a total system there is 5% issue only if there is 1500 staff but not a
large number because company structure is so very strong. The employee grievances are
declined previously that is from past four years ratio it is quite less, but if hr system is properly
implemented in July it would be much more reduced. Certain issue of grievances is

Personal issues,

lease issue

benefits not availed

issues not clear,

Bosses not helping.

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Rights not identified by employees.

No as such disciplinary problem is found in KFC. And if it occurs KFC senior team portrays in
such a manner to whole company that the employees dont do it again or think to do it .The
branch manager Visit every KFC on weekly basis, and such problems are resolved immediately.
Clearly defined procedures for handling disciplinary cases are there. As per policy KFC team
took decision on time violation, absent 3 days without inform then usually they discharge
termination letter but doing through investigation and all, and took strict action according to the
particular case. The major disciplinary causes are personal issues.

Time to time employee tardiness, absenteeism and turn over stays but not eliminated. Meeting
takes place for such purpose. The major reasons for this are most people dont have interest to do
work and sometimes work load is more etc .Certain counseling sessions are arranged personally
for each employee. KFC follow VOC (voice of champion) strategy in order to resolve employee
grievances. Contractual staffs have meeting with and senior staff and hear what they have to say
and ask them for suggestions and further improvements. This helps to built more strong
relationship b/w employee and boss and also reduces turn over.No union is found in KFC.
Things are very controlled in such a manner that such stuff is controlled to a lot of extent, that no
chance of developing the unionism.

Problems
The main problem are in KFC regarding the HR is acceptability like in many other organizations
in Pakistan the HR department is very week, or you can say that people doesnt bother about the
recruitment and selection, like if there is a post of marketing then marketing head is appointing
his person according to him, if there is a post in finance the finance manager appointing it so
they didnt bother to have HR department and the think that it is waste of assets having a support
department of the HR so due to that thinking the performance of the company is not become
consistent and even the one department have no idea that what is going in other department so
the organization have lost their goals and forget the vision because the people which are hired by
the department heads have no concern with the basic goal and vision of the company which
ultimately leads towards the bad performance.

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Suggestion
First of all organization needs to know about the importance of the HR department.
In the case of acceptability it is need that every department should be aligned with HR .
When the strategies are going to make strategies should be made with the concern of HR .

Logic behind the Suggestions


So the reason behind these suggestion is that if any department head is appointing employees
without the concern of HR then maybe they think only about their department but the HR always
think about the main goal and vision of the company and HR must appointed only those
employees who are best for the companys performance so by giving the information about the
importance of HR department in companys performance the issue of acceptability can be solved.

References

http://www.scribd.com/doc/54409370/15/THEORETICAL-BACKGROUND

http://www.beliscity.com/gifts_to_pakistan_food_delivery_kfc/c22_1652_1671/m596_1671/kfc/i
ndex.html?osCsid=tivd99gsd4tfgk54g99dneiu74

http://www.kfc.com/about/

http://lawaonline.com/blog/macdonalds-menu/

http://www.viewsbuzz.com/mcdonald-pakistan-deals-menu-prices-uan-home-delivery-number-
careers-jobs-history/

http://www.kfcpakistan.com/

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http://en.wikipedia.org/wiki/KFC

http://www.amcy5.com/projects/marketing/amcy22.htm

Appendices
Part I

The Organization and its Mission

1. When and why was this organization established?

Answers: Cupola is a Dubai based company that internationally owns many brands and
establishes them and after that sales them. KFC is also owned by Cupola and it was first
established in 1997 in Gulshan Iqbal.

2. What are the principal needs and objectives that the organization needs to fulfill?

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Answer: The mission of KFC is that its customer oriented company i.e. they want to delight
their customer and to provide them with best quality product and the main reason behind its
establishment is profitability.

3. What are the structural components of the company?

Answer: It is divided into two parts which are:

Operation department

Support department

Operational department includes the teams, running the restaurants and support department
includes marketing and finance department. The main structure is matrix or hybrid structure
which has South and North regions. The head office is situated in South and remaining all the
departments is in North region.

The staff is also divided into two parts namely:

Operational staff : employees of the brands

RSC ( rational support center): all the departments

4. Where is the focus of decision making authority for carrying out the objectives?

Answer: It varies from person to person or department to departments.

5. How centralized or decentralized is the decision-making process with respect to

Organizational planning

Operational management

Answer: It again varies but Organizational planning is centralized, finance department is


centralized but the HR and marketing is highly decentralized. Operational management is again
decentralized because it varies from person to person and department to department.

6. What are the sources of revenue for this company?

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For capital expenditures

For operating expenditures

Answer: Sales are the source of revenue for both.

7. Have there been any noticeable increases or decrease in revenues?

Answer: It depends on the political stability and market e.g. the issue of bird flu affected the
revenue and taxes imposed by the government on food items like K&Ns and etc which made a
difference in the revenue and their margin is very low.

8. Have there been new sources of funding?

Answer: No there are no new sources of funding because they develop their own property with
minimum two years contract.

9. What is the total employment complement of the organization?

By departments and operations

Answer: The total permanent staff is 580 and 350 in the north and south region respectively by
operations.

By departments (table)

10. Does the organization operate in overseas?

Answer: No.

11. What are the major problems and opportunities confronting this organization?

Answer: Problems: The major and main problems are customer services and proper support of
marketing

Part II

THE ROLE OF HUMAN RESOURCE FUNCTION:

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A. Does this organization have a formal and identifiable Human resource function
(department)?

ANSWER: KFC has formal and identifiable Human resource department.

1. When was this department or function formally established?

ANSWER: HR department was established in KFC from day one, but the concept of HR was
different, when it was established admin, personnel and HR department were combined but 5
years back HR and admin department were separated and now it is a distinguished identifiable
department.

2. How is the human resource function organized to carry out the objective of the
organization?

ANSWER: HR department at KFC is very effective in carrying out the objectives of the
company. In relation to vision and mission of the company, it has achieved a lot of objectives but
there were a lot of problems and issues in HR department in past, because they were unable to
meet their objective. Then with the development of effective Performance management system
and HRIS system employees run time data is available, they are able to meet their goals more
efficiently, and it has decreased turnover.

3. How many individuals are directly associated with human resource management?

ANSWER: 16 people are directly associated with HR department from Lahore and Karachi.

4. What is the academic and employment back ground of those involved in the Human
resource function?

ANSWER: For higher officials they need to have a degree in HR and an internship experience of
at least 6 weeks. Along with this they need to have theoretical knowledge about things and they
should have done something practically in internship. For lower employees there is no such
academic background requirement. For hiring the knowledge should be relevant the field,
personality test and IQ tests are also used, then finally the employee is recommended.

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B. What is the focus of decision making authority on personnel matters with in a company?

1. Who establishes objectives and policies for Human resource management?

ANSWER: There is a strong focus of decision making authority on personnel matters as they
play an important role in the organization. Basically the objectives and policies related to human
resource management are research based and there implementation vary from region to region or
from restaurant to restaurant.

2. What is the relation between human resource management and other department of the
organization?

ANSWER: Backbone of any organization is operations, If there is some problems in operations


HR department has to deal with it they have to see the peoples part ,they need to study human
side as well, because its not always the employees mistake if something wrong happens, they
have to closely view the problem and find solutions. Along with this there are so many issues
related to research or any other matter like benefits, salaries, promotions, CAPS(carrier
advancement plans),they all consult HR department so almost all the department are directly or
indirectly related to HR.

C. To what extent Human resource function used information technology to manage


information?

ANSWER: In KFC it is 40%, because of the geographical spread is so big and they are spread in
so many places now, they have a software where they get run time information from all the
places which makes decision making easier, if we see the competitors they are behind, because
the software used by KFC is very expensive in the market in fact it is considered the best
software in Dubai.

D. To what degree internet is used in Human resource management department?

ANSWER: It depends, if department's nature is so, then internet is used. The use of internet is
not much but according to the requirement.

E. What is the perceived importance of Human resource management relative to functional


operations of the organization?

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ANSWER: HR department is interrelated to all other departments.HR is the base and it is off
course very important as all the department depends on HR, same is the case for KFC,HR
department is very important.

F: Does the human resource function provide support in foreign countries?

ANSWER: They do have coordination with all KFC'S in other countries like India china and
Dubai they have combined sessions, the performance management system and HRIS system here
in Pakistan is very efficient and it has been appreciated by international KFC, but it is not as such
centralized or it does not provide any support in foreign countries. There link is indirect basically
through yum that connect internationally.

G. What recommendations do you have for reorganizing Human resource management?

ANSWER: KFC should make routine task better and effective and HR should cover all areas
and all the employees should get benefit from it. There should be no errors, software should be
used for run time data and decision making in all the fields that will make it more effective.

Part III

Employment Decisions

A. To what degree is human resources management integrated into the strategic management
of

The organization? How?

Answer

About 80 % Human resource management is integrated into strategic management of the


organization. Through their need, training need , educational need and development etc. . People
part is linked with the profit maximization of the organization. They emphasis very much on
their human resources management and make 1 to 5 years plan regarding recruitment training
and appraisals of the employees. If the people part is mature and flexible then it will positively
help in the strategic management

B. Who is responsible for human resource planning and forecasting for the organization?

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HR manager of North and South departments deal in human resource planning and forecasting
for the organization.

1.What methods are used to determine staffing needs?

They keep the detailed record of all their employees. Moreover their intelligence system is so
strong that they easily determine the staffing needs through it.

2.Does the organization focus primarily upon short-run or long-run human resource needs, or
both?

Incase of HR manager then the organization focuses upon the long run human resource needs.

3. Are job analyses and job descriptions made for each position in the organization? To what
degree are they updated periodically?

Ideally job analysis and job descriptions should be revised annually but KFC has not updated it
since two years because they are using a very defined method which need to be updated after
three years.

4. What specific problems have been encountered in the hU111an resource planning process?

The organization has not faced any such problem in the human resource planning. The only
hurdle is the old employees show resistance in adapting a change and training.

A .To what can they be attributed?

In order to run the HR department efficiently it is very necessary to have detailed know how
about the department. Otherwise tasks cannot be performing competently.

5. If no human resource planning is done, Has the lack of human resource planning had any
negative impact? Why?

Yes definitely it overall affects the efficiency of the organization. The example id Mcdonalds
.They have closed almost 4 outlets just because of poor human resource planning .Their
recruitment, training and labor cost was rising so rapidly that they couldnt cope with it.

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6.Does the organization provide career planning and career counseling for employees? Why or
why not?

The organization focuses a lot on the career planning and career counseling for the employees.
The regional managers actively participate in keeping a check on the training and counseling
session of the employees. Recently KFC has given career counseling to three of their employees
.Out of three people, two gave fruitful results.

C. Once staffing needs are established, what procedures are utilized for filling job vacancies?

1. Who is responsible for staffing the organization-the human resource department or the
respective functional departments?

Human Resource Department is responsible for filling the Job vacancies.

2. What methods and criteria are used for evaluating and selecting job applicants? Have these
methods been validated? How?

Evaluate the CV on the basis of Job description, initial interview by HR manger Their could be a
series of interview. Then also do the personality test.

3. What degree does the organization seek to fill existing job vacancies from among present
employees or by recruiting new Employees, and why?

The organization always prefers to fill existing Job vacancies from present employees. From the
last two years KFC is implementing this strategy because it proofs to be beneficial in case of
KFC whereas incase of Mcdonalds and warid it is not beneficial.

4. To what degree does the staffing reflect the skills, knowledge, and abilities necessary to
successfully implement the strategic goals of the organization?

This analysis of staffing examines their organizational goals and abilities needed to accomplish
these successfully.

5. To what degree and how does the organization support a goal of diversity in the workplace?

The organization do support diversity in the workplace .Now KFC has hired female staff as well.

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6. What does the organization do to enhance the work and family interface?

The organization is not enhancing the work and family interface on large sake but they keep the
families record of their employees.

Part IV

Determination of Working Conditions and Rewards

A. Occupational classification system:

Occupational classification system is based on the Grading System is being used by the
organization. For this they have divided the employee into two parts.

Managerial Grades includes 3,4 and 5

Non Managerial Grades Above

1. Determination of Occupational classification system:

HR department is responsible for determine the classification system.

2. Basic feature of Occupational classification system:

Categories

Benefits

Categories:

Managerial

Non managerial

Expertise

Executives

Benefits or Incentives:

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Salary ranges

Pay structure

Increase in salaries

Evaluation system

CAP

Company policies

a. Variation in Job Skills:

Yes, it appropriately reflects variation in job skills like as mention above the case of managerial
and non managerial staff which is being distinguish on the basis of their job skills

b. Identifying Carrier Path:

Yes, it is effectively use as mechanism for identifying carrier path by analyzing the skill of the
employees on the basis of their grades which provide them a clear path for developing their
carrier by using organization hierarchy and benefits are also determine on basis of CAP

c. Review and Evaluation:

Recently they are doing salary survey to review and evaluate the performance of classification
system in relation to organizational and personnel goals.

Salary survey include

Internal survey conducted within organization

Competitor analysis like McDonald and Hardees

B. Wage and Salaries level and Annual Improvements

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Wage and Salaries level and Annual Improvements are determine on the basis of following

Performance

Inflation

Govt. conditions

Food buckets

Basically salary increase is done on the basis of the performance of the employee.

1. Evaluation of Employees:

Yes, they are conducting salary survey and for internal evaluation they do quarterly evaluation of
their employees.

2. Maintain an Effective Workforce:

Yes, the organization is able to attract and maintain an effective workforce because of the
reliability of the organization which is the competitive edge of the organization and it is very
high as they do not terminate their employees during the recession and it will make them more
reliable as compare to others who go for downsizing during the recession period.

3. Differential in Salary Grades:

Yes, differential in salary grades appropriately reflect differential in skills and responsibilities

Managerial

Non managerial

Expertise

Executive

So we can say that their grade reflect the skills and responsibilities

4. Employees groups:

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Yes, large proportion of the employees grouped into particular salaries and grade level

Majority of the employees lies in 5 and 6 grades

The 80% lies in 5 to 8 grades

The remaining 20% lies above grade 8

5. Salary level comparison:

Salary level comparison is done with competitors by doing salary survey

6. Current Reward System:

Yes, the current reward system adequately reward employees which is necessary to implement
the strategic plan

7. Past year trends in salary level:

Business cycle impact on Past year trends in salary level are as following

Before recession 20 to 25%

Recession 15%

After recession 25 to 30%

Past year performance of the employees is also consider but if some employees are doing
outstanding performance or show no performance they are not consider in this range.

8. Incentive Compensation:

Incentive compensation is used by organization but it is not area specific rather it is great specific
on the basis of which incentive are given to employees like

Car

Mobile

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House rent

Petrol

Medical etc

C. Methods used for employees evaluation

Following are the Methods which are being used for employees evaluation

Panel score card

Quarter evaluation

Daily employees performance check

Trend chart

HAY method

1. Employees Performance Appraisal System:

Yes, employees performance appraisal system reflect job performance because above mentioned
system are very effective and daily employees performance check and trend chart give clear
picture of the employees performance and the chance of occurring errors are very low and they
almost provide 80-90% results which is good enough.

2. Current Methods:

The method that are currently used by organization are adequate for performance appraisal
because it is unique industry and daily performance checks are possible method use by
performance evaluation are very effective.

3. Performance Appraisal System Effectiveness:

Yes, employees performance appraisal system reflects the knowledge, skills and the abilities
needed to implement the department strategic goals because the performance evaluation methods
also reflect the department strategic goals and identify and analyze the employees skills.

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D. Non-Wage Fringe Benefits:

Non-Wage Fringe Benefits includes following benefits

Leave encashment

Hajj draw

Petrol allowance

Mobile

Mobile cards

Five type of leave

Three type of medical

Bonus

Sale allowance

1. Determinations of Non-Wage Fringe Benefits:

Following are the methods by which the Non-Wage Fringe Benefits are determined.

Policy

Grade

Performance

Incentive base

Monthly sales target

2. Comparison with other organization

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It is better than other organization because it provide more incentive and is more reliable because
they provide job security to their employees and they also ensure the growth of the employee.

3. Change in Non-Wage Fringe Benefits:

The Change in non wage fringe benefits depends upon situations and in future they are planned
to contract with UMT and Baharia Town in order to facilitate their employees. It will help their
employee and their family to get discounted education and residence.

E. Health and Safety Conditions:

To ensure the health and safety conditions of their employees they have special department
which deals with the health and safety issues and work for the betterment of their employees
which is the Quality Enhancement (QE) Department.

F. Employees Moral and Job Satisfaction:

They ensure the employees moral and job satisfaction by providing

Job security

Growth opportunity

G. Telecommuting and Job Sharing:

The organization is no providing flexible work option like telecommuting and job sharing to
their employees

H. Outsourcing:

The organization is not doing outsourcing in any area.

I. Retirement Option:

The organization is offering good retirement option to their employees but only one employee
can achieve this facility because of high turnover but it will not affect them because of their
strong training system and they also prefer young blood.

J. Improvement in Compensation and Employees Motivation:

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Yes, they need to make improvement in compensation and employees motivation they must
increase the compensation due to inflation and other factors that decrease the motivation level of
the employees in order to motivate the employees.

Part V

Employee Training and Development

A. Has the organization supported programs for employee training and development?
Why or why not?

Ans. The organization has supported programs for employee training and development. These
programs have been established for better performance of the employees so that the organization
could flourish.

1. What kinds of programs have been established? Have they been oriented toward?

a. Job skills?

b. Supervisory and leadership skills?

c. Basic educational skills?

d. Knowledge, skills and abilities necessary for strategic goal attainment?

Ans. The programs that have been established cover all the skills if observed in general terms.
But in basic terms, CSL; a book on HR and Finance has been launched by KFC that is being
distributed among all employees so that they could improve their job skills. Moreover, the
supervisors and leaders are have to give presentations on specified time intervals, otherwise they
could not be promoted. Further, KFC had made contracts with UMT, Virtual and other such
universities by giving them their logo which benefits the universities by marketing them and
benefits the KFC employees by giving them special student discounts if any employee desires to
receive higher education.

2. How do these programs relate to the organizations strategic and operational objectives?

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Ans. These programs relate to the organizations strategic and operational objectives in the sense
that on one hand the employees are responsible to give presentations on specified time intervals,
otherwise they could not be promoted further while on the other hand,KFC had signed contracts
with UMT ,Virtual and other such universities by giving them their logo. Due to this the
employees of KFC receive special discounts from these universities if they want to receive
higher education. And the benefit that these universities receive is that it promotes to their
marketing.

3. Does the organization maintain its own training staff or are outside organizations used
for training purposes?

Ans. The organization maintains its own training staff for training purposes and they welcome
the outside employees as well for training. But they do not hire outside organizations for the
implementation of their training programs.

4. What proportion of employees has participated in training and development programs


supported by the organization?

Ans. Since, all employees have to participate so all employees have participated in training and
development programs supported by the organization.

B. To what extent have the organizations programs of employee training and development
been used in making decisions related to promotions and transfers within the organization?

Ans. To a reasonable extent have the organizations programs of employee training and
development been used in making decisions related to promotions and transfers within the
organization.

1. Are promotion decisions based primarily upon the measured and observed abilities of
employees or upon their seniority in the job?

Ans. The promotion decisions are purely based upon the measured and observed abilities of
employees.

2. Are promotion decisions based partly on an employees willingness to take advantage of


development opportunities?

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Ans. Yes, promotion decisions are partly based on an employees willingness to take advantage
of development opportunities.

C. What problems, if any, have been encountered in the administration of employee


training and development programs within the organization? What suggestions of
improvement can you make? Why?

Ans. No, there have been no problems in the administration of employee training and
development programs within the organization, since our complete implication is always there.

Part VI
Employees Frictions

A: what methods and procedures are available for resolving employee complaints and
grievances?

Hierarchy and structure is so strong .KFC team have develop the culture that a person should talk
to immediate boss and if he is not taking any action then move forward and so on , then every
individual posses senior contact number with whole staff even a guard can call any one and ask
for help.

1. Have there been large numbers of grievances? Why?

In a total system if there is 5% issue if there is 1500 staff but not a large number because
company structure is so very strong.

2. Has the volume of grievances been growing or declining? Why?

If hr system is properly implemented in July it would be much more reduced but from past four
years ratio it is quite less.

3. What are the problems eliciting the majority of employee grievances?

Personal issues,

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lease issue

benefits not availed

issues not clear,

Bosses not helping.

Rights not identified by employees.

B: have there been many employee disciplinary problems?

No not at all disciplinary problem is found in KFC. As the branch manager Visit every KFC on
weekly basis, and such problems are resolved immediately.

1. Are there clearly spelled out formal procedures within the organization for handling
discipline cases? What are they?

Yes there are clearly defined procedures. As per policy KFC team took decision time violate ,
absent 3 days without inform then usually we discharge termination letter but doing through
investigation and all, took strict action according to the particular case.

2. How often employees disciplined or discharged?

Disciplined regular basis and discharged on serious cases.

a. What are the major causes of such problems?

The major causes are personal issues.

b. How have these been dealt with by the organization?

Very rare, And if it occurs KFC senior team portrays in such a manner to whole company that
the employees dont do it again or think to do it .

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C: to what extent have employee tardiness, absenteeism and turn over been problems?

Time to time it stays but not eliminated.

a. Have these problems been studied to determine their most likely causes? What
are they?

Yes meeting take place for such purpose. The major reasons are most people dont have interest
to do work and sometimes work load is more etc

b. What steps have been taken to resolve these problems, if they exist? What steps
should have been taken? Why?

Certain counseling sessions are arranged personally for each employee. KFC follow VOC (voice
of champion) strategy in order to resolve employee grievances. Contractual staffs have meeting
with and senior staff and hear what they have to say and ask them for suggestions and further
improvements. This helps to built more strong relationship b/w employee and boss and also
reduces turn over.

D: Have any of the employees sought to join labor organizations for the purpose of
engaging in collective bargaining over wages, hours, and working conditions? Explain.

No union. Things are very controlled in such a manner that such stuff is controlled to a lot of
extent, that no chance of developing the unionism.

1. Why have or have not such organization activities taken place?

2. What is the official position of the organization towards acceptance or rejection of


unionism for its employees

3. If a labor union exists in the organization what effect has the union had upon..?

E: what has been the relationship B/W .?

F: what suggestions would you make for minimizing employee grievances and improving
the labor relations climate (if applicable) Why?

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As such no negative impact. But KFC portrays in such a manner like illegal issue aroused and
they spread the pictures in the organization in order to resolve problem and made the mark for
others so that .they wont do it. Secondly KFC follow VOC (voice of champion) strategy in order
to resolve employee grievances. Contractual staffs have meeting with and senior staff and hear
what they have to say and ask them for suggestions and further improvements.

Part VII

Summary and Evaluation

a) How effectively is the human resource function of this organization contributing to the
fulfillment of its mission, objective and strategic plan?

Starting the company is only financial driven, and the finance is more important. But now HR is
2nd position. Because it gives importance to the human if part of human would be strong they
finance increases. You do everything with the help of soft ware. But to run this software you
need a human. And to control this human you need a HRM department. If these people are not
managed by you than all other things would also disturbed are realize this to HR with the help of
ROI, that the part of HR is not good. And with this thing are disturbed, like your finance
department, supply chain department and restaurant are also affected. The role of hr is very
important that companies cannot higher Fire without the permission of Hr. at first the role of Hr
department was not more effective it was only duty of Hr to latter print ND employees pay.

b)What are some of the problems of human resources management that have been
adequately solved or are now in the process of being solved by the organization?

Acceptability issue HR faced in Pakistan HR is not a line department it is only a support


department throughout top to low level and Guard etc. it serves every one side. HR has dont
linked anyone but all are linked with it

Its acceptability is very important if company is driven HR. the major change would come in our
sales and # of restaurants and would be our competitive adage.

c) What are some of the major human resource problems that remain to b confronted and
solved?

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it has no issue expect acceptability issue first our level was this that our control act was with
only a department but now we making decision with company level. And now HR department
directly challenged with CEO. The plan of HR department complicity, with the plan of CEO,s.

d) What would appear to be among the most describe solutions to these problems? Provide
specific detail and justification for your recommendation?

Time, ROI, Creativity, Researches, work efficiency effectiveness. Time will requirement,
Quarterly issue not understand with exact time.

If they doing work process HR doing the help of process with the daily research. HR department
built the relationship of companies with customers through face book and linked, and also built
powerful relation with different companies and universities.

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