Interloop Ltd Final MPHP project

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Final Report
Managing People for High Performance
Submitted to:
Sir.Nabeel Arif
Submitted by:
ShahidNadeem (RMBA Fall 12-025)
Hassan Salman (RMBA Fall 12-022)
Muhammad Saleem (RMBA Fall 12-023)
ShanzaMehmood (RMBA Fall 12-037)
Muhammad Azeem (EXMBA Fall 10-026)
Date of submission:
29th May, 2014
Institute of Business & Management
University of Engineering & Technology
Lahore

2. Table of Contents
Dedication....................................................................................................................................... 3
Acknowledgement ......................................................................................................................... 4
Executive Summary ........................................................................................................................ 5
Organizational Structure ............................................................................................................. 7
Organogram – Hosiery ................................................................................................................... 8
Project Background ........................................................................................................................ 9
Decision Making ......................................................................................................................... 9
Suggestions / Strategies for Improvement ................................................................................. 10
Decentralized Structure............................................................................................................ 10
ERP Training .............................................................................................................................. 11
Job Rotation and Effective Planning in Task Design................................................................ 11
Performance Management ...................................................................................................... 11
Justice & Equity ............................................................................................................................ 12
Grievance Redressal System .................................................................................................... 12
Performance Management System ............................................................................................. 13
Strategy Map for Interloop .......................................................................................................... 16
Competencies ............................................................................................................................... 18
Balance Scorecard ........................................................................................................................ 19
Comparison of Stated Versus Achieved Score of Objectives .................................................. 21
Actual Performance .................................................................................................................. 22
Targets....................................................................................................................................... 22
Graphical Presentation of Balance Scorecard Scores ................................................................. 23
Financial Perspective ................................................................................................................ 23
Comments ................................................................................................................................. 24
Customer Perspective............................................................................................................... 25
Comments ................................................................................................................................. 26
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3. Internal Perspective ..................................................................................................................... 27
Comments ................................................................................................................................. 28
Learning & Growth Perspective ................................................................................................... 29
Comments ................................................................................................................................. 30
Conclusion..................................................................................................................................... 31
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THIS REPORT IS
DEDICATED TO OUR
RESPECTED
TEACHERS AND
BELOVED GRAND
PARENTS.
Dedication

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Acknowledgement

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Executive Summary
This report is analysis of Interloop, one of the world’s largest socks manufacturer with an annual
company turnover exceeding $200 million, to identify its elements of high performance work
system. Organizational structure, Information system, Task design, Reward system, People
(selection, training and development), Justice and equity are few aspects critically analyzed in
this regard.
The effects of these defined elements on productivity and efficiency, Contribution to cost,
product quality, customer satisfaction, employee turnover, learning organizations on Interloop
are also investigated. Our team has recommended few solutions / strategies to these identified
key issues which arehampering growth of Interloop. We are very optimistic that Interloop will
overcome these hurdles if they apply these strategies in true sense.
Moreover, we have critically analyzed Performance Management System of Interloopand tried to
present our understanding of this system.

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Company Introduction
Interloop started out in 1992 with just 10 knitting machines, now has 2300 machines and a
workforce of more than 13500. Interloop Limited has transformed itself into South Asia’s largest
Socks Manufacturer and Exporter offering the highest quality socks at a level of service
unknown in our industry. It is located in Pakistan's Industrial hub Faisalabad and Lahore.
Interloop is an integral part of this business community, continuously striving to revolutionize
business practices in this region.
Interloop is a complete vertical unit offering a wide range of price points and needle counts and
is on the cutting edge in terms of the latest technology for each production process. They believe
their success is due to a highly focused concentration on quality and speedy turnaround, a
combination which increases its customers' edge in a highly competitive marketplace. In
pursuance of its goal to achieve and maintain good quality, Interloop set up a High-Tech
Spinning Unit that will ensure finest quality yarn made from the best available natural cotton.
This project has enhanced the value of money for our customers by offering even more
competitive rates to its clients.
Hard work and utmost commitment from its employees and management, strict Quality Control
Measures, timely Shipments and reliable Service Standards have been paramount towards
Interloop's phenomenal growth. It is one of the very few firms in Pakistan with an impressive
Social Responsibility Portfolio, realizing that a commitment to sustainability in all areas of
commercial activity endorse the long term interests of a business.

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Organizational Structure
Inter Loop Company follows vertical policy making system. All the goals and strategies are
made by executives of the company. Their executive bodies are responsible for that all. The
lower management performs operational tasks. The planning is done from top to bottom in
vertically direction.
Following structure is indicating how activities such as task allocation, coordination and
supervision are directed towards the achievement of organizational aims. When organization
structure and design change it impact on the organizational culture and also on the management
policies and practices too
Chief Executive
Officer
Chief
Operating
Officer
PPC (Sr
Manager)
Operation HD
01 (DGM)
Operation HD
02 (DGM)
Processing
(DGM)
QAD (DGM &
Q&M)
Organizational
Development
MIS (DGM)
EHS (Manager)
Productivity
improvement
(Consultant)
Director
Technical
Engineering (Sr
Manager
Administration
(GM)
HRD (DGM)
Director
Finance
Finance
Store (Sr.
Manager)
Director
Sourcing
Supplies
S & M (Sr.
Manager)
Spinning (G M)
Executive
Director I & E
Internal Audit
I & E (Sr
Manager)
Merchandize
DGM Q&M
Corporate

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Organogram – Hosiery

10. Project Background
We have identified issues in the system of Interloop mentioned in the last report submitted. Now
we are suggesting Interloop few strategies for removing and improving its system which are as
follows:
Decision Making
Decision making in Interloop is centralized as shown in the following chain of command
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Suggestions / Strategies for Improvement
Decentralized Structure
Interloop should use the model of TQM (from downward to upward) by decentralization and delegate the
power to the front level employees for making decisions to avoid any wastage and increase the efficiency.
Because any organization cannot grow unless the management delegate powers.
For example, an inspection executive receiving and inspecting raw material cotton bags in huge quantities
should have authority, after consultation with immediate supervisor, to accept or reject particular type of
product. The same procedure should be used for finished goods delivery to avoid any kind of delay.
Recommended decentralized chain of command is as follows:
Team
Members
Supervisors
Coordinators
Executive
Manager
Assistant
Manager
Managers
Senior
Managers
General
Managers
CEO

12. ERP Training
Interloop must schedule ERP training sessions for selected employees recommended by department heads
with regular interval for optimal utilization of ERP. Once implemented thoroughly, Interloop can save
huge amount of cost which can used in other development projects.
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ERP user manuals should be available in every relevant department for references purpose.
Job Rotation and Effective Planning in Task Design
The management reliance on particular employee for completing any task can be minimized by
rotating employees on different areas of departments. Every personnel of department should
know responsibilities of every employee to avoid any delay. This will help them in following
ways:
o Decision.It will improve tactical-level decisions throughout the Interloop. It will also
remove many small decisions from senior management, which therefore has more time to
develop strategic direction.
o Speed. Since there are fewer layers of bureaucracy in a decentralized structure,
Interloopwould be able to make decisions more quickly, which is useful in a highly
competitive environment.
o Turnover. Employees who are given more authority tend to stay with aInterloop longer,
so employee turnover declines.
o Training. Giving some authority to local managers is an excellent way to observe their
decision-making ability, which can be used to determine advancement to higher
positions.
o Wide span of control. There is less need for middle managers, since many employees can
report to fewer managers. This reduces overhead costs.
Task assignment and planning should be done in sucha way that no employee gets
overburden for achieving targets.
Performance Management
Interloop should implement well acquired Performance Management System (analyzed later) to
avoid any kind of biasness like recency effect, personal biases has been seen in Interloop.
Interloop must developa system of evaluation which involves employee himself/herself for feedback and
ultimately it will enhance their motivation level.

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Justice & Equity
Grievance Redressal System
We are suggesting Interloop a Grievance Redressal System to resolve differences in peaceful,
orderly and expeditious manner.
It enables the parties to investigate and discuss the problem through
(i) Open-door policy
(ii) Step ladder type
(iii) Grievance handling committee
Steps in Handling Grievances
Interloop should follow the points mentioned below:
1. Receive and define the nature of dissatisfaction.
(a) Manner and attitude when complaint is received
(b) Acknowledging grievance – it will create a conducive work environment with instances
of grievance reduced.
(c) Assessment must be made that the complaint is presented fairly.
(d) Statement and issues must not be pre-judged.
(e) Proper time and attention is given.
2. Get the facts
(a) Facts are separated from impressions and opinions.
(b) Consult the policies.
(c) Consult the records.
3. Analyze the cause of grievance and decide alternative course of actions should be though to
manage it.
4. Execution and review
The manager should execute the decision quickly, ignoring the fact, that it may or may not hurt
the employees concerned.
5. Follow-up
After implementing the decision, a follow-up must be there to ensure that the grievance has been
resolved completely and adequately.

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Performance Management System

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Setting of Personal Objective / Personal Performance Plan
Goals are determined for each personnel of departments at the start of year till 30th January. The
following factors are considered while setting goals for individuals:
 Look at your business and departmental goals
 Identify where you could deliver results to support your business and department
 Create SMART objectives and development of actions
 Use the success factors as a reference in creating development of actions
 Discuss and agree your personal objectives and development of actions for the
year with your manager
 Ensure your agreed objectives and development of actions are recorded on your
P&D Dialogue paper
Performance Dialogue I
This supervisor / head dialogue is for reviewing the objectives to assess progress and adjust if
necessary, based on changing business needs or priorities.Coaching the individuals if required.
The period of dialogue is from 1st to 10th of April every year.
Mid Year Performance Management Review Meeting
The period of midyear performance management review is from 20thto 30th of June every year
which consists of following points:
 Internal audit of performance
 Hold frequent informal feedback, discussion with your manager throughout the
performance year
 Hold a more formal dialogue with your manager in the middle of the year
 Review your progress on objectives and development of actions
 Discuss long term development plans
Performance Dialogue II
This performance dialogue longs from 15th to 30th of September every year to discuss following
matters:
 Review progress and accomplishments
 Evaluate performance against the objectives agreed upon

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Final Year Performance Management Review Meeting
 Internal Audit of Performance
o Manager collects feedback, assesses results interms of objectives, progress on the
development actions and the employees’ level of competence for each of the
success factors
 Performance Review
o Manager decides on an overall proposed performance rating and passes this to the
next higher manager for review.
o Next higher manager discuss with their team the proposed ratings and overall
department distribution in a calibration process.
o Manager and employee hold the year-end discussion on results, development
progress, level of competence on the success factors and overall rating.
o Manager finalizes and signs the form, sends it to the employee for comments and
signature.

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Strategy Map for Interloop
The following diagram shows how integrated and interdependent are different departments in an
organization to achieve its objectives. Like:
 Interloop staff is trained in Balance Scorecard to utilize knowledge base effectively and
to create mobile workforce which helps in enhancing customer satisfaction and improve
customer awareness about our offers. Consequently, this stepimproves customer
satisfaction boasts each project’s profitability.
 All fresh hiring / graduates / employees are assigned a mentor for counseling, couching,
training etc. which will develop staff on-board process, enhance customer awareness and
therefore reduces overhead cost.
 This couching proves Interloop to be a great place to work that result into improving
consultant utilization, customer awareness which ultimately reduce overhead cost of the
plant.
This strategy map clearly depicts interdependence of each division which ultimately leads
towards increase profitability and reducing overhead cost of the firm.

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Financial
Customer
Internal
Learning & Growth
Increase Project Profitability Reduce Overhead Cost
Improve Customer Satisfaction Improve Customer Awareness
Better Use of Knowledge Base Improve Staff on-board process Improve Consultant Utilization
Create a mobile workforce Automate Invoice Processing
All Staff Trained in Balance Scorecard All Graduates have a Mentor A great place to work

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Competencies
Interloop has divided competencies to evaluate its employeeswhich are as follows:
Core
 Integrity
 Respect
 Accountability
Technical
 Ability to ensure timely production and output of work,
 Maintaining consistent quality
Managerial
 Interpersonal Skills: (establishing desired communication / cordiality with
subordinates/peers/superiors, ability to train and develop subordinates)
 Leadership: (intelligence/common sense, maturity & confidence, expression(verbal &
written) and Dependability
We have analyzed competencies or evaluated followingemployees’ performance during the
period of project visits.
1. Mr. Mujahid Abbas HR Generalist
2. Mr. Babar Saeed Assistant HR
3. M. Farooq Assistant Manager operation
Moreover, we have attached evaluated reports of these employees for your reference.

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Balance Scorecard
Interloop is working on the following objectives to alignbusiness activities to its vision and
strategy, improve internal and external communications, and monitor overall performance
against strategic goals.
It provides a framework that not only provides performance measurements, but helps Interlooop
planners identify what should be done and measured. Moreover, it enables executives to truly
execute their strategies.
Financial Perspective
 Increase Project Profitability
o Projetcs greater than 250 million
o Operating Profit
o % Operating Profit
 Reduce Overhead Cost
o % overhead to revenue
o Sales people trained in software
Internal Perspective
 Better use of knowledge base
o Number of items in database
o Number of hits to database
o Total Number of Industry template
 Improve staff on-board process
o % staff through company induction
o Cost to crecruit per head
 Improve consultant utilization
o % consultant utilization
o No. of new projects found
 Create a mobile workforce
o Sales staff issues with iPads
 Automate invoice processing
o Days taken to issue an incoice
o Number of bad debts issued

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Customer Perspective
 Improve Customer Satisfaction
o % Satisfaction Surveys complete
o Satisfaction Survey score
o Consultant days on customer site
 Improve Customer Awareness
o Position 1 in Google search
o Number of customer meetings
Learning & Growth Perspective
 All staff trained on Balance Scorecard
o Number of courses booked
o Number of courses attended
o Total number of staff trained
 All graduates have a mentor
o % graduates with a mentor
o Number of consultants mentoring
 A great place to work
o Employee staisfaction score
o Number of CVs received

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Comparison of Stated Versus Achieved Score of Objectives
The Annex-I is explanation of objectives in more detail and comparison of stated versus
achieved targets in terms of scores.
 According to the Annex-I, Interloop has successfully exceeded the target in enhancing
project profitability and performed reasonably well in Financial Perspective.
 Interloop has surpassed the targets in improving its customer awareness and performed
very well in enhancing customer satisfaction as shown by figures in Annex-I.
 Moreover, the information in Annex-I reveals effectiveness of internal perspective of
Interloop managed to meet some targets but needs a lot of improvements in this area
particularly delegation.
 Furthermore, Interloop has excelled in learning and growth perspective except number of
consultants appointed for mentoring and number of CVs received which needs
improvement as per data menioned in Annex-I.

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Actual Performance
The Annex-II shows the actual performance in each of the perspective of Balance Scorecard shown by
Interloopin meeting its objectives. It has proved itself as we comapre achievments with targets.
Targets
The Annex-III explains as figures are goals set by Interloop management to grow and get
competitive advantage in its market.

24. Graphical Presentation of Balance Scorecard Scores
We have analyzed each of the perspective separately and shown in graphically to understand it
thoroughly.
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Financial Perspective
Objective: Increase Project Profitability
Month
Actual
Target
%Achieved
April
0
1
0%
May
1
1
100%
June
1
1
100%
July
2
2
100%
August
2
2
100%
September
2
October
3
November
3
December
3
January
4
February
4
March
4
4.5
4
3.5
3
2.5
2
1.5
1
0.5
0
Actual
Target

25. Comments
August: After a poor start the financial are picking up with a general trend upwards. Need to
recognize the workforce is over utilized.
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Performance Analysis
Their consultants are putting a lot of effort into the area often to expenses of other activities.
Sales are also working hard in this area with good results; however the overhead cost is too high
for the business.
Recommendation
They need to get the balance correct between activity on project greater than 250 million and
smaller project work. The key is in training for both their sales team and consultants.
Recommend they increase the training programs.
Strategic initiatives
Create a training program for sales

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Customer Perspective
Objective: Improve Customer Satisfaction
Month Actual Target %Achieved
April 85% 90% 94%
May 87% 90% 97%
June 90% 90% 100%
July 92% 90% 102%
August 88% 90% 98%
September 90%
October 90%
November 90%
December 90%
January 90%
February 90%
March 90%
0.94
0.92
0.9
0.88
0.86
0.84
0.82
0.8
Actual
Target

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Performance Analysis
Customer satisfaction has been good and on the rise until this month. The sharp dip may indicate
that they have a problem with one or two customers however, it should be noted that they are
still well within target parameters.
Recommendation
Suggest they ask their account managers to work more closely with customers and spend more
time on customer site.
Strategic Initiatives
Account managers to spend more time on customer site
Comments
August: General trend is upwards however they are seeing a sharp decline this month. May be
connected to over- utilization.

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Internal Perspective
Objectives
 Better use of knowledge base
 Improve staff on board process
 Improve consultant utilization
 Create a mobile work force
 Automate invoice processing
Metrics
 Number of items in database
 Number of hits to database
 Total number of industry templates
Objective: Better use of knowledge base
Month Actual Target %Achieved
April 22 27 81%
May 23 28 82%
June 23 29 79%
July 24 30 80%
August 24 31 77%
September 32
October 33
November 34
December 35
January 36
February 37
March 38

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40
35
30
25
20
15
10
5
0
Comments
Actual
Target
August: Generally below target, they are not recruiting fast enough and existing staff have too
many roles

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Learning & Growth Perspective
Objectives:
 All staff trained in balanced scorecard
 All graduates have a mentor
 A great place to work
Metrics
 Number of courses booked
 Number of courses attended
 Total number of staff trained
Objective: All staff trained in balanced scorecard
Month Actual Target %Achieved
April 0 0
May 2 3 67%
June 1 3 33%
July 4 3 133%
August 3 3 100%
September 3
October 3
November 3
December 3
January 3
February 3
March 3

31. 4.5
4
3.5
3
2.5
2
1.5
1
0.5
Comments
August: After a good recovery in July they are seeing another decline in august. Focused
attention must be placed on training programs.
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0
Actual
Target

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Conclusion
Interloop has founded highly structured automated system which can only be beneficial in the long run if
they follow it sincerely and improve it continually. We have identified some weaknesses and suggested
improvements in the above explanation. Training to its employees regarding this automated system is the
key to its growth.
We have examined Performance Management System, Strategy Map, performance in terms of Balance
Scorecard actual versus target objectives in the form of statistics and graphically too. Interloop has
performed very effectively in Financial, Learning & growth perspectives of Balance scorecard while they
have performed average in Customer perspective and need improvement in Internal Perspective.