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The Human Resource Planning at ADNOC

This project identifies the human resource aspects of ADNOC. The focus is on the human resource planning in the company. Several aspects of human resource or rather several problems like turnover, management development, etc, diagnose the source of the current problems and

provide feasible recommendations for organizational action are under the main focus of the project. The projects deals with the mechanism specified for the planning for the Human resource Development in the company. Main considerations for HR planning are:

Recruitment of new employees

Absolute turn over in a year

Managing the present man power of the company.

Introduction to the Company

ADNOC is at the top in the world amongst Oil Companies which are working for the exploitation of or rather extraction of vast Oil and Gas reserves in the emirate Abu Dhabi. It is a state owned enterprise with 90% of UAE’s vast oil and gas reserves. It came into existence in 1971 at Abu Dhabi, United Arab Emirates. Recently ADNOC has entered into business enterprise which deals with oil exploration with state of the art seismic analysis technology. Company operates two refineries in UAE. These are Ruwais and Umm Al Nar. The company produces around 3.5 billion barrels of oil per day. Also there is a production of 2 billion cubic feet of gas per day. Company has installed 150 petrol stations across UAE. It has employee strength of 19,300. Towards accomplishing the goal to make ADNOC a top organization with ecological factors in mind, the company’s aim is on health, environment, and safety (The ADNOC Structure, 2007)

Category

Government corporation

Headquarters

 Abu Dhabi

Founded

1971

Industry

Oil & Gas

Key people

“Sheikh Khalifa bin Zayed Al Nahyan, Chairman of the Supreme Petroleum Council

Yousef Omair Bin Yousef, CEO”

Website

http://www.adnoc.ae/

Subsidiaries of ADNOC

Company has lately expanded itself in all the upstream and downstream activities of petrochemical industry through its subsidiaries. Eleven subsidiaries of ADNOC are:

,,,,,,,,,,,,, ,

These are:

Abu Dhabi Gas (ADGAS) for processing, marketing and distributing LPG & LNG.

Abu Dhabi Gas Limited (GASCO) for production and operation of liquefied gas products.

Abu Dhabi Marine Operating Company (ADMA-OPCO) for offshore oil and gas production.

Zakum Development Company (ZADCO) for oil production in zakum field.

Abu Dhabi Company for Onshore Oil Exploration (ADCO) for Oil Exploration, Production and export for onshore oilfields.

National Gas Shipping Company (NGSCO) for shipments of liquefied gas products from Das Island.

National Petroleum Construction Company (NPCC) for construction of oil industries facilities.

ADNOC distribution for distribution, storage and transport of refined products.

Abu Dhabi Polymers Company Ltd (Borouge) for processing and production of ethylene and polyethylene.

Abu Dhabi Petroleum Ports Operating Company (IRSHAD) for operations of oil exporting ports such as Ruwais and Jebel Dhanna.

Abu Dhabi Oil Refining Company (TAKREER) for refining of Crude Oil, Chlorine and related chemicals production and sulphur granulation.

Abu Dhabi National Tanker Company (ADNATCO) for transporting crude oil and refined products.

National Drilling Company (NDC) for offshore and onshore drilling. Among all the group companies of ADNNOC, NDC was the first venture.

Ruwais Fertilizer Industry (FERTIL) for production and marketing of urea and ammonia in the Ruwais plant.

ESNAAD for material handling services, offshore supply base, waste management, production & marketing of mud chemicals, chemical blending and manufacture.

Vision

Vision of company is to reach the position of value-added supplier of environment-friendly, integrated, and extreme value products and also the services in the gulf.

Mission

Mission of ADNOC is a quality-focused relationship which will manage a considered logistics support base allowing comprehensive products and services to the industry of oil and gas, but not loosing grip on commitment to its customers, owners, employees and the community.

Brief Human Resource Overview of ADNOC

ADNOC has a large number of multi national, Administration, and Technical staff. Human Resource Department is a crucial department at ADNOC. This department has been continuously and consistently working towards increasing the percentage of UAE nationals in its workforce. A large training programs both for internal employees as well as for those UAE aspirants who are interested in being a part of ADNOC. Some of the important activities of HR Department are job planning, performance appraisal, career development, job design, work measurement, training and development and others. Mr. Saeed bin Saif bin Butti Al Qamzi is the ADNOC’s Director of Human Resources and Administration. Thirty members give support to this Dire. There is also a separate Employee Development Department which works in close coordination with HR Department for skills and career development of employees. Human Resource Directorate assures that apt personals are properly selected, trained, appraised, recommended, developed, and retained. This directorate also takes into consideration that there is proper implementation of personal and human resource policies across the group companies. It coordinates and effectively monitors the implementation of these policies. Directorate of Human Resource is also involved in providing unique services like employee housing in Abu Dhabi, Ruwais and Umm Al Nar. There are 1,360 housing units built at Ruwais housing complex for providing housing support to ADNOC’s employees and their families. Directorate also provides services like Medical, Public Relations, Cost Control Coordination, and Records Management.

(A high-level Australian government delegation visits ADNOC, 2006)

Human Resource Planning at ADNOC

The HRP strategies in ADNOC are focused on regular recruitment and upholding of the man power for various purposes in the company. The company keeps a check on availability of Human resource for on going work base and also tries to predict the need of additional workforce if necessary. The company presently is hiring more employees of UAE nationality under its plan called Group National Recruitment program which is managed by Group National Recruitment Department. Under this program, the company is aiming to increase the number of UAE nationalist in the company up to 75% by the year 2010 [1] .( The ADNOC Structure, 2007,)

Apart from GNRP, the company is dependent on cheap workforce form Indian-subcontinent for basic ground works at various levels in the company. Apart from its objective to increase the number of UAE nationalist in the company, the organization aims at improving the skills of the human resource and to make ADNOC a good work place. In HRP, only higher management contributes towards developing the strategies and to decide the objective of the planning process.

Pestle analysis and impact on HRP

Political:

ADNOC is a state-owned firm therefore the company is tremendously affected by government’s decision. For an example, the company’s decision to accommodate more and more UAE personals in the company is a result of government’s Emiritization policies.

Economical:

Economical problems obviously are outside factors in Human Resource Planning of ADNOC. For example we can take the current economical crises has greatly impacted the intake of every enterprise including ADNOC.

Social:

Social responsibilities should be a major concern for every company because if social reputation is lost then sufferings on financial side will also start. The company has to take serious steps in order to meet the social responsibility towards its people. These practices often bring involvement in HRP in terms of discriminations towards foreign workers

Technological:

Revolution in Technology attracts the employees who can deal with new technology are needed in every aspects of work. Also there is a need that current employees must also be re engineered so that they can adjust themselves with new style of work.

Ethical:

A few Ethical constraints which also restricts the strategies for HR planning in ADNOC like limited work hours, minimum number of holidays etc.

Legal:

Labor laws and trade unions forms the legal boundaries ahead of HRP in ADNOC.

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New Employee Recruitment

There needs to be a business case for any new hiring or recruitment. If the GNRD department is not able to fulfill the requirement through the internal movement, it shall initiate a new hiring process. The required job profile will be sent to the different recruitment agencies as well as posted on company’s website. Submitted resumes will undergo the first round of evaluation by the GNRD department. Short listed resumes will then be sent to the manager of the respective department at different associated companies. Preference will be given to UAE Nationals. Several posts are reserved for only UAE Nationals. Expatriate cannot apply for such positions in the company. Department manager will scrutinize the profile and select few potential candidates. He will notify the GNRD team about the selected candidates which in turn will try to fix up an interview. Either a manager or the superintendent will conduct an interview of the candidate. He will be evaluated by the department on several competencies like technical skills, previous exposure to the projects, learning ability, years of experience, previous employment history etc. Once there is a green signal from the department, GNRD department conducts another round of interview which is basically HR interview. In this interview, employee’s fit in the organizational culture is evaluated. His personal history is studied. If GNRD department is convinced, offer letter is released by the department. However, employees at the lowest level like operator etc can be recruited without conducting an interview process. (Group Nationals Recruitment Department (GNRD, 2006)

Emiritization and it’s impact on Human resource planning of ADNOC

As per The National Human Resource Development and Employment Authority (TANMIA), ADNOC has been able to exceed its target in terms of UAE National Employment Drive. There was a success rate of 100% in providing jobs to UAE Nationals job seekers last year. Company and its subsidiaries have been able to increase the percentage of UAE nationals to 50% in the work force. They have set an ambitious target of increasing this percentage to 75% in the next two years.

ADNOC’s Emiratization policy has generated lot of publicity in UAE and across the globe. However, these policies have various concerns from both the local and transnational companies who are doing business with ADNOC. Several organizations in UAE have considered Emiratization as a form of taxation.

Trainings have been the important pillar of Emiratization at ADNOC. Training institute established by ADNOC provides necessary training to young candidates. Recently ADNOC has also tied with various agencies like GETEX for career planning and training of young UAE nationals.

As per the director of training and development at ADNOC, “ADNOC is pleased to offer hold up as a title sponsor to GETEX - Careers and Training 2008. The important reason for our involvement is our want to attract and nurture the best in local and regional talent. ADNOC is expanding quickly, and our support of GETEX-Careers and Training forms a major part of our long-term human resources strategy to discover new as well as experienced talent that aids us in meeting the countless demands of a competitive energy sector.”

There were some identified loopholes in the above strategy

There were instances when company had to compromise on quality just because of the policy enforcement objectives. Many good quality candidates were rejected on the ground of nationality. Various unskilled individuals found place in the company because of their UAE origin. Company has to ensure that it maintain a perfect balance between quality and policy expectations.

Training and development programs at ADNOC were biased towards the UAE Nationals. Many good quality candidates could not take leverage of the education and skills imparted at such institutes.

There is productivity lose at various instances. There had been situations when ADNOC or its subsidiaries need a particular skill which is immediately required. Company is forced to take extra time to fill the post because of the Emiritization compulsion. It has to search for the talent in the national pool irrespective of availability of similar talent easily in the expatriate population. This results in lose of revenue for the company because filling of position is unnecessarily delayed. Revenue lose is much greater for higher positions than lower positions and skills.

ADNOC has a highly diverse workforce. More than 50 percent of its employees are foreign nationals. People are from different background. There are several legal, cultural, and ethical aspects involved whenever such a diverse force has to be maintained. Greater preference for Nationals might evoke a feeling of disenchantment among the migrant workers.

Effective management of HR

In any organization, Human Resource management includes four main parts: developing employees, acquiring employees, motivation then and retaining employees. ARDM stands for “Acquiring, Rewarding, Development and Maintaining and Protecting.” The aim of this model is to encourage socially responsible and at the same time developing ethical practices.

According to ARDM model, an organization is successful in HRM context when it fulfills two necessary conditions. Firstly employees in the organization are the best qualified and secondly employees perform jobs that fit their skills, needs, and abilities. ARDM also states that when people are matched with activities, goals are fulfilled in a better manner. This task can be accomplished by diagnostic approach.

ARDM is very beneficial in providing a diagnostic point of view to HRM. The reason is the ARDM has basic four steps and Diagnosis is the first among the four steps. The remaining there steps are Prescription, Implementation and Evaluation. ARDM serves the manager by acting as an instrument to diagnose the specific work situation.

According to ARDM model, the manger can diagnose the situation of the work by identifying few key factors. After this step, a recommendation is made to interpret the diagnosis into achievement. A normal HRM problem has more than one such recommendation as they are complex enough. Identification of key factors is a step that depends on the type of situation. If the situation is known, older information can be used for diagnosis of the situation. A newer problem on the other hand requires extra efforts.

Next step towards diagnostic approach is evaluation. This step is necessary as it tells whether any change in prevailing ARDM process is needed or not. This step provides another dimension to the diagnostic approach to the HRM practices in an organization. Evaluation step is necessary in enfaced situations that may not be properly fulfilled by older ARDM standards.

Another essential element in attaining diagnostic approach in the HRM is following ethical behavior and acting socially responsible and to provide sound competition and produce high-quality services and products. This step is also attainable by ARDM if the organization focuses on ARDM model and the external environment of the organization. In this way, ARDM again provide a step to implement diagnostic approach to Human Resource Practices in an organization.

Next step in this approach is to timely review of any situation so that corresponding actions can be taken to any situation that can appear in human resource front. ARDM also asks for a complete through and systematic review to any situation. This provides further more strength in analyzing a specific situation. Such timely and through analysis of any situation provide a further more step in diagnostic approach to any Human Resource situation in a firm.

Thus in this way, by identifying the key factors, evaluation of situation, focusing on external environment with ARDM and by timey, through and systematic reviewing any situation, ARDM model helps in providing a diagnostic approach in Human Resource Management.

The first phase is acquiring human resource. This part deals with staff building related activities like fixing categories of employees, deciding number of employees etc. This past has three dimensions too namely career building expects management development and employee training. The third function is motivating employees. This includes searching for individual needs of employees and finding ways that can motivates employees towards the organization. The retention function mentioned above deals with activities that helps in sticking the human resource to the organization. This includes factors like work environment, satisfaction with salary, authority given to employee, role in team and decision making process etc. ADNOC should look forward to these management strategies. Emiritization should be followed by keeping in mind the expatriates interests who are working for the same mission and vision of the company.

Employee Job Turn Over Rate

ADNOC favors Emiritization which is beneficial for the local nationals but for the expatriates working in the company, it is totally a disaster. It creates a feeling of biasness amongst the employees of ADNOC which are migrants and thus out of injustice and partiality they leave their job. Expatriates don’t find it justified seeing a less capable UAE national rising in front of them. This creates a sense of dissatisfaction amongst them and they decide to quit the job. This is the prime reason of high job turn over rate of ADNOC. Do we know what actually is the Employee Turn Over Rate.( Employee Turnover, 2005). It can be defined as no. of employees that a company replaces in a definite time period over total average no. of employees in the company. Basically, employee turn over rate is highest in job where payments are less. It’s equally important to know the reasons of employee turn over in an organization. From the reading of those research articles, we 0came to know various reasons that can be causes to employee turn over in an organization. Salaries, company advantages, employee absenteeism, job performance are some of the vital factors that can stem from employee as well as employer and play a major role in enhancing employee turn over.

Now, what’s the harm to the company when employee turn over rate is high?

When I went through the gathered research articles, I came to know that high employee turn over rate is costly to the company because it leads to various direct and indirect expenses that are useless and simply waste of money.

When new employees have to be hired then there are cost of advertisements which have to be given in newspapers, radio, televisions and other sources of media. This incurs a huge amount of cost to the company. Also, if an individual who has left a job and is a looking for a new job also take advertisements as a major job-finding source, thus investing money in it.

Headhunting costs also indulges in the direct expenses. To recruit new people, company hires new expertise to hire new employees. Thus the compensation given to them is called as headhunting costs.

Human resource cost is another indirect form of expense and is included in the expenses of a company due to high employee turn over rate.

After new employees enter into the company, initial productivity of the firm slows down. Employees need time to adjust with the culture of the organization, working climate, stamina, and policies. This leads to indirect monetary loss to company.

Training costs to train the new employees, so that they get familiar with the proceedings of the company. According to different departments of the company, different training modules are implied. IT, finance, Human resource etc. incorporates different training courses to be taught to the newly hired employees.

Other indirect cost that the employers have to bear is the customer retention cost.

Solutions can be:

ADNOC HR department has to maintain a balance between the expectation of individuals, business, and aspirations of Emiritization policy. It has to ensure that migrants working at ADNOC do not face the feeling of bias.

ADNOC HR department should compensate migrant workers for the Emiratization Policy. This can be in terms of salary hikes or other benefits provided to them. This will help in creating the much needed balance. It will also help in keeping the migrant workers satisfied.

Management by Objective (MBO)

It can be referred to as a process by which the management [2] and come to know the reasons for their existence in the Government and the Government objectives they have to agree upon.

Key Elements

Goal specificity

Participative decision making

An explicit time period

Performance feedback

Under drawn figure shows cascading [3] of objectives.

Employee Recognition Programs

Various types of programs can be implemented so as to motivate the employee for a job well done and thus ensuring superior quality of work from him in the near future.

Types of programs

Personal attention

Expressing interest

Approval

Appreciation for a job well done

Benefits of programs

Fulfills employees’ desire for recognition.

Encourages repetition of desired behaviors.

Enhances group/team cohesiveness and motivation.

Encourages employee suggestions for improving processes and cutting costs.

Employment Involvement Programs

Employees are involved in the decision making processes and thus the commitment towards the organization is increased.

Various involvement programs can be implemented to surge motivation level in an employee and they show the participation level of employee also:

Participative Management: Superiors and sub-ordinates sit together to prticpate in decision making process..

Representative Management: Workers participate in organizational decision by making a small group of representative employees.

Work Councils: Employees who are given priority as council or work group which has to be consulted before taking any decision.

Board Representative: In the board, representative of employees sit and unveil the need of the employees. .

Variable pay programs

Performance in an organization directs some part of the salary of the individual.

We have several plans like:

Price –Rate Pay Plans : It is plan in which workers are paid a fixed amount after completion of production of each unit.

Profit Sharing Plans: Organizationwide programs that distribute compensation based on some estabilished formula designed around a company’s profitability.

Gain Sharing plans: Plans that share gains among the gropus on the basis of their productivity.

ADNOC HR department should take into confidence the migrant workers while pursuing Emiritization policy. This is necessary because almost 50% of employees working in the company are migrants.

Training and Skills Development Facilities should be extended to migrants and expatriates.

Focus should be on quality rather than quantity while making recruitment decision. ADNOC should ensure that they find the suitable candidate for the group of companies so that employee becomes an asset for organization but not a liability.

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