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| HUMAN RESOURCES | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| HR Management in PSUs has Certainly Become Very Challenging | Interview with V. C. Agrawal, Director (HR), IOCL | |||||||||||||||||||||||||||||||||||||||||||||||||||
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How do you spell ‘HR’? Conventionally, ‘HR’ is still referred
to as ‘Human Resource’ but the approach towards this resource has
completely undergone a change over the last one-and-a-half decades. It
has emerged as the most valuable and most sought-after resource and has
been placed on a higher pedestal over other factors of production.
Human resource is no longer referred to
as a numeric entity; it is referred more in terms of competitiveness
and competencies.
How do you see the impact of HR management on the growth of a company? The employees of any organisation form
the corner stone of success. The job of HR management is to
extract the best out of the employees and simultaneously equip them
with the best possible way so that they can give their best and
contribute to the growth of the organisation.
In the past two decades, IndianOil has
increased its refining capacity by about 109%, its pipelines capacity
increased by a whopping 175%, and the growth in marketing activities
was about 79%. We could achieve this fete with a reduction in manpower
by about 10%.
In addition to increase in throughput,
IndianOil had taken several steps during the past decade to diversify
into both upstream and downstream activities, especially in the field
of petrochemicals.
In petrochemicals, IndianOil has already
captured 38% market share in Linear Alkyl Benzene (LAB, used in
detergent manufacture) and the product has been exported to Indonesia,
Turkey, Thailand, Vietnam, Norway and Oman. An integrated
Paraxylene/Purified Terephthalic Acid (PX/PTA) plant for polyster
intermediates is already in operation at Panipat, while a Naphtha
Cracker with downstream polymer units is coming up at Panipat.
Similarly IndianOil has made its presence felt in the Gas Business and
also in oil exploration & production.
This has been achieved without any
addition to manpower and by continuous interventions like business
process reengineering, business unit restructuring, consolidation,
decentralization, etc, which are an integral part of our progressive HR
management practices.
What improvement do you suggest in the managerial activities in the future? The managerial activities in future need
to be in tune with time – this is the basic ingredient of success. The
management has to be more cautious about the changes taking place in
the business environment and continuously assess what impact these
changes may have on the competitiveness of the organisation’s business.
It has to continuously monitor the technological environment for
adoption of new technologies. While sectoral competency and leadership
will be important, the companies will have to look for both organic and
inorganic growth opportunities.
In the emerging globalised scenario, there will be more of consolidation across the industry. Because economies of scale will matter more in facing the competition from global players who leverage heavily on their scale and size of operations. So what we are seeing in the airlines industry could soon be a reality for other industries also. Do you think that there is a need for change of attitude of HR management? As it is said, ‘Change is the only
permanent thing in the world’, the HR concepts and practices also need
to metamorphose with changing times, and, more importantly, the
changing nature of business challenges. Over the last one-and-a-half decade, the Indian business
scenario has undergone a rapid change.
The new business challenges outline a new agenda for HR management – an agenda focussing on championing competitiveness. HR management needs to focus more on the deliverables of their work rather than doing their work better. HR management needs to articulate its role in terms of value created. The following changes in the attitude of HR management, in my opinion, will be helpful for building organisational competitiveness:
What kinds of HR policies are being adopted in your company? IndianOil adopts a progressive HR policy
– the theme for which is maximising employee engagement. An ‘engaged’
workforce helps improve business performance in terms of the company’s
growth as well as customer satisfaction.
He/she understands what the business is
trying to achieve and feels motivated to help make it happen.
Actions have also been initiated to
positively discriminate the performers from non-performers in terms of
compensation. We have implemented an e-
Performance Management System and on the
basis of the scores obtained through this measurement system, a part of
the performance- linked incentive is paid to individual officers. It
has been a departure from the previous system of paying team-based
incentive.
The policies have also been made simpler
and people-friendly. To mention a few – the LTC rule has been
simplified; the leave rules have been rationalised, earned leave that
exceeds the ceiling level of 300 days gets automatically encashed now.
How is your work culture different from that of other oil PSUs? The work culture in IndanOil is based on
its core values of care, innovation, passion and trust. In our work
culture, care stands for concern, empathy, understanding, cooperation
and empowerment. Innovation implies creativity, ability to
learn/unlearn, ability to adapt/absorb, ability to be flexible, ability
to lead change. Passion signifies deep commitment, dedication, pride,
inspiration, ownership, zeal and zest. Trust stands for delivered
promises, reliability, dependability, integrity, truthfulness,
transparency and honesty.
In terms of diversities, IndianOil’s
scale of business operations is much bigger and wider compared to other
oil sector PSUs. IndianOil has about 500 units spread across the length
and breadth of the country, which are at least three times more that
the number of locations other oil PSUs are handling. In terms of
manpower also, IndianOil’s strength of 30,000 is only second to ONGC.
The differences in work culture arise out of such diversities in
operation.
Within the organisation also there are
differences in work culture across divisions like Refineries, Pipelines
and Marketing. Research & Development division would have a
different work culture than that of rest of the divisions.
IndianOil has also merged its
subsidiary, IBP Co. Ltd., which has been a 99-year-old company with its
own work culture. Keeping in mind that most of the mergers have run
through rough weather because of differences in the culture, IndianOil
has been very cautious about it and is taking all precautions to see
that the people from the merging entity do not feel alienated in the
new set-up.
While IndianOil ventured overseas and
set up in its offices in Sri Lanka and Mauritius, it took the route of
‘multi-domestic’ approach, as far as cultural integration is concerned.
It never tried to impose its work culture inIndia in those two
countries. In fact, a unique work culture gradually took shape there,
which is a blend of IndianOil’s and the local work culture.
What factors may affect your HR policies in the future?
Where Do IndianOil’s HR strategies stand today? The HR management strategy in IndianOil
has always been people-centric and it is this HR strategy that produced
a considerable number of industry leaders not only in the oil & gas
sector but for other industry segments also. The present HR strategies
of IndianOil tend to achieve:
What is the Human
Resources Management scenario in India, mainly in PSUs? Do you think
that it is on the right track?
The human resources management scenario
in India and also in PSUs has certainly become very challenging. We are
facing challenges in attracting and retaining talent and also keeping
our HR policies and practices in tune with the changing time.
The Indian economy is currently at an all time high. The services sector, led by IT and IT-enabled services, is on a hiring spree. The manufacturing sector has also bounced back and recruiting heavily for manning its expansion. The Indian education system, it seems, is yet to be fully geared to produce enough qualified manpower as per the need of the industry. The average salary level in India for the same skills set has risen by about 15% over the last year and this is one of the highest in the world. The PSU salaries have not risen in line with the industry trend and particularly for the senior level officials, the differences are quite striking. However, the overall scenario in IndianOil as far as the human resources management is concerned, is quite comfortable. Attrition rate last year had been about 2% in the executive cadre, which is in no way alarming if we compare with private sector and leading MNCs. However, the attrition rate is a little higher in the initial three to four years of joining the company, particularly among the campus recruits. Several of them take up assignments outside the petroleum industry. Very few, in fact, join petroleum MNCs and private players. The attrition rate, though low currently, is certainly an area of concern, particularly when several petroleum MNCs and private sector players are entering the field in India. As the largest downstream major in the country, we are aware that IndianOil will be a major poaching ground. But we are initiating several interventions to keep this attrition rate under control. IndianOil has also taken initiative towards ‘employer branding’ exercise to ramp up its image as a better career platform for attracting fresh talent. What are the major initiatives you have taken to improve an employee in IOCL? The following major initiatives have
been taken by IndianOil for improvement of employees:
Rewarding
performance:
There was a felt need to differentiate
and reward superior performance based on a set of well-defined
performance measures. This was done to create a substantial individual
performance orientation in the Performance Incentive Scheme across all
grades since no other element of pay had a significant linkage with
performance. As promotion opportunities are narrow in the higher
grades, individual weightage was designed to motivate even those high
performers who may not get the promotion opportunity despite of good
performance.
Implementation
of a robust performance management system:
Rewarding performance required a robust
performance management system. There was also a need to rationalize the
roles and establish job equivalence to sharpen the performance
differentiation. It was achieved by implementation of e-PMS in
IndianOil.
Measuring
employee engagement:
IndianOil recently undertook an Employee
Engagement Survey with professional help from International Management
Institute, New Delhi, to gauge the job and career satisfaction levels
of 11,000 strong employees in executive cadre of IndianOil.
The main objective of the survey was to
assess the level of employee engagement and to identify the drivers of
employee engagement. In the survey, the drivers like benefits,
stakeholders, job content and co-worker were found to be well looked
after across all the four divisions surveyed in IndianOil. A few other
drivers were identified, which require some improvement.
Based on the findings of the survey, an
action plan has been drawn up, which on implementation will definitely
have a positive impact on areas like work-life balance,
decision-making, HR alignment, etc.
Survey
among new recruits:
In another initiative, I have also
personally mailed a questionnaire to newly recruited employees to get
an understanding of their aspirations and satisfaction level. On the
basis of the feedback we have taken initiatives to improve the ‘on and
off’ worksite facilities. Realising their need for improving the cash
component in the total salary, a number of simplifications and
improvements have been introduced in perquisites.
Creating
a learning organisation:
In order to create a learning
organisation and to facilitate the desire for young recruits to acquire
higher qualifications, IndianOil has introduced a scheme for sponsoring
its employees for part-time MBA at leading management institutes in the
country.
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