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EXECUTIVE SUMMARY
Oil and Natural Gas Corporation Limited (ONGC) is engaged in the business of exploration and drilling of crude oil and natural gas and is the worlds second biggest exploration and production company ONGC owns and operates more than 11000 kilometers of pipelines in India, including nearly 3200 kilometres of sub-sea pipelines. The company contributes more than 78% of Indias oil and gas production. Today, ONGC is the flagship company of India; and making this possible is a dedicated team of nearly 40,000 professionals who toil round the clock. It is this toil which amply reflects in the performance figures and aspirations of ONGC. The company has adapted progressive policies in scientific planning, acquisition, utilization, training and motivation of the team. At ONGC everybody matters, every soul counts. ONGC has a unique distinction of being a company with in-house service capabilities in all the activity areas of exploration and production of oil & gas and related oil field services. Needless to emphasize, this was made possible by the men & women behind the machine. Over 18,000 experienced and technically competent executives mostly scientists and engineers from distinguished Universities/Institutions of India and abroad form the core of our manpower. They include geologists, geophysicists, geochemists, drilling engineers, reservoir engineers, petroleum engineers, production engineers, engineering & technical service providers, financial and human resource experts, IT professionals and so on. This report concentrates on the study of the performance appraisal system being practiced in ONGC and to check its effectiveness and further to suggest and recommend any possible ways to improve and strengthen its PMS.
The India Petroleum Industry is a case in point for exhibiting the giant leaps India has taken after its independence towards its march to attain a self-reliant economy. During the Independence era of 1947, the India Petroleum Industry was controlled by foreign companies and Indias own expertise in this sector was limited. Now, after 60 years, the India Petroleum Industry has become an important public sector undertaking with numerous skilled personnel and updated technology that is comparable to the best in the world. The vim and the achievement during these years is the growth of productivity in petroleum and petroleum-based products. Even the consumption has multiplied itself nearly 30 times in the post-independence era. An important advancement in the petroleum industry came with the Industrial Policy Resolution, 1956 which signified the promotion of growth of industries. The ONGC originally set up as a Directorate in 1955, was transformed into a Commission in 1956. In 1958, the Indian Refineries Ltd., a government undertaking, came into existence. The Indian Oil Company (IOC), also a government undertaking, was set up in 1959 with the purpose of marketing petroleum-related products. Indian Oil Corporation Ltd. was formed in 1964 with the merger of the Indian Refineries Ltd. and the Indian Oil Company Ltd. Presently, 17 refineries operate under the India Petroleum Industry.
GLOBAL RANKING
ONGC ranks as the Numero Uno Oil & Gas Exploration & Production (E&P) Company in Asia, as per Platts 250 Global Energy Companies List for the year 2007. ONGC ranks 23rd Leading Global Energy Major amongst the Top 250 Energy Majors of the World in the Platts List based on outstanding performance in respect of Assets, Revenues, Profits and Return on Invested Capital (RIOC) for the year 2007. ONGC is the only Company from India in the Fortune Magazines list of the Worlds Most Admired Companies 2007. ONGC is 9th position in the Industry of Mining, crude oil production.
ONGC MISSION
Dedicated to excellence by leveraging competitive advantages in R&D and technology with involved people. Imbibe high standards of business ethics and organizational values. Abiding commitment to safety, health and environment to enrich quality of community life. Foster a culture of Trust, openness and mutual concern to make a stimulating and challenging experience for our people. Strive for customer delight through quality products and services.
WEAKNESSES
A) O.N.G.C facing difficulties to produce oil from aging reservoirs.
OPPURTUNITY
A) Energy utilization of buried coal resource (700 -1700M), estimated 63BT Equivalent to 15000 BCM. B) O.N.G.C facing difficulties to produce oil from aging reservoirs.
THREATS
A) Security of personnel & property especially crude oil continues to be a cause of concern in certain area. B) In some exploration Campaign Company involves high technology, high technology, High investment and high risk.
HR VISION
"To attain organizational excellence by developing and inspiring the true potential of companys human capital and providing opportunities for growth, well being and enrichment".
HR MISSION
"To create a value and knowledge based organization by inculcating a culture of learning, innovation & team working and aligning business priorities with aspiration of employees leading to development of an empowered, responsive and competent human capital".
HR OBJECTIVES
To develop and sustain core values To develop business leaders for tomorrow To provide job contentment through empowerment, accountability and responsibility To build and upgrade competencies through virtual learning, opportunities for growth and providing challenges in the job To foster a climate of creativity, innovation and enthusiasm To enhance the quality of life of employees and their family To inculcate high understanding of 'Service' to a greater cause
HR Strategy
To meet challenging demands of the business environment, focus of the HR strategy is on change of the employees mind set. Building quality culture and resources. Re-engineering and redeployment for maximizing utilization of HR potential . To build and upgrade competencies through virtual learning, opportunities for growth and providing challenges in the job. Re-strengthening mutual faith, trust and respect. Inculcating a spirit of learning & enjoying challenges.
Role of HR
Alignment of HR vision with corporate vision. Shift from support group to strategic partner in business operations. HR as a change agent. Enhance productivity and performance by developing employee competency and potential. Developing professional attitude and approach. Developing Global Managers for tomorrow to ensure the role of global players.
Measuring HR Performance
HR Parameters have been incorporated in the MOU by ONGC since 1994-95 to systematically and scientifically evaluate effectiveness of HR Systems, which enables and facilitates time bounds initiatives
The oil and gas industry is totally a global industry. However, its underlying importance in Indias growth cannot be ignored. Current business scenario has raised many challenges for oil and gas industry and policy makers. In order to acquire and sustain competitive advantage, companies need to continuously innovate; un-learn; learn; restructure; and improve their core and support processes. It is not just enough to manage current processes; but go beyond the existing model and framework to question and reassess how value is created and delivered. Functional area challenges must be unique for this unique and growing industry.
STRATEGIC VISION
For focusing on core business of E&P, ONGC has following Objectives: To double Reserves. To improve average recovery from 28% to 40%.
The focus of management will be to monetize the assets as well as to assetise the money.
GLOBALIZATION
ONGC operations are being internationalized with a view to acquiring exploration acreage and access to oil in other basics world over in line with the over strategy followed by international oil companies .ONGC Videsh Limited .a subsidiary of ONGC , is managing the overseas ventures.
PERFORMANCE APPRAISAL
Performance appraisal can be defined as the process of evaluating the performance of an employee & communicating the result of the evaluation to him for the purpose of rewarding & developing the employee. According to Michael Armstrong Performance appraisal is a formal assessment & rating of individual by their managers at usually at annual review meeting.
Performance can be defined as the degree of accomplishment of tasks by an employee in his job. In some organizations it is measure of the result achieved & target accomplished whereas in others, it is a measure of employee efforts & behaviour. However most organizations use a combination of both efforts & results. Performance appraisal is also termed as performance review, annual review & annual appraisal.
ESSAY APPRAISAL
In the essay appraisal method, the appraiser prepares a document describing the performance of the employees. Questions or guidelines are provider to the appraiser based on which analyses & describes the employees performance.
RANKINNG METHOD
There are three commonly used methods of ranking namely alternation, paired comparison & forced distribution. The first two methods are used when there are only a
few employees to be ranked, whereas forced distribution method is used in large companies which have thousands of employees.
CHECKLIST
In this method the rater has to respond yes or no to a set of questions which assess the employees performance & behaviour. Normally weights are attached to each of these questions based on which the final appraisal score of the employee is calculated.
TEAM APPRAISAL
In the new economy era, where team work is essential for any venture to succeed, team appraisal has emerged as one of the best tool for the performance management. In the team appraisal method the individual team member evaluate their colleagues in the team & provide feedback.
BALANCED SCORECARD
The balanced scorecard as a method of measuring performance channelizes the efforts of people to achieve organizational goals. The implementation of balanced scorecard involve formulating a strategy & deciding what each employee needs to do to achieve the objectives based on strategy.
The objectives of the performance appraisal system at ONGC are: To set norms and targets of work performance, as well as, to monitor the work progress of employees. To facilitate placement of employees in accordance with their suitability for different types of assignments. To provide an objective basis for determination of merit, efficiency and suitability for the purpose of promotion. To identify areas requiring exposure for training and development.
The work performance of an employee on the present job in relation to the expected levels of performance, both qualitative and quantitative.
The extent of development achieved by the employee during the period under review.
Evaluation of behavioural attributes attitudes and abilities. Evaluation of potentials for assuming higher responsibility.
Performance during the period from 1st April to 31st March of every year. All regular employees of the company. a) Non Executives. b) Executives
RESEARCH METHODOLOGY
RESEARCH DESIGN The present investigation is descriptive type of study undertaken to estimate the effectiveness of the performance appraisal system of ONGC Ltd. The present study identifies views of employees of different levels and disciplines. They have divided the whole sample into various groups on various criterions like age, experience, discipline, and management level. To do the better analysis these groups are further incised as
Age
Age less than 40 years Age between 40-50 years Age above 50 years Age not provided
Experience
Experience less than 10 years Experience between10- 20 years Experience between20- 25 years Experience between25- 30 years Experience above 30 years
Discipline
Finance Geo Sciences HR Production Technical and Engineering
Managerial Level
Junior Management(E0 - E2) Middle Management(E3 E4)
MAJOR FINDINGS
Performance Appraisal System in ONGC is not transparent. Appraisers are usually unbiased. Employees are not able to know their actual position after the appraisal. The management is serious about the appraisal process.
The appraisal process provides them an opportunity for development and growth.
Relations with the superior affect the evaluation. Greater weight age is given to the recent performances. There are fixed standards to evaluate the performance but those are not clear due to the subjectivity of the topic. Raters know how to conduct the appraisal. Raters are not that much concerned about the varied needs of people at levels of experience and background. Superior-subordinate relations are good. Superior helps them set and achieve meaningful goals. This makes the environment amiable and congenial.
Performance appraisal sheet is lucid and easy to understand and fill. The parameters used to appraise the potential are ample. The system being not so transparent, employees are unable to identify the performance gaps in order to prepare for the future. Individual feedback is not provided. The management helps provide an atmosphere where all are encouraged for comradeship and teamwork. Appreciation is provided for the good job done. The appraisers are generally aware about their subordinates and their talents and potential. Most of the raters have the ability to give constructive criticism in a friendly, firm and positive manner. Employees dont have the opportunity to respond to the appraisal result. Employees are being rated on their knowledge and skills.
Majority of people want that there should be some incentives based on performance.
Employees are not provided with the genuine feedback. Appraisal counselling is considered beneficial for future developments. Management doesnt bother much about the training requirements mentioned in the appraisal sheet. Most of the employees want that 360o feedback system should be introduced.
STRATEGIC DECISIONS
Strategic decisions taken by ONGC o ONGC changed from a Commission to a company. o ONGC appointed MC Kinsey as a consultant for complete revamping and restructuring of the organization. o ONGC expanded its global operation through its subsidiary OVL. ONGC bought 71% stake in the MRPL refinery. o ONGC decided to acquire equity oil abroad through the endeavours of the OVL. Human resource development.
OPERATIONS:
Oil and Natural Gas Corporation carries out its recruitment process in the process as shown in the block diagram as shown in the figure above. The methods involved are: 1) Internal Recruitment. 2) Direct Recruitment. 3) Indirect Recruitment. 4) Third Party.
Internal Recruitment
Internal Recruitment involves selecting the deserving candidates to various posts by promotions and transfer job posting. Internal Recruitment is also done on the basis of employee referrals.
Direct Recruitment
Direct Recruitment involves conducting the campus recruitment. HR employees Of ONGC are responsible for conducting the recruitment process at the campuses of many Colleges and undertake the selection procedure that involves various tests that are discussed as follows: a) Aptitude Test; b) Group Discussion; c) Personal or Technical Interview.
Indirect Recruitment
Under the indirect recruitment, company informs about the vacancies through various advertisements on newspaper, internet etc. The aspirants need to fill the online application form which is available on ONGCs website i.e. ongcindia.com. After filling the application form the aspirants are issued admit cards as they have to go through series of tests which were discussed above. After the completion of the all the above mentioned steps the final decision on hiring the candidates is taken. Now let us have a look at the eligibility for various posts in the company.
RECOMMENDATIONS
The performance appraisal system of ONGC is of good quality. With the introduction of new e-PAR system, the PMS system is refined further. On the basis of the analysis of responses and findings I have reached to some conclusions. So taking them into consideration few steps may be considered to strengthen the performance appraisal system.
The system should be made more transparent. This can be achieved by creating awareness among the employees regarding each and every aspect of the appraisal process. They should be made aware about the standards and the criterions for evaluation. Further they should be shown the appraisal result. The appraiser and appraise should sit together and then the appraiser should
rate the appraise for his performance and should state the reason for the same. This will increase the level of transparency and the employee will feel satisfied as he will have an opportunity to respond at that very moment itself. The genuine feedback should be provided to the employees. So that they may be in a position to know where they stand exactly. So that they can identify their performance gaps and prepare accordingly for the future. The general belief among employees is that the relations with the superior affect the evaluation process. This is not good as this creates a sense of favouritism in the organization. No doubt one should be in pleasing terms with the superior but that should not affect the evaluation at all. For this the raters should always consider the performance as the only measure for the evaluation.
The raters should take note of the critical performance incidents of an individual
so that at the end of the year it should not be that only the recent performances are given more weight age.
Raters should consider the specific requirements of the people to do the job. They should help them out by providing necessary skill set to do the job more efficiently. They should set the goals as per the potential and calibre of the individual.
Employees should have the opportunity to respond to the appraisal result. For this individual feedback should be provided. Management should take serious note of the training requirements shown by the individual in the appraisal sheet. Training plays a vital role in the development of an individual and helps improve the performance.
Some incentives should be introduced on the performances basis. This thing
creates a sense of healthy competition among employees which boost up the growth of the individual as well as the organization.
Golden Peacock Award for Excellence in Corporate Social Responsibility in Emerging Economies' 2006 - by World Council for Corporate Governance, UK.
'Golden Peacock Award for Excellence in Corporate Governance - 2006' by Institute of Directors.
References:
http://www.ongcindia.com www.citehr.com