47820522 PMS in Shell Final

SHAHEED ZULFIQAR ALI BHUTTO INSTITUTE OF SCIENCEAND TECHNOLOGY

SEMESTER: SPRING 2008

PERFORMANCE APPRAISAL

LECTURER: MR. JAHANGIR ALI

PERFORMANCE MANAGEMENT SYSTEM AT SHELL

NAMESANJUMARTIASMA SETHIMANAHIL RASHID KHATRI

0735135SHAHBAZ

ID

ContentsINTRODUCTION.........................................................................................................................................................................................4

HUMAN RESOURCE

MANAGEMENT AT....................................................................................................................................................................................6

SHELL........................................................................................................................................................................................................ 6

STRATEGY ADOPTED BY HR........................................................................................................................................................................................6

HR PRIORITIES...........................................................................................................................................................................................7

ROLE OF HR............................................................................................................................................................................................... 7

PERFORMANCE MANAGEMENT SYSTEM: A............................................................................................................................................10

GENERAL PERSPECTIVE...........................................................................................................................................................................10

COMPONENTS OF PERFORMANCE MANAGEMENT................................................................................................................................11

DRIVING PERFORMANCE........................................................................................................................................................................13

PURPOSE OF PERFORMANCE MANAGEMENT........................................................................................................................................14

ROADBLOCKS TO PERFORMANCE MANAGEMENT..................................................................................................................................15

TYPES OF PERFORMANCE APPRAISALS...................................................................................................................................................15

Performance Appraisal Ratings and Forms.............................................................................................................................................16

Performance Appraisal Roles..................................................................................................................................................................16

MANAGEMENT BY OBJECTIVES...............................................................................................................................................................17

MBO Strategy.......................................................................................................................................................................................... 18

6 MBO Stages.......................................................................................................................................................................................... 18

BOTTOM LINE......................................................................................................................................................................................... 19

PERFORMANCE MANAGEMENT SYSTEM................................................................................................................................................20

AT SHELL................................................................................................................................................................................................. 20

PERFORMANCE EVALUATION PROCESS..................................................................................................................................................21

CONTENTS OF IDP...................................................................................................................................................................................22

PROPOSED PERFROMANCE MANAGEMENT...........................................................................................................................................23

SYSTEM................................................................................................................................................................................................... 23

MEASUREMENT CRITERIA.......................................................................................................................................................................27

BUILDING COMPETENCE.........................................................................................................................................................................28

CONCLUSION........................................................................................................................................................................................... 29

ACKNOWLEDGEMENT

We would like to thank God Almighty for providing means that enabled us to conduct theresearch.We would also like to thank Sir Jahangir for his valuable and constant support in helpingus accomplish our report.Our warm gratitude extends towards our families who provided ample support and loveduring the research.

EXECUTIVE SUMMARY

Research was conducted on the performance management system (PMS) implemented atShell. The process was gauged along with evaluation techniques and results of appraisal.Other human resource functions were also assessed and suggestions for improvementwere granted in context of the already efficient PMS at Shell.

Shell employs a very effective PMS that is uniform all over the globe for all itsemployees. In the report we have discussed the importance of PMS at Shell. Its processhas been highlighted with special emphasis on the Goals and Performance Appraisal(GPA), Individual Development Plan (IDP) and Individual Performance Review (IPR).

In the last part of the report, we tagged compensation and benefits, career planning, teamwork, employee relations, measurement criteria and competence based rewards with oursuggestions to further improve the PMS at Shell.

INTRODUCTION

Shell brand name enjoys a 100-year history, dating back to 1899 when Asiatic Petroleum,began importing kerosene oil from Azerbaijan into the subcontinent. It is a global groupof energy and petrochemical companies. Currently it is operating in 140 countries andterritories and employs around 108,000 people worldwide.

Shell explores for and produces oil and gas to create essential products from them, suchas fuels and petrochemicals. Currently its exploration and production network has beenexpanded across 38 countries worldwide with employees around 17,500, along with afurther 10,000 contractors and joint venture employees. Shell has also pioneered the gasindustry for more than 30 years. It’s now one of the largest equity producers of naturalgas with a fast-growing presence in the Power business.

Shell emphasizes a lot on its core values. These values are honesty, integrity and respectwhich have formed the basis of its General Business Principles for 30 years and remainas important as ever. The company is convinced that its short- and long-term businesssuccess depends on finding environmentally and socially responsible ways to help meetthe world’s future energy needs.

It also has downstream classes of businesses (manufacturing, supply and distribution,retail, business to business, chemicals and lubricants businesses), trading and shippingbusiness within the Shell Group and Global solutions which provides business andoperational consultancy, technical services, and research and development expertise tothe energy industry world-wide.

The strategy of Shell is more of an upstream and profitable downstream. The companyaims to engage efficiently, responsibly and profitably in oil, oil products, gas, chemicalsand other selected businesses and to participate in the search for and development of

other sources of energy to meet evolving customer needs and the world’s growingdemand for energy.

The HR professionals contribute to Shell’s bottom line performance and long-termsustainability. They work diligently to support the business, but often forget the need tobuild a shared understanding within the HR function of their roles and celebrate thesuccess they work so hard to achieve.

HUMAN RESOURCE MANAGEMENT AT

SHELL

STRATEGY ADOPTED BY HRHR professionals of Shell continuously work hard to enhance the performance and longterm sustainability of Shell. HR collaborates with the business leaders around the world.It solves employee issue and supports their interests. It implements robust processes andprocedures along with effective functional strategic plans to deliver better businessresults. However, there is one hindrance of establishing a shared understanding of theirrole within the HR function.

There is one unique strategy named as plan, carried out by HR known as ‘More Upstreamand Profitable Downstream’. This plan clarifies the functional accountabilities and hasthe capability to bring any fundamental transformation within the organization. This planis central part of functional leadership role at Shell and is directly related to the overallstrategy.

HR PRIORITIES

ROLE OF HRThere are four key strategic priorities that are to be undertaken by Shell across the world:

1. Talent Now and a Sustainable Future Supply- HR have a critical role in meetingthe immediate resourcing needs of the businesses. It ensures that needs have to bemet in 5-10 years time.

2. Strengthening Leadership and Deepening Professionalism - HR supports andencourages leadership development at all levels.

3. Improving Individual and Organizational Performance- HR provides clearindividual goals and objectives, appraise performance, and reward superiorperformance.

4. Increase Efficiency and Effectiveness of HR Systems and Processes- HR strivesfor first quartile efficiency in the delivery of basic processes. In order to achievesuch efficiency, they do proper benchmarking and focus on continuousimprovement.

All the HR business professionals work collectively as a global HR community tomaximize alignment and increase efficiency. Ulrich Model is being used as a frameworkfor defining the roles and activities carried out by entire HR. The various roles andactivities defined are:

Business Player:Attraction and recruitment processesLeadership and talent identification and assessmentSkill pool management and talent reviewsOrganizational analysis and designAligning business strategy with individual objectives

Change Agent:Strategy planning and culture assessmentChange management planningMergers and acquisition supportBehavioral feedback and coachingEmployee communicationsBusiness improvementLearning strategies

Line/Staff Support:Employee advocatePerformance management processesStaff opinion surveysConsultationEmployee issues resolution and relationsPolicies and systemsRemuneration and benefits

Administrative Expert:Transactional activitiesShared services - outsourcing and off shoringPayroll administrationEmployee servicesJob evaluation processes

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PERFORMANCE MANAGEMENT SYSTEM: A

GENERAL PERSPECTIVE

Performance Management System is the heart of any ‘people management’ process inthe organization. Performance Management involves the careful selection of

employeescommunication of work expectations, monitoring of performance, feedback and supportfor ongoing development and recognition for excellent performance. It enhancesorganizational success through increased employee clarity regarding organizational goalsand individual contributions towards goals. A unified approach to performancemanagement—one that ties together the organizational and individual aspects— isdiscussed in the following pages.

COMPONENTS OF PERFORMANCE MANAGEMENT

Performance management is an amalgamation of five missing linkages. These arecombined together through the organizational and individual aspects. These corecomponents include:

Align the objectives, resources and budgets of the different parts of theorganization and the goals, opportunities and quotas of individuals.Measure organizational and individual performance.Reward individuals for performance.Report organizational and individual performance.Analyze organizational and individual strategy execution.

AlignmentAn organization consists of business units, departments and divisions, each with its ownset of objectives. Alignment must exist between the objectives of the variousorganizational entities and the strategic objectives of the organization itself. Thisgrouping must be frequently adjusted — at least quarterly — in response to newobjectives, changes in the business environment or problems with achieving currentobjectives.

Aligning employees involves cascading strategic objectives down to all levels of theworkforce. This enables members of the workforce to understand how their performancewill be measured and evaluated, and also how their efforts tie into the overall strategy.This linkage between organizational objectives and individual goals and activities is atthe core of effective performance management.

MeasurementAlthough all organizations measure performance, most focus on financial metrics andmeeting government regulations. An organization that only measures historical financialperformance, however, is focusing on the past rather than driving future performance.

To drive performance, one must link organizational objectives and individual employeegoals — and their associated metrics of performance — with the measurement of actualorganizational and individual performance. Measurement is of critical value in linkingpay to performance and in laying out a feedback mechanism that allows one to adjusttheir strategy and tactics over time.

Measuring individual performance through a tight link to goal achievement definesexpectations for the employees, thus providing an equitable and predictable basis foraccountability. It also provides a way for management to assess employee capabilities.Such measurement provides a consistent and objective basis for determination ofemployee rewards.Frequent, objective measurement facilitates in assessing whether the organization is onthe right path or needs to adjust objectives—and the goals of individual employees—todrive desired behaviors.

RewardLinking performance measurement to rewards is the power steering that enables theorganization to drive the behaviors of the entire workforce and keep them on thestraightest path to achieving the organization’s strategic objectives.

All employees in the organization should be on a variable pay plan that is linked to theirindividual performance. Although rewarding people based only on individualperformance may make for an overtly competitive culture, teamwork and collaborativeeffort can be factored in to preclude unhealthy competition.

ReportReporting is about providing timely information to executives, managers and individualsabout the performance of the organization and its people. However, for mostorganizations reporting is more a matter of compliance with government regulations.

DRIVING PERFORMANCE

Effective reporting allows you to see the degree of objective and goal achievement andprovides a feedback mechanism that allows you to adjust your strategy, tactics, objectivesand goals over time.

AnalyzeAnalysis answers the why and how of performance management. The purpose of analysisis to initiate change—changes in strategy, in tactics, in personnel, in budgets and manyother aspects of managing the enterprise.

Analysis of organizational performance provides actionable, timely, meaningfulinformation that enables the organization to take corrective action proactively and tolearn and adapt rapidly. Analysis of individual performance enables managers to helpemployees understand how specific behaviors affect the company’s performance, identifytrouble points in processes that are restricting individual performance and make the bestuse of resources by optimally aligning people and activities.

In essence, effective performance management is when every part of the organization andevery person is drumming to the same beat and marching in step.

For many organizations, becoming performance-driven might cause a cultural upheavalthat, at least in its early stages, results in turmoil, a perception of chaos and a lot ofdiscomfort. It can trigger turnover of long-time employees who do not like to be heldaccountable for goal achievement and who feel entitled to a certain level of payregardless of their performance. And it might cost money as they make the initialinvestments.

But with the leadership and commitment of senior management, becoming performance-driven will lead to dramatic improvements in performance in financial terms, with respectto employee productivity and morale and in the flexibility to quickly adapt to change.The effort will be well worth it.

PURPOSE OF PERFORMANCE MANAGEMENT

Performance management has many advantages. It greatly facilitates the organization to: Ensure that the work plans of the employees are effectively directed towards

thestrategic direction of the organization. It significantly motivates employees toaccomplish their best.

Improve performance by establishing clear communication between the managerand the employee about what he/she is expected to accomplish. It also providesongoing, constructive feedback on performance and reveals poor areas that needimprovement.

Identify skills and abilities of each employee so that work assignments build andreflect on employee’s strength.Train & develop the staff in the right way so they successfully accomplish theirwork and career goals. All this is done by identifying training needs anddevelopment opportunities.

Formulate administrative decisions that support decision making regardingpromotions, terminations, compensation and rewards.

Performance measurement is designed to highlight achievements and reveal strategic andoperational issues that hinder progress toward the attainment of the organization’smission. It is not designed or intended for use in assessing performance at the individuallevel. It is an on-going progress, and is not a once a year process like performanceappraisal was initially where employees met once a year to look back at the work doneduring the previous year and to evaluate what was accomplished. Performancemanagement on the other hand, is the process employers use to make sure that employeesare working towards organizational goals.

ROADBLOCKS TO PERFORMANCE MANAGEMENT

TYPES OF PERFORMANCE APPRAISALS

Rating scales are applied inconsistentlyEvaluators are not trained leading to rater errorsSupervisors do not value the procedure and use it for reprimanding or arguingStandards and criteria are not objective, relevant and realistic or are unrelated tothe work performed.Failure to use evaluation results for decision.It is highly personal and time consumingSupervisors are reluctant to measure performance of the very employees theydepend on to get work accomplished from.

Self Appraisal: when the employee is asked to evaluate his/her own workPeer Appraisal: staff of equal rank within the organization are asked to evaluatethe employeeTeam Appraisal: similar to peer appraisals; employees who work as a part of theteam are asked to evaluate the team work.Assessment centre: the employee is assessed by professional assessors usingseveral types of evaluation such as work simulations and actual activities360-degree Appraisal: the employee’s work is reviewed by gathering input fromrepresentatives of all the groups the employee interacts with as supervisors, peers,subordinates and clients.

Management by Objectives: the employee’s achievements of work objectivesthat are set in collaboration with his/her supervisor are assessed.Combination Methods: some organizations combine different methods into theirperformance management process. Some organizations include an evaluation ofcompetencies such as the KSAs that distinguish superior performance.

Performance Appraisal Ratings and Forms

Performance Appraisal Roles

Organizations usually establish appraisal ratings to indicate the level of performanceachieved by employees. The current trend is to simplify rating scales and move awayfrom numeric scales to words of descriptive performance. The value of a rating system isthat it provides a clear indicator to the employee of the level of his or her performanceachievement. However, over focus on the performance rating minimizes the value of theongoing performance development of the employee.

An appraisal form constitutes to consistency in performance feedback and managementin the organization and ensures performance management activities are properlydocumented. Form should be kept as simple and clear as possible the more complex theform, the more opportunity for misunderstanding and miscommunication.

Supervisorso Usually do the actual appraising.o Must be familiar with basic appraisal techniques.o Must understand and avoid problems that can cripple appraisals.o Must know how to conduct appraisals fairly.

HR departmento Serves a policy-making and advisory role.o Provides advice and assistance regarding the appraisal tool to use.o Prepares forms and procedures and insists that all departments use them.o Responsible for training supervisors to improve their appraisal skills.o Responsible for monitoring the system to ensure that appraisal formats and

criteria comply with Equal Employee Opportunity (EEO) laws and are upto date.

MANAGEMENT BY OBJECTIVES

Management by objectives (MBO) is a systematic and organized approach that allowsmanagement to focus on achievable goals and to attain the best possible results fromavailable resources. It aims to increase organizational performance by aligning goals andsubordinate objectives throughout the organization. Ideally, employees get strong input toidentify their objectives, time lines for completion, etc. MBO includes ongoing trackingand feedback in the process to reach objectives.

Managerial FocusMBO managers focus on the result, not the activity. They delegate tasks by "negotiating acontract of goals" with their subordinates without dictating a detailed roadmap forimplementation. Management by Objectives (MBO) is about setting objectives and thenbreaking these down into more specific goals or key results.

Main PrincipleThe principle behind Management by Objectives (MBO) is to make sure that everybodywithin the organization has a clear understanding of the aims, or objectives, of thatorganization, as well as awareness of their own roles and responsibilities in achievingthose aims. The complete MBO system is to get managers and empowered employeesacting to implement and achieve their plans, which automatically achieve those of theorganization.

Where to Use MBOThe MBO style is appropriate for knowledge-based enterprises when your staff iscompetent. It is appropriate in situations where you wish to build employees'management and self-leadership skills and tap their creativity, tacit knowledge and

MBO Strategy

6 MBO

Stages

initiative. Management by Objectives (MBO) is also used by chief executives ofmultinational corporations (MNCs) for their country managers abroad.

1. All individuals within an organization are assigned a special set ofobjectives that they try to reach during a normal operating period. Theseobjectives are mutually set and agreed upon by individuals and their managers.2.

3.

Performance reviews are conducted periodically to determine how close

Rewards are given to individuals on the basis of how close they come toindividuals are to attaining their objectives.

reaching their goals.

1.2.

3.4.5.6.

Define corporate objectives at board levelAnalyze management tasks and devise formal job specifications, which

Set performance standardsAgree and set specific objectivesAlign individual targets with corporate objectivesEstablish a management information system to monitor achievements

allocate responsibilities and decisions to individual managers

against objectives

AdvantagesMBO programs continually emphasize what should be done in an organization toachieve organizational goals.MBO process secures employee commitment to attaining organizational goals.

DisadvantagesThe development of objectives can be time consuming, leaving both managersand employees less time in which to do their actual work.

BOTTOM LINE

The elaborate written goals, careful communication of goals, and detailedperformance evaluation required in an MBO program increase the volume ofpaperwork in an organization.

For many organizations, becoming performance-driven might cause a cultural upheavalthat, at least in its early stages, results in turmoil, a perception of chaos and a lot ofdiscomfort. It can trigger turnover of long-time employees who do not like to be heldaccountable for goal achievement and who feel entitled to a certain level of payregardless of their performance. And it might cost money as you make the initialinvestments.

But with the leadership and commitment of senior management, becoming performance-driven will lead to dramatic improvements in performance in financial terms, with respectto employee productivity and morale and in the flexibility to quickly adapt to change.The effort will be well worth it.

PERFORMANCE MANAGEMENT SYSTEM

AT SHELL

Being the third largest corporation in the world (Wikipedia, 2008), Shell employs ahighly proficient performance evaluation system. Performance management is an annualactivity. It facilitates the organization to plan in advance and to achieve its strategic goals.It gives a bird’s eye view of the performance of the whole organization and aids intracking and steering it towards the right direction.

The upper level management is very committed towards performance management andplays a crucial part in ensuring that appraisals are unbiased and are conducted on time.One major reason for the commitment of upper level management towards performancemanagement system is that the employee’s performance is reported on a global level. Astandard appraisal system is used throughout Shell which was designed in Hague. Italigns the organization’s vision/mission and objectives and takes into account thecompany’s strategic business plans.

In Pakistan, Shell has the six departments, including: Finance, Global Functions&Learning Advisor, Retail, Lubes & Commercial Fuels, Lubricants, Operations and S&D& Aviation. For each department there is a separate Human Resource Accounts Manager/HR Relationship Manager. His major duties include: building effective workingrelationships with leadership teams to create significant business value, identifying wherechanges are necessary and how these can be implemented effectively and representing theinterests of line managers.

The HR Relationship Manager is also responsible for facilitating processes; coaching,advising and guiding senior leaders; managing communication delivery; ensuring HRstrategies operate correctly; balancing individual team requirements with those of thebusiness as a whole and enabling change to happen. Among the duties mentioned above,his one main job includes conducting performance appraisal for his/her department

PERFORMANCE EVALUATION PROCESS

because performance management at Shell is not conducted under a separate departmentor division.

Employees record their targets in a document called Goals and Performance Appraisal(GPA). The goals are made for the current year and are aligned to the business objectivesbecause individual performance goals are linked to it. Achievement is focused on currentsuccesses, results and development actions within the current performance year, and alsoinvolves goal setting for the following year.

The GPA is linked to Individual Development Plan (IDP) which is a plan fordevelopment of a Shell employee in his current role as well as the next. This is also anongoing document which is continually updated and recorded in ‘Shell People’. IDPfacilitates in recruitment and granting promotion and is incredibly useful for personnelresponsible for resourcing and talent management. Because it helps match employeeswith positions that best fit their skills and identifies potential opportunities fordevelopment.

Employee performance evaluation is called the Individual Performance Review (IPR).IPR is conducted by three individuals in the presence of the employee. These threeinclude the employee’s line manager; HR Relationship Manager and the GeneralManager, both are of the employee’s department. The employee’s goals, which were setat the beginning of the year with his line manager, are compared with the employee’sachievements for the passing year. At the end of the IPR, the employee is given anIndividual Performance Factor (IPF) score. The score comprises of numbers ranging from0.7 (lowest) to 1.5 (highest). These numbers are based on forced ranking distribution.Bonuses and increments are granted on the basis of the IPF score.

Goals are set on the basis of SMART technique. Business goals and individualdevelopment goals are set during the months of January and February. A midyear reviewis conducted to gauge the progress made. Feedback is given, on performance against

CONTENTS OF IDP

goals, during the end of year review. Performance is rewarded during the months ofFebruary and March.

Preparation of meetingEmployee completes his competence self assessment, drafts his goals and reviews them.The supervisor also reviews the employee’s competence assessment, goals and hisperformance to date. He also evaluates the employee’s achievements and behavior.

During the meetingBoth agree on the goals set and the development needs. Progress against goals anddevelopment plan is assessed. Performance and its outcomes are discussed i.e. how theIPF leads to pay outcomes.

Outcomes of meetingEmployee records his targets in GPA, and his plans in IDP. The supervisor reviews theGPA and IDP, ensuring they are up to date; he completes the performance summary inthe GPA. He then ranks the employee in the IPF and prepares for the next cycle.

Strengths: includes key areas of strength that contribute to performance of the employee.

PROPOSED PERFROMANCE MANAGEMENT

SYSTEM Areas for development: behaviors, skills, knowledge and / characteristics that theemployee needs to acquire or address for future success

Actions to address development needs: identify recommended learning opportunities toaddress development needs e.g. formal courses, special projects.

Next job/ position option: the likely position or generic job that may be appropriate forthe employee’s next assignment.

Long term career options: likely types of generic jobs or roles for longer time frame (3-5 years) taking Current Estimated Potential (CEP) into account

Own views and wishes: an employee’s view on his current assignment and preferencesfor short and long term development.

Mobility: accurate reflection of an employee’s willingness to change location

Availability date: earliest date the employee is available for re assignment.

Strengths, areas for development, actions to address development needs, next job/position option, and long term career options are filled by the employee. Own views &wishes and mobility are discussed with the supervisor whereas the availability date isdiscussed and agreed upon in consultation with the supervisor.

COMPENSATION & BENEFITS

The remuneration and benefits department at Shell plays a major impact on the success ofthe business as it helps to attract and retain the best people for the right jobs. Regular, in-depth benchmarking processes are carried out. Job evaluation is conducted to establish ahierarchy of job groups. Pay is managed among these levels and is linked to performancewhich results in rewards and promotion.

In some locations, subsidized services such as sports facilities, medical & dental care andcar parking are offered. In some countries, employees are offered a chance to participatein a Share save program. It is administered by Halifax. And allows Shell employees tosave money and invest in Royal Dutch Shell plc.

Individual contributions are recognized and rewarded through performance-related payand bonuses. They are granted in the form of merit increment, annual bonus and theMD’s Award (a prize which equivalent to one month’s salary). The higher the IPF scorethe higher the increment and bonus. If the achiever is an extraordinary high performer, heis nominated for a VP Award. The VP Award is a global prize, in which the employeewith his family is invited to The Hague (Royal Dutch Shell’s headquarters), in allexpense paid trip, where he is awarded a prize of 5000 Euros in a special ceremony.

Executive remuneration supports the policies and practices for the top executives anddirectors at Shell. Global benefits are responsible for the global governance and supportof retirement benefits arrangements throughout Shell. Annual leave entitlements andmaternity/paternity leave allowances are given. Career breaks and sabbaticals are alsoaccommodated wherever possible.

Flexible working practices are granted where necessary and operationally possible.Employees can ‘telecommute’ and work from home. Some locations also offer flexi-timeworking – enabling the employee to start his work day earlier or later to fit his needs.Some of the actions taken to date include: advocating video or teleconferences to reducetravel, organizing midweek meetings to avoid weekend travel, promoting an email Code

of Conduct to improve efficiency and standardizing the recognition of unavoidableovertime work.

Special packages and support is granted to expatriates to make their relocation pleasant.These people are immensely respected because they have a combination of analytical andcreative problem solving techniques. It’s comprehensive and contains policies fromtemporary accommodation requirements to schooling.

Compensation adopted as a strategy can be improved if benefits are granted inaccordance to the contribution each employee makes; it will generate a very valuableperception of rewards among employees. Rewards offered should be uniform i.e. anemployee in one company of Shell performing, should get the same award granted toanother employee working for Shell in another country. The benefits mentioned aboveshould be extended to all employees around the globe and they should be facilitated withthe opportunity of investing in Share save.

CAREER PLANNING

New employees are placed in G scheme. They take two assignments in three year period in two different functions. Appraisal is conducted every six months. Coaching

program is given to help the graduates so they learn the procedures of Shell.When they successfully exit the G Scheme at SG5 or SG6, they are allowed inthe normal salary progression policy.

Career development is greatly emphasized at Shell. Line managers and employees worktogether. They highlight the development framework of competency based jobs and notethe qualities necessary for the specific role of each job. The employee thus identifies hisneeds and avails the career opportunities. As Shell operates in over 140 countriesemployees are exposed to projects in every corner of the globe. A special careerdevelopment program was introduced for women as part of an overall strategy toaccelerate their development and progression.

The Individual Development Plan is a good way of fostering employees to plan for theircareers. It also emphasizes the importance and value of career planning.

TEAMWORKTeam work is employed to conduct appraisals. This eliminates biasness altogether or atleast ensures that it’s at a minimal level. An employee’s immediate line manager, the HRrelationship manager and the General Manager of the concerned department do theappraisal. The final IPF score is awarded to employee based on voting by these threepeople.

HR Business Development Partners are integral members of management teams. Theirjob is to co-ordinate the delivery of the HR Functional Plans. They also ensure that robustprocesses and procedures are in place and that effective delivery takes place of functionalstrategic plans. They provide advice and guidance to line managers, on the appropriateHR tools, facilitate processes, addressing performance issues and ensure proper feedbackis provided. They help other teams move from where they are to where they want to beby providing support in a variety of areas - from recruitment and performancemanagement to leadership and development.

Team efforts in Shell can further be improved if HR has a strong base in the organization.Since every department has an HR relationship manager, there is no separate departmentfor HR. this weakens the power of the HR manager when he tries to implement change. Ifa separate department is formed, it will extend a good backing for the HR officer inimplementing new strategies and practices especially those that are relatively new for thecompany. It will also control different areas of HR including reward management, talentmanagement, employee development etc.

EMPLOYEE RELATIONSContribution from every member is appreciated no matter their background or level. Aspecific department manages Diversity and Inclusiveness (D&I) within the organization.Its purpose is to manage D&I as a critical business activity, value the cultural and

MEASUREMENT CRITERIA

personal differences of employees at Shell and provide a means for employees to sharepersonal support, learning, self-development and communication.

Employee and Industrial Relations professionals focus on the morale and motivation ofemployees and how they feel about working for Shell. They also build strongrelationships with employee representatives. Communication and consultations are donewith the staff of Shell on a global level. There are various cultural similarities anddisparities between the countries where Shell operates. ER issues are solved usingdifferent approaches but the company strengthened its global employee relationscapability so that issues are solved form a global perspective. Innovation is greatlyencouraged and so are individual priorities, ambitions and aspirations.

Shell’s hundred year successful operation its presence in 140 countries is greatlycommendable. Managing such diverse cultures must have only been possible throughquality processes, calculated progression and team work. Having a centralizedgovernance system that effectively governs many companies which work under it isexceptionally praiseworthy.

Goals are set using the SMART technique. Employees set goals in collaboration withtheir immediate line managers. Performance is measured through Forced RankingDistribution.

Every two years, shell conducts a survey of its employees called the Shell People Survey.The survey gauges the real views of all employees as to the level of inclusiveness theyexperience in the organization. This way trends and needs of specific groups areidentified.

BUILDING COMPETENCE

Employees are encouraged to participate in discussion forums and interactive webcasts.This gives everyone a chance to make suggestions on improving their work environment,to give input for policies or to address areas of concern.

Using the SMART technique to set goals is a well-organized and useful way to undergothe said activity. Forced ranking system is an effective way of identifying laggards anddistinguishing high achievers. The benefit of the above mentioned appraisal system isthat it segments employees according to their performance. It also stops the leniencyattitude some raters have towards employees and forces them to reveal the lowperformers. The benefit to the latter is that they can easily avail training facilities andimprove their performance.

If low performance continues for two years consecutively i.e. the employee gets a ratingbelow 1.00 (average), disciplinary action should be taken. This is because Shell providescontinuous feedback to low performers, and a lot of amount is spent on training them.There is no reason for performance not to improve.

Self appraisal technique should be introduced for employees working in the middle level.This will facilitate them in evaluating themselves at the end of the year as they areresponsible for their IDP. They will also get ample opportunities to defend their scores.

360o Feedback should be introduced for the upper hierarchy as they are more involved inthe strategic decisions. This way they will be assessed from the top, by peers and theirsubordinates. The assessment will be made keeping in mind, how effective and beneficialtheir strategies were for the company (efficiency based). It will highlight their interest inemployee development plan (development based) and also show how effectively theyimplement their plans (implementation).

Learning and development is taken very seriously at Shell. The aim is to equip anemployee with competencies and confidence that will build his professional expertise.

CONCLUSION

Special focus is given on developing leadership skills and commercial acumen.Aholistic approach is used to connect interest and challenge the development of individualtalent. From on-the-job learning and training for recognized professional qualifications topersonal development programs and ‘buddy’ schemes, Shell offers tools to develop anemployee’s skills and knowledge.

Shell recognizes that the value from formal classroom learning can be maximized whenit's blended with assignments in the workplace and face-to-face coaching while reapingthe benefits of internal and external networks. They believe this reflects best practice inthe learning world - the real innovation comes from how learners apply it for Shell’sbusinesses and functions.

Employees at all levels of the business have access to personal development and trainingopportunities, which help to enhance their skills and ensure they are better equipped tocompete for employment opportunities in the future. Women are encouraged toparticipate in all training and development opportunities.

Motivating employees who fall under second category is also important. This issue arisesdue to forced ranking distribution. The difference between the performance of A and Bgraders is minimal, but the former gets more recognition, praise and rewards incomparison to the latter. Shell should especially target B graders and introduce somereward scheme that is purely granted on the basis of competence to encourage them.

Creating a competency based succession planning system will be very helpful for Shell.This will constantly supply and ensure availability of managerial-ship because it willidentify people who can fit the job well.

Shell employs a very competent Performance Management System. Management of Shellkeeps a vigilant eye on all the processes related to performance of the organization. It

carries out a well defined performance evaluation process to achieve its target goals. Inaddition to that, Shell offers an attractive compensation and benefits package that retainsemployees for a longer period of time.

It provides numerous monetary as well as non-monetary benefits like flexible workinghours which enhance the productivity of employees. Career development is consideredone of the instrumental motivational factors at Sell. It implements special careerprograms to motivate its employees. Its management conducts all appraisals ofsupervisors through teamwork which shows that teamwork plays significant role ineliminating biasness.

It highly recognizes the work contributed by employees because it believes that ifcontribution that each employee makes to raise the reputation of its organization is notacknowledged and appreciated then it will result in employee dissatisfaction and wouldeventually result in employee turnover. Shell encourages employee involvement insetting goals of the organization. Shell believes that learning and development has acritical role in grooming employees it ensures that employees from all levels have accessto development and training opportunities.

REFERENCE

Wikipedia. (2008). Royal Dutch Shell. Retrieved on April, 19, 2008 from the World Wide Web:http://en.wikipedia.org/wiki/Royal_Dutch_Shell