54823717 Chevron or CALTEX Report

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___________________________________________________________Human Resource Management

R EPORT

ON

HR P RACTICES I NC HEVRON O IL P AKISTAN L IMITED )

C HEVRON P AKISTAN L IMITED(F ORMALLY K NOWNAS

(Term Project)Submitted to:

Mr. Murtaza M. Ilyas

Submitted by:

Subayyal Ahmed Khan (13206) Amara Shahrukh Sanam Sandhiya Kumari

Date: 30th April 2011

Human resource Management MBA (E) Iqra University

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LETTER OF AUTHORIZATION

Dear Reader, As students of MBA, we have been authorized by Mr. Murtaza M. Ilyas to make this report on Human Resource Practices of Chevron Pakistan Limited. This has been a learning experience for our team. The exercise was suggested by our teacher as a way to help us discover the compensation and recruitment policies practicing in many business organizations but in this case particularly relevant to the lubricant industry.

Sincerely, Subayyal Ahmed Khan Amara Shahrukh Sanam Sandhiya Kumari

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LETTER OF TRANSMITTALMr. Murtaza M.Ilyas Iqra University Karachi. Dear Mr. Ilyas, As a requirement for the Human Resource Management course offered in the MBA program we were required by you, to conduct a survey on Human Resource Practices, Compensation and Recruitment Policies of Chevron Pakistan Limited. You will see from the following report that during our meeting with a cross section of employees working in Chevron we discovered and observed some of questionable practices at the organization. We appreciate having this assignment and if you require any additional information in interpreting this report, please contact us. Sincerely, Subayyal Ahmed Khan Amara Shahrukh Sanam Sandhiya Kumari

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LETTER OF ACKNOWLEDGEMENT

Dear Reader: We would like to offer our thanks to the Human Resources Department of

Chevron Pakistan Limited, for the time and patience in talking to us, answering our questions and generally being helpful in providing us an in-depth view of their organization. In particular we are indebted to Ms. Elizabeth Fernandas, Asst. Human Resources Manager for providing us the necessary information. We owe our gratitude to Mr. Murtaza M. Ilyas for his guidance and encouragement throughout the duration of this course. We are also grateful to our institute for the patronage and support we received. Sincerely, Subayyal Ahmed Khan Amara Shahrukh Sanam Sandhiya Kumari

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Table of Content

EXECUTIVE SUMMARY..........................................................................................8 CHEVRONS MISSION ................................................................................................9 COMPANYSBCKGROUND.....................................................................................9 CHEVRONS ARRIVAL IN PAKISTAN.......................................................10 RECRUITEMENT.....................................................................................................11 NO ADVERTISEMENTS POLICY.............................................................11 DATABASE....................................................................................................12 INDUSTRY SOURCES.................................................................................12 LOWER LEVEL POSITIONS.....................................................................12 INTERNAL POSTING..................................................................................14 FIRST PREFERENCE TO INTERNAL CANDIDATES..........................14 TRACK RECORD OF EXISTING EMPLOYEES....................................15 INVESTMENT IN THE EMPLOYEE........................................................15 PURPOSE.......................................................................................................16 MANGERS CONSENT................................................................................16 MOTIVATION FOR EMPLOYEES...........................................................16 SELECTION...................................................................................................17 EXCOM...........................................................................................................17 UNIT MANAGERS........................................................................................17 INTERVIEWING SKILLS...........................................................................18 THE CURRENT SYSTEM...........................................................................18 ORIENTATION.........................................................................................................19 CHARACTERISTICS OF CHEVRON S ORIENTAION PROGRAM.....19 BENEFITS OF THE ORIENTATION PROGRAM..................................20 EMPLOYEE PLACEMENT.........................................................................20 -6


PERFORMANCE APPRAISAL...............................................................................22 OBJECTIVE APPRAISALS.........................................................................23 PERFORMANCE ALIGNMENT WORKSHOPS.....................................23 CONTINUOUS FEEDBACK........................................................................23 CONTROL OF RATER BIASES IN APPRAISAL REPORT..................24 HALO EFFECT AND PERSONAL PREJUDICE.....................................24 ERROR OF CENTRAL TENDENCY.........................................................24 RECENCY EFFECT.....................................................................................25 APPRASIAL FORM......................................................................................25 BUSINESS UNIT /DEPARTMENT OBJECTIVES.......................25 INDIVIDUAL OBJECTIVES...........................................................26 FEEDBACK TRACKING.........................................................................................28 EMPLOYEE COMMENTS......................................................................................28 SUPERVISORS COMMENTS................................................................................29 SUMMARY.................................................................................................................29 TIMING JUSTIFIED.................................................................................................30 POINTS SYSTEM......................................................................................................30

COMPENSATION.....................................................................................................31 PAY FOR PERFORMANCE........................................................................33 MERIT INCREASES.....................................................................................34 PROMOTIONAL INCREASES...................................................................35 SURVEYS.......................................................................................................35 WICR...............................................................................................................36 GENERAL SUMMARY................................................................................37 TURNOVER...................................................................................................38 REFERENCES...........................................................................................................40

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EXECUTIVE SUMMARYThis report focuses on the human resource practices, recruitment policies, overall compensation system, the problem of turnover and the stiff competition that Chevron faces today. Recently Chevron has globally restructured the organization along functional lines and in line with this global strategy, also had to restructure. This resulted in the laying off of around 7 % of the total employees from all levels. The whole oil industry including Chevron went into turmoil during the global crisis and as a response the Company initiated the restructuring process in order to cut costs. This economic challenge posed the most significant threat to Chevrons operations. Recruitment at Chevron is usually done without any public advertisements. Internal candidates are given preference as first the vacancy is offered to through the internal job postings program. Selection after the restructuring process is influenced by the unit managers. The company conducts a 4 day orientation program for the employees before placing them in their specific departments. For the purpose of appraisal a new more objective and goal based system is being initiated. The goals will be set by the employee in consultation with the manager and the employees will be assessed only on those set goals.

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The company pays competitive salaries to its employees and rewards contribution from the employees. COPLs compensation philosophy is Pay for Performance. In the late 1980s Chevron believed in excessive hiring but now the process has become a more selective one in order to cut extra costs being incurred and increase efficiency.

CHEVRON PAKISTAN LIMITEDCHEVRONS MISSION:

Providing Energy for Human Progress

COMPANYS BACKGROUND:Chevron is one of the world's largest integrated energy companies with subsidiaries that conduct business worldwide. Chevron explores for, produces and transports crude oil and natural gas; refines, markets and distributes transportation fuels and other energy products; manufactures and sells petrochemical products; generates power and produces geothermal energy; provides energy efficiency solutions; and-9


develops the energy resources of the future, including biofuels and other renewables. Chevron is based in San Ramon, Calif. More information about Chevron is available at www.chevron.com. In 2007, Chevron produced 2.62 million barrels of oilequivalent per day. About 70 percent of that volume occurred outside the United States and in more than 20 different countries. Chevron had a global refining capacity of more than 2 million barrels of oil per day at the end of 2007. Our marketing network supports more than 25,000 retail outlets on six continents. We have invested in 13 power-generating facilities in the United States and Asia. Our diverse and highly skilled global workforce consists of more than 62,000 employees. As a company and as individuals, we take great pride in contributing to the communities where we live and work. We also care deeply about the environment and are proud of the many ways in which our employees work to safeguard it.

CHEVRONS ARRIVAL IN PAKISTAN (History):Chevron Pakistan Limited (formerly known as Caltex Oil Pakistan Limited) is a part of Chevron Corporation (earlier known as ChevronTexaco Corporation), a leader in the global integrated energy business. Chevron is the fifth-largest- 10


integrated energy company in the world. Headquartered in San Ramon, California, 180 and conducting this highly business in approximately countries, competitive

corporation is engaged in every aspect of the oil and natural gas industry, including exploration and production; refining, marketing and transportation; chemicals manufacturing and sales; and power generation. With a diverse and highly skilled global work force of more than 59,000 employees, Chevron and its people take great pride in a commitment to community partnerships, social responsibility and environmental excellence. Chevron Pakistan Limited has operated in the sub-continent since 1938 and apart from the main oil storage facility at Karachi, has 10 Depots throughout the country, which includes three inland terminals in Rawalpindi, Machike and Shikarpur. The companys Retail network consists of 598 outlets located throughout the country as well as a wide spread distributor network catering to the demands of the Industrial, as well as the Agricultural sectors. Chevron installed its first CNG facility at its Company managed retail outlet at Islamabad. Subsequently, more CNG facilities have been added to the network in Karachi and Lahore increasing the number of CNG refueling facilities to 66 nationwide. In addition, Chevron has also established three CNG conversion kit centers.- 11


Chevron Pakistan was the first oil marketing company to introduce many modern concepts in the industry in Pakistan. A hallmark of its technical advantage in the industry is its state-of-the art computerized lubricating oil blending plant, which has been set up and commissioned at the West Wharf Terminal, Karachi. Chevron was the first in modernizing its retail outlets, installing electronic dispensers and implementing Customer Service Systems. It was the first oil marketing company to launch CNG station in Islamabad in 1998. Its modern testing laboratory fully equipped with the latest equipment coupled with fully documented procedures was the first ISO 9000 accredited Oil Testing Facility in the country. It is also the first oil marketing company to acquire ISO 14001:2004 International Environmental Management System for its West Wharf Laboratory and West Wharf Lube Blending Plant . Chevron is the pioneer in establishing Convenience Stores and introducing co-branded Cards in the market. Recently, Chevron Pakistan received three awards in

recognition of its world-class Health, Environment and Safety Standards. Chevron Pakistan Lubricant Blending Plant was adjudged to be the recipient of the ChevronTexaco Global Lubricants (CTGL) Safety Excellence Award while Chevron Pakistan Marketing won the coveted ChevronTexaco Zero Is Attainable Award. Zero is Attainable is a corporate HES annual award programme, that recognises organisations with- 12


exceptional Operational Excellence performance during a calendar year. This is yet another acknowledgement of Chevron Pakistans exceptional performance and commitment towards Health, Environment and Safety (HES) in all aspects of its operations. Moreover Chevron Pakistan Keamari Terminal received The Most Admired Terminal award for the year 2004 in the worldwide Chevron system. In the refueling of International Airlines at Quaid-e-Azam International Airport, Karachi, Chevron became the first company in the country to have its refueling facility, accredited with ISO 9000 standards. Chevron Pakistan took the lead in renovating, revamping and modernizing its Retail network bringing the standards in line with its International image in order to provide quality products ad services to their valued customers. The company has undertaken and sponsored numerous environmental projects and had made generous donations to the various campaigns launched over the years, living up to its reputation as a responsible corporate citizen. Chevron has greatly increased the level of its investment in Pakistan over the last decade. The most recent major investment has been in the acquisition and further development of the LPG Business of Sui Southern Gas Company limited (SSGCL) as well as acquiring 11% equity in the White Oil Pipeline.- 13


Chevron Pakistan is known as a responsible corporate citizen by following the local laws and customs and maintaining a long-standing emphasis on safety and health for its employees, customers and other stakeholders. As an equal opportunity employer, Chevron is proud of having women employed in key management positions across different departments. With 98% of its employees worldwide being local nationals, Chevron is a part of the community it serves.

Caltex BrandThe Caltex Star stands for quality. The Caltex Star stands for value. The Caltex Star stands for service. But most importantly, the Caltex Star symbolizes our commitment to treat you, our customers as individuals and not as numbers. In everything we do, from our advertising, to our products and services, to our staff and so much more, we always focus on building relationships with you. Our brand is designed to renew your drive and keep you on the go. Though we know that we are just but a small part of your lives, we prefer to keep it that way. So that you can stay focused and determined to reach your goal. We provide the little refills that you need so you can focus on getting on with the bigger things in your lives. At the core this means fuels and other energy products, certainly, but it also means supplying food, beverages and other every day supplies and services, freeing you to focus on the things that really matter. The Caltex brand is the embodiment of everything we strive to accomplish. It becomes our promise to all whose lives we touch. When you see the Caltex brand, it acts as an endorsement of quality. This is because the Caltex brand tells- 14


you that we are professional, well established, customer focused and socially responsible. To become the brand of choice, we rely on our creed of quality, professionalism, service and efficiency. This creed dictates that you come first and that you must receive ultimate worth and value through fast and polite service, modern, professionally managed facilities, and high quality products. You can count on Caltex for unique and compelling product and service offerings, for consistent delivery on brand promises and continuous productive and distinctive value for you. To ensure that we are doing the most to help you enhance your own performance, Caltex will continue to explore all partnerships that will enable us to better deliver on our brand promise, to support your efforts to reach your goals.

Community PartnershipsChevron Providing "Energy for Learning"

As a global energy company having Partnership as one of its core values, Chevron is committed to the communities in our areas of operation. Chevrons Policy, Government & Public Affairs Unit has the responsibility of engaging communities to ensure their well-being and is operating globally under a unified, concerted strategy for raising the level of underprivileged sections of the society. Education is one of the many fields where we are helping young children to gain a solid foundation for a better and bright future.- 15


Chevron Pakistan plans to spend a major portion of its community-engagement segments of our society. As part of this global strategy, Energy for Learning, Chevron Pakistan has collaborated with The Citizens Foundation. TCF is a professionally managed, non-profit organization set up in 1995 by a group of highly-educated and motivated citizens concerned with the unsatisfactory state of education in Pakistan. It is now one of Pakistan's leading organizations in the field of formal education. As of 2009 TCF has established 600 purpose-built school units nationwide with an enrollment of 90,000 students. TCF encourages female enrollment and boasts of a 50% female ratio in almost every campus. TCF has a full Female Faculty of 4,150 members and also has a dedicated Teacher Training Center in Karachi for the ongoing training of its faculty. It provides logistical support to all its teachers. Over 6,000 jobs have been created in communities in which TCF operates. TCFs aim is to remove barriers of class and privilege and to make the citizens of Pakistan Agents of Positive Change. Apart from following the regular curriculum, the focus is on the character building of students to equip them with high moral values and confidence. budget on providing quality education and basic necessities to the under-privileged

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To achieve their goals, TCF is constantly surveying educationdeprived locations in Pakistan to extend its network. Each new location is appraised through an extensive land survey, assessment of population, income level, number and standard of existing schools in the area, demand for new school units, availability of an accessible site to build a school, qualified teachers in the area and a number of other criteria. The partnership between Chevron and TCF is a natural fit because both the organizations have similar values based on integrity, trust, diversity and a passion for excellence. It has been launched with Chevron Pakistan adopting 2 campuses which entails bearing all the operating expenses, an amount of over US $ 26,000. One of the campuses is in the Mauripur area of Karachi and the other near Bara Kahu in the suburbs of Islamabad. At the cheque handing-over ceremony held at the corporate headquarter of Chevron Pakistan, attended by Mr. Nadeem Jafarey, Country Representative Chevron Pakistan and Mr. Assad Ayub, CEO & President of The Citizens Foundation, Mr. Jafarey reiterated the companys resolve to play an important part in meeting its social responsibility. He lauded the roles of Syed Amjad Shabbir, Manager PGPA, Chevron Pakistan and Ms. Asma Khan, Vice President, TCF Islamabad, who have been instrumental in establishing the partnership. He also highlighted the other initiatives taken by the company in the field of education, especially the partnership with the Institute- 17


of Business Administration, Karachi in helping meet its ambitious plans.

RECRUITEMENTRecruitment is the process of finding and attracting capable applicants for employment. The process or the Human Resource cycle begins when new recruits are sought by the organization. The organizations ability to attract a good pool of qualified candidates is essential for finding good candidates to do the job at hand. In the backdrop of tightening labor markets, the recruitment process needs to be handled with great care. Even in times when employment rate is soaring during the current recessions, qualified applicants can be difficult to find and retain. In such times a proactive approach is required of the human resource department. The personnel department at Chevron recognizes the

importance of a good recruitment policy for remaining an effective and competitive organization. However keeping in view the particular situation in the country, the personnel department has adjusted its recruitment policies accordingly. The Caltex brand, as well as all its associated products and services are owned and operated by Chevron Corporation, a- 18


company with a reputation for solid business results, strong ethics and incredible employees, everywhere they operate. They recognize corporate social responsibility as a

cornerstone of future success. There approach is rooted in their core values, The Chevron Way, in which they commit to conducting business in a socially responsible and ethical manner, respecting the law, supporting universal human rights, protecting the environment and benefiting the communities where they work. They take advantage of technology to meet the challenges of the energy industry. Whether youre developing new refining processes, working on global information infrastructure or simply sending email to colleagues, youll have access to the latest tools and technology. At the company, youll find people with a variety of backgrounds, experiences, styles, cultures, skills and competencies. And, they welcome you to share your unique background and insights with them. Their goal is to be recognized by their employees, customers, shareholders, industry peers and the governments in countries where they operate, as a company that values diversity and leverages it for business success. To reach this goal, they are continuing to build an open, inclusive work environment where all of their employees can realize their potential.

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They believe that diversity will help us succeed as a global business. They prize people who can work effectively with others from all walks of life and who feel free to contribute their best. At a global level, they support universal human rights and work to improve the quality of life in the countries where they operate. Within Chevron, operating companies and departments have strategies to build a diverse workforce. Have proactive recruiting and outreach programs, diversity councils, employee networks, personnel development committees, training, discussion groups and developmental assignments for employees. They have operations and employees in more than 180 countries. You may want to travel and work in different locations around the world. Or, you may want to stay and grow in one location. Whatever your path, as part of Chevron, your career will have a global impact.

NO ADVERTISEMENTS POLICY:The personnel department has a policy of not giving advertisements. The reason, being that hiring without giving advertisements helps the organization in selecting employees without any pressure from external or internal sources. In this way the impartiality is maintained and the best applicant can- 20


be selected. However this obviously has a disadvantage when considering the fact that the possible pool of applicants for the particular job is reduced, thus reducing the quality of the selection process. Chevrons Human Resource Service Unit (HRSU) considers that the right person is found through this process. Since no pressure can be applied by anyone this helps the company in getting the right person without the job.

DATABASE:The company maintains a database of all applicants it can identify .This is usually made by people who came to drop in their resumes directly to the organization. Also all the internees about who the company has the information are kept by the Human Resource Service Unit. This potential pool of applicants is considered enough by the personnel are department and therefore the organization does not pursue the policy of giving advertisements. As far as MBA s concerned for the purpose of hiring fresh graduates the graduate directory of the MBAs is a good potential source of applicants. Apart from this the applicants that hand in their resume is yet another source of interested applicants from whom the organization chooses.

INDUSTRY SOURCES:- 21


If the above sources are not able to fulfil a position then one method that is commonly used is the use of industry sources and personal contacts to find the right candidate. The senior managers or the personnel department may use their own contacts to find a potential candidate for a particular position that might open up.

LOWER LEVEL POSITIONS:Chevron follows the above recruitment policies for managerial and clerical positions. However; for worker level positions, Chevron follows a totally different policy. According to the policy for labor level positions, Chevron prefers and actively hire the children of personnel that retire. In this way this is a very strong incentive for the workers to contribute positively for the organization. Also since not only theirs but the jobs of at least one of their child is guaranteed, their commitment with the organization is usually higher. A database of such employees is not required for there is seldom need to hire from outside sources as the number of existing employees is adequate. Also the turnover in such lower level jobs is also very low. As employees retire or pass away, their children are hired. Thus a pool of applicants is available who require a lesser background check as their- 22


parents had worked for the organization. Thus applicants have more credible background and more commitment for the organization. This is a unique method being followed at Chevron. Through this method not only does the organization have a ready pool of applicants ready but also does not have to incur the expenses for recruiting and selecting employees from outside. Thus through these policies the organization is able to resist any pressure that many political as well company personnel may use to induct people of their choice. As the positions may try to use much significance it may happen that people of positions may try to use influence in the absence of such clear policies of hiring the children of existing employees. Thus in this way the organization has reduced pool of potential applicants but is able to hire without any outside or any internal interference and at much lower cost. Also a pool of applicants with at least a minimum amount of credibility is obtained and as the positions require a very low level of skills these policies do not affect the performance of the job at hand. This unique technique is used successfully in many other MNCs and local organizations. Also this goes a step further as compared to the Japanese style of management which provides lifetime employment to their employees. In this particular technique of recruitment- 23

not

only

life

time


employment is being offered but also employment for the children is being provided once they retire. In this way their financial security is in a way guaranteed even after retirement However; this method is applied only for workers level staff. However; the position offered varies with the qualifications of the person and the type of job available. If a person is qualified for a particular job but a job for his level is not available then he is temporary offered a job in the other department. For example a Chevron employee passed away and his child who had education relevant in the computer and IT profession .He was offered a job in the computer section of the order and dispatch section of the West Wharf Lubricants and Blending Plant. Thus in this way Chevron fulfills its commitment to its employees.

INTERNAL POSTING:Internal posting is the process by which internal openings are offered to internal candidates. In Chevron for the purpose of internal communication over the Local Area Network (LAN) a ccmail system is used .Through this system internal opening- 24


is offered to the existing internal candidates. Then through system of self nominations or on the recommendations of the unit managers employees who are interested in the posted opening send in their applications to the Human Resource Service Unit.

FIRST PREFERENCE TO INTERNAL CANDIDATES:Chevron offers the openings to the internal candidates. There is a strong preference in Chevron for external candidates. By offering the position to internal candidates employees who are presently unhappy or want an exposure in a different area or whose believe their career has become stagnant may shift their job. Through this unhappy employees may shift their jobs. This way the process acts as a motivator and shaper of the careers of individuals. By first offering the openings to the current employees the company escapes itself from the position in which the internal morale will fall if external candidates are preferred over them. Thus this again offers the current employees the opportunity to further their growth and show interest in the development of their own careers.

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Through this policy of first offering the openings to the internal candidates human resource departments can lower the overall cost of salaries for the organization. This because external hiring and recruitment process entails a lot of cost to the organization .and in such difficult times when economy is passing through a recessionary period the human resource department must ensure processes which aim to minimize the costs of salaries to the organization. As the long term salaries and benefit structure of new hiring can be quite costly the organization prefers to hire from the existing pool of applicants rather then going for the external candidates and committing the organization to longer term costs. Even if the organization hires the candidates on contract basis the costs associated with the new hiring can be exorbitant.

TRACK RECORD OF EXISTING EMPLOYEES:The human resource department of the organization knows the existing pool of applicants working for the company; these personnel have already been working with the company for a certain number of years. Therefore, the organization can expect a certain minimum amount of commitment from them .If there is a need to train them further and make some investments in their skills before they can be transferred from

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one departments to the other, the organization will be ready to do so.

INVESTMENT IN THE EMPLOYEE:If the opening is such that the applying candidate has a certain level of skills that are applicable to the new the job the applicant may be accepted. However; this will entail a certain amount of investment from the organization. Even if a more appropriate candidate can be found from outside, the organization will prefer the internal candidate for the job. This is because it acts as an incentive for motivating the employees in achieving their careers objectives. Keeping this concept in mind the company is willing to make an investment in the existing employees even if they have some amount or a certain minimum amount of relevant skills with them. But if the employee doesnt have even the bare minimum amount of relevant skills then the employee will not be considered for the particular post. This is because hiring from outside even on contract basis entails a certain amount of cost this cost in most cases would be higher than the partial training of the internal candidates who are already comfortable with the particular culture of the- 27


organization.

Therefore,

the

performance

of

such

an

employee who makes a well decided career move of shifting from one department to a department of interest to him would be expected to outperform most of the external candidates. Although it is possible that the investment made in the employee may end up helping the competition, however; this is a risk that Chevron doesnt hesitate on taking. Also since the candidate has been working for a certain number of years in the company he is already aware of the organizational culture he/she doesnt take so much time in adapting to the new departmental culture. Therefore, the organization prefers in investing in the existing candidates rather then investing in the outside candidates or hiring from outside to fill vacancies which can be filled with some amount of investment in the internal candidates.

PURPOSE:The purpose of internal job posting is to encourage employees to seek promotions and transfers that help the human resource department fill internal openings and meet personal objectives of employees. Although at Chevron almost all the

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job openings are posted, however; senior management and top staff positions may be filled through external recruiting.

MANGERS CONSENT:In the case of internal postings the consent of the concerned manager whose department then the transfer the employee is leaving is essential if the employee is indispensable for the department of such an employee would render the current department with essential deficiency .Therefore, in such cases the consent of the current manager is essential. If the current manager doesnt release the employee then chances are that such an employee would not be considered for the internal openings.

MOTIVATION FOR EMPLOYEES:Internal postings help in keeping the work force motivated .This may also help in reducing the turnover of employees as employees who are not satisfied with their present careers or who are now fed up or bored with their jobs are provided an opportunity to switch their jobs. Thus, in the case of those employees who are not happy with their current positions

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they are provided an opportunity to switch from one job to another. This process helps in keeping the workforce motivated and those employees who are not in a very motivated state they are provided an opportunity to shift these jobs and try their luck in a separate field that interests them. It is also possible that the person had taken up a job in a different department than that of particular aptitude or interest to the employee. For example, an entry level employee with an interest in treasury joins the Internal Audit Service Unit. However; after working there for 2 to 3 years an opening comes up in that particular field of treasury. Since the employee already had a particular interest in this field this provides him an opportunity to finally work in a department where ha has greater aptitude and interest. In this way the employee is more capable of working to his full potential as he is doing work which he enjoys doing. Thus, in this way the employees motivational level rises as he is finally doing what interests him.

SELECTION:Selection is the series of steps taken to select an applicant from the pool of applicants available to the company. At- 30


Chevron there are two main pools of applicants one internal and one external.

EXCOM:Previously Chevron was a company with a highly centralized decision making. At that time the EXCOM (Executive Committee) used to make officer level selections for the company. EXCOM comprises of directors and senior managers of the company .Unit managers didnt have major roles in the selection process although it was they who have to work with the employees.

UNIT MANAGERS:Recognizing that the involvement of the unit managers is vital to the success of the new employee and due to the restructuring process the corporate culture is being changed to include unit managers who will play a significant role in the selection process.

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INTERVIEWING SKILLS:For this purpose a training program of the managers has been initiated to teach them, the skill of interviewing and assessing candidates. This would be helpful to the managers in the selection of the employees.

THE CURRENT SYSTEM:Chevron believes that employees at all levels need to possess leadership skills. There is no fixed recruitment cycle. On receiving requests from the relevant managers does the HR department arrange for interviews? The resumes are screened on the basis of the requirements of the concerned manager, the qualification etc. required. After which the concerned manager and then finally the director and the country manager are consulted. Chevron considers GPA to be a high indicator of an individuals qualifications and competency for the jobs. The format of the interviews is unstructured at present, however; the company is working towards a predetermined- 32


set of questions which will help in determining and identifying whether the individuals have the required competencies and at the same time providing the interviewer with necessary training required to probe into areas of particular interest through a set of on the spot queries during the interview. There are no personality or aptitude tests conducted except for secretaries where tests for short hand and typing etc. are conducted because there is no reliability of the normally carried out personality and aptitude tests.

ORIENTATION

Orientation is the process through which the new employees are introduced to the company. The Human Resource department makes efforts to help integrate newcomers into the organization and enable socialization to take place. Through this the new employees get acquainted with the companys culture. It is by this process of orientation that the employees find out the companys culture, the rules and regulations and other important dos and donts of the organization. The orientation programs are particularly effective ways of helping the new employees in their socialization process.- 33


Individuals that join the organization have a strong desire to get to know the organizations culture and they attempt to internalize the way things are done in the organization. The organizational values, beliefs and traditions are slowly absorbed as a person is exposed to orientation training and the peer group. Eventually the newcomer becomes more fully integrated into the organization after which their performance and productivity start to reach the optimum level. For the performance of an employee to reach the optimum level he/she should be comfortable with the organizations culture and ways of doing things.

CHARACTERISTICS OF CHEVRON S ORIENTAION PROGRAM:The salient characteristics are: Orientation at Chevron is a three to four day program.

The employees are given a detailed interactive lecture on the over all structure of the organization. The workers are shown around the facilities of Chevron.

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The facilities that are shown around are the Kemari terminal and the West Wharf Lubricants Blending Plant.

The workers are given a detailed overview of the facilities by the respective terminal managers. At the end of the orientation program the new workers are then introduced to each of the department heads who then brief each employee about the functions of his/her department. This process gives the employee a good over view of the organization. Once the employee has a good overview of the

organization they are better able to identify their work with the organizations overall work and strategies.

BENEFITS OF THE ORIENTATION PROGRAM: The employees are able to identify themselves with the organization. Once the employees break in to the organizations culture then they are able to give their best.- 35


Once the workers get over their anxiety and become familiar with the organization they are able to perform well. With lesser anxiety the new comers will learn their duties better.

EMPLOYEE PLACEMENT:In Chevron employee placement is also done by internal job posting which is done by email that provides employees opportunity to make moves at furthering their careers. Internal posting is the process by which internal openings are offered to internal candidates. Through the system of self nominations employees who are interested in the posting openings send in their applications to the human resource service unit. Chevron offers the openings first to the internal candidates, the position is never offered to an external candidate as long as there is an internal candidate available. If the opening is such that the applying candidate has even a certain level of skills that are applicable to the new job the applicant may be accepted, however; this will entail a certain amount of investment from the organization.- 36


The purpose of internal job posting is that it helps in encouraging employees to seek promotions and transfers that help the human resource department fill internal openings. In the case of internal posting the consent of the concerned manager whose department the employee is leaving in essential, .if the employee is indispensable for the department then the transfer would render the current department with an essential deficiency. Internal postings help in keeping the workforce motivated .This may also help in reducing the turnover of employees as employees who are not satisfied with their present careers .Thus in the case of those employees who are not happy they are given a choice to switch. This process thus helps in keeping the work force motivated and those employees who are not really motivated they are given a chance to rotate and try their luck in those fields that interests them.

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PERFORMANCE APPRAISALPerformance appraisal is the process by which the

organizations evaluate individual job performance. Through this process the organizations, the supervisors and the employees benefit as it gives feedback to each of them regarding the performance of the individual. These help in contributing to the overall success of the organization. Performance appraisals concern the employees performance and accountability. In the competitive environment companies need high performance from the employees. Employees at Chevron need feedback on their performance as a guide to future behaviour. Specific and timely feedback helps the employees in planning for their careers, training, and development decisions, pay increases and other important decisions. The Human Resource department at Chevron uses the information gathered to evaluate the success of other functions such as training and development, recruitment, selection, orientation and other HR activities. Although informal and ongoing appraisals on a day to day basis are necessary for smooth- 38

operation

these

are


insufficient for the needs of a professional organization such as Chevron. Previously appraisal at Chevron was done from one year after the joining date of the employee, for e.g. if some employee was hired in June then his appraisal would be done every June similarly if another group was hired in April then their appraisal would be done every April. This system caused a lot of workload, as the Human Resource would the whole year round be working on appraisals. From this year onwards the appraisals would be done at the same time every year for all employees. Irrespective of the joining date appraisals will be done in January.

OBJECTIVE APPRAISALS:From this year the human resource department has

introduced a fully objective goal oriented appraisal system.

PERFORMANCE ALIGNMENT WORKSHOPS:To help the managers in setting objective and quantitative goals for the employees the company is holding This is PERFORMANCE ALIGNMENT- 39

WORKSHOPS.

intended to be a one time activity. Some refresher courses ___________________________________________________________Human Resource Management

may be held next year. Through this system Chevron intends that only quantitative and measurable objectives be set for the organization.

CONTINUOUS FEEDBACK:Chevron from this year is introducing a new appraisal form. Usually what happens to most appraisals and goal-based systems is that goals are set in the beginning of the year and come up only at the end of the year. To deal with this problem a section of the form to be filled is the feedback tracking section. In this section the manager and the subordinate are required to sit at least quarterly and discuss the goals that were set at the beginning of the year. To have a control over this process the manager and the subordinate are required to write the particular feedback received along with the date the feedback was received on. The main purpose of doing this is to ensure that the goals that were set by the subordinate and the manager should not just lie in the drawer but should play an active role in the performance of the individual and the department. The goals that are decided and the feedback of the employee help in achieving the set goals.- 40


CONTROL OF RATER BIASES IN APPRAISAL REPORT

HALO EFFECT AND PERSONAL PREJUDICE:Chevron takes particular care to ensure that the personal biases of the managers and the halo effect do not influence their appraisal system. Employees are provided a place and opportunity to give their comments. There have been cases when the employees have complained against their managers about discrimination. But in this new system the objectives of the employees are jointly decided. Even if the worker has some different personal opinions about the employee, that doesnt appear on the appraisal form.

ERROR OF CENTRAL TENDENCY:Error of central tendency refers to the tendency of the manager to give almost everyone the same central marks. To reduce this error, the option whereby the manager would- 41


have available ratings such as Excellent Very good, Poor, Satisfactory are limited. The focus is on whether the employees performance was in line with set goals i.e., the employees either exceeded the set goals, met the goals or was not able to meet the goals .This will reduce the error of central tendency and will enable the real employee performance to come up on the appraisal sheet. This process will ensure that the correct results come out .Therefore both the manager and employee will have to set their goals keeping this aspect in mind. This will improve the appraisal process and provide results on the basis of which the employees will be judged.

RECENCY EFFECT:When the appraisal is being done at the end of the year ratings are affected by the employees most recent actions. Recent actions are more likely to affect the appraisal system, however; the feedback tracking system being used by Chevron would help in reducing this effect. This is possible if the feedback system is properly used by the managers and the employees. Timely feedback would be given to the employees from time to time. Therefore, when the final appraisal is done at the end of the year both the managers and the employees know what was written in the report. This- 42


feedback tracking system reduces the recency effect as the manager and the employees continually keep track with the goals they themselves set for the department and the individual employee. Thus the quarterly feedback system keeps the goals in view of the department and the employees.

APPRASIAL FORM:

A-BUSINESS UNIT /DEPARTMENT OBJECTIVES This business unit/department section contains: Department objectives that are set by the department managers in consultation with the higher level managers. These are set in line with the overall corporate and company objectives. Measure of performance is set keeping in view the type of objectives and the type of department. The training in this regard and the methods will be taught to the managers in the performance alignment workshops being held with the purpose of training the managers. The target is then set for the department. This is the same for all the employees keeping in view the objectives set for- 43


the department. The purpose of having this in the performance appraisal of each employee is to make sure that each employee is aware of the targets set for the department. What happens because of this is that the employees become aware of the overall target that their department has to achieve. Through this mechanism they come to know of the importance of their own and others contribution organization. The result is then measured keeping in view the objectives set in the beginning and using the measure of performance to compare each of the department objectives and the result that has been achieved. This result then indicates whether the department as a whole has failed to achieve any of the mentioned goals in the objective column. B- INDIVIDUAL OBJECTIVES The individual objectives are also divided into the same above mentioned columns with some more additional columns: The individual objective of the employee is set by the manager in consultation with the employee. This system is quite similar to the management by objectives concept in which the employees themselves set the objectives. As the employees are involved in setting the objectives therefore- 44

towards

the

overall

success

of

the


they are more committed to the process, this selfcommitment to the goals is usually more than in the case where the individuals goals are set by someone else. Therefore, through the introduction of this system the individual goals become a source of motivation and the individual will strive harder to achieve goals that he/she himself set. A measure of each type of objective is then decided. Here the experience and the new training mechanism will come in handy. The manager will establish a measure of performance to which both the employee and the manager will agree. The performance alignment workshops will come in handy here for the manager and as well as the company. The target for the employee is set by the employee and the manager. In this phase the participation of the employee is crucial to the success of the process. It is here that the employee sets his/ her own targets in consultation with his/ her manager. Through this mechanism the employee is even more motivated to achieve his/ her goals as he/she was personally involved in the decision making process. This area provides an opportunity to the employee to get involved in his/her own appraisal system. Now the employee will only be appraised for performance targets to which he/she had already agreed to. Therefore, the level of his motivation should naturally be higher than the case- 45


where his performance targets were defined by others. Targets set by others may be considered as unachievable by the employee and therefore the employee would himself not work hard from the very beginning. Thus this system of setting of targets and goals has an advantage from day one as compared to the system whereby the goals are set by someone else. The 4th column refers to the extent to which the employees goals are aligned to the overall department objectives. This also refers to how much this particular objective is important for the department to achieve its own goals .For e.g. one goal set for the internal audit employees could be to get professional certification from the Institute of Internal Auditors, however; this may not have any direct significance to the achievement of the goals of the department. Similarly, some other goal may be vital to the success of the department. These goals which are vital for the department will also carry more significance for the department as compared to personal development goals such as education etc. However; this doesnt mean that other goals be left unmet and are not important. Chevron is of the view that although such goals do not carry a very direct significance to the current years performance, they are vital to the long term performance of the department.- 46


The 5th column is the result column .To reduces the error of central tendency there are only 3 options available for the manager .either the employee hasnt achieved the targets he has achieved the targets, or he has exceeded the target. There is no other option available to him. Here the manager writes in qualitative terms the performance and the nature of the performance of the employees. The 6th column is the rating column. Rating is only between one to three: If the value assigned is 1 that means the target has not been achieved If the value is 2 that means the target has been achieved If the value assigned 3 also means that the target has been achieved

FEEDBACK TRACKING:This section tracks the feedback that has been received by the employee during the year. The purpose is that the employee keeps on receiving the feedback over the years. Chevron from this year is introducing a new appraisal form. Usually what happens to most appraisals and objectives is that the goals are set towards the beginning of the year and- 47


surface at the year end. To deal with this problem a section of the form to be filled is the Feedback Tracking Section. In this section the manager and the subordinate are required to sit at least quarterly and discuss the goals that were set. To have a control over this process the manager and the subordinate are required to write the particular feedback received along with the date the feedback is received .The main purpose of doing this is to ensure that the goals that were set by the subordinate and the manager should not just lie in the drawer of the table but should play an active role in the performance of the individual and the department. This will enable the firm in achieving the overall strategic business and corporate goals.

EMPLOYEE COMMENTS:This section gives the employees a chance to give as many comments as they want to; this is a very positive aspect. The contribution of the valuable comments of the employee forms an integral part of the appraisal system. Here the employee can comment on anyone, even give reasons as to what were the causes for the employees not reaching their goals. Thus this increases employee.- 48

the motivation

and

performance of the


This area also provides the candidate the chance to voice any concerns that he or she might have regarding the appraisal system. There have been cases where the employees were of view that they have been unfairly treated by their respective managers. Chevron looks at such allegations seriously. If and when such concerned is voiced an investigation is immediately launched to verify the allegation or disapprove it. Steps are taken to alleviate the concern of the employee as such an unpleasant situation is harmful to the morale of the employee as well as other employees as the working conditions of the department are affected.

SUPERVISORS COMMENTS:The concerned supervisor is then asked to provide qualitative description of the employees performance. Here the manager can write in detail what he/ she couldnt discuss in the objective section. The human resource department is aware of the fact that appraisal which is such a qualitative area cant be fully covered in the objective section alone with a rating of 1, 2, 3. Although the objective section caries the most weight,

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the importance of the qualitative comments cannot be downplayed. Here the manager can write topics and issues regarding the employees performance which could not be discussed in the area above. For e.g. if the employee during the year round not only completed his/her own target but also helped out the manager and other employees in an extraordinary way it couldnt have been discussed in the above areas. Therefore, this area provides a chance to discuss the important issues which have not been covered in the objective area of the appraisal form.

SUMMARY:Here the concerned manager indicates whether the

employees performance was acceptable or not during the period reviewed and the manager is also required to justify his or her own comments. This is the area upon which the final decisions are to be taken such as the increment in the pay, promotion, transfer or any other HR decision. The manager also has to justify his claims regarding each employee.- 50


Similarly if the manager is of the opinion that the employee has failed to meet his/her targets then the employee will have to refer to the goals to prove his statements. As the appraisal form is prepared before the candidate and the employee knows what is being written this does create a sort of hurdle for the manager to be open about the bad performance of the employee.

TIMING JUSTIFIED:The Human Resource department justified its timing of the appraisal with the increments etc. The appraisal has to be done every year in December and the changes are to be implemented immediately after that in January. The justification provided was that when a persons appraisal is done he/she expects and wants to be rewarded as soon as possible after the appraisal is done. However; if he is not rewarded immediately and his increments come six months after that then he will not be able to associate his reward with his performance the company seeks to complete this process as soon as possible. One disadvantage with this system which was identified was that if the appraisal and the rewards are done simultaneously then the manager wouldnt be able to give their fair contribution to the appraisal report. Thus to correct this bias- 51


that may develop the managers and the employees are expected to remain objective and the main focus of attention should be the objectives that have been set. To remove this flaw from the process the main emphasis of the appraisal process is on the quantitative and easily measurable objectives. This helps remove some of the effect of the timing which the appraisal process may have on the managers. Usually managers and their subordinates become good friends which may affect on the neutrality of the process. To prevent this, the process focuses mainly on the quantitative aspects of the process.

POINTS SYSTEM:Point system is that upon which the final decisions are taken. This is a classified document that cant be shown to the employees and therefore wasnt disclosed to us. It is here where the real decisions regarding the employee performance and the increments etc. is taken. As this is not shown to the employees therefore the managers can make such evaluations which dont come up in the appraisal form, but form a part of the overall rating of the employee. However; if there is a great variation between the appraisal form and the points being given to the employee then the manager may be- 52


asked to justify this. If the employees were fully aware of this, then their main focus would be only on items which matter to the points system while ignoring other factors.

COMPENSATION

Chevrons salaries

compensation which reward

mission each

is

to

pay in

employee

proportion to the value of his/her services according to established salary levels which compare favorably with rates paid by competitive employers. If pay is low, we cannot keep good performers or attract highly qualified new employees. If pay is too high, our fixed costs will escalate, we will not be able to keep our goods and services at a competitive level and we will become a less financially solid company.

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Compensation managements objective is to ensure internal equity i.e. the jobs with more responsibility are paid more. Similarly, there should be external equity, i.e. the jobs should at least pay what they are worth outside the organization. Chevron agrees that compensation should be high enough to attract good applicants and also be at least enough so as to retain the good employees the firm has. If the compensation package is not competitive, then the first ones to leave the organization are usually internal and external equity among the workers. The HR department believes in having competitive starting salaries to some extent, also if the organization usually pays the same to all starting salaries i.e. those having the same level of schooling. This strategy, however; may vary with how badly the company is need of the applicant. Also if the applicant has some extra skills or he has some more experience as compared to the other fresh graduates, he may also be compensated for the extra skills and education as well as the experience that he brings to the company. Another reason for which a new candidate may be paid significantly higher than other candidates could be that his- 54


particular profession may be highly demanded in the market. Also the candidate may bring some particular experience which the he knows is highly needed by the organization. Therefore in such a case the company may be willing to pay him more. For example, when implementing the SAP program, the SAP certified professionals were needed desperately by the company, however; Pakistan was lacking in good professionals with this type of qualification. In this case the candidate hired got more than he would have had under normal circumstances. The company being an MNC provides salaries that are consistent and competitive with what the market offers. Increments, however; are dependent on a variety of factors such as the employee performance, and the present relative worth of his job, his authority and area of responsibility if promotion or transfer occurs. Every position in the company has a defined range of salary that can be payable. The exact position of the person on that range depends on various factors such as: Education level Experience of the individual either with the company or previous experience in any other firm- 55


Worth of the job Performance of the individual will help him climb to the top of the range Demand of the particular skill in the job market

These factors determine the particular wage rate that is too paid for each worker.

PAY FOR PERFORMANCE:The concept of Pay for Performance, which is Chevrons compensation philosophy is the recognition and reward of productivity. This idea is designed to encourage initiative and long term performance. Performance is measured by comparing an employees dayto-day performance and results against the performance plan the employee and his/her supervisor agree to at the start of the performance cycle.- 56


Performance plans include: A selected set of factors that describe the manner in which basic activities of the job are performed. Relevance indicator that designate each factor as critical or important to an employees particular job. Standards that define the level of performance expected in each of the selected factor areas. Objectives that set measurable goals for the employee to achieve.

The performance planning process and on going progress discussions should help insure that the employee and his/her supervisor have a shared understanding of performance expectations for the employees job and the employee has a good idea of how he/she is doing. With an ongoing dialogue during the performance cycle, the performance review discussions conducted at the end of the cycle should contain no surprises. The overall performance rating, which is discussed during the performance review, provides an overall summary of how well- 57


the

employees

actual

performance

compares

to

the

expectations established in his/her performance plan. The performance rating categories are: Exceptional Very Good Good Does Not Meet Requirements (G) (MM) (DR) Meets Minimum Requirements (E) (VG)

The overall rating is determined by combining the individual factor ratings and the rating for the attainment of goals and objectives as agreed to in the performance appraisal meeting. In determining an employees rating, designated as critical in a performance plan. Other considerations that may also affect performance ratings are the difficulty of the assignment and overall contribution to the group. Performance is recognized in salary actions in two ways: Merit increases, which recognize sustained performance on the job. Promotional increases, which reward an employees

assumption of greater responsibilities.- 58


MERIT INCREASES:Employees have their performance reviewed annually. Merit increases are awarded at twelve month intervals for employees whose salaries are at or below the full job value, the time interval between increases will be extended. Salary increases are not automatic they must be earned. When an increase is given, the employees salary moves to a higher level within the salary class. The amount of the increase is dependent upon: The employees current position in the salary range The employees performance rating The relative competitiveness of the final salary The size of the salary budget available for merit adjustments The merit budget represents a balance between what would like to pay, what the external market place is paying, and what the Company can afford to pay employees. The size of the budget is influenced by many factors, both internal and external. These include present and anticipated rate of inflation, competitive influences, and the current and expected profitability of the company.- 59


Fully qualified employees with proven job performance who are paid below the full job vale will, over time, progress to the full job value in their particular salary classes. Increases for such employees are likely to be higher in percentage terms that for employees who are currently paid above the full job value.

PROMOTIONAL INCREASES:When an employee is promoted the new job should be in a higher salary class with a higher salary range. The employees future salary action is considered in relation to the new salary range. Promotional increases may be given at any time but should generally not occur within six months of the employees most recent increase.

SURVEYS:Chevron for job evaluation purposes hires the services of a third party, Fergusons. It conducts surveys regarding the prevailing salary levels in the market place. The salary range is a band from the minimum to the mid-point. Salary scale is based on this very compensation survey.- 60


When it comes to determining the various salary levels the experience does not come into play at the junior level as it does at the senior level. The process of conducting the survey involves identifying the salary levels and other fringe benefits (such as house rent allowance, bonus etc.) of the company and providing the relevant data to survey consultants (Fergusons in this case). This involves filling in a questionnaire by Chevron. This data in turn is combined with that provided by other firms so as to develop competitive tables. One important consideration for the company is to see where it is from the mid point. The company considers the scale from the minimum to the mid point. If a worker or employee is highly skilled then the pay is more towards the mid point so as to retain the talent. Chevron also conducts internal surveys with respect to job evaluation at all levels through the American based Hay Group. The group has a reputation of consistency and possesses tremendous knowledge and experience in the field. The company benchmarks positions and allocates points for each of these jobs known as Hay Points. Broad banding allows in determining the salary levels. The banding is confidential and is an indicator of the internal equity. The Hay- 61


Group uses the regression model in the survey which takes about two months to complete. Since a huge number of MNCs and other renowned firms follow the Hay Point System the data may be compared for the determination of the external equity to some extent.

WICR:Chevron has an incentive program related to the companys earnings, however; there is no concept of stock-sharing for Chevron is a private limited company. Chevron has a recognition program known as WICR (Work Improvement Cost Reduction). All employees below the L2 manager level are eligible to participate in this program. The process and eligibility criterion for the program

encompasses the following: Employees suggest improvements within/ outside their own departments

Joint decisions are not eligible Implementation steps should be clearly outline WICR committee will evaluate all the suggestion pouring in

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The evaluation will be based on the following criteria: Suggestions should be practical and aligned with COPL policies

Volume of cost reduction/ revenue generation to be considered Implementation time frame for the suggestions should be short (1-6 months) Continuity of cost saving/ revenue generation versus one time benefit will be preferable

GENERAL SUMMARY:The contractors and union workers are offered Merit Based Pay. Inflation which has been a very regular phenomenon in our economy does somewhat affect the compensation policies, however; not directly but simply because the whole market is being affected. Chevron awards bonuses to its workers on the basis of improved performance which is connected to STRIVE (Strategic Incentive for Value Enhancement) that is revised annually. It also grants house rent allowances, offers medical plans and provides various such facilities to its

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employees. Also there exists workers compensation in case of injury on the job. Chevron also recognizes the services of its employees; in particular it has a long service award which is given to employees for every five years that they complete with the company. There is also a Quarter Century Club which gives plaques, memorabilia etc. to its employees on the completion of 25 grand years with COPL.

TURNOVER:In the late 1980s Chevron was seriously lacking good middle managers. The top executives did not take the responsibility of grooming the lower level managers nor were there any training and development programs in place with this regard that left a vacuum in the company. To address this rather serious issue Chevron adopted an adhoc approach and started hiring MBAs in particular, in huge numbers. These people as a result took the job rather lightly and treated their job at Chevron as a launch pad to their careers while always being on a lookout for better jobs. This created an image of Chevron being the savior of all those who could not afford a job elsewhere. However; now Chevron has become rather particular about its hiring policies.

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During Mr. George Mahans tenure as the GM Chevron had a hiring policy whereby it hired people irrespective of whether there were vacancies in the Company or not. Special place was created for these candidates in the company. Chevron then believed in having a talent pool even if it meant that there was excessive hiring, and though a lot of people left the company the turnover was never a major concern. In 1998 the Chevron Head Office was shifted to Islamabad due to security concerns in Karachi on orders from the Dallas Head Office. This, however; proved to be a big mistake and on the basis of cost-benefit analysis Chevron soon decided to reverse its decision. Operating an additional (regional) office at Karachi was proving to be expensive plus the travel and communication costs were too high and since a lot of the employees working within Karachi were unwilling to part with their families and work at Islamabad finding the right people in Islamabad, a completely new territory was a major problem. A lot of jobs had to be cut down on at Karachi office therefore there was a reduction of about 70 employees who were retrenched. Also there were many resignations that were handed in by the employees. This loss of employees who were well adjusted to Chevrons corporate culture is deeply regretted by the current Chevron management. This year Chevron under went restructuring, which resulted in further reduction of the Chevron employees. The current- 65


management has brought down the number of employees (managers, contract and non-contract workers) from 500 plus to 472, for the unnecessary number of employees was resulting in inefficiencies and excessive administrative costs. During the last year very limited hiring has been done at Chevron. Shell Pakistan Limited is Chevron Pakistan Limiteds biggest competitor and Shell over the past few years has earned the reputation of attracting a large share of the market labor force due to attractive starting salaries that it offers to potential candidates. This, however; quite surprisingly has not spelled out disastrous consequences for Chevron though it would be unfair to deny that it has had some unpleasant implications. Chevron claims to match Shells huge starting pay with rapid promotions, pay increases and an excellent working environment which ensures the personal development of employees. Chevron also has an open-door policy whereby it encourages the participation and suggestions of all its employees. The salaries at higher levels of both companies are, however; quite identical. Also Chevron being a smaller company compared to Shell is able to give ample recognition to all its employees which are a great motivating factor. Even those employees that left Chevron for Shell are of the opinion that the environment at Chevron is free of any politics and bureaucracy and the managers are followers of Theory Y- 66


rather than Theory X style of management, a practice not common in a lot of local companies.

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Bibliography:

www.Chevron.com

Human Resource and Personnel Management by William b. Werther, Jr. Keith Davis Practical experience and meeting employees and asking them their views towards the compensation policies and recruitment process in Chevron.

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54823717 Chevron or CALTEX Report

Documents

human resources manager

mba program

ilyas iqra university

orientation program

students of mba

questionable practices

following report

imited c hevron p akistan