Analysis of Human Resource Department of OGDCL Islamabad

Anum Shahid Mumtaz Ali MBA 3rd

Quaid-i-Azam School of Management Sciences

Quaid-I-Azam University Islamabad

Table of contents
page no
Chapter 1 .Introduction 1.1 Foundation………………………………………………………………. 7 1.2 Organizational structure………………………………………………… 8 1.3 Principle line of business………………………………………………...9 1.4 Competition faced and level of technology used…………………………………………………… 10 Chapter 2 Human resource Department 2.1Functions………………………………………………………………….11

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2.2 No. of employees…………………………………………………………11 Chapter 3 Recruitment and Selection 3.1 Policies………………………………………………………………… 12 3.2 Functions…………………………………………………………………13 3.3 Practices………………………………………………………………….13 3.4 Types……………………………………………………………………..14 3.5 Analysis…………………………………………………………………..15 Chapter 4 Socialization and Orientation 4.1 Policy…………………………………………………………………….17 4.2 Socialization……………………………………………………………..17 4.3 Orientation……………………………………………………………….17 4.4 Analysis………………………………………………………………….18 Chapter 5 Training

5.1 Policies……………………………………………………………………………...19. 5.2 Practices…………………………………………………………………20 5.3 Analysis………………………………………………………………....21 Chapter 6 Development and promotion 6.1 Career planning and development………………………………………22 6.2 Organizational development…………………………………………… 24 6.3 Management development………………………………………………24 6.4 Analysis………………………………………………………………… 24 Chapter 7 Performance appraisal system 7.1 Policies………………………………………………………………… 26 7.2 Practices………………………………………………………………… 26 7.3 Analysis………………………………………………………………… 28 Chapter 8 Rewards and compensation 8.1Reward policy…………………………………………………………… 30 8.2 Practice…………………………………………………………………. 30 8.3 Pay plan……………………………………………………………… 30

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8.4 Compensation……………………………………………………………30 8.5 Other benefits……………………………………………………… … 31 8.6 Analysis……………………………………………………………… Chapter 9 Collective bargaining and safety measures 9.1 Policy…………………………………………………………………….32 9.2 Collective bargaining…………………………………………………… 32 9.3 Objectives of unions………………………………………………….….32 31

9.4 Analysis……………………………………………………………………… 32 Chapter 10 Analysis…………………………………………………………………………… 34 Chapter 11 Recommendation………………………………………………………………… 36 Conclusion………………………………………………………………………… 37 References………………………………………………………………………… 38 Appendix………………………………………………………………………… 39

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Acknowledgements
We like to thank Almighty Allah the most beneficent and merciful for enabling us to reach here and use His sources to complete our project. We are humbly thankful to Amjid Javed, (General Manager) and Abdul Razik khattak (Senior Recruitment Officer) HR Department of OGDCL, Islamabad and all others who guided us during the course of project. The behavior of all the supervisors of HR Department was very good to us. They were always there to encourage us and they were very cooperative to guide us the mechanism of the HR Department in which we worked We are also grateful to Dr Basit B. Tayyab, who gave us opportunity to enhance our capabilities. This project is very helpful for us because, we have learnt a lot by applying theoretical knowledge in practical field. In addition, we like to say thanks to our parents to support us and encourage us at every step.

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Chapter 1

Introduction
Before the existence of OGDCL, exploration activities were carried out under the label of Pakistan Petroleum Ltd (PPL) and Pakistan Oilfields Ltd (POL). In 1952, PPL discovered a giant gas field at Sui in Balochistan. This discovery generated massive interest in exploration and five major foreign oil companies entered into concession agreements with the Government. During the 1950s, these companies carried out widespread geological and geophysical surveys and drilled 47 exploratory wells. As a result, a few small gas fields were discovered. Despite these gas discoveries, exploration activity after having reached its peak in mid-1950s, declined in the late fifties. Private Companies whose main objective was to earn profit were not interested in developing the gas discoveries especially when infrastructure and demand for gas was non-existent. With exploration activity at its lowest ebb several foreign exploration contracting companies terminated their operation and reduced land holdings in 1961.

1.1 Foundation of OGDC
On 04 March 1961, the Government of Pakistan signed a long- term loan agreement with the USSR, where by Pakistan received 27 million to finance the equipment and services of Soviet experts for exploration. Subsequently, OGDCL was created under an Ordinance dated 20th September 1961 and was charged with prime responsibility to undertake a well thought out and systematic exploratory programs and to plan and promote Pakistan's oil and gas prospects. As an instrument of policy in the oil and gas sector, the Corporation followed the Government instructions in matters of exploration and development. The day to day management was however, vested in a five-member Board of Directors appointed by the Government. In the initial stages the financial resources were arranged by the GOP as the OGDCL lacked the ways and means to raise the risk capital. The first 10 to 15 years were devoted to development of manpower and building of infrastructure to undertake much larger exploration programmes. Later, in July 1989, as the company progressed as a result of major oil and gas discoveries, the Government off-loaded the Company from the Federal Budget and allowed it to manage its activities with self generated funds. The year 198990 was the company's first year of self-financing. Today, OGDCL is the largest Exploration and

Production Company in Pakistan, listed on all three exchanges of the country as well as the London Stock Exchange. A number of donor agencies such as the World Bank, Canadian International Development Agency (CIDA) and the Asian Development Bank provided assistance for major development projects in the form of loans and grants. OGDC's intensive efforts were very successful as they resulted in a number of major oil and gas discoveries between 1968 and 1982. Two oil fields were discovered in 1968 which paved the way for further exploratory work in the North. During the period 1970-75, the Company reformed the strategy for updating its equipment base and undertook a very aggressive work programme. This resulted in discovery of a number of oil and gas fields in the Eighties, thus giving the Company a measure of financial independence. These include the Thora, Sono, Lashari, Bobi, Tando Alam & Dhodak oil/condensate fields and Pirkoh, Uch, Loti, Nandpur and Panjpir gas fields which are commercial discoveries that testify to the professional capabilities of the Corporation. OGDCL. (March 3, 2010)).Retrieved from http://www.ogdcl.com/aboutus/History.htm

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1.2 Organizational Structure 1.2.1 Main offices
OGDCL Head Office is located at Jinnah Avenue, Blue Area Islamabad and Regional Offices are located in Karachi and Multan. Besides this OGDCL has its Liaison Offices in Hyderabad, Sukkur, and Quetta for operational activities. (for details refer to appendix) (A.Javed, personal communication, march 3, 2010)

1.2.2 Main departments
The main departments of OGDCL are corporate department, exploration and production department and technical services department. Each of the three departments is further subdivided.(For details refer to appendix figure 5,3)

1.2.3 No of employees in OGDCL
In OGDCl employees consists of management cadre, executive cadre and overall staff. Each cadre is divided into pay groups and again each pay group is divided on the basis of all over Pakistan merit employees and on the quota of particular provinces. (A.Javed, personal communication, march 3, 2010)

1.2.3.1 Management cadre

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The management cadre consists of M-I, EG IX and EG VIII and only 4 EG VIII employees are open merit based and rest of the 10 employees are from four provinces, FATA and AK on the basis of quota. 1.2.3.2 Executive cadre In the executive cadre consists of EG VII(executive general), EG VI, EG V, EG IV, EG III, EG II, EG I and trainees. In it 143 employees are on the Pakistan merit base and rest of 1762 employees are on the basis of quota from four provinces, FATA and AK 1.2.3.3 Over all staff Over all staff consists of non-executive employees and trainees. There are 40 employees on the all over Pakistan open merit and rest of 9150 employees are from Singh, Punjab, NWFP, Balouchistan, FATA and AK on the basis of relevant provincial quota.(For details refer to appendix, table 1)

1.3 Principle area of business
OGDCL is one of the largest and leading companies of Pakistan. The principle area of OGDCl is exploration and production of oil and gas. As the leading Exploration and Production Company in Pakistan, OGDCL’s primary objective is to enhance its reserves and production profile and ultimately maximize value for shareholders. OGDCL continues to accelerate production growth through utilizing cutting edge technologies, allowing the Company to utilize its significant reserves base and capitalize on the strong economic growth and accelerating energy demand in Pakistan. It exploits exploration Opportunities by building the Company’s future reserves portfolio through its large onshore exploration land. During the fiscal year 2008-09 target of drilling is 52 wells. OGDCL’s operating environment will be a major factor in allowing it to control its low cost structure. Within Pakistan, the Company’s leading position also enables it to access economies of scale across its significant reserves base and operations. The domestic expansion remains OGDCL’s core focus, the Company intends to grow and diversify its portfolio through selective international expansion in the medium to long-term. OGDCL implements international best practices to ensure an efficient organizational structure and business processes that are focused on core production. As part of OGDCL’S restructuring plan, OGDCL has established an in-house technical services division, the Petroserv Directorate, which separates technical support

services from core E&P activities. OGDCL. (March 3, 2010). http://www.ogdcl.com/about-us/Strategy.htm

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1.4 Competition faced and level of technology used
Being one of the largest companies, OGDCL faces the competition of many other oil producing companies. The major competition faced by the company is Pakistan State oil (PSO) as well as foreign companies, such as MOL etc. As OGDCL is exploratory and producer of Oil and Gas Company in nature, technology used in it is very much complex and comprehensive. Technology used in OGDCl for the production and exploration purpose is mostly imported from the foreign countries. Huge costs are incurred for importing these machineries from outside. Besides importing technology from outside various plants and machineries that are manufactured inside the country are also used. (A.Javed, personal communication, march 3, 2010)

Chapter 2

Human Resource Department

Human resource department of OGDCL is one of the main departments of the

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OGDCL.

Human Resource Deportment at OGDCL is being reorganized to manage people and develop their skills for meeting Company’s requirements. Being the largest exploration and production Company, OGDCL seems to be an attractive company for talented and motivated people in which high levels of personal and company’s performance are recognized and rewarded. Human Resource Department seems to ensure development of world class workforce, as per OGDCL’s mission statement, target based working and performance based reward system has been evolved.

2.1 Functions of HR Department
The Company is focusing on the human resource department, as it aims to motivate its employees through proper placement, employee recognition, effective appraisals, empowerment, and communication and promoting employees skill development programs. Various human resource polices are being reviewed and rationalized by taking into account the industry norms to bring about an effective change in order to meet the challenges of highly competitive business environment. It helps to understand and evaluate the different and sometimes ambiguous views of human resource management by investigating its origins, explanatory models, technology and practice.

2.2 Number of employees in HR Department
In OGDCl, HR Department consists of number of employees under different job titles. There are round about 13 officers and 97 total staff, as well as there are also data processing officers. Detailed description is given below in HR Organogram ( for details, refer to appendix, figure 4)

Chapter 3

Recruitment and selection

Recruitment process in OGDCL is conducted under the recruitment section, which employees.

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generates

pool of potential candidates and acts as a real base to provide facilities of selection of new and old

3.1 Recruitment and selection policies
It is the company’s policy to implement an appropriate recruitment system base on careful determination of the required competencies and objectives by implying effective search and selection methods along with the efficient means of communication with potential candidates. It is the policy of the company that, when ever possible, positions should be filled through internal job posting and promotions. All departments’ heads (EDs, GMs, Managers) are to fully participate and contribute to the hiring process of their respective management staff in collaboration with HR Department. The hiring process/procedures shall be specified by the HR Department. All department heads are responsible for making respective description and job specification in collaboration with an Hr Department, for the purpose of allowing Hr to set annual hiring plan. All recruitment ( direct or through services contractors) shall be done through human resource department in compliance with the company’s laid down procedures and standards, no individual shall conduct recruitment or hiring activity without the specific knowledge and involvement of ED human resources. Candidates will be selected on the basis of applicable recruitment tests ( for entry level positions only ), qualification, experiences, ability, interest, aptitude and adoptability to the specific job recruitments, as already defined in the respective position description. The salary offered will be with in approved salary policy guideline of the company (R. khattak, personal communication, March 5, 2010)

3.2 Functions of Recruitment Section
Recruitment section basically performs the following functions

When ever any department in OGDCL seems to require new employee, it informs the there is real need of new employee or not.

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HR

Department to hire new employee for that. Then HR Department analyzes the real situation, whether

HR Department advertize the vacant position in the news paper and in the media to generate the pool of potential candidates and through the recruitment process hire the new employee for the specific required department. Same as mentioned above when ever any department feels the need of employee for the hire position, it informs the HR Department. On the behalf of that department HR Department recruit the employee by generating the pool of potential candidates. When ever there is pool of potential candidates, to select the most appropriate candidate for the vacant position, HR Department conducts examination, interview and short list the available applicants. (R. khattak, personal communication, March 5, 2010)

3.3 Practices of recruitment
After circulation to every department they analyze that how many employees perform their duties and how many are required and they take a deficiency with the scale. After the completion of circulation or survey they take the official approval from chairman and give advertisement through public relation department of the most required vacancies. The sources of advertisements used by HR department are news papers, media and internet. The recruitment procedure of the OGDCL is mostly related with CSS of Pakistan .i.e. as under:Punjab Sindh rural sindh urban N.w.f.p Merit Baluchistan Fata A.j.k 50% 11.4% 7.6% 11.5% 10% 3.5% 04% 02%

After the advertisement, they receive application from all over Pakistan and conducts

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written

examination. This examination is held in those departments, where the candidate want to join and that department send the result to recruitment section. OGDCl also hire the external agencies, which provide facilities of conducting examination of applicants. The selection procedure is recently shortly changed and is as under:Written Test Experience Academic Qualification 40%weightage 30%weightage 30%weightage

The time for a written test is usually one hour. Those candidates who qualified the test are then sent a call for interview. Interviews are used to analyze the courage, boldness communication skill, convincing power and also his dealing with other people. (R. khattak, personal communication, March 5, 2010)

3.4 Recruitment types
Regular employees Contract Basis employees Trainees – Special Trainees Hiring through Contractor Classified appointment (R. khattak, personal communication, March 5, 2010)

Selection
3.5 Selection Practices
Selection process in OGDCL starts with preliminary interview of the applicant who qualified the test. Depending upon the position, preliminary interviews board is formed, who conduct the preliminary interview. An applicant’s knowledge, skills and attitude is judged on the basis of following factors. Education (academic and Professional), Previous experience, Applicable tests (for entry level position only), Interviews References

The results of the candidates interviewed are compiled in the order of merit. After

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conducting

the preliminary interview, the successful candidates are preceded for the selection interviews, conducted by selection board. This selection board is formed while considering the positions required. After selection interview, the successful candidates are required for pre-employment medical examination arranged by the HR department. In this way HR department completes the selection process and formulates the job offer. Job offer or appointment letter is delivered to the successful candidates. This letter clearly spells out the terms and the conditions of employment and the benefits applicable to the position. All management position offer letters are signed by ED (executive director HR), while Executive Director’s position letters are signed by the chairman and CEO. When there is no suitable replacement available within the company and when all sources has been utilized with no results to fill the vacancy with highly potential candidate, then company rehire an exemployee on merit. For the requirement of certain position the company re-engaged the retired employees who are beyond the age of 60, after mutually agreed terms and conditions. In order to keep the track of attrition, to know the reasons leaving job and to collect the feed of leaving employee, the exit interview is conducted by the HR Department. This is also done in order to reduce employee turn over, because greater the employee turn over, greater will be the cost of employment. All these practices seem to be aligned with above mentioned policies. (R. khattak, personal communication, March 5, 2010)

3.6 Analysis
To recruit the employees both internal and external methods are used with in the OGDCL, but analysis reveals that the corporation gives preference to the internal method. The main draw back of this method is that it blocks the way for new generation which carry new ideas and knowledge. Further more the recruitment system is also influenced by the nepotism of politicians. Not only recruitment of employees is influenced by the nepotism of politicians, but selection also. Employees for high positions are selected on the basis of personal relations and blood relationship. Though OGDCL is the largest and very multifaceted organization, in spite of that there is no computerized data based system to record the data of employees.

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Chapter 4

Socialization and Orientation
New environment, different work activities, a new boss, different and mostly new group of coworkers certainly requires the process of Socialization and orientation for the new employee.

4.1 Policy

All newly inducted employees shall undergo a comprehensive orientation program of

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up to

one

week duration comprising of class room presentation on all professional and organizational aspects by the various department heads or their nominees, along with field visits( If any). (A.Javed, personal communication, march 15, 2010)

4.2 Socialization
Socialization starts with the move form an outsider to being an insider after the job offer letter in the OGDCL. HR Department takes special attention to put the new employees at ease, because loneliness and a feeling of isolation are not usual for new employee. It removes the anxiety of employee and helps him to improve strong commitment of new employee with their organization. (A.Javed, personal communication, march 15, 2010)

4.3 Orientation
In the OGDCL all the new employees undergo the comprehensive orientation process. It usually with the arrival of new employee in OGDCL and continue for the time period of not more than one week. It comprises of class room presentation on all professional and organizational aspects by various department heads or their nominee and field visits to the related fields, if necessary. Through the orientation process new employees are introduced to their job, to their colleagues, co-workers, peers, and bosses. In short this process provides the information about environment of the field and the organization where new employee has to work. (A.Javed, personal communication, march 15, 2010)

4.4 Analysis
There is the informal system of socialization and orientation practiced in the OGDCL. It means that there is no proper way of guiding their new hired employees. Less expenses are incurred by OGDCL to introduce their new employees with peers, bosses, and over all environment. Here Socialization and orientation is not considered an essential part of the system. It seems that orientation practices are not aligned with its policies

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Chapter 5

Training
All employees (regular and contract) are provided the opportunity of training to accord equal opportunities for professional development and to ensure effective management It is seemed that need of job redesign and technological break through in OGDCL require training of employees.

5.1Training policies

All matters concerning foreign/local trainings/attachments, conferences will be dealt with the HRD (human resource department.

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with directly

The HRD department training coordinators shall work with Department Head and finalize a list of well reputed training sources both local and foreign in all disciplines of organizational development. The vendors shall then be prequalified by the HR Department. The HRD department training coordinator, in vendors shall make a discipline wise local/foreign training calendar covering the professional and the organization development aspects through a TNA (training need assessment). The same shall be emailed to each department head by July 15th each year. In case of foreign program, the HRD department training coordinators are to ensure that proper lead time is forecasted for processing, keeping in view the visa/travel arrangements. The respective department head would be required to forward names with number of officers/staff that qualify the prescribed training benchmarks with in the announced deadlines, though an email to the HRD Department. The HRD Department training coordinators shall carry out due diligent, process the received names as per the prescribed parameters, get the required approvals and prepare the qualifying list. (R. khattak, personal communication, March 30, 2010)

5.2 Practices of trainings in OGDCL
To implement its policies OGDCL use the following practices:

5.2.1OGTI
OGDCL has well build training institution to conduct the training of its employees. The training institute consists of OGDCL local instructors, outside local instructor (in case of absence of OGDCL instructor) and foreign instructor. These instructors provide the services of training the employees. They train the employees appointed by HR department and follow the relevant policies which ultimately leads to organizational development. Present employees are also sent to foreign country for

training as per policy. OGTI provide the facility of sending employees to foreign for new skills, abilities and knowledge by joining training sections.

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enhancing

5.2.2 Local training programs
Local training programs are mostly on going job training provided by the local trainers on the fields of OGDCL. Mostly these types of trainees are assigned job of training by the OGDCL.

5.2.3Leadership training program
Leadership training programs are mostly for the leaders with in the organization. This type of training is conducted by highly professional trainee from home country or from foreign expert assigned by OGDCL.this leads to overall organizational development as cited in the policy

5.2.3 Advance management program
Advance management training programs are designed for higher level management. In these types of training highly expert trainees conduct proper training sections for the employees.

5.2.4 Conferences
Conferences are held in OGDCL on the regular basis by GDTI. These conferences not only enhance the real knowledge about the exploration and production but also present the true picture of the real working scenario.

5.2.6 Others
In addition job rotation, seminars, lectures; committee assignments are also used for training (R. khattak, personal communication, March 30, 2010)

5.3 Analysis
Training is used to develop the skills abilities and knowledge of the employees, in this regard lot of expenditure is made but unfortunately training facilities are awarded to the employees based on nepotism. As OGDCL has it training institute to facilitate employees, unluckily training sessions are held for reference based employees only. In addition, they don’t use the efficient and effective training methods and techniques to build above mentioned attributes of the employees, such as no simulation techniques are adopted to train employees. Training is done mostly through on the job mentoring and coaching

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Chapter 6

Development and Promotion
6.1Career planning and development
Career planning is basically career orientation and career development. Career planning section is under the control of HR manager. It informs the employees of OGDCL about their future planning. i.e., they prescribed to the employees their operational set up. It informs the employees that what they will do after 5 years And 10 years. Promotion is main source of career planning here. The elaboration is as under:-

8.1.1 Promotions
6.1.1.1 Promotion policies Promotion is the mixture of both merit and seniority in OGDCL.

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The company reserves its rights to promote or not to promote any functionary, with in the specified guidelines HR department shall prepare and finalize a list of all employees who are eligible for promotions along with options, by end of June each year the same shall be communicated to respective department’s heads for consents, review remarks. Under mentioned criteria shall be adhered to for processing of all promotion cases. All promotions would henceforth be on the basis of merit. All eligible employees at the time of submission of promotion proposals should be considered and the employees securing highest points would be promoted subject to availability of vacancies. All positions are too benchmarked according to the educational qualification, number of years of relevant experiment and trainings/certification, required to efficiently carry out that particular function, minimum/maximum level that could be attained in that position, cross functional roles, care path etc. An employee to become eligible for promotion must physically complete two years services in the grade for promotion up to EG-VI and three years for promotion to EG-VII and exceptions can be when hire vacancy to be filled internally and available employees is of “Outstanding” profile. All promotions will be linked with the future organizational development needs of the company. There is no maximum limit of the services in one grade. The employees who are superseded twice for the promotion to the next grade will be considered to have been permanently superseded. However, their annual increment shall continue to be linked to their respective performance rating up to maximum of that level only. Their length of services shall be determined by the number of the years benchmarked for that position. For contractual employees to consecutive below average ratings, no contract extension shall be made after due diligence by HR. (T.Ahmad, personal communication, April 5, 2010) 6.1.1.2 Promotion practices

For giving promotion to an employee its performance and relevant work experience is

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considered.

Promotion Criteria in OGDCL for officers was adopted in 1994. Its main components are: ACRs Qualification Technical Publications Relevant Experience : : : : 60% 15% 05% 20%

Seniority come fitness is the guiding principal in promotions The promotion cases of Staff are evaluated as per Promotion Criteria of 1991 its highlights are:

ACRs Qualification Seniority Experience Evaluations (Refer to promotion chart in appendix) (T.Ahmad, personal communication, May 5, 2010) 6.1.1.3 Important factors for promotion

: : : : :

25% 15% 05% 15% 40%

There are many factors affecting the promotion in OGDCL, such as experience for the post, number of the years in the vacancy, seniority, performance (ACR/PER Synopsis or qualification) prescribed qualification, requisite present executive group and finally disciplinary profile. While promoting any employee, above factors are kept at the mast priority to have a close look of them. (T.Ahmad, personal communication, April 5, 2010)(for details refer to appendix figure 2)

6.2 Organizational Development
In OGDCL just like any other organization, organization is developed when its missionary objectives are met. To achieve missionary objectives goals are set up with in the organization. To achieve the

goals certain strategies are formulated and finally strategies require actions and tasks

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to

be

implemented in the form of project (T.Ahmad, personal communication, April 5, 2010)

6.3 Management Development
Management development is linked with career development. Management development is done in order to enhance the effective decision making, better working management and to develop the sense of responsibility. The techniques the OGDCL practices for the career development are promotion of employees to higher levels and job rotation of the employees to various positions in different departments. They provide employees exposure to environment, which leads to the enhancement skills, abilities and knowledge. (T.Ahmad, personal communication, April 5, 2010)

6.4 Analysis:
Analysis reveals that career planning section works in close collaboration with the human resource department for planning career of their employees however not much time is given by the section to guide the employees for developing their career. They are usually guided in an informal way. OGDCL is only organization in the field of exploration and development of oil and gas resources of the country, but unfortunately does not use scientific techniques in career planning of employees promotions are major source of career development here. However is also analyzed that promotion process is comparatively slow which some times create a feeling of demotivation among employees. An organization is developed when its missionary objectives are met. So 0GDCL meets its missionary objectives through mega projects for organizational development

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Chapter 7

Performance Appraisal System
Performance review helps supervisors feel more honest in their relationship with their subordinates and feel better about themselves in their supervisory roles. Subordinates are assured clear understanding of what is expected from them, their own personal strengths and areas for development and a solid sense of their relationship with their supervisor. Avoiding performance issues ultimately decrease morale, credibility of management, the organizations overall effectiveness and wastes more of management’s time to do what isn’t being done properly.

7.1 Performance appraisal policies
Appraisals based on balance score card model taking in facts the employees professional output as well as personal traits that may affects his performance. All company employee will be appraised at the time of completion of trial (period will be of six months as per the recruitment policy). In case of satisfactory performance their services will be confirmed, and confirmation letter will be issued by the human resource department. At the time of

the confirmation, management/ HR may consider salary adjustment. In case of UN performance,

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satisfactory

Probationary period may be extended for further periods of three to six months .Appraisal will be done once every year during the period July-august on the prescribed appraisal form from employees .in management grades. (R. khattak, personal communication, April 7, 2010)

7.2 Practices
The scoring system is having a major impact on effective performance appraisals. The accuracy and reliability of any scoring system increases with full descriptions or definitions and still better with examples for each score band. This gives everyone the same objective scientific reference points, and reduces subjectivity. All the departments at OGDCL are enforced to follow following performance rating Outstanding Very Good Normal Marginal Poor 05% 20% 50% 20% 05%

In OGDCL Issuance of ACR forms toke place to all departments according to time schedule usually 15th December of each year. And reception of the ACR forms toke place at the date of 1st March of each year. After receiving the forms proper record is maintained, because its secrecy and integrity is very important. (R. khattak, personal communication, April 7, 2010)

7.2.1 Activities (ACR)
ACR evaluate employees on the basis of perception and judgment.ACR was used to provide comprehensive instructions from time to time to educate and clear ambiguities. ACR forms have been serialized for officers to minimize duplication/ misuse. Actually ACRs were not filled or /returned according to the notified schedule. Lot of time and efforts were involved in correspondence. Over-writing, use of fluid, mere marking instead of initials were

the most commonly observed problems. There was lack of consistency in various ACR that is frequently noticed. (R. khattak, personal communication, April 7, 2010)

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parts

of

7.2.2 ACR replaced by PER
That’s why ACR technique used for the purpose of performance appraisal was changed into PER (Performance evaluation report) in 2005. Through PER now employees are evaluated, on the basis of provided tasks, assignments and projects completion. It neglects the factors of biasness and perception based evolution(R. khattak, personal communication, April 7, 2010)

7.2.3 Relative and Absolute standards
. In the beginning ACR use relative standards to evaluate employees. They evaluate employees more on the basis of perception and judgment. However now a days it was replaced by absolute standards in PER. PER evaluates employees performance keeping in view job description of any specific employee i.e., performance is evaluated on the basis of pre assigned tasks checking whether they are fulfilled or not. On the basis of evaluation employees are promoted and given rewards. Basic component of the promotion criteria with their relatives weight age would be as under;1. Qualification 2. ACR’s 3. Seniority 4. Relevant experience including Experience outside OGDCL 5. Assessment by the promotion Committee 40% ------------------Total 100% --------------------These five basic components are analyzed before promotion criteria. When any employee qualifies these components then he will be promoted with the approval of the chairman. For every employee it 15% 15% 25% 05%

is necessary to get minimum 60% marks in above components. (R. khattak, personal communication, March 7, 2010)

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7.2.4 Classification method
Classification method is usually used to evaluate employees by establishing distinct classes of grades such as skills, knowledge, working condition and employees are evaluated on the basis of these criteria. (R. khattak, personal communication, April 7, 2010)

7.3 Analysis
After analyzing the performance appraisal system it becomes clear that though PER is replaced by ACR which is more judgmental based and PER evaluates employees on the basis of certain assigned tasks but here also sometimes performance evaluation is influenced by personal relation and perception of the person who is being evaluated. Any body that has personal relations with his boss get high marks and is evaluated more positively.

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Chapter 8

Rewards and Compensation
8.1 Reward policy
It is the policy of OGDCL to award both financial and non financial performance based rewards to its employees. (A.Javed, personal communication, April 26, 2010)

8.2 Practices
In OGDCL, both financial based and non financial based type of rewards are provided to employees. Financial rewards are actually performance based rewards, which include bonuses, one month additional salary etc, while non financial rewards are mostly letters of appreciation and recognition. Additionally rewards in the form of honorarium are also provided, allotting separate parking space serve as recognition and reward to high level positions. These rewards actually seem to motivate the employees to show the commitment with the organization. (A.Javed, personal communication, April 26, 2010)

8.3 Pay plans
For the offers pay ranges from 45000 to 100000 rupees, for assistant pay ranges from 25000 to 40000 rupees and for workers pay ranges from 15000 to 20000.these pay plan is established after compensation survey using the information that what others in the same industry are paying for same positions. (A.ali,personal communication, may 4,2010)

8.4 Compensation

OGDCL provides 15% increment on the best performance, 7% increment on average and it also provides performance bonus on net profit.

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performance

OGDCL provides additional benefits to employees such as friendly working environment, pick & drop Service, allowances for food, heads in annual budget for staff, fire Department, air base (under process) and fly camp (entertainment). (A.ali,personal communication, may 4,2010)

8.5 Other Benefits
OGDCL develops appropriate retirement plan to benefit its employees In addition various kind of medical benefits are also provided X-ray and laboratory diagnostic facilities are available at M.C Islamabad. Patients are referred for hospitalization as and when required to hospital/nursing, homes /specialist on the panel of the corporation and re-imbursement is allowed when such facilities are not availed. Medicines are provided to patients from entitle panelist chemist through prescription. Vaccination facilities for children are available at both medical centers and every Monday is specially fixed for this purpose. Ambulance equipped with first aid kit is available at medical centre Islamabad for 24 hours duty. (A.ali,personal communication, may 11,2010) Residential facility is also provided to facilitate its employees

8.6 Analysis
It is analyzed that there is an injustice system of distribution of rewards to employees. The senior positions are rewarded higher as compared to rewards given to workers and junior positions. It also leads to demodulation among employees when they see and feel such big differences. Being a public sector organization it is also analyzed that OGDCL provides a number of facilities to its employees and try to retain its employees using this policy.

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Chapter 9

Safety measures and collective bargaining
9.1 policy
The Policy of ODGCL in carrying out all its activities is to provide a safe and healthy work place OGDCL believes that good health, safety and environment contributes to business success and that maintaining good health, safety and protecting environment is a shared responsibility across the Company. (R. khattak, personal communication, March 18, 2010)

9.2 Collective bargaining
In OGDCL two main labor unions are found as maintained below: All Employees Labor Union All Mazdoor Ittahad Union These unions negotiate with each other to settle disputes. (R. khattak, personal communication, March 5, 2010)

9.3 Objectives of union
These Unions in OGDCL aim to provide security and protect the rights of the employees and set the terms and the conditions through collective bargaining. These unions and management meets to negotiate improved wages, hours and working conditions and set agreements in the mutual benefit of management and employees. When ever management takes the against the rights of employees, these unions steps forward to protect the rights of employees by using different tools, such as Strikes, Boycotts, and Corporate Campaign. (R. khattak, personal communication, March 5, 2010)

9.4 Analysis

As OGDCl is one of the largest and leading Oil and Gas production and Exploration

31

Company in

Pakistan so if employees don’t work for an hour, the company has to face the loss of millions of rupees. So it is analyzed that labor union actively negotiate with each other to settle disputes. These unions have a lot of authority here.

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Chapter 10

Analysis
In-depth analysis reveals following weaknesses in.OGDCL To recruit the employees both internal and external methods are used with in the OGDCl, but the corporation gives preference to the internal method. The main draw back of this method is that it blocks the way for new generation which carry new ideas and knowledge. Further more the recruitment system is also influenced by the nepotism of politicians. Not only recruitment of employees is influenced by the nepotism of politicians, but selection also. Employees are selected on the basis of blood relationship and personal relations.OGDCL is the largest and very complex organization, in spite of that there is no computerized data based system to record the data of employees. The old system of recording employee information in the form of files is used and those file are sent to different officers by their personal assistance. this not only consume the large amount of time while carrying files from floor to other floor, but also affects the efficiency of the work. Unofficial system of orientation is used to introduce new employees ignored mostly with the organizational culture, employees etc.this function is at times ignored in OGDCL.Training is used to develop the skills of the employees. In this regard lot of expenditure is made but unfortunately training facilities are awarded to the employees based on nepotism. As OGDCL has it training institute to facilitate employees, unluckily training sessions are held for reference based employees only. In addition, they don’t use the efficient and effective training methods and techniques to build above mentioned attributes of the employees, such as no simulation techniques are adopted to train employees Career planning section does not give adequate time in guiding employees how to develop their career. OGDCL is only organization in the field of exploration and development of oil and gas resources of the country, but unfortunately does not use scientific techniques in career planning of employees promotions are major source of career development here. However it is also analyzed that promotion process is comparatively slow which some times create a feeling of demotivation among employees. Promotion policy is the mixture of both merit and seniority, although PER is in place but in practice emphasis is given to ACR and can say that where there is ACR there an idea of favoritisms. So there is no proper way to monitor the performance of employees. In addition PER is also influenced by favoritism and nepotism.OGDCL is only organization in the field of exploration

and development of oil and gas resources of the country, but unfortunately does not

33

use

scientific techniques in career planning of employees. For the promotion first CPC invites recommendations to reach end February and end August each year. They are seldom received according to schedule. Consequently, CPC has great difficulty in meeting the promotion dates of 1st July and 1st December each year. Seconded the cases are received with inadequate information causing wastage of time and un-necessary correspondence. Third, there is lack of effective communication among departments which causes un-necessary wastage in time and efforts. Forth, there is absence or lack of clarity of promotion channels. There is no check and balance in awarding the rewards and benefits, because upper level position employees are awarded high rewards as compared to other positions. This injustice demotivates employees and affects their performance. While working in HR department it is also analyzed that the overall environment of OGDCL is imitative killer.employees.it does not appreciate the employees coming up with their own ideas. It is also seen that attitude of employees is not prudent because of job security factor. They have fair idea that no body can expel them from here.

Chapter 11

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Recommendations
Following recommendations can be helpful to get rid of the weaknesses of the functioning of human resource department. Equal opportunities should be given to external employees during hiring process. This will bring new ideas, knowledge and experience to the organization. In addition recruitment should be done totally on merit basis.favorotism and nepotism should be avoided. In this modern area computerization of record is very much essential. There should be computerization of record because it is of great essence for speedy disposal and accuracy of record. Although OGDCL usually import technology from outside however to meet the changing needs it must take actions and allocate higher budget for hiring it. Formal method of orientation should be used. Training should be provided on the basis of requirement. Equal opportunities should be given to employees to train them. Full attention should be given to intensive professional training of staff in related fields. . The department can organize professional training at OGDC or with outside agencies etc and latest literature newspapers and magazines etc of professional interest should be provided at sites free of cost. Career planning section must give adequate time in guiding employees how to develop their career. Appraiser must appraise employees on the basis of actual performance. Performance evaluation on the basis of judgment should be avoided. To encourage the employees to take interest in their work rewards should be provided but there should be fair means of distribution of awards. Unjust distribution of awards must be avoided.empolyees should be encouraged to come up with their own ideas. Initiative killer environment must be removed. In the end it is strongly recommended to eliminate the government influence on each and every function of HR department at OGDCL

Conclusion
From this whole discussion we conclude here that though HR department has well formulated policies. There is strong need for the just implementation of such policies. Though each and every

thing is written in papers about these policies but unfortunately practices in some

35

cases

are

quite different. So practices must be in accordance of the policies and government should not use its influence and provide freedom for the proper functioning of Human resource department.

References
OGDCL. (March 3, 2010)).Retrieved from http://www.ogdcl.com/about-us/History.htm OGDCL. (March 3, 2010). http://www.ogdcl.com/about-us/Strategy.htm

OGDCL, (March 3, 2010) , retrieved from http://www.ogdcl.com/aboutus/Directors.htm

36

Appendix
Figure 1:

Board of directors Not announced by the ministry Of the petroleum Mr. Shah Mahboob Alam Mr. Muhammad Aijaz ChaudhryMr. Waqar A MalikMr. Isikander Muhammad khanMr. Tariq FaruqueMr. Tariq iqbal khanMr Waseem A ZuberiMr. Shagufta JumaniMr. Rafique DawoodManaging director/ CEO Director Director Director Director Director Director Director Director Chairman

37

OGDCL, (March 3, 2010) , retrieved from http://www.ogdcl.com/about-us/Directors.htm

Table 1 No of employees in OGDCL PAY GROUP DOMICILE TOTAL

MeritPUNJAB SINDH NWFP BALUC- FATA AK IN THE URBAN RURAL TOTAL GROUP HISTAN

MANAGEMENT CADRE

M-1 EG IX EG VIII

0 0 4

0 2 3

0 1 0

0 0 1

0 1 11

1 0 0

0 1 0

0 0 0

0 0 0

1 4 9

EXECUTIVE CADRE

38

EG VII 3 EG VI 12 EG V 19 EG IV 28 EG III 28 EG II 22 EG I 15 TRAINEES12 TOTAL 143

37 102 116 109 178 204 132 69 952

6 18 36 29 57 17 28 13 205

1 13 49 36 46 39 47 20 252

7 31 85 65 103 56 75 33 457

11 31 28 34 28 38 18 15 205

1 10 11 6 9 7 7 11 63

1 4 10 14 7 8 3 8 55

0 5 5 6 3 3 2 6 30

60 195 274 262 356 338 252 154 1905

OVERALL STAFF

PAY GROUP

DOMICILE MeritPUNJAB SINDH URBAN RURAL TOTAL HISTAN NWFP BALUC- FATA AK

TOTAL IN THE GROUP

NON EXECUTIVE CADRE

16 15 14 13 12 11 10 9 8 7

2 2 0 0 15 0 4 3 5 0

163 106 253 4 623 1 148 425 164 93

49 12 58 2 59 0 24 45 35 11

14 25 109 0 60 0 56 67 95 16

63 37 167 2 119 0 80 112 130 27

22 20 58 1 113 0 34 79 30 5

2 0 7 0 14 0 6 20 11 8

1 0 6 0 5 0 2 2 2 0

5 5 13 0 31 0 12 12 9 3

258 170 504 7 920 1 286 653 351 136

6 5 4 3 2 1 TOTAL

3 0 0 0 0 0 40

670 99 264 198 324 1392 27 4954

94 19 28 39 70 103 1 649

166 9 79 31 220 705 2 1654

260 28 107 70 290 808 3 2303

102 23 30 25 41 136 8 727

50 5 63 29 128 566 8 917

39

7 0 0 2 1 2 0 30

17 13 17 26 14 45 1

1109 168 481 350 798 2949 53

TRAINEE6

223 9194

Source:(A.Javed, personal communication, march 3, 2010)

Figure 2

40

Promotions– Flow Chart
Re commendations of the Hea d of the Department

In com plete /Prema ture cases re turne d. Cases in orde r re taine d fo r processin g -

Eval ua tion Sheet, Seniori ty , AC R S ynopsis , Disci plina ry Profileothe r formali ties an d com plete d

Com plete d case su bmi tte d befo re De partmen tal Promotion Committee

Approval of the Managin g Di recto r/Board o f the Di recto rs

Promoti on Noti ficati on

Source: (T.Ahmad, personal communication, April 5, 2010)(

41

Figure 3

Company Secretary

Source: A.Javed, personal communication, March 3, 2010)

E.D (Admin)

E.D (Finance/ Accounts)

42

Figure 4

P E R SO N N E L D E PA R T M EN T
A m j aJ da v e d M a n a g e r ( P e r) s o n n e l

O R G A N O G ORFA M

sh m K h a l i d P e r v e z K h u r s h e e d A . H aM u hi a m m a d I q b a l K h a n M u k h ta r A h m ad J i g e r M u h am m a d D C P O (C o ord )/ P r o g r a m m e r D .M D C P O (C ) D C P O (A ) P S (G ) ( B ,D ,P e n & E O B I ) C o m p u te r S e c M u h a m m a d Y o uAna s d A s la m h e r a z M u h a m m a d bi S S h e i k h F a r eSead b i r H u s s ai n n a S h a uM at h a m m a d K h a l id Ra k u PO * D .P .O * D .P .O P O (E ) P O (F ) S P O (B ) P O (D ) (E O B I / P e n )

S e c t io n s o f P e r s o n n e l D e p a r t m e n t
A F
T o ta l O f f i c e r s T o ta l S ta f f : 13 : 97

B G

C

D

E

E OBI / C O M P UTE R O R D CO P E N SION

D a ta P r o c e s s i n g O f f i c e r

Source: (A.Javed, personal communication, March 3, 2010)

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Figure 5

Main Offices The overall organizational structure / organogram is as under Following are the main offices located throughout Pakistan OGDCL Head Office, Jinnah Avenue Islamabad. Pirkoh Gas Company Private Limited, Islamabad. OGDCL Regional Office, Shafi Chamber, Karachi OGDCL Regional Office, Multan OGDCL Liaison Office, Quetta OGDCL Liaison Office, Sukkur OGDCL West Wharf Office, Karachi OGDCL Base Store, Islamabad OGDCL Base Store, Khadiji, Karachi OGDCL Base Store, Korangi OGDCL Base Store, Kot Addu OGDCL Base Store, Kot Sarang Medical Centers, Islamabad, Rawalpindi & Karachi OGDCL Workshops, Islamabad Oil & Gas Training Institute, Islamabad. Main departments Corporate Department

Administration Department Human Resource Department Communication Department Personnel Department Procurement Department Legal / Regulation Department Finance & Accounts Department Audit Department Security Department Stores Department E&P Departments Exploration Department Exploitation Department Process Department Production Department Technical Services Department Engineering Department Drilling Department Data Logging Department Wire line Logging Department Mud Engineering Department Geological Department Geological Well Supervision Department Well Services Department Cementation Department Data Processing Department Source: A.Javed, personal communication, March 3, 2010)

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