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Training and Development- IndianOil

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TRAINING AND DEVELOPMENT

Introduction

Every organization needs to have well trained and experienced people


to perform the activities that have to be done. Training is a process of
learning a sequence of programmed behaviour. It is application of
knowledge. It gives people an awareness of the rules and procedures
to guide their behaviour. It attempts to improve their performance on
their current job and prepare them for an intended job. Development is
a related process. It covers not only those activities which improve job
performance, but also which bring about the growth of the personality;
help individuals in the progress towards maturity and actualization of
their potential capabilities so that they become not only good
employees but better men and women. In organizational terms, it is
intended to equip person to earn promotions and hold greater
responsibility.

Training a person for a bigger and higher job is development. And this
may well include not only imparting specific skills and knowledge but
also inculcating certain personality and mental attitudes. As the jobs
become more complex, the importance of employee development also
increases. In a rapidly changing society, employee training and
development are not only an activity that is desirable but also an
activity that an organization must commit resources to if it is to
maintain a viable and knowledgeable work force.

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Training has played a very important role in helping the corporation to
reach the commanding heights of performance. Any training would be
considered to be successful only when the knowledge gained by the
participants is transferred to the job performance

Training is the main function of HR. To enhance the Corporation's


growth and keep the Corporation ready to anticipate all types of
competition and face it too, there is a need that Human Resource
should play more active role for overall progress of the Corporation.

The impact of training programme is to mould the employee’s attitude


and help them to synergies individual goals with organizational goals.
It also helps in reducing dissatisfaction, complaints, absenteeism and
labour turnover.

Definition

According to Flippo, “Training is the act of increasing knowledge and


skills of an employee for doing a particular job" The major outcome of
training is learning. A trainee learns new habits, refined skills and
useful knowledge during their training programme, which helps them
to improve their performance. Training can also be defined as
activities designed to change the behaviour.

Another way of defining training would be a planned programme


designed to improve performance and bring about measurable
changes in knowledge, skills, attitudes and social behaviour of
employees.

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Training imparts the ability to detect and correct error. Further more it
provides skills and abilities that may be called on in the future to
satisfy organisation’s human resources needs.

Management development

Management development is an attempt at improving an individual’s


managerial effectiveness through a planned and deliberate process of
learning. For an individual this means a change through a process of
planned learning. This should be the common and significant aim of
development from the point of view of the trainer and the trainee in
an organisational setting.

“All development is self development. It must be generated within the


main himself. Development is highly individual. The development of an
individual is due to his day to day experience on a job. Hence,
emphasis should be on experiences from day to day work. Any activity
designed to improve the performance of existing managers and to
provide for a well planned growth of managers to meet future
organisational needs is management development.
The change in the individual must take place in those crucial areas
which can be considered as output variables:

Knowledge change;
Attitude change
Behaviour change
Performance change
End-operational results (the last two changes being the
result of the first three changes)

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Training Philosophy:

Training constitutes an important component of overall Human


Resource Management (HRM) strategy. It is a part of the Human
Resource Management efforts of the organization that enables the
employees of the organization to continuously update their functional
knowledge and skills in various disciplines.

The employees should be familiar with the latest technological


developments, organizational procedures and system as well as
various Management concepts. An opportunity should, therefore, be
provided by the organization to its employees, particularly in
management cadre, to attend the management training courses, who
in turns can share their knowledge and experience with the juniors in
the organization.

One of the basic philosophies of the training programmes is to bring


together participants of different disciplines from different regions so
that they can exchange their work experience and the problems being
encountered, with other participants.

After employees have been selected for various positions in an


organization, training them for specific task to which they have been
assigned, assumes great importance. Training is an important activity
in an organization.

Features of training

Increase knowledge and skill for doing a job.

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Bridge the gap between job needs and employee skills.
Job oriented process, vocational in nature
Short-term activity designed especially for operatives.

Objectives of Training

The overall training objective is to develop required knowledge, skills


and attitudes of our employees so that they can perform more
productively and achieve the business goals. It is recognized that the
employees learn primarily from on-the-job experience. Therefore, in
achieving this objective, the primarily contribution is from on-the-job
training and supporting contribution from the formal training effort.

1. To impart basic knowledge and skill to new entrants and


enable them to perform the job well.
2. To equip employee to meet the changing requirement of
the job and organization.
3. To teach the employees the new technique and ways of
performing the job or operations.
4. To prepare employees for higher level task and build up
a second line of competent managers.

Training has always played an important and integral part in furthering


many kinds of human learning and development. However, the fact
that training can make an important, if not crucial, contribution to
organizational effectiveness is only now being recognized fully.
Companies, organizations and government are beginning to appreciate
the value of adequate, consistent and long term investment in this
function.

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Training and Development programmes help remove performance
deficiencies in employees. This is particularly true when –

The deficiency is caused by a lack of ability rather than a


lack of motivation to perform.
The individual(s) involved have the aptitude and motivation
needed to learn to do the job better.
Supervisors and peers are supportive of the desired
behaviours.

There is greater stability, flexibility and capacity for growth in an


organization. Training contributes to employee stability in two ways.
Employees become efficient after undergoing training. Efficient
employees contribute to the growth of the organization. Growth
renders stability to the workforce. Further, trained employees tend to
stay with the organization. They seldom leave the company. Training
makes the employee versatile in operations. All rounder can be
transferred to any job. Flexibility is therefore ensured. Growth
indicates prosperity, which is reflected in increased profits from year to
year. Accidents, scrap and damage to machinery and equipment can
be avoided or minimized through training. Even dissatisfaction,
complaints can be reduced if employees are trained well.

Training is an investment in human resource with a promise of


better returns in futures.
A company’s training and development pays dividends to the
employee and the organization. Though no single training programme
yields all the benefits, the organization, which devotes itself to training
and development, enhances its human resource capabilities and
strengthens its competitive edge. At the same time, the employee’s

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personal and career goals are furthered, generally adding to his
abilities and value to the employer.

Role and Scope of Training

Training has been performing a very important role in helping the


Corporation to reach the commanding heights of performance over the
years. The vitality of an organization depends upon its capacity to
adapt itself to change. And the current changing environment calls for
this the most. Training plays a vital role in this regard. The primary
role of training is to assist the employees in their pursuit of knowledge
and self-actualization, expounding the belief that there are no limits to
human potential and growth and such potential should get transformed
into reality. Any training would be considered successful only when
the knowledge gained by the participants of various programmes is
transferred to their job performance.

All formal training activities conducted by the Training Centres at Head


Office and at Regional Offices are in line with the organizational needs.
Formal training efforts of the Training Centres are directed towards
supplementing the primary training process which takes place on-the-
job.

Need for basic purposes of training

The need for the training of employees would be clear from the
observations made by the authorities
1. To Increase Productivity: “Instruction can help employees
increase their level of performance on their present assignment.
Increased human performance often directly leads to increased

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operational productivity and increased company profit.” Again, “
increased performance and productivity, because of training, are
most evident on the part of new employees who are not yet fully
aware of the most efficient and effective ways of performing the
jobs.”

2. To Improve Quality: “Better informed workers are less likely


to make operational mistakes. Quality increase may be in
relationship to a company product or service, or in reference to
the intangible organisational employment atmosphere.”

3. To Help a Company Fulfill its Future Personnel Needs:


“Organisations that have a good internal education programme
will have to make less drastic manpower changes and
adjustments in the event of sudden personnel alterations. When
the need arises, organisational vacancies can more easily be
staffed from internal sources if a company initiates and maintain
an adequate instructional programme for both its non-
supervisory and managerial employees.”

4. To Improve Organisational Climate: “An endless chain of


positive reactions results from a well planned training
programme. Production and product quality may improve;
financial incentives may then be increased, internal promotions
become stressed, less supervisory pressure ensure and base pay
rate increase result. Increased morale may be due to many
factors, but one of the most important of these is the current
state of an organisation’s educational endeavour.”

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5. To Improve Health and Safety: “Proper training can help
prevent industrial accidents. A safer work environment leads to
more stable mental attitudes on the part of employees.
Managerial mental state would also improve if supervisors know
that they can better themselves through company-designed
development programmes.”

6. Obsolescence Prevention: “Training and development


programmes foster the initiative and creativity of employees and
help to prevent manpower obsolescence, which may be due to
age, temperament or motivation, or the inability of a person to

adapt himself to technological changes.’

7. Personal Growth: “Employees on a personal basis gain


individually from their exposure to educational experiences.”
Again, “Management development programmes seem to give
participants a wider awareness, an enlarged skill, and
enlightened altruistic philosophy, and make enhanced personal
growth possible.

Need for training

a) An increased use of technology in production;


b) Labour turnover arising from normal separations due to death or
physical incapacity, for accidents, disease, superannuation,
voluntary retirement, promotion within the organization and
change of occupation or job.

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c) Need for additional hands to cope with an increased production
of goods and services;
d) Employment of inexperienced, new or badli labour requires
detailed instruction for an effective performance of a job.
e) Need for reducing grievances and minimizing accident rates.
f) Need for maintaining the validity of an organization as a whole
and raising the morale of its employees.

Collectively, these purposes directly relate to and compromise the


ultimate purpose of organisational training programmes to enhance
overall organisational effectiveness.

Importance of training

Training is the corner-stone of sound management, for it makes


employees more effective and productive. It is actively and intimately
connected with all the personnel or managerial activities. It is an
integral part of the whole management programme, with all its many
activities functionally interrelated.

There is an ever present need for training men so that new and
changed techniques may be taken advantage of and improvements
affected in the old methods, which are woefully inefficient.

Training is a practical and vital necessity because, apart from the other
advantages, it enables employees to develop and rise within the
organization, and increase their “market value”, earning power and job
security. It enables management to resolve sources of friction arising
from parochialism, to bring home to the employees the fact that the
management is not divisible. It moulds the employees’ attitudes and

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helps them to achieve a better co-operation with the company and a
greater loyalty to it.

Training, moreover, heightens the morale of the employees, for its


helps in reducing dissatisfaction, complaints, grievances and
absenteeism, reduces the rate of turnover. Further, trained employees
make a better and economical use of materials and equipment;
therefore, wastage and spoilage are lessened, and the need for
constant supervision is reduced.

Training Methods/ Techniques

The forms and types of employee training methods are inter-related. It


is difficult, if not impossible, to say which of the method or combination
of methods is more useful than the other. Infact, methods are
multifaceted in scope and dimension, and each is suitable for a
particular situation. The best technique for one situation may not be
best for different groups or tasks. Care must be used in adapting the
technique/ method to the learner and the job. An effective training
technique generally fulfills this objective;

Provide motivation to the trainee to improve job


performance,
Develop a willingness to change, provide further trainee’s
active participation in the learning process.
Provide a knowledge of results about attempts to improve
(i.e. feedback), and permit practice where appropriate.

The various training techniques are as follows:

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ON–THE-JOB- TRAINING:

Virtually every employee, from the clerk to the president, get “On-The-
Job Training”, when he joins a firm. It is primarily concerned with
developing in an employee’s skills and habits consistent with the
existing practices of an organization, and orienting him with his
immediate problems. It is mostly given for unskilled and semi-skilled
jobs- clerical and sales jobs.

Employees are coached and instructed by skilled co-workers, by


supervisors, by the special training instructors. They learn the job by
personal observation and practice as well as occasionally handling it.
He is learning by doing, and it is most useful for jobs that are either
difficult to stimulate or can be learned quickly by watching and doing
it.

The main advantage of on-the-job training is that the trainee learns on


the actual equipment in use and in the true environment of his job. He,
therefore, gets a feel of the actual production conditions and
requirements. In this way, a transfer from a training centre or school to
the actual production conditions following the training period is
allowed. Secondly, it is highly economical since no additional personnel
or facilities are required for training. Thirdly, the trainee learns the
rules, regulations procedures by observing their day to day
applications. He can, therefore be easily sized up by the management.

VESTIBULE TRAINING

This method attempts to duplicate on-the-job situations in a company


classroom. Its is a class room training which is often imparted with the

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help of the equipment and machines which are identical with those in
use in the place of work. This technique enables the trainee to
concentrate on learning the new skills rather than on performing on
the actual job. In other words, it is geared to job duties. Theoretical
training is given in the class room, while the practical work in
conducted on the production line.

It is a very efficient method of training semi-skilled personnel,


particularly when many employees have to be trained for the same
kind of work at the same time. It is often used to train clerks, bank
tellers, inspectors, machine operators, testers, typists, etc. It is most
useful when philosophic concepts, attitudes, theories and problem
solving abilities have to be learned.

Training is generally given in the form of lectures, conferences, case


studies, role playing and discussion.

The various advantages of vestibule training are:

As training is given in a separate room, distractions are


minimized.
A trained instructor, who knows how to teach, can be more
effectively utilized.
The correct method can be taught without interrupting
production.
It permits the trainee to practice without the fear of the
supervisors/ co-workers observation and their possible
ridicule.

OF-THE-JOB METHODS:

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“Of-the-job training” simply means that training is not a part of


everyday job activity. The actual location may be in the company
classroom or in the places which are owned by the company, or in
universities or in associations which have no connection with the
company.

This method consists of:


1. Lectures
2. Conferences
3. Group Discussions
4. Case Studies
5. Programmed Instructions

1. Lectures:
Lectures are regarded as one of the simplest ways of imparting
knowledge to the trainees, esp. when facts, concepts, or principles,
attitudes, theories and problems-solving abilities are to be taught.
Lectures are formal organized talks by the training specialists, the
formal superior or other individual specific topics.

The lecture methods can be used for very large groups which are to
be trained within a short time, thus reducing the cost per training. It
can be organized rigorously so that ideas and principles relate
properly. Lectures are essential when it is a question of imparting
technical or special information of a complex nature. They are
usually enlivened with discussions, film shows, case studies, role-
playing and demonstrations.

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In training, the most important uses of lectures include:

Reducing anxiety about upcoming training programmes or


organisational changes by explaining their purposes.
Introducing a subject and presenting an overview of its
scope.
Presenting basic material that will provide a common
background for subsequent activities.
Illustrating the application of rules, principles; reviewing,
clarifying and summarizing.
The main advantage of lecture system is that it is simple
and efficient and though it is more materialistic it can be
presented within a given time.

1. Conference method:
In this method, the participating individuals ‘confer’ to discuss point
of common interest to each other. A conference is basic to most
participative group-centered methods of development. It is a formal
meeting, conducted in accordance with an organized plan, in which
the leader seeks to develop knowledge and understanding by
obtaining an considerable amount of oral participation of the
trainees. It lays emphasis on small group discussions, on organized
subject matter, and on the active participation of the members
involved. Learning is facilitated by building up on the ideas
contributed by the conferees.

The conference is ideally suited for the purpose of analyzing


problems and issues and examining them from different view
points. It is an excellent method for development of conceptual
knowledge and for reducing dogmatism and modifying attitudes

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because the participants develops solutions and reach conclusions,
which they often willingly accept.

2. Group discussions:
This is an established method for training. A group discussion is
conducted in many ways:

It may be based on a paper prepared by one or more


trainees on a subject selected in consultation with the
person incharge of the group discussion. It may be a part of
a study or related to theoretical studies or practical
problems. The trainees read their papers, and this is
followed by critical discussion.
It may be based on the statement made by the person
incharge of the group discussion or on a document prepared
by an expert, who is invited to participate in the discussion.
The person incharge of the group discussion distributes in
advance the material to be analysed in the form of required
readings. The group discussion compares the reaction of
trainees, encourages discussion, defines the general trends
and guides the participant to certain conclusions.

1. Case studies:
“The case study is based on the belief that the managerial
competence can best be attained through study, contemplation and
discussion of concrete cases.” The ‘case’ is the set of data, written
or oral miniature, description and summary of such data that
present issues and problem calling for solutions or action on the
part of trainee. When the trainees are given cases to analyse, they
are asked to identify the problem and recommend tentative solution

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for it. This method offers to the trainees matter for reflection and
brings home to them a sense of complexity of life as oppose to
theoretical simplifications of, and practices in the decision-making
process. The case study is primarily useful as a training technique
for supervisors and is specially valuable as the technique of
developing decision-making skills and for broadening the
perspective of the training.

2. Programmed instruction:
Programmed instruction involves a sequence of steps which are
often set up through the central panel of an electric computer as
guides in the performance of a desired operation or series of
operations. It incorporates a pre-arranged, proposed, or desired
course of proceedings pertaining to the learning or acquisitions of
some specific skills or general knowledge. A programmed
instruction involves breaking information down into meaningful
units and then arranging these in a proper way to form a logical and
sequential learning programme or package.

Evaluation of training programme

Objectives of training evaluation is to determine the ability of the


participant in the training programme to perform jobs for which they
were trained, the specific nature of training deficiencies, whether the
trainees required any additional on the job training, and the extent of
training not needed for the participants to meet the job requirements.

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Evaluation of the training programme must be based on the following
principles:

Evaluation specialist must be clear about the goals and


purpose of evaluation.
Evaluation must be continuous.
Evaluation must provide the means and focus for trainers to
be able to appraise themselves, their practices, and their
products.
Evaluation must be based on objective methods and
standards.
Realistic target dates must be set for each phase of the
evaluation process. A sense of urgency must be developed,
but deadlines that are unreasonably high will result in poor
evaluation.

There are various approaches to training evaluation. To get a valid


measure of training effectiveness, the personnel manager should
accurately assess trainee’s job performance two or four months
after completion of training.

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CASE STUDY

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The Indian Petroleum Industry

The Petroleum industry in India stands out as an example of the strides


made by the country in its march towards economic self-reliance. At
the time of independence in 1947, international companies controlled
the industry. Today, a little over 50 years later, the industry is largely
in the public domain with skills and technical know-how comparable to
the highest international standards. The testimony of its vigour and
success during the past five and half decades is the significant
increase in crude oil production from 0.25 to 0.33 million tonnes per
annum and refining capacity from 0.3 to 103 million metric tonnes per
annum. The consumption of petroleum products has grown 30 times
in the last 50 years from 3 million tonnes during 1948-49 to about
107.7 million tonnes in 2003-04, an increase of 3.5% over 104.1 million
tonnes registered in 2002-03. A vast network of over 29,000
dealerships and distributorships has been developed backed by over
400 storage points over the years to serve the people even in the
remote and once-inaccessible areas.

Oil production & consumption in India(Million tons)

1997 1998 1999 2000 2001

Crude oil production 32.9 33.9 32.7 32 32.5

Crude oil consumption 62.9 65.2 68.5 86 103.5

Deficit (Met by Imports) (33.9) (34.5) (39.8) (54.0) (71.0)

In order to understand the level of Indian demand for petroleum


products in a global perspective, the following table furnishes a

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comparison of per capita consumption of petroleum products in the
various parts of the world.

(Kilograms per annum)

* India 98

* China 165

* North America 2,610

* World average 585

With the per capita consumption level in India being only about 60% of
that in China, a strong growth potential exists in India, given
particularly a large population base of over a billion.

Growth

In the 50 years since independence India has witnesses a significant


growth in the refining facilities and increase in the number of refineries
from one to eighteen now. The first decade of Independence (1947-
57) saw the establishment of three costal refineries by multinational oil
companies operating in India at that time, viz. Burmah Shell, Esso
Stanvac and Caltex; the first two at Mumbai and the third at
Vishakhapatnam. A major boost to the oil industry came in pursuance
of the Industrial Policy Resolution, 1956 that intended to promote
growth of the vital sectors such as petroleum under the State control.
ONGC, which was formed a Directorate in 1955, became a Commission
in 1956.
The second decade (1957-67) witnessed the setting up of the Indian
Refineries Ltd. in 1985, a wholly owned public sector Government
Company. Under its banner three refineries were set up at Guwahati

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(Assam), Barauni (Bihar) and Koyali (Gujarat) essentially to process the
indigenous crude discovered in Assam and Gujarat. In 1959, the Indian
Oil Company (INDIANOIL), again a wholly owned Government
company, was formed for marketing of petroleum products. Indian
Refineries Ltd. was merged with Indian Oil Company Ltd. to form Indian
Oil Corporation Ltd. on 1st September 1964.

The next ten years period (1967-77) witnessed the establishment of


two refineries, one with equity participation from America and Iranian
companies at Chennai and another in the public sector at Haldia by
Indian Oil.

The Period 1977-87 saw the commissioning of two more refineries in


the public sector. The refinery at Bongaigaon was the first experiment
in having an integrated petroleum refinery-cum-petrochemicals unit.
The other refinery was set up at Mathura in 1982. Major expansions of
the coastal refineries at Mumbai, Cochin, Chennai and Vishakhapatnam
were also completed during this period. The notable feature of the
capacity additions during this decade have been the extensive
utilization of the process design capabilities of M/s. Engineers India Ltd.
and installation of Secondary Processing Facilities to increase the
production of much required kerosene, diesel and LPG.

During the fifth decade (1987-97), a small refinery of 0.5 MMTpa


(Million metric tonnes per annum) at Nagapatinnam was built in Tamil
Nadu. It is based on crude from adjoining fields. In 1996, a MMTpa
refinery was built in the joint sector at Mangalore between HPCL and
Indian Rayon. This decade also saw significant expansion to the
capacities of the existing refineries, thereby raising the refining
capacity to about 62 MMTpa.

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However, the production of crude oil increased to over 35 million
tonnes per annum in the year 1997-98. This represents only less than
50% of country’s requirement of petroleum. The balance had to be
made good by imports putting our foreign exchange to a great strain.
Considering the ever-growing demand of petroleum at the rate of
about 7% per annum, and the dwindling reliance on indigenous
production of oil and natural gas, the Government of India, in 1991
decided to open up the exploration and production of oil and natural
gas to the private sector.

The ministry of petroleum invited bids from the private parties /


consortiums, in a number of bidding rounds. Consequently, as many
as 21 small oil-gas fields and more than a dozen exploration blocks
were awarded to private parties, for exploration and production work.
It was also decided by government to import Liquefied Natural Gas, to
meet the ever-growing requirement of natural gas in the country. The
government also decided to open up oil exploration in the deeper
continental shelf by private parties.

With the setting up of Panipat Refinery in 1999-2000, there are 18


refineries operating in the country, 15 in the public sector, one in the
joint sector and one in the private sector, with an installed capacity of
102 million metric tonnes per annum.

The year 2003-04 saw important developments in Government policy


as well a concerted efforts by individual companies to align their plans
and progress with the free market scenario.
On the disinvestments front, the Government of India successfully sold
10% of its equity in Oil & Natural Gas Corporation Ltd.(ONGC) and GAIL
(India) Ltd. during the year. The Government also sold its residual
equity of 26% in IBP Co. Ltd. through public offer. Earlier in 2002,
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IndianOil had acquired 33.58% of Government of India’s equity in IBP
through competitive bidding process, and thereafter acquired another
20% through open offer to the public.

In the upstream sector, the Government of India signed 20 contracts


for oil & gas exploration under the fourth round of New Exploration
Licensing Policy (NELP) and eight contracts under the second round of
the Coal Bed Methane (CBM) Policy. Significant hydrocarbon
discoveries in the blocks awarded earlier enhanced the prospects of
finding more oil & gas reserves in the country. For enhancing the
country’s oil security, the Government decided to set up 5 million
tonnes of strategic crude oil storage in the country at Mangalore and
Vishakhapatnam, which will be built and operated by IndianOil.

Demand for Petroleum Products


Demand growth from 1991 - 2001
The Indian GDP and energy consumption have each grown at the rate
of about 6% per annum from 1991 to 2001. Correspondingly the
demand for petroleum products has been growing steadily as shown
below:
Growth rates: Crude processing & demand for petroleum products
(1990-91 to 2000-01)
Compound
Consumption Consumption
Avg.
in year ended in year ended
growth
31.03.1991 31.03.2001
rate
52 million 103 million
* Crude oil processing 5.1 %
tons tons
Demand for total 55 million
* 94 million tons 5.5 %
Petroleum products tons

Threats:

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Towards end of the year, the major concern of the petroleum industry
was the rising cost of crude oil. While the uprising in gross refining
margins helped improve the bottom line, Indian refiners were severely
impacted by the ever-rising and fluctuation price of crude oil and
products in the international market. Since our country is still
dependent on imports to the extent of 70% of its requirement, we shall
continue to be subject to volatility in the international prices of oil. The
strengthening of the Indian Rupee against the US Dollar helped limit
the impact partially. Concerted steps taken by the Government to
augment indigenous production through the NELP rounds, and
encouragement to Indian companies in acquiring equity oil and gas
abroad, are therefore steps in the right direction

Introduction:
Petroleum is one of the most valuable natural resource in the world.
Some people call it as “Black Gold”, but it may be better described as
the Life Blood of Industrialised Countries.

The Indian oil sector is in the threshold of major changes. The


Government of India had already decanalised some products like

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Furnace Oil, Aviation Turbine Fuel etc and also trying to decontrol High
Speed Diesel, Motor Spirit, Liquefied Petroleum Gas, Superior Kerosene
Oil etc in the near future. In spite of Government regulations there
exists an intense competition among the existing oil companies. The
flexibility of grabbing more market share will intensify after decontrol
of these products from the Government.

Consumption of Petroleum products is an index of a country’s


development, industrialisation and economic well-being. From an
annual consumption of less than 3 Million Tonnes in 1948-1949 India’s
Petroleum products consumption has grown to 107.7 Million Tonnes in
2003-2004. It shows the growth rate of Petroleum Industry in the
country in the post independence period.

In order to protect national interest, the Government of India decided


to establish a nationally owned and controlled Oil Industry in the India
under the Ministry of Petroleum and Natural Gas.
IndianOil Corporation as an idea was born out of the Industrial Policy
Resolution of 1956 and since then has emerged as one of the largest
and leading corporations in the world.

Indian Oil Corporation Limited (INDIANOIL) is the 18th largest


Petroleum Company in the World. INDIANOIL is ranked 153rd among
the 500 largest companies in the world. (as per the Fortune Listing). It
is the only Public Sector Undertaking among ‘India’s Top 10
Companies’ listed by the Far Eastern Economic Review in 2004.
IndianOil has also been adjudged No.1 in petroleum trading among the
national oil companies in the Asia-Pacific region.

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In another major feat, IndianOil was ranked among the top 10 ‘Best
Employers in India–2004’ in a joint survey conducted by Business
Today and Hewitt Associates across 220 organizations.

For 15th consecutive year, IndianOil earned ‘Excellent’ rating for its
performance in its MOU with the Government of India for the year
2003-04.

IndianOil started with a sales turnover of Rs. 109 crores and a profit of
1 crore in 1964-65. In the year 2005-06 INDIANOIL has achieved a
sales turnover of Rs.1,83,204/-crores (profits of Rs. 4,915 crores for
2005-06). The total sales volume (inclusive of export sales) increased
from 47.56MMT in 2002-03 to 48.61MMT in 2003-04, registering a
growth of 2.2 %. The Corporation recorded the highest ever Profit
Before Tax of Rs.9,691 crore (Rs.2,686 crore tax) during 2003-04 as
against Rs.8,414 crore (Rs. 2,299 crore Tax) in 2002-03, registering a
growth of 15.2 %. The Profit before tax for the year ending 2005-06
was 6,706/-crores.

IndianOil deals with various petroleum products. The Companies main


products are:

1. Fuel and Feedstock


2. Lubes and Greases
3. Petrochemicals and specialties
4. Liquefied Petroleum Gas / LPG
5. Motor Spirit / Gasoline
6. Superior Kerosene Oil / Kero
7. High Speed Diesel / Gas Oil
8. Aviation Turbine Fuel / Jet Kero

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9. Lubricants

History

In the late 1950s Indian oil industry was dominated by three Multi
national Companies, viz., Shell, Esso and Caltex. The country was
dependant on refined petroleum products imported into the country by
these companies.

In the year 1956, Parliament passed an Industrial Policy Resolution


bringing Oil under the purview of the State sector as a step to bring all
the industries of basic and strategic importance into the Public Sector.

In 1958, a Public Sector Company called Indian Refineries Limited was


set up, followed by a marketing organisation called Indian Oil Company
Limited In 1959. By September 1964 both these companies were
merged and Indian Oil Corporation was formed.

In 1970, the Multinational Oil Companies were nationalized and this led
to the emergence of Bharat Petroleum Corporation Limited (BPCL)
(from Shell) and Hindustan Petroleum Corporation Limited (HPCL) (from
Esso and Caltex). Apart from this Government also formed Indo-Burma
Petroleum (IBP) Limited. While the three oil majors have their own
refineries, IBP relied only on marketing. Later Assam Oil Company was
merged with INDIANOIL, and a separate division known as Assam Oil
Division (of INDIANOIL) was formed.

Apart from this other public and private sector companies like Madras
Refineries Limited, Cochin Refineries Limited, Bongaigaon Refineries
and Petrochemicals Limited, IPCL, Reliance Petroleum, Essar Oil
Limited also entered the market at later stages. Initially they were not

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given any marketing rights for the controlled oil products but could
refine crude oil and sell through the nationalized oil companies. But,
after the withdrawal of Administered Pricing Mechanism (APM), (in
2002) these oil companies were allowed to sell these decontrolled
products through the Retail Outlets or by bulk to direct customers.

IndianOil holds over 33% of the country's refining share (42%, if the
capacity of recently acquired subsidiaries is also added). All refinery
units are accredited with ISO 9002 and ISO 14001 certifications. It’s
Mathura refinery is the first refinery in Asia and the third in the world
to earn the British Standard (BS: 7750) and ISO-14001 certifications in
environmental management.

The refinery network is presented with its installed refining capacity:

IndianOil Refineries: Installed Capacities


(In MMTPA)

As on As on As on As on As on As on
Refinery
1.4.2000 1.4.2001 1.4.2002 1.4.2003 1.4.2004 1.4. 2005

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IOC
IOC- Guwahati 1.0 1.0 1.0 1.0 1.0 1.0
IOC- Barauni 3.3 4.2 4.2 6.0 6.0 6.0
IOC- Koyali 13.0 13.7 13.7 13.7 13.7 13.7
IOC- Haldia 4.6 4.6 4.6 4.6 6.0 6.0
IOC- Mathura 7.5 8.0 8.0 8.0 8.0 8.00
IOC- Digboi 0.65 0.65 0.65 0.65 0.65 0.65
IOC- Panipat 6.0 6.0 6.0 6.0 6.0 6.0
Sub-Total IOC 36.05 38.15 38.15 39.95 41.35 41.35
IOC Subsidiaries
CPCL- Chennai 6.5 6.5 6.5 6.5 9.5 9.5
CPCL-
0.50 0.50 0.50 1.0 1.0 1.0
Narimanam
BRPL-
2.35 2.35 2.35 2.35 2.35 2.35
Bongaigaon
Sub-Total IOC
9.35 9.35 9.35 9.85 12.85 12.85
Subisdiaries
IOC-Total(With-
45.40 47.50 47.50 49.80 54.20 54.20
Subsidiaries)

IndianOil holds over 33% of the country's refining share (42%, if the
capacity of recently acquired subsidiaries is also added). All refinery
units are accredited with ISO 9002 and ISO 14001 certifications. It’s
Mathura refinery is the first refinery in Asia and the third in the world
to earn the British Standard (BS: 7750) and ISO-14001 certifications in
environmental management. The refinery network is presented below
with its installed refining capacity.

The IndianOil group of companies owns and operates 10 out of 18 Oil


refineries in the country with a current combined rated capacity of
57.80 million metric tonnes per annum (MMTPA) or one million barrels
per day (bpd). These include two refineries of subsidiary Chennai
Petroleum Corporation Limited and Bongaigaon Refinery &
Petrochemicals limited to increase its refining capacity . These are
located at Guwahati and Digboi (Assam), Barauni (Bihar), Koyali
(Baroda,Gujarat), Haldia (West Bengal), Mathura (Uttar Pradesh) and
Panipat (Haryana). Continuous innovation and up gradation of

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technology have resulted in high efficiency and optimum capacity
utilization.

With sales of 49.61 Million Tonnes in 2005-06, Indian Oil holds over
51.2 % of Market share. (with the acquisition of IBP it holds around 60
% of the market in India)

The Corporation’s employee strength as on March 31, 2006 was


30,801, including 10,437 officers. There are 2,406 women employees
including 775 officers, constituting 7.8% of the total manpower. These
employees are engaged in Crude Oil Refining, Pipeline Transportation
and Marketing of Petroleum Products. It is the sole canalizing agency
for the import and export of Crude Oil and Finished Petroleum
products.

INDIANOIL has five divisions:


1) Refineries Division
2) Pipelines Division
3) Marketing Division
4) Research and Development Division and
5) Assam Oil division.

As the name suggests Refineries division is into refining of imported


and local crude which is available in India. In maximum cases it crosses
the installed capacity utilization. Research and development division is
into developing new lubes and lube formulations required for the
current market. From its inception it has formulated more than 2000
lube formulations. Assam Oil division is into refining and also
marketing of oil products in the northeast part of India.

The marketing division has its Head Office at Mumbai. It controls a


network of over 22,000 sales points spread over India (the largest in

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the country). These include Retail Outlets of MS/HSD, SKO/LDO
dealers, LPG distributors, SERVO shops etc.

INDIANOIL constantly strives to develop its nationwide pipeline


network. It transports Crude Oil and Finished Products through over
7,575 kms of Cross-country pipelines (country’s largest network). It
keeps abreast of the latest technology when laying new systems and
inducts the same into existing systems too.

Twelve Joint ventures are now operational in partnership with leading


companies like Mobil and Lubrizol Corporation (USA), Oil tanking GmbH
(Germany), Petronas (Malaysia), Marubeni (Japan), Bharat Petroleum
Corporation Limited (BPCL), Oil and Natural Gas Corporation Limited
(ONGC), IBP, Reliance Petroleum Limited (RPL), Essar Oil Limited (EOL),
Gas Authority of India Limited (GAIL) etc of India.

In addition to products refined at its own plants, INDIANOIL also


markets the products refined by the following refineries :

i. Madras Refineries Limited


ii. Reliance Petroleum Limited
iii. Cochin Refineries Limited
iv. Bongaigaon Refineries & Petrochemicals Limited.

The famous Brands under IndianOil

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IndianOil's branded fuels XtraMile and


XtraPremium have made a significant impact in the petroleum retail
market. XtraMile, IndianOil's new generation High Speed Diesel with
world-class additives has taken a leadership position in the market.

The launch of premium fuels - XtraPremium and XtraMile (originally


IOC Premium and Diesel Super respectively), marks a new beginning
for IndianOil and its customers. XtraPremium is, in fact, the only petrol
in India with 91 Octane and doped with Multifunctional Additives. The
maiden launch of these branded fuels took place in Delhi on Sept. 24,
2002. Subsequently, XtraPremiuem sales have been extended to 200
cities and 750 petrol & diesel stations, and XtraMile to 850 cities and
1750 petrol and diesel stations by the end of

SERVO is India's largest selling lubricant


brand. SERVO ranges of lubricants enjoy approvals from major Original

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Equipment Manufacturers (OEMs) including new generation cars. 9,000
Retail Outlets and a countrywide network of SERVO SSls and SSAs
Bazaar traders offer servo range of lubricants to customers.

The Servo range of lubricants is used in almost every application


covering automotive, industrial and marine sectors. Servo range of
lubricants is fast emerging as a Global Brand. Servo has been
designated as a superbrand. Servo has genuine oil tie ups with a
wide range of companies like Hyundai, Maruti, Bajaj, Lancer. Anil
Kumble, the ever dependable sporting icon is servo Brand
Ambassador.

Developed exclusively at IndianOil's world-class R&D Centre at


Faridabad, there is a Servo lubricant for virtually every single
application. With over 42% market share and 450 grades, the country's
leading Servo brand lubricants from IndianOil are sold through over
8,100 IndianOil petrol/diesel stations, over 1,300 Servo Shops and a
countrywide network of bazaar traders.

IndianOil Indane LPGas is used in 40


Million homes as cooking fuel and commands over 48% market share
in India. Indane LPGas is marketed through a network of 4350 Indane
distributors. Widely used in commercial sectors like industries, hotels &
restaurants, medical labs, etc. 87 Indane Bottling Plants are spread
across the country with a combined bottling capacity of 3.77 MMTPA.
New and convenient 5 kg Indane LPGas cylinders introduced in rural
and hilly regions for wider use by economically weaker sections.
IndianOil's auto LPG brand Autogas is the leader in the segment.

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Marketed through a network 48 stations out of an industry total of 103
Auto LPG Dispensing Stations.

Autogas (LPG) has been introduced in Hyderabad,


Bangalore and Mumbai markets. This alternative fuel is a good business proposition in
the long term, and IndianOil intends to further expand its marketing in a big way

INDIANOIL SERVES CUSTOMERS FROM KARGIL TO


KANYAKUMARI:

IndianOil’s remarkable marketing and distribution network extends


from Kargil to Kanyakumari, catering to a vast spectrum of customers
including households, industries, agriculture, transport, and defence
forces, with total sales crossing 49.61 Million Metric Tonnes in 2005-06.

The Marketing Division of the Corporation has its headquarters located


in Mumbai. It has FOUR Regional Offices located at Mumbai, Delhi,
Chennai and Kolkata. There are 15 State Offices and 44 Divisional

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Offices including 2 of Assam Oil Division. A large network of 9,138
Retail Outlets including 82 Jubilee Retail Outlets serve the retail
market. A total of 3,521 Kerosene/ Light Diesel Oil (LDO) dealers reach
the products to the customers throughout the country. They are fed by
162 Bulk storage depots/terminals all over the country.

INDIANOIL has 35 Area Offices to deal with the marketing of LPG.


Indane Cooking Gas is distributed to over 375 lakh customers in 2,177
towns through 4,350 distributors. The Corporation has 87 LPG Bottling
plants with a total capacity of 36, 74,000 tonnes per annum.
INDIANOIL has 94 Aviation Fuel Stations catering to Civil and Defence
Aircrafts with a market share of 68 %. INDIANOIL meets around 89 %
requirements of Air Force whereas total needs of Army and Navy.

The company has a ISO-9001 certified, modern Research and


Development Centre at Faridabad with facilities matching international
standards. The centre has developed over 2000 Lubricant/Grease
formulations and introduced multigrade fuel-efficient lubricants for
modern vehicles and is constantly trying new ways of improving fuel
efficiency and quality. INDIANOIL has launched genuine lubricating oils
for almost all brands and makes of vehicles. A wholly owned
subsidiary, Indian Oil Blending Ltd. manufactures over 450 grades of
the country’s leading SERVO brand of lubricants and greases with 42 %
market share, and are sold through more than 9,100 Company retail
outlets, besides a countrywide network of bazaar traders.

INDIANOIL- IMPROVING THE QUALITY OF LIFE:

INDIANOIL provides welfare schemes including housing, medical,


sports and recreation facilities to its employees and their families.
INDIANOIL has also given top priority to its customers’ interests. Be it

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peace time or war, drought or floods, INDIANOIL has carried oil
requirements to remote hamlets, provided fuel for transport and
fulfilled energy needs of the Defence forces. INDIANOIL has always
been keen supporter of worthy causes such as family planning and
welfare and rehabilitation of handicapped and under privileged.
INDIANOIL views energy as a means of achieving self-reliance and
healthy economy. So it continuously strives to bring energy to life.

Projects :

IndianOil accords high priority to timely project implementation. The


details of various major projects are as follows:

Completed Projects :

Diesel Hydrotreating and Solvent De-waxing units at Digboi


Refinery.
Viramgam – Koyali crude oil pipeline (148 km).
Koyali-Viramgam-Sidhpur product pipeline (102 km).
Kurukshetra-Roorkee-Najibabad product pipeline (167 km).
LPG bottling plants at eight locations.
Port terminal at Mauritius with a tankage of 15.5 TMT.

Ongoing Project :

Linear Alkyl Benzene unit at Koyali Refinery.


Diesel Hydrotreating unit at Mathura Refinery.
MS quality improvement projects at Mathura, Koyali and
Haldia refineries.
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Paraxylene/Purified Terephthallic Acid unit at Panipat
Refinery.
Panipat Refinery expansion from 6 MMT per annum to 12
MMT per annum.
Grassroots refinery at Paradip
Mundra-Kandla crude oil pipeline (73 km) and conversion of
the Kandla – Panipat section of KBPL to crude oil service.
Paradip – Haldia crude oil pipeline (353 km).
Sidhpur – Sanganer product pipeline (506 km).
Chennai – Trichy – Madurai product pipeline (683 km).
Capacity augmentation of LPG bottling plants at Chengalpet
and Tikrikalan.
Naphtha transfer pipeline from Asaoti to NTPC, Faridabad.
Hydrocracker Laboratory – Phase-II – at R&D Centre.

New Project :

Naphtha Cracker project and downstream polymer units at


Panipat.
Branch pipelines to Raxaul and Baitalpur from Barauni –
Kanpur product pipeline.
Koyali - Ratlam (274 km) and Koyali – Dahej (112 km) product
pipeline.
Dadri – Panipat gas pipeline.
7 depots at various locations.
Dockline at Narimanam (8 km).
Construction of grassroots LPG bottling plants at Raipur and
Virudhachalam.

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Divisions of Indian Oil
Corporate :

IndianOil is India’s Flagship national oil company, accounting for 51.2%


petroleum products market share, 42% national refining capacity and
67% downstream pipeline transportation network. In 2005-06 , Indian
Oil sold 46.22 million metric tonnes (MMT) of petroleum products,
while its seven own refineries achieves a throughput of 37.66 MMT,
and pipeline network transported 44.50 MMT of crude oil and
petroleum products.

IndianOil is the country’s largest commercial enterprise – also the first


and only company to cross Rs.1 lakh crore turnover – with a Gross
Turnover of Rs. 1,83,204/- crore (approx US$ 41,059 million), and a net
profit of Rs.4915 crore (approx US$ 1,603 million) for 2003-04.
IndianOil is the sole Indian presence in Fortune’s prestigious listing of
the world’s 500 largest corporations, ranked 153 and is the 18th largest
petroleum company in the world. It has been adjudged No.1 in
petroleum trading among the national oil companies in the Asia-Pacific
region, and is ranked 325th in the current Forbes’ “Global 500” listing of
the largest public companies.

IndianOil operates under the aegis of the Ministry of Petroleum &


Natural Gas (MOP&NG), Government of India, with the VISION to be
a major, diversified, transnational, integrated energy company,
with national leadership and a strong environment conscience,
playing a national role in oil security & public distribution.

MISSION STATEMENT:

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To achieve international standards of excellence in all aspects of
energy and diversified business with focus on customer delight through
value of products and services, and cost reduction.
2 To maximize creation of wealth, value and satisfaction for the
stakeholders.
3 To attain leadership in developing, adopting and assimilating
state-of-the-art technology for competitive advantage.
4 To provide technology and services through sustained Research
and Development.
5 To foster a culture of participation and innovation for employee
growth and contribution.
6 To cultivate high standards of business ethics and Total Quality
Management for a strong corporate identity and brand equity.
7 To help enrich the quality of life of the community and preserve
ecological balance and heritage through a strong environment
conscience.

Objectives and Obligations of the Company

Objectives of the company

To serve the national interests in the oil and related sectors


in accordance and consistent with Government policies.
To ensure and maintain continuous and smooth supplies of
petroleum products by way of crude refining, transportation
and marketing activities and to provide appropriate
assistance to the consumer to conserve and use petroleum
products efficiently.
To earn a reasonable rate of interest on investment.

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To work towards the achievement of self-sufficiency in the
field of oil refining by setting up adequate capacity and to
build up expertise in laying of crude and petroleum product
pipelines.
To create a strong research and development base in the
field of oil refining and stimulate the development of new
product formulations with a view to minimize/eliminate their
imports and to have next generation products.
To maximize utilization of the existing facilities in order to
improve efficiency and increase productivity.
To optimize utilization of its refining capacity and maximize
distillate yield from refining of crude to minimize foreign
exchange outgo.
To minimize fuel consumption in refineries and stock losses
in marketing operations to effect energy conservation.
To further enhance distribution network for providing
assured service to customers throughout the country
through expansion of reseller network as per Marketing
Plan/Government approval.
To avail of all viable opportunities, both national and global,
arising out of the liberalization policies being pursued by the
Government of India.
To achieve higher growth through integration, mergers,
acquisitions and diversification by harnessing new business
opportunities like petrochemicals, power, lube business,
consultancy abroad and exploration & production.

Financial Objectives

To ensure adequate return on the capital employed and


maintain a reasonable annual Dividend on its equity capital.

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To ensure maximum economy in expenditure.

To manage and operate the facilities in an efficient manner


so as to generate adequate internal resources to meet
revenue cost and requirements for project investment,
without budgetary support.
To develop long-term corporate plans to provide for
adequate growth of the activities of the Corporations.
To endeavour to reduce the cost of production of petroleum
products by means of systematic cost control measures.
To endeavour to complete all planned projects within the
stipulated time and cost estimates.

Performance Graphs 2005-06

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Obligations :
Towards customers and dealers :

To provide prompt, courteous and efficient service and


quality products at fair and reasonable prices.

Towards suppliers:

To ensure prompt dealings with integrity, impartiality and


courtesy and promote ancillary industries.

Towards employees:

Develop their capability and advancement through


appropriate training and career planning.
Expeditious redressal of grievances:
Fair dealings with recognized representatives of employees
in pursuance of healthy trade union practice and sound
personnel policies.

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Towards community:

To develop techno-economically viable and environment-


friendly products for the benefit of the people.
To encourage progressive indigenous manufacture of
products and materials so as to substitute imports.
To ensure safety in operations and highest standards of
environment protection in its manufacturing plants and
townships by taking suitable and effective measures.

Towards Defence Services:

To maintain adequate supplies to Defence Services during normal and


emergency situations as per their requirement at different locations.

Areas Of Focus :

1 Strategic resitement of Retail Outlet, specially for Diesel Oil, to


sites outside town area to facilitate better/improved Gasoline
facilities in metros/major towns.
2 Bigger site for Retail Outlets on highways.
3 Promote / inculcate dealers as IndianOil family member and
ensure that they are “working dealers” and not “absentee
dealers”.

4 Profit maximization through


➢ Sale of “Free Trade Product”.
➢ Import Parity Pricing.

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➢ Project Management for faster completion of on-going
project.
➢ Faster commissioning of Retail Outlets.

5 Quickly create infrastructural facilities at supply locations /


Divisional Offices to improve customer service through:
➢ Faster loading of Railway Tank Wagons / Tank Trucks.
➢ Quick and accurate billing.
➢ Computerized and modernized accounting system.
➢ Improved communication facilities.

6 Areas of improvement as per “Customer Satisfaction


Measurement and Management” study :
➢ Finance.
➢ Supply Point.
➢ Maintenance.

Strengths

Wide field network.


Dealership network to assist in our direct efforts.
Up-country storages nearer to the market.
Lower cost of production from old Refineries.
Strength on international trade.
Eight existing Refineries.

Spreading Wings :
IndianOil has overseas offices in Sri Lanka, Dubai, Kuala Lumpur and
Mauritius to co-ordinate business activities. It has also set up
subsidiaries in Mauritius and Sri Lanka for implementing business

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expansion project. SERVO lubricants are being exported to Dubai,
Nepal, Bhutan, Kuwait, Malaysia, Bahrain, Indonesia, Sri Lanka,
Mauritius, Bangladesh etc.

Marketing
The marketing of petroleum products in India today is dominated by
the four state-owned oil companies. Their market shares as on 31st
March 2001 were as follows:

* Indian Oil Corporation 55 % approx.*

* Bharat Petroleum Corporation 21 % approx.*

* Hindustan Petroleum Corporation 19.5 % approx.*

* IBP Company 4.5 % approx.*

IndianOil has the maximum market share with 55% followed by Bharat
Petroleum Corporation with 21% and Hindustan Petroleum Corporation
with 19.5%

Training At IndianOil

INDIANOILL is the largest industrial corporation in India in terms of


sales turnover. As per the ranking by the Fortune500 magazine, it is
ranked 153rd largest Industrial Corporation in the world. The training
department of Head Office and the Regional Office look after the
formal training requirements of about 17000 employees in the
Marketing Division of the corporation. The Head Office training center
looks after the management training activity of over 2000 managers in

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Marketing Division. In addition it also receives nominations from
Refinery and Pipelines Divisions, R & D Center, Assam Oil Division,
Indian Oil Blending Limited (IOBL), Oil Co-ordination Committee (OCC),
PCRA, PII and defence personnel. It also offers an opportunity for
participation in training programme to managers of organization from
developing countries with whom it has co-operation agreements.

The Corporation has not only established its leadership in this field, but
has also gained unquestionable credibility at the international level.
The credit for this achievement goes to its most potent and vital force
that is the dedicated efforts of the Indian Oil employees. Indian Oils
aims at world-class excellence, which requires top-notch managerial
training and development of their human resource. That is the reason
why INDIANOIL has given the highest importance to training right from
its inception, which has enabled it to maintain and perpetuate its
profitable and efficient existence.

Evolution of Training in INDIANOIL :

Prior to 1964, the individual companies had their own training schemes
patterned on the erstwhile oil companies approach. The early focus
was on supervisory development. Since the organization was designed
along divisional lines, the training activities were also carried out
almost independently division-wise. The training in Marketing Division
started with programmes organized by them for the Defence Personnel
for handling of petroleum products called the Petrol Oil and Lubricants
(POL) courses. Even as early as 1963-64 technical programmes on fuel
engineering were conducted for the sales force with the help of MOBIL,
USA. In 1965, the Administrative Staff College (ASC) was set up in

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Bombay to conduct functional programmes in areas such as Personnel
Management and Productivity for INDIANOIL personnel in addition to
the POL programmes for the Defence Personnel. The first few
programmes were adapted from those being conducted by the Burma
Shell with guest faculty and later on with the help of internal faculty.

Emphasis in the organization on training programmes was largely in


the areas of handling of Petroleum products, Liquid Petroleum Gas
(LPG) and a few bahavioural programmes.

A few years later, in 1967-68 as more programmes were added,


training was taken up at the regional levels with four regional training
centers, each set up headed by a Branch Training Officer.

Training activities in the R&D Division started in early 1960s in the


Guwahati Refinery. In the initial years the United Nations experts
helped in organizing supervisory development programmes. Full
fledged training centers were set up in all the refineries – Guwahati,
Barauni, Gujarat, Haldia, Digboi – Assam Oil Division(AOD) and Mathura
with major emphasis on technical and skill-development programmes
in the initial years of their existence

In the 1970s, with the help of the Marketing Division, General


Management Programmes and behavioural programmes were
organized in the Refinery training centers. For increased
understanding and coordination between the two divisions a series of
interface programmes were organized since 1975-76.

The IndianOil Management Academy (IMA) started functioning in


August 1979 to meet the emerging training needs at selected
managerial levels. The IMA was to conduct specific functional and
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developmental programmes for officers of the R&P Division. The AOD
by itself has a long history of emphasis on training even prior to its
nationalization and integration with INDIANOIL. Various technical and
skill development programmes were conducted by AOD for officers and
staff at all levels. The refinery at Digboi being peculiar to itself in
terms of the technology and operations, specific training programmes
in operations and maintenance were organized. The AOD had a strong
and systematic approach to training with major emphasis on planned
on-the-job training.

In the mid-1970s, the performance appraisal forms were amended in


INDIANOIL to introduce a component of training to help in the
identification of training needs. In early 1980s, the INDIANOIL
reviewed its corporate plans as a result of which the need was felt to
give a different orientation to the training activity keeping in view the
organisation’s development. It was also decided to have an
organization development (OD) intervention by an outside consultant
with a view to develop a proper linkage between the corporate plans
and human resources development. Accordingly, Professor M. Athreya
was invited as an OD interventionist. Based on the suggestions made
by the consultant, emphasis was given to Human Resources
Development and it became a subsystem of the Personnel function.
Consequently, there were certain organizational changes in the
Personnel function. The Personnel function was regrouped and,
reorganized into three subsystems – Personnel and Administration,
Training and HRD. The HRD group was specifically assigned the task of
integrating the identified corporate mission with the department and
individual goals, which included appropriate career planning and role
analysis.

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Consequently, further changes were introduced in the Annual
Performance Appraisal (APA) System. The APA form was redesigned
and training need identification was given more importance. In 1990,
the personnel department was redesigned as Human Resource
Management to reflect the greater emphasis on HRD though the basic
set up continued as earlier. Thus, the training also got a fillip with
introduction of general management and leadership courses and
interface programmes.

At the same time, there was considerable technical upgradation, which


necessitated greater emphasis on technical training. As a result of the
HRD outlook in the organization, eight disciplines were identified in the
Marketing Division namely, Marketing, LPG, Operations, Technical
Services, Personnel, Finance, Sales, Aviation and appropriate career
path models drawn. The interdisciplinary programmes were introduced
to expose the officers to function other than their parent discipline.
-The concept of the staple programmes – all officers to be exposed to
them was simultaneously introduced.

Coinciding with this, in keeping with the corporate objective closer /


greater interface was envisaged between the divisions. In 1987, the
Tata Management Training Centre (TMTC) was invited to study the
training activities in INDIANOIL. The TMTC offered suggestions to
improve the training infrastructural facilities and better utilization of
manpower for training within the organization.

In Indian Oil Corporation today, training committees at the Corporate


office level, Head Office (Division) level, Regional/unit level play an
active role in formulating training plans, review of ongoing course, etc.

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In the Marketing Division, the training activity is organized with set ups
at selected locations, at each regional headquarter level and at the
head office. The workmen training is organized at the selected
locations while officers’ training and some workmen training are
organized at regional headquarters, apart from the training
programmes for direct recruits and promotee officers and the middle
and senior level officers at the HO.

In the Refineries and Pipelines Divisions, each refinery has a


comprehensive training set up taking care of both workmen training,
officer training for junior and mid level officers and management
training programmes for direct recruits while the Indian Management
Academy (IMA) organizes programmes for middle and senior level
officers in addition to the Junior Executive Development programmes
for Promottee officers.

The Pipeline training activities are also organized on a three-tier basis


with unit/location, regional office and head office handling workmen
training, middle and junior level officer training programmes and
external and middle and senior level officers training respectively. The
internal training programmes at the head office level for mid/senior
level officers is taken up by the IMA.

Over the past few years there has been a substantial increase in the
number of employees exposed to training in the various divisions of
INDIANOIL.

In addition to the efforts of the training department in INDIANOIL,


certain training programmes are conducted by other departments like
Fire & Safety Department and Inspection etc.

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Over the years the INDIANOIL has invested substantial amount of
financial resources into training.

Training MISSION :

1 To facilitate the process of integration of personal ambitions and


aspirations of employees with the corporate objectives through
training interventions.
2 To continuously scan the environment, review training
programmes and design need-based inputs to ensure
achievement of high level of excellence in customer satisfaction.
Equip work-force with skills to make IndianOil Corporation a
global player.
3 Assist / guide the employees in their pursuit of knowledge and
self-actualization, expounding the belief that there are no limits
to human potential and growth.
4 Facilitate the induction of new employees into IndianOil
Corporation through suitable orientation programmes.
5 Enable through training, Defence Services to efficiently handle
storage, distribution and consumption of petroleum products,
which shall also play a vital role in building customer relations
over a long term.

TRAINING PROCESS

TRAINING COMMITTEES

ROLE OF TRAINING COMMITTEES:


The main role of the Training Committees is to oversee the training
functions and the training needs of the organization keeping in view
the environmental changes.

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Based on the need identified, training programmes focused towards
specific area of interest are approved by the committee for
implementation. The training committee also reviews the training
activities on a half-yearly basis.

HO TRAINING COMMITTEE

Chairman - Director (M)

Members - Executive Director, and General Managers I/C.


In addition one Regional ED is invited to the HO training Committee.

Convenor - DGM (T&D)

REGIONAL TRAINING COMMITTEE

Chairman - ED of the Regional.

Members - General Managers / Dy. General Managers (HOD) of the


Region.

Convenor - Training In-charge of the Region (Senior / Manager


(T&D))

In Indian Oil Corporation :

Training Department has a training calendar, which is sent


to all the departments.

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Basically two types of training programmes are conducted
by the training department :
a. Functional Programme
b. Developmental Programme

Training department makes use of in-house personnel for


functional programmes and employs people from outside for
development programmes

The current system provides consultation with concerned


officers by his superior to ascertain the training needs.

Similarly, the superior in consultation with the Unit level co-


coordinators identifies training needs of the workmen and
Regional Training Heads and new need based programmes
are mounted.

Each employee’s training needs are identified through


system of Annual Performance Appraisal (APA).

Nomination for Regional course is as per the eligibility


criterion laid down for each programme.

Once the nominations are identified and course


announcement made, withdrawal of nomination is normally
not permitted.

Participants at the end of each programme do the overall


course evaluation and the courses are modified depending
upon the feedback received.
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Participants attending external training are required to make


a formal presentation regarding the training received along
with action plan for implementation. This ensures transfer of
knowledge for on job performance.

Role of training :

1 Training has been performing a very important role in helping


the Corporation to reach the commanding heights of
performance over the years.
2 Training has played a pivotal role in helping the organization
adapt itself to change, which is the most important thing called
for in the current changing environment.
3 To assist the employees in their pursuit of knowledge and self-
actualization.

Training Linkage to Corporate / Divisional Objectives

The training policies have been developed for 4 main reasons :


1 To define the relationship between the organization objectives
and its commitment to the training function.
2 To provide operational guidelines for management, for example
to state management’s responsibilities for planning and
implementing training and in particular to ensure that training
resources are allocated to priority and statutory requirements.
3 To provide information for employees. For example, to stress the
performance standards expected; to indicate the organisation’s
commitment to training and development and to inform
employees of the opportunities of training development

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(including willingness to grant time off, and/or payment of fees
for External courses).
4 To enhance public relations for example, to help recruit high
caliber recruits; to reassure clients and public at large about the
quality of products or services or to project an image as a caring
and progressive employer by taking part in government
sponsored “Social” training programmes.

Need for Training :

IndianOil Corporation is involved in refining and marketing of POL.


Here, training becomes a core function for the following reasons :
1 Training is necessary for new employees to get an idea about the
job and to do it effectively.
2 Junior employees need training before they take the position of
their seniors.
2 It is necessary for the company to fulfill its future personnel
needs and to train the employee in the company culture pattern.
3 It is necessary for old employees to enable them to keep abreast
of changing methods, techniques and technology.
4 It is needed to improve the quality and quantity of output by an
employee and raising their morale.
2 Training is required to revise the specialized skills learnt in the
past.
3 Job Rotation practice in IndianOil demands training.
5 It reduces wastage and accidents.
4 For self – development.

Importance Of Training

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The main importance is to mould the employees attitude and help
them to achieve better co-operation with company. It also helps in
reducing dissatisfaction, complaints, absenteeism and labour turnover.
A successful training programme can be made by creating a good
environment for it.

Participants’ Expectations from a training programme


:

➢ Improving and solving specific problems confronted in job


functions.
➢ As a means to improve promotional aspects.
➢ For professional growth in organization.
➢ To develop understanding of specific subjects covered in the
training programme
➢ As a change for routine job schedule.
➢ To get acquainted with new technology.
➢ For personal growth
➢ To gain new and pertinent knowledge
➢ Acquire specific approaches, skills or techniques that can be
applied on the job.
➢ Help and confirm some earlier ideas.
➢ Acquaint with problems, ideas and solutions from other
departments
➢ Look at oneself and one’s job objectively.

Training process of IndianOil involves several steps :

1. Defining organizational objectives and strategies


2. Assessment of the training needs
3. Establishing training goals

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4. Devising the training programme
5. Implementation of the programme
6. Evaluation of the results

Training procedure in INDIANOIL

1. Identification of training needs.


2. Training Nominations
3. Training Facilities
4. Training Techniques
5. Training Faculty
6. Preparation of the Trainee
7. Evaluation Effectiveness of training in IndianOil.
8. Follow – up.

1) Identification of training needs:

Identification of training needs is the stepping-stone in the appropriate


management training system on which the entire edifice of training
programme is built. Like the prevalent management development and
training programmes, appropriate management training system does
not take a generalized view of training needs. It attempts to take a
specialized individualized view of training needs of different categories
of managers performing more or less similar job in similar
organizations. Under this system, assessing training needs is treated
as an important and crucial training function before designing and
conducting a programme.

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An organization normally employs sufficient number of managerial and
non-managerial personnel with required competence to perform given
jobs leading to the accomplishment of organizational objectives.
Effective performance of a job requires a standard of competence in
the job holder consisting of vital areas such as job related knowledge,
skill and attitude. But due to one or other reasons the existing
competence of the jobholder may fall short of the standard
competence required in the job. The processing of assessing and
finding the gap between the standard competence required in a job
and the existing competences in turns of vital knowledge and skill and
attitude in the job holder may be called as the identification of the
areas of deficiencies and the resultant inventory of gaps in the job
holder in terms of knowledge and skill and attitude may be said as his
training needs.

This logic highlights two processes :

1. Identification and definition of standards of knowledge, skill and


attitude required in a job.

2. Assessing existing level of knowledge, skill, attitude of the job


holder.

These two processes are of critical importance and should be carried


out as accurately as possible because the outcome of the comparison
between the two provides the information from which an appropriate
training programme is developed.

A training programme should be established only when it is felt that it


would assist in the solution of specified operational problems. The
most important step in the first place is to make a thorough analysis of

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the entire organization, its operations and manpower resources
available in order to find out the ‘trouble spots’ where training may be
needed.

In IndianOil, training needs are identified by the Training committees at


HO/Regional level keeping in view the changing environment and the
objectives and the mission of the organization. Based on this new
training also gets identified year after year. Traditional programmes
are redesigned so as to be effective utilized.

Each officers training are identified in the “Training needs Exercise”


which is covered every two years. Prior to identifying needs of each
officer, their current system provides consultation with concerned
officers by his superior to ascertain the training needs.

The training need for officers are identified in the “Training need” form
that constitutes the basis on which the nominations are accepted by
the training centers for the various in-house training progrmmes. The
nominations to external training programmes are encouraged only for
such progrmmes where in-house training programmes are not
available, and there is a self/organizational need.

The training needs of workmen in employees category are identified by


the superiors in consultation with the unit level coordinators and the
Regional Training Heads and new based in-house programmes are
mounted.

Employees do write in their Annual Performance Appraisal (APA) forms


about the training they would like to undergo.

2) Training Nominations

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As far as possible opportunity is given to the officers to attend HO


training programmes of their choice once every two years.
Nominations for regional courses are as per the eligibility criteria laid
down for each programme.

The main thrust of training activities at regional level is improving


functional competency. The nominations for workmen category are
finalized at the regional training centers keeping in view the specific
needs of each employee segment.

Withdrawal of nomination – once the nominations are identified by the


training department and course announcement is made, withdrawal of
nomination is normally not permitted. However, in extreme
unavoidable circumstances, this is permitted subject to prior approval
of the competent authority.

3) Training Facilities

The non residential training programmes are conducted in the training


halls located in the HO/Regional head quarters. The training halls have
been carefully designed keeping acoustic requirement in view. The
training halls are equipped with the latest and most sophisticated
audio-visual equipments to ensure training effectiveness.
Management training courses / supervisory development courses are
conducted in some of the reputed nominated hotels. They have also
acquired latest electronic gadget like liquid Crystal Display, Videorama,
Electronic Board (Panaboard), direct projector, for improving training
efficiency.

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The training center at HO has well equipped reference library. It has
an excellent collection of books and CDs on various aspects of
Management, Information Technology, Petroleum Industry and Energy
Management besides general disciplines.

4) Training Techniques

Depending on the course objectives, training methodology mix is


carefully designed. In the training courses the management provides
ample opportunity to the employees to take active part in the learning
process. In the management training courses emphasis is placed on
the use of state-of-the art training technologies like simulation
exercises, computer aided Management Games, live video recording,
structured experiential instruments, case study method etc. Syndicate
project studies are also given in most of the courses to study the live
organizational problems and give recommendations, which are then
duly considered by the management for implementation. The
participants of various training programmes are also required to
prepare reports and make formal presentations. This aids in the
process of learning for workmen training. Adequate emphasis is given
to hands-on-training.

5) Training Faculty

The trainer has to be prepared for the job for he is the key figure in the
entire programme.

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The strength of the Training in INDIANOIL lies in the faculty being
generated from within. In-house faculty imparts a lot of credibility to
the training efforts. The training faculty members are selected on the
basis of their positive attitude towards training assignment and their
ability to communicate effectively with others. Each faculty member is
required to have thorough knowledge of his subject. The training
faculty is responsible for ensuring that the formal training activities are
in line with the organisational requirements.

The functional managers from various departments are invited as part-


time faculty members to share their knowledge pertaining to their
disciplines. It also helps the functional managers to remain up-to-date
in their specialized functions. On a very selective basis, they invite
guest speakers in the training programmes in such areas where they
do not have sufficient expertise within the organization. This is done
with the selection of names from CEOs of top corporate houses and
professional institutes like IIMs and IITs.

The training center is also well equipped with professionally qualified


trainer who are competent to conduct the management development
programmes, both at HO/Regional level.

6) Preparation of the Trainee (participants):


This step consists of
1 Putting the learner(trainee) at ease.
2 Stating the importance and the ingredients of the job and its
relationship to work flow.
2 Explaining why he is being taught.
3 Creating interest and encouraging questions, finding out what
the learner already knows about his job.

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4 Explaining “why” of the whole job and relating it to some other
job the worker already knows.
5 Placing the learner as close to his normal working position as
possible.
6 Familiarizing him with equipment, materials, tools and trade
terms.

1) Evaluation Effectiveness of training in Indian Oil.

Different approaches could be adopted to evaluate the effects, impact


and effectiveness of training. The methods may vary from an
evaluation of the perceptions on training of the trainees, supervisors,
subordinates and trainers to studying the entire training function itself.
The study could encompass the cost benefit analysis of the training or
the impact it has had on productivity and efficiency of the
organization.

To understand the knowledge gained from the training and thereafter,


the transferability of this learning on the job situation and its effect on
rise or fall of productivity necessitates the availability of certain
information. It is essential to understand the level of knowledge of
participants before the initiation of training process to calculate the
possible gains from training.

On the other hand, a study which comes in after the event of training
is necessarily constrained to study the perceptions of the trainees,
trainers and the organization with regard to effectiveness of the
training effort. The perception study is principally an after the event
evaluation. The approach here is to elicit the perception of
participants after attending training programmes, on various aspects

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of the programme, the learning he/she has derived from the
programme and any change in attitude, knowledge or skill level and its
transferability to on-the-job situation. The perceptions expressed by
the participants are further checked out with their superiors,
subordinates and peers.

For management training courses, session-wise evaluation is done for


each session. The overall course evaluation is done by the participants
at the end of each programme and the courses are modified
depending upon the feedback received. At periodic intervals,
evaluation of training effectiveness is conducted by reputed outside
professional agencies like Tata Management Training Centre,
Administrative staff college of India etc. The participants attending the
external training and are required to make a formal presentation
regarding the training received along with an action plan for
implementation. This ensures transfer of knowledge for on-the-job
performance. Training function also enjoys adequate support from top
management to monitor various programmes and upgrade the same
from time to time.

The post course evaluation and monitoring of functional courses is


done with the support of the respective functional groups. A high
degree of innovation in training efforts is ensured due to the above
interventions.

2) Follow-up

This step is undertaken with a view to trusting the effectiveness of


training efforts. This consist of-

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➢ Putting trainee ‘on his own’.
➢ Checking frequently to be sure that he/she has followed
instructions.
➢ Tapering off extra supervision and close follow-up until he is
qualified to work with normal supervision.

Basically two types of training programmes are conducted by the


training department :
a. Functional Programme
b. Developmental Programme

Nature / Methods of TRAINING :

After the employee has been recruited, selected and inducted he must
next be developed to better job and the organization. No one is
perfect fit at the time of hiring and some training and education is
essential. No organization has a choice of whether to develop
employees or not, the only choice it has is that of method of
development. If no organized programmes exist then development will
largely be self-development, while learning on the job. Development
would include both training to increase skill in performing a specific job
and education to increase general knowledge and understanding of the
total environment. Planned development programmes will return
values to the organization in terms of increased productivity,
heightened morale, reduced costs and greater organizational stability
and flexibility to adapt to changing external requirements. Such
programmes will also help meet the needs of individuals in their search
for work assignments that can add up to life-long careers.

There are mainly two reasons for functioning training:

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1. Training programmes for non managers to develop skills to perform
a job.
2. Training and educational programmes designed to develop
organizational units as entities.

Classification of training methods :


1. ON-THE-JOB TRAINING :
Virtually, every employee, from the assistant to company’s chairman
gets some on-the-job training when he joins a firm. Since most jobs in
an industry can be learnt is a relatively shorter period of time this
method is widely used. It has the advantage of strongly motivating the
trainee to learn since it is not located in the artificial situation of a class
room. The fact that the success of the system depends almost entirely
upon the immediate supervisor, the trainer, means that the personnel
unit has a major responsibility for making a good effective teacher out
of every supervisor.

There are a variety of on the job methods such as coaching or under


study; job rotation and special assignment under coaching or under
study method (which is also known as internship and apprenticeship
method), the employee is trained on the job by his immediate
supervisor. Internship is usually applied to managerial personnel and
provide a wide variety of job experience. Apprenticeship is generally
used to impart skills requiring long periods of practice as found in
trade, crafts and other technical fields. In job rotation a management
trainee is made to move from job at certain intervals. The jobs vary in
content. Special assignments or committees are other methods used
to provide lower level executives with first hand experience in working
on actual problems.

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2. OFF-THE-JOB METHODS OR CLASS ROOM :


Off-the-job training simply means that training is not a part of every
day activity. The actual location may be in
the company class rooms or in places which are owned by the
company or in universities or associations which have no connection
with the company. These methods consist of
i. Lectures
ii. Conferences
iii. Group Discussions
iv. Case studies
v. Role playing
vi. Programmed instructions
vii.T-group training

i. Lectures
Lectures are regarded as one of the simplest ways of imparting
knowledge to the trainees especially when facts, concepts or
principles, attitudes, theories and problems solving abilities are to be
taught. Lectures are formal organized talks by the training specialist,
the formal superior or other individual specific topics. The lecture
method can be used for very large groups which are to be trained
within a short time thus reducing the cost per trainee. It can be
organized rigorously so that ideas and principles relate properly.

ii. Conference method


In this method, the participating individuals confer to discuss points of
common interests to each other. A conference is basic to most
participative group centered methods of development. It is a formal
meeting; conducted in accordance with an organized plan in which the

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leader seems to develop knowledge and understanding by obtaining a
considerable amount of oral participation of the trainees. It lays
emphasis on small group discussions, on organized subject matter and
on the active participation of the members involved.

iii. Seminar or team discussion


This is an established method for training, a seminar is conducted in
many ways. It may be based on paper prepared by one or more
trainees or on a subject selected in consultation with a person in
charge of the seminar. It may be part of the study or related to the
critical studies or practical problems.
It may be based on the statement made by the person in charge of the
seminar or on a document prepared by an expert who is invited to
participate in the discussion.
The person in charge of the seminar distributes in advance the
material to be analysed in the form of required readings. The seminar
compares the reactions of trainees, encourages discussions, defines
the general trends and guides the participants to certain conclusions.

iv. Case studies


This method was first developed by Christopher Lanzdell in the 1880s
at the Harward Law School to help students to learn for themselves by
independent thinking. Case study is based on the belief that
managerial competence can best be attained through the study,
contemplation and discussion of concrete cases. A case is a set of
data, real or fictional, written or oral miniature description and
summary of such data that present issue and problems calling for
solutions or actions on the part of the trainee. When the trainees are
given case to analyse they are asked to identify the problems and to

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recommend tentative solutions for it. In Case study method, the
trainee is expected to
➢ Master the facts, become acquainted with the content of the
case.
➢ Define the objectives sought in dealing with the issues in the
case.
➢ Identify the problems in the case and uncover their probable
causes.
➢ Develop alternative courses of action.
➢ Screen the alternatives using the objectives as criteria.
➢ Select the alternative that is most in keeping with the stated
objectives.

v. Role – playing
In role-playing trainees act out a given role as they would in a stage
play. Two or more trainees are assigned parts to play before the rest
of the class. These parts do not involve any memorization of lines or
any rehearsals. The role players are simply informed of the situation
and of the respective roles they have to play. Sometimes after the
preliminarily involves employee-employer relations, hiring, firing,
discussing a grievance procedure, conducting a post appraisal
interview or disciplining a subordinate or a salesman making a
representation to a customer.

vi. Programmed Instruction (teaching by the machine

method)
Programmed Instruction involves a sequence of steps which are often
set up through the central panel of an electronic computer as guides in

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the performance of desired operation or series of operations. It
incorporates a pre-arranged, proposed or desired course of
proceedings pertaining to the learning or the acquisition of some
specific skills or general knowledge, a programmed instruction involves
breaking information down into meaningful units and arranging these
in a proper way to form a logical and sequential learning programme or
package.

vii. T-Group Training


This usually comprises association, audio-visual aids and planned
reading programmes. Members of a professional association receive
training by it in new techniques and ideas pertaining to their own
vocations through a regular supply of professional journals and
informal social contacts or gatherings, members are kept informed of
the latest development in their particular fields. Audio-visual aids-
records, tapes and films are generally used in conjunction with other
conventional teaching methods. Planned and supervised reading
programmes are conducted, technical publications and the latest
journals are kept in the library for the use of the trainees.

3. VESTIBULE TRAINING :
This method attempts to duplicate on the job situations in a company
class room. It is a class room training which is often imparted with the
help of the equipment and machines which are identical with those in
use in the work place. This techniques enables the trainee to
concentrate on learning the new skill rather than on performing an
actual job. It is a very essential method of training semi-skilled
personnel, particularly when many employees have to be trained for
the same kind of work at the same time.

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Conclusion:
Training has played a very important role in helping IndianOil to reach
the commanding heights of performance. Any training would be
considered to be successful only when the knowledge gained by the
participants is transferred to the job performance. And IndianOil is
been very successful in doing that.

IndianOil has a very strong base of human resource development and


training and it has percolated right form the top to the bottom levels
and this had played a role in more systematic organization
development. The training programmes have helped their employees
to improve their skill and efficiency as a result of which they are able
to undertake new challenges in their work. The training and
development programmes held in IndianOil helped their employees to
know theirs strength and weaknesses and helped them to work on
their weaknesses.

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BIBLIOGRAPHY

www.iocl.com

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