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TRAINING AND DEVELOPMENT
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.
Training and Development- IndianOil _______________________________________________________________________ _ 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.
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 Training can also be defined as useful knowledge during their training programme, which helps them to improve their performance. 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.
Training and Development- IndianOil _______________________________________________________________________ _ 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 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)
Training and Development- IndianOil _______________________________________________________________________ _
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. 4
Training and Development- IndianOil _______________________________________________________________________ _ 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.
Training and Development- IndianOil _______________________________________________________________________ _ 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 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. employees contribute to the growth of the organization. Efficient Growth of the desired
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. transferred to any job. All rounder can be Growth Flexibility is therefore ensured.
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
Training and Development- IndianOil _______________________________________________________________________ _ 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-thejob.
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 7
Training and Development- IndianOil _______________________________________________________________________ _ 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 nonsupervisory 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.”
Training and Development- IndianOil _______________________________________________________________________ _ 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.”
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.
Training and Development- IndianOil _______________________________________________________________________ _ 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 10
Training and Development- IndianOil _______________________________________________________________________ _ 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: 11
Training and Development- IndianOil _______________________________________________________________________ _
Virtually every employee, from the clerk to the president, get “On-TheJob 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.
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 12
Training and Development- IndianOil _______________________________________________________________________ _ 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.
Training and Development- IndianOil _______________________________________________________________________ _ “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
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, roleplaying and demonstrations.
Training and Development- IndianOil _______________________________________________________________________ _ 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 15
Training and Development- IndianOil _______________________________________________________________________ _ 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 16
Training and Development- IndianOil _______________________________________________________________________ _ 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.
Training and Development- IndianOil _______________________________________________________________________ _ 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.
Training and Development- IndianOil _______________________________________________________________________ _
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 Crude oil production Crude oil consumption Deficit (Met by Imports) 32.9 62.9 1998 33.9 65.2 1999 2000 2001 32.7 68.5 32 86 32.5 103.5
(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
Training and Development- IndianOil _______________________________________________________________________ _ comparison of per capita consumption of petroleum products in the various parts of the world. (Kilograms per annum) * * * * India China North America World average 98 165 2,610 585
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.
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 (194757) 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 22
Training and Development- IndianOil _______________________________________________________________________ _ (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 Indian company, was formed for marketing of petroleum products. 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.
Refineries Ltd. was merged with Indian Oil Company Ltd. to form Indian
Training and Development- IndianOil _______________________________________________________________________ _ 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 Earlier in 2002, equity of 26% in IBP Co. Ltd. through public offer. 24
Training and Development- IndianOil _______________________________________________________________________ _ 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
Training and Development- IndianOil _______________________________________________________________________ _ 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
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 26
Training and Development- IndianOil _______________________________________________________________________ _ 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.
Training and Development- IndianOil _______________________________________________________________________ _ 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 28
Training and Development- IndianOil _______________________________________________________________________ _ 9. Lubricants
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 29
Training and Development- IndianOil _______________________________________________________________________ _ 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
As on 1.4.2000
As on 1.4.2001
As on 1.4.2002
As on 1.4.2003
As on 1.4.2004
As on 1.4. 2005
Training and Development- IndianOil _______________________________________________________________________ _
IOC IOC- Guwahati IOC- Barauni IOC- Koyali IOC- Haldia IOC- Mathura IOC- Digboi IOC- Panipat Sub-Total IOC IOC Subsidiaries CPCL- Chennai CPCLNarimanam BRPLBongaigaon Sub-Total IOC Subisdiaries IOC-Total(WithSubsidiaries)
1.0 3.3 13.0 4.6 7.5 0.65 6.0 36.05 6.5 0.50 2.35 9.35 45.40 1.0 4.2 13.7 4.6 8.0 0.65 6.0 38.15 6.5 0.50 2.35 9.35 47.50 1.0 4.2 13.7 4.6 8.0 0.65 6.0 38.15 6.5 0.50 2.35 9.35 47.50 1.0 6.0 13.7 4.6 8.0 0.65 6.0 39.95 6.5 1.0 2.35 9.85 49.80 1.0 6.0 13.7 6.0 8.0 0.65 6.0 41.35 9.5 1.0 2.35 12.85 54.20 1.0 6.0 13.7 6.0 8.00 0.65 6.0 41.35 9.5 1.0 2.35 12.85 54.20
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
Training and Development- IndianOil _______________________________________________________________________ _ 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) 2) 3) 4) 5) Refineries Division Pipelines Division Marketing Division Research and Development Division and 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 32
Training and Development- IndianOil _______________________________________________________________________ _ 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). 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. ii. iii. iv. Madras Refineries Limited Reliance Petroleum Limited Cochin Refineries Limited Bongaigaon Refineries & Petrochemicals Limited. It keeps abreast of the latest technology when laying new systems and
The famous Brands under IndianOil
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 34
Training and Development- IndianOil _______________________________________________________________________ _ 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. 35
Training and Development- IndianOil _______________________________________________________________________ _ 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 36
Training and Development- IndianOil _______________________________________________________________________ _ 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 37
Training and Development- IndianOil _______________________________________________________________________ _ 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.
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. 38
Training and Development- IndianOil _______________________________________________________________________ _ 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.
Divisions of Indian Oil
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.
Training and Development- IndianOil _______________________________________________________________________ _ 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. 41
Training and Development- IndianOil _______________________________________________________________________ _ 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.
To ensure adequate return on the capital employed and maintain a reasonable annual Dividend on its equity capital. 42
Training and Development- IndianOil _______________________________________________________________________ _ 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
Towards customers and dealers : To provide prompt, courteous and efficient service and quality products at fair and reasonable prices.
To ensure prompt dealings with integrity, impartiality and courtesy and promote ancillary industries.
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.
To develop techno-economically viable and environmentfriendly 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. 45
Training and Development- IndianOil _______________________________________________________________________ _ ➢ 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.
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 46
Training and Development- IndianOil _______________________________________________________________________ _ expansion project. SERVO lubricants are being exported to Dubai, Nepal, Bhutan, Kuwait, Malaysia, Bahrain, Indonesia, Sri Lanka, Mauritius, Bangladesh etc.
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 Bharat Petroleum Corporation Hindustan Petroleum Corporation IBP Company
55 % approx.* 21 % approx.* 19.5 % approx.* 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 47
Training and Development- IndianOil _______________________________________________________________________ _ 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 48
Training and Development- IndianOil _______________________________________________________________________ _ 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 Full helped in organizing supervisory development programmes.
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 organized in Programmes the Refinery and behavioural centers. programmes For were training 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 49
Training and Development- IndianOil _______________________________________________________________________ _ 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.
Training and Development- IndianOil _______________________________________________________________________ _ 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. 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. Thus, the training also got a fillip with introduction of general management and leadership courses and
Training and Development- IndianOil _______________________________________________________________________ _ 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. organized at The workmen training is organized at the selected regional headquarters, apart from the training locations while officers’ training and some workmen training are 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.
Training and Development- IndianOil _______________________________________________________________________ _ 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 and scan the environment, need-based review to training ensure programmes design inputs
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 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. 53
Training and Development- IndianOil _______________________________________________________________________ _ 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 Members - Director (M) - Executive Director, and General Managers I/C. Committee.
In addition one Regional ED is invited to the HO training Convenor - DGM (T&D)
REGIONAL TRAINING COMMITTEE Chairman Members Region. Convenor (T&D)) Training In-charge of the Region (Senior / Manager - ED of the Regional. General Managers / Dy. General Managers (HOD) of the
In Indian Oil Corporation : Training Department has a training calendar, which is sent to all the departments.
Training and Development- IndianOil _______________________________________________________________________ _ Basically two types of training programmes are conducted by the training department : a. b. Functional Programme 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 cocoordinators 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. 55
Training and Development- IndianOil _______________________________________________________________________ _ 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 selfactualization.
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 employees to of training the and development of and to inform opportunities training development
Training and Development- IndianOil _______________________________________________________________________ _ (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
Training and Development- IndianOil _______________________________________________________________________ _ 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 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. in the
Training process of IndianOil involves several steps :
1. Defining organizational objectives and strategies 2. Assessment of the training needs 3. Establishing training goals 58
Training and Development- IndianOil _______________________________________________________________________ _ 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.
Training and Development- IndianOil _______________________________________________________________________ _ 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. competence of But due to one or other reasons the existing jobholder may fall short of the standard The processing of assessing and the
competence required in the job.
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 60
Training and Development- IndianOil _______________________________________________________________________ _ 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. 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. Based on this new training also gets identified year after year. Traditional programmes
2) Training Nominations
Training and Development- IndianOil _______________________________________________________________________ _ 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. audio-visual equipments to ensure training The training halls are equipped with the latest and most sophisticated 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.
Training and Development- IndianOil _______________________________________________________________________ _ 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. prepare reports and make formal presentations. to hands-on-training. The participants of various training programmes are also required to This aids in the process of learning for workmen training. Adequate emphasis is given
5) Training Faculty
The trainer has to be prepared for the job for he is the key figure in the entire programme.
Training and Development- IndianOil _______________________________________________________________________ _ 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. in line with the organisational requirements. The functional managers from various departments are invited as parttime 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. The training faculty is responsible for ensuring that the formal training activities are
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 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. job and its
Training and Development- IndianOil _______________________________________________________________________ _ 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 65
Training and Development- IndianOil _______________________________________________________________________ _ 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 participants are further 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. professional agencies like Tata At periodic intervals, Training Centre, evaluation of training effectiveness is conducted by reputed outside Management 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. interventions. A high degree of innovation in training efforts is ensured due to the above The perceptions expressed by out with their superiors, checked
This step is undertaken with a view to trusting the effectiveness of training efforts. This consist of66
Training and Development- IndianOil _______________________________________________________________________ _ ➢ 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. b. Functional Programme 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. for work assignments that can add up to life-long careers. There are mainly two reasons for functioning training: Such programmes will also help meet the needs of individuals in their search
Training and Development- IndianOil _______________________________________________________________________ _ 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. 68
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. within a short time thus reducing the cost per trainee. The lecture It can be method can be used for very large groups which are to be trained organized rigorously so that ideas and principles relate properly. ii.
A conference is basic to most
In this method, the participating individuals confer to discuss points of common interests to each other. participative group centered methods of development. It is a formal meeting; conducted in accordance with an organized plan in which the 69
Training and Development- IndianOil _______________________________________________________________________ _ leader seems to develop knowledge and understanding by obtaining a considerable amount of oral participation of the trainees. 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 A case is a set of managerial competence can best be attained through the study, contemplation and discussion of concrete cases. 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 It lays emphasis on small group discussions, on organized subject matter and
Training and Development- IndianOil _______________________________________________________________________ _ 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
Programmed Instruction involves a sequence of steps which are often set up through the central panel of an electronic computer as guides in 71
Training and Development- IndianOil _______________________________________________________________________ _ 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. conventional teaching methods. Audio-visual aidsrecords, tapes and films are generally used in conjunction with other 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. actual job. This techniques enables the trainee to concentrate on learning the new skill rather than on performing an 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.
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. 73