Professional Documents
Culture Documents
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Human Resource Management
R EPORT ON HR P RACTICES I N
C HEVRON P AKISTAN L IMITED
(F ORMALLY K NOWN AS C HEVRON O IL P AKISTAN L IMITED )
(Term Project)
Submitted to:
Mr. Murtaza M. Ilyas
Submitted by:
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LETTER OF AUTHORIZATION
Dear Reader,
This has been a learning experience for our team. The exercise was suggested by
our teacher as a way to help us discover the compensation and recruitment
policies practicing in many business organizations but in this case particularly
relevant to the lubricant industry.
Sincerely,
Subayyal Ahmed Khan
Amara
Shahrukh
Sanam
Sandhiya Kumari
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LETTER OF TRANSMITTAL
You will see from the following report that during our meeting with a cross section
of employees working in Chevron we discovered and observed some of
questionable practices at the organization.
We appreciate having this assignment and if you require any additional information
in interpreting this report, please contact us.
Sincerely,
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LETTER OF ACKNOWLEDGEMENT
Dear Reader:
We owe our gratitude to Mr. Murtaza M. Ilyas for his guidance and encouragement
throughout the duration of this course. We are also grateful to our institute for the
patronage and support we received.
Sincerely,
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Table of Content
EXECUTIVE SUMMARY..........................................................................................8
RECRUITEMENT.....................................................................................................11
NO ADVERTISEMENTS POLICY.............................................................11
DATABASE....................................................................................................12
INDUSTRY SOURCES.................................................................................12
LOWER LEVEL POSITIONS.....................................................................12
INTERNAL POSTING..................................................................................14
FIRST PREFERENCE TO INTERNAL CANDIDATES..........................14
TRACK RECORD OF EXISTING EMPLOYEES....................................15
INVESTMENT IN THE EMPLOYEE........................................................15
PURPOSE.......................................................................................................16
MANGER’S CONSENT................................................................................16
MOTIVATION FOR EMPLOYEES...........................................................16
SELECTION...................................................................................................17
EXCOM...........................................................................................................17
UNIT MANAGERS........................................................................................17
INTERVIEWING SKILLS...........................................................................18
THE CURRENT SYSTEM...........................................................................18
ORIENTATION.........................................................................................................19
CHARACTERISTICS OF CHEVRON ‘S ORIENTAION PROGRAM.....19
BENEFITS OF THE ORIENTATION PROGRAM..................................20
EMPLOYEE PLACEMENT.........................................................................20
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PERFORMANCE APPRAISAL...............................................................................22
OBJECTIVE APPRAISALS.........................................................................23
PERFORMANCE ALIGNMENT WORKSHOPS.....................................23
CONTINUOUS FEEDBACK........................................................................23
CONTROL OF RATER BIASES IN APPRAISAL REPORT..................24
HALO EFFECT AND PERSONAL PREJUDICE.....................................24
ERROR OF CENTRAL TENDENCY.........................................................24
RECENCY EFFECT.....................................................................................25
APPRASIAL FORM......................................................................................25
BUSINESS UNIT /DEPARTMENT OBJECTIVES.......................25
INDIVIDUAL OBJECTIVES...........................................................26
FEEDBACK TRACKING.........................................................................................28
EMPLOYEE COMMENTS......................................................................................28
SUPERVISOR’S COMMENTS................................................................................29
SUMMARY.................................................................................................................29
TIMING JUSTIFIED.................................................................................................30
POINTS SYSTEM......................................................................................................30
COMPENSATION.....................................................................................................31
PAY FOR PERFORMANCE........................................................................33
MERIT INCREASES.....................................................................................34
PROMOTIONAL INCREASES...................................................................35
SURVEYS.......................................................................................................35
WICR...............................................................................................................36
GENERAL SUMMARY................................................................................37
TURNOVER...................................................................................................38
REFERENCES...........................................................................................................40
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EXECUTIVE SUMMARY
This report focuses on the human resource practices,
recruitment policies, overall compensation system, the
problem of turnover and the stiff competition that Chevron
faces today. Recently Chevron has globally restructured the
organization along functional lines and in line with this global
strategy, also had to restructure. This resulted in the laying
off of around 7 % of the total employees from all levels.
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The company pays competitive salaries to its employees and
rewards contribution from the employees. COPL’s
compensation philosophy is ‘Pay for Performance’.
In the late 1980s Chevron believed in excessive hiring but
now the process has become a more selective one in order to
cut extra costs being incurred and increase efficiency.
CHEVRON’S MISSION:
COMPANY’S BACKGROUND:
Chevron is one of the world's largest integrated energy
companies with subsidiaries that conduct business worldwide.
Chevron explores for, produces and transports crude oil and
natural gas; refines, markets and distributes transportation
fuels and other energy products; manufactures and sells
petrochemical products; generates power and produces
geothermal energy; provides energy efficiency solutions; and
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develops the energy resources of the future, including
biofuels and other renewables. Chevron is based in San
Ramon, Calif. More information about Chevron is available at
www.chevron.com.
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integrated energy company in the world. Headquartered in
San Ramon, California, and conducting business in
approximately 180 countries, this highly competitive
corporation is engaged in every aspect of the oil and natural
gas industry, including exploration and production; refining,
marketing and transportation; chemicals manufacturing and
sales; and power generation.
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Chevron Pakistan was the first oil marketing company to
introduce many modern concepts in the industry in Pakistan.
A hallmark of its technical advantage in the industry is its
state-of-the art computerized lubricating oil blending plant,
which has been set up and commissioned at the West Wharf
Terminal, Karachi. Chevron was the first in modernizing its
retail outlets, installing electronic dispensers and
implementing Customer Service Systems. It was the first oil
marketing company to launch CNG station in Islamabad in
1998. Its modern testing laboratory fully equipped with the
latest equipment coupled with fully documented procedures
was the first ISO 9000 accredited Oil Testing Facility in the
country. It is also the first oil marketing company to acquire
ISO 14001:2004 International Environmental Management
System for its West Wharf Laboratory and West Wharf Lube
Blending Plant . Chevron is the pioneer in establishing
Convenience Stores and introducing co-branded Cards in the
market.
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exceptional Operational Excellence performance during a
calendar year. This is yet another acknowledgement of
Chevron Pakistan’s exceptional performance and commitment
towards Health, Environment and Safety (HES) in all aspects
of its operations. Moreover Chevron Pakistan’ Keamari
Terminal received “The Most Admired Terminal” award for the
year 2004 in the worldwide Chevron system.
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Chevron Pakistan is known as a responsible corporate citizen
– by following the local laws and customs and maintaining a
long-standing emphasis on safety and health for its
employees, customers and other stakeholders. As an equal
opportunity employer, Chevron is proud of having women
employed in key management positions across different
departments. With 98% of its employees worldwide being
local nationals, Chevron is a part of the community it serves.
Caltex Brand
The Caltex Star stands for quality. The Caltex Star stands for
value. The Caltex Star stands for service.
But most importantly, the Caltex Star
symbolizes our commitment to treat
you, our customers as individuals and
not as numbers. In everything we do,
from our advertising, to our products and
services, to our staff and so much more,
we always focus on building relationships with you.
Our brand is designed to renew your drive and keep you on
the go. Though we know that we are just but a small part of
your lives, we prefer to keep it that way. So that you can stay
focused and determined to reach your goal. We provide the
little refills that you need so you can focus on getting on with
the bigger things in your lives. At the core this means fuels
and other energy products, certainly, but it also means
supplying food, beverages and other every day supplies and
services, freeing you to focus on the things that really matter.
The Caltex brand is the embodiment of everything we strive
to accomplish. It becomes our promise to all whose lives we
touch. When you see the Caltex brand, it acts as an
endorsement of quality. This is because the Caltex brand tells
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you that we are professional, well established, customer
focused and socially responsible.
To become the brand of choice, we rely
on our creed of quality, professionalism,
service and efficiency. This creed dictates
that you come first and that you must
receive ultimate worth and value through
fast and polite service, modern,
professionally managed facilities, and
high quality products. You can count on
Caltex for unique and compelling product and service
offerings, for consistent delivery on brand promises and
continuous productive and distinctive value for you.
To ensure that we are doing the most to help you enhance
your own performance, Caltex will continue to explore all
partnerships that will enable us to better deliver on our brand
promise, to support your efforts to reach your goals.
Community Partnerships
Chevron Providing "Energy for Learning"
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To achieve their goals, TCF is constantly surveying education-
deprived locations in Pakistan to extend its network. Each new
location is appraised through an extensive land survey,
assessment of population, income level, number and standard
of existing schools in the area, demand for new school units,
availability of an accessible site to build a school, qualified
teachers in the area and a number of other criteria.
RECRUITEMENT
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company with a reputation for solid business results, strong
ethics and incredible employees, everywhere they operate.
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They believe that diversity will help us succeed as a global
business. They prize people who can work effectively with
others from all walks of life and who feel free to contribute
their best. At a global level, they support universal human
rights and work to improve the quality of life in the countries
where they operate.
NO ADVERTISEMENTS POLICY:
DATABASE:
INDUSTRY SOURCES:
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If the above sources are not able to fulfil a position then one
method that is commonly used is the use of industry sources
and personal contacts to find the right candidate. The senior
managers or the personnel department may use their own
contacts to find a potential candidate for a particular position
that might open up.
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parents had worked for the organization. Thus applicants
have more credible background and more commitment for the
organization.
INTERNAL POSTING:
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is offered to the existing internal candidates. Then through
system of self nominations or on the recommendations of the
unit manager’s employees who are interested in the posted
opening send in their applications to the Human Resource
Service Unit.
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Through this policy of first offering the openings to the
internal candidates’ human resource departments can lower
the overall cost of salaries for the organization. This because
external hiring and recruitment process entails a lot of cost to
the organization .and in such difficult times when economy is
passing through a recessionary period the human resource
department must ensure processes which aim to minimize the
costs of salaries to the organization. As the long term salaries
and benefit structure of new hiring can be quite costly the
organization prefers to hire from the existing pool of
applicants rather then going for the external candidates and
committing the organization to longer term costs. Even if the
organization hires the candidates on contract basis the costs
associated with the new hiring can be exorbitant.
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one departments to the other, the organization will be ready
to do so.
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organization. Therefore, the performance of such an
employee who makes a well decided career move of shifting
from one department to a department of interest to him
would be expected to outperform most of the external
candidates.
PURPOSE:
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job openings are posted, however; senior management and
top staff positions may be filled through external recruiting.
MANGER’S CONSENT:
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they are provided an opportunity to switch from one job to
another.
SELECTION:
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Chevron there are two main pools of applicants one internal
and one external.
EXCOM:
UNIT MANAGERS:
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INTERVIEWING SKILLS:
ORIENTATION
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• The facilities that are shown around are the Kemari
terminal and the West Wharf Lubricants Blending Plant.
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• Once the workers get over their anxiety and become
familiar with the organization they are able to perform well.
• With lesser anxiety the new comers will learn their duties
better.
EMPLOYEE PLACEMENT:
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The purpose of internal job posting is that it helps in
encouraging employees to seek promotions and transfers that
help the human resource department fill internal openings.
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PERFORMANCE APPRAISAL
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insufficient for the needs of a professional organization such
as Chevron.
OBJECTIVE APPRAISALS:
CONTINUOUS FEEDBACK:
The main purpose of doing this is to ensure that the goals that
were set by the subordinate and the manager should not just
lie in the drawer but should play an active role in the
performance of the individual and the department. The goals
that are decided and the feedback of the employee help in
achieving the set goals.
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CONTROL OF RATER BIASES IN APPRAISAL
REPORT
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have available ratings such as Excellent Very good, Poor,
Satisfactory are limited. The focus is on whether the
employee’s performance was in line with set goals i.e., the
employees either exceeded the set goals, met the goals or
was not able to meet the goals .This will reduce the error of
central tendency and will enable the real employee
performance to come up on the appraisal sheet.
This process will ensure that the correct results come out
.Therefore both the manager and employee will have to set
their goals keeping this aspect in mind. This will improve the
appraisal process and provide results on the basis of which
the employees will be judged.
RECENCY EFFECT:
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feedback tracking system reduces the recency effect as the
manager and the employees continually keep track with the
goals they themselves set for the department and the
individual employee. Thus the quarterly feedback system
keeps the goals in view of the department and the employees.
APPRASIAL FORM:
• The target is then set for the department. This is the same
for all the employees keeping in view the objectives set for
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the department. The purpose of having this in the
performance appraisal of each employee is to make sure
that each employee is aware of the targets set for the
department. What happens because of this is that the
employees become aware of the overall target that their
department has to achieve. Through this mechanism they
come to know of the importance of their own and other’s
contribution towards the overall success of the
organization.
B- INDIVIDUAL OBJECTIVES
The individual objectives are also divided into the same above
mentioned columns with some more additional columns:
• The target for the employee is set by the employee and the
manager. In this phase the participation of the employee is
crucial to the success of the process. It is here that the
employee sets his/ her own targets in consultation with his/
her manager. Through this mechanism the employee is
even more motivated to achieve his/ her goals as he/she
was personally involved in the decision making process.
This area provides an opportunity to the employee to get
involved in his/her own appraisal system. Now the
employee will only be appraised for performance targets to
which he/she had already agreed to. Therefore, the level of
his motivation should naturally be higher than the case
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where his performance targets were defined by others.
Targets set by others may be considered as unachievable
by the employee and therefore the employee would himself
not work hard from the very beginning. Thus this system of
setting of targets and goals has an advantage from day one
as compared to the system whereby the goals are set by
someone else.
FEEDBACK TRACKING:
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surface at the year end. To deal with this problem a section of
the form to be filled is the ‘Feedback Tracking Section’.
EMPLOYEE COMMENTS:
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This area also provides the candidate the chance to voice any
concerns that he or she might have regarding the appraisal
system. There have been cases where the employees were of
view that they have been unfairly treated by their respective
managers.
SUPERVISOR’S COMMENTS:
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the importance of the qualitative comments cannot be
downplayed.
Here the manager can write topics and issues regarding the
employee’s performance which could not be discussed in the
area above. For e.g. if the employee during the year round
not only completed his/her own target but also helped out the
manager and other employees in an extraordinary way it
couldn’t have been discussed in the above areas. Therefore,
this area provides a chance to discuss the important issues
which have not been covered in the objective area of the
appraisal form.
SUMMARY:
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Similarly if the manager is of the opinion that the employee
has failed to meet his/her targets then the employee will have
to refer to the goals to prove his statements. As the appraisal
form is prepared before the candidate and the employee
knows what is being written this does create a sort of hurdle
for the manager to be open about the bad performance of the
employee.
TIMING JUSTIFIED:
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that may develop the managers and the employees are
expected to remain objective and the main focus of attention
should be the objectives that have been set.
POINTS SYSTEM:
Point system is that upon which the final decisions are taken.
This is a classified document that can’t be shown to the
employees and therefore wasn’t disclosed to us. It is here
where the real decisions regarding the employee performance
and the increments etc. is taken. As this is not shown to the
employees therefore the managers can make such
evaluations which don’t come up in the appraisal form, but
form a part of the overall rating of the employee. However; if
there is a great variation between the appraisal form and the
points being given to the employee then the manager may be
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asked to justify this. If the employees were fully aware of this,
then their main focus would be only on items which matter to
the points system while ignoring other factors.
COMPENSATION
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Compensation management’s objective is to ensure internal
equity i.e. the jobs with more responsibility are paid more.
Similarly, there should be external equity, i.e. the jobs should
at least pay what they are worth outside the organization.
Chevron agrees that compensation should be high enough to
attract good applicants and also be at least enough so as to
retain the good employees the firm has.
• Education level
• Experience of the individual either with the company or
previous experience in any other firm
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• Worth of the job
• Performance of the individual will help him climb to the top
of the range
• Demand of the particular skill in the job market
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Performance plans include:
Exceptional (E)
Very Good (VG)
Good (G)
Meets Minimum Requirements (MM)
Does Not Meet Requirements (DR)
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MERIT INCREASES:
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Fully qualified employees with proven job performance who
are paid below the full job vale will, over time, progress to the
full job value in their particular salary classes. Increases for
such employees are likely to be higher in percentage terms
that for employees who are currently paid above the full job
value.
PROMOTIONAL INCREASES:
SURVEYS:
WICR:
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The evaluation will be based on the following criteria:
GENERAL SUMMARY:
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employees. Also there exists worker’s compensation in case
of injury on the job.
TURNOVER:
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During Mr. George Mahan’s tenure as the GM Chevron had a
hiring policy whereby it hired people irrespective of whether
there were vacancies in the Company or not. Special place
was created for these candidates in the company. Chevron
then believed in having a talent pool even if it meant that
there was excessive hiring, and though a lot of people left the
company the turnover was never a major concern.
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Bibliography:
www.Chevron.com
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