Analysis of Human Resource Department of OGDCL

Islamabad

Anum Shahid

Mumtaz Ali

MBA 3rd

Quaid-i-Azam School of Management Sciences

Quaid-I-Azam University Islamabad

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Table of contents
page no

Chapter 1
.Introduction
1.1 Foundation………………………………………………………………. 7
1.2 Organizational structure………………………………………………… 8
1.3 Principle line of business………………………………………………...9
1.4 Competition faced and
level of technology used…………………………………………………… 10
Chapter 2
Human resource Department
2.1Functions………………………………………………………………….11
2.2 No. of employees…………………………………………………………11
Chapter 3
Recruitment and Selection
3.1 Policies………………………………………………………………… 12
3.2 Functions…………………………………………………………………13
3.3 Practices………………………………………………………………….13
3.4 Types……………………………………………………………………..14
3.5 Analysis…………………………………………………………………..15
Chapter 4
Socialization and Orientation
4.1 Policy…………………………………………………………………….17
4.2 Socialization……………………………………………………………..17
4.3 Orientation……………………………………………………………….17
4.4 Analysis………………………………………………………………….18
Chapter 5
Training
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5.1 Policies……………………………………………………………………………...19.
5.2 Practices…………………………………………………………………20
5.3 Analysis………………………………………………………………....21
Chapter 6
Development and promotion
6.1 Career planning and development………………………………………22
6.2 Organizational development…………………………………………… 24
6.3 Management development………………………………………………24
6.4 Analysis………………………………………………………………… 24
Chapter 7
Performance appraisal system
7.1 Policies………………………………………………………………… 26
7.2 Practices………………………………………………………………… 26
7.3 Analysis………………………………………………………………… 28
Chapter 8
Rewards and compensation
8.1Reward policy…………………………………………………………… 30
8.2 Practice…………………………………………………………………. 30
8.3 Pay plan……………………………………………………………… 30
8.4 Compensation……………………………………………………………30
8.5 Other benefits……………………………………………………… … 31
8.6 Analysis……………………………………………………………… 31
Chapter 9
Collective bargaining and safety measures
9.1 Policy…………………………………………………………………….32
9.2 Collective bargaining…………………………………………………… 32
9.3 Objectives of unions………………………………………………….….32

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

We like to thank Almighty Allah the most beneficent and merciful for enabling us to reach here and
use His sources to complete our project. We are humbly thankful to Amjid Javed, (General Manager)
and Abdul Razik khattak (Senior Recruitment Officer) HR Department of OGDCL, Islamabad and all
others who guided us during the course of project. The behavior of all the supervisors of HR
Department was very good to us. They were always there to encourage us and they were very co-
operative to guide us the mechanism of the HR Department in which we worked

We are also grateful to Dr Basit B. Tayyab, who gave us opportunity to enhance our capabilities. This
project is very helpful for us because, we have learnt a lot by applying theoretical knowledge in
practical field. In addition, we like to say thanks to our parents to support us and encourage us at
every step.
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Chapter 1

Introduction

Before the existence of OGDCL, exploration activities were carried out under the label of Pakistan
Petroleum Ltd (PPL) and Pakistan Oilfields Ltd (POL). In 1952, PPL discovered a giant gas field at
Sui in Balochistan. This discovery generated massive interest in exploration and five major foreign
oil companies entered into concession agreements with the Government.

During the 1950s, these companies carried out widespread geological and geophysical surveys and
drilled 47 exploratory wells. As a result, a few small gas fields were discovered. Despite these gas
discoveries, exploration activity after having reached its peak in mid-1950s, declined in the late
fifties. Private Companies whose main objective was to earn profit were not interested in developing
the gas discoveries especially when infrastructure and demand for gas was non-existent. With
exploration activity at its lowest ebb several foreign exploration contracting companies terminated
their operation and reduced land holdings in 1961.

1.1 Foundation of OGDC

On 04 March 1961, the Government of Pakistan signed a long- term loan agreement with the USSR,
where by Pakistan received 27 million to finance the equipment and services of Soviet experts for
exploration. Subsequently, OGDCL was created under an Ordinance dated 20 th September 1961 and
was charged with prime responsibility to undertake a well thought out and systematic exploratory
programs and to plan and promote Pakistan's oil and gas prospects.

As an instrument of policy in the oil and gas sector, the Corporation followed the Government
instructions in matters of exploration and development. The day to day management was however,
vested in a five-member Board of Directors appointed by the Government. In the initial stages the
financial resources were arranged by the GOP as the OGDCL lacked the ways and means to raise the
risk capital. The first 10 to 15 years were devoted to development of manpower and building of
infrastructure to undertake much larger exploration programmes. Later, in July 1989, as the company
progressed as a result of major oil and gas discoveries, the Government off-loaded the Company from
the Federal Budget and allowed it to manage its activities with self generated funds. The year 1989-
90 was the company's first year of self-financing. Today, OGDCL is the largest Exploration and
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Production Company in Pakistan, listed on all three exchanges of the country as well as the London
Stock Exchange.

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

1.2 Organizational Structure

1.2.1 Main offices

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

1.2.2 Main departments

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

1.2.3 No of employees in OGDCL

In OGDCl employees consists of management cadre, executive cadre and overall staff. Each cadre is
divided into pay groups and again each pay group is divided on the basis of all over Pakistan merit
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employees and on the quota of particular provinces. (A.Javed, personal communication, march 3,
2010)

1.2.3.1 Management cadre

The management cadre consists of M-I, EG IX and EG VIII and only 4 EG VIII employees are open
merit based and rest of the 10 employees are from four provinces, FATA and AK on the basis of
quota.

1.2.3.2 Executive cadre

In the executive cadre consists of EG VII(executive general), EG VI, EG V, EG IV, EG III, EG II,
EG I and trainees. In it 143 employees are on the Pakistan merit base and rest of 1762 employees are
on the basis of quota from four provinces, FATA and AK

1.2.3.3 Over all staff

Over all staff consists of non-executive employees and trainees. There are 40 employees on the all
over Pakistan open merit and rest of 9150 employees are from Singh, Punjab, NWFP, Balouchistan,
FATA and AK on the basis of relevant provincial quota.(For details refer to appendix, table 1)

1.3 Principle area of business

OGDCL is one of the largest and leading companies of Pakistan. The principle area of OGDCl is
exploration and production of oil and gas. As the leading Exploration and Production Company in
Pakistan, OGDCL’s primary objective is to enhance its reserves and production profile and ultimately
maximize value for shareholders.

 OGDCL continues to accelerate production growth through utilizing cutting edge technologies,
allowing the Company to utilize its significant reserves base and capitalize on the strong economic
growth and accelerating energy demand in Pakistan. It exploits exploration Opportunities by building
the Company’s future reserves portfolio through its large onshore exploration land. During the fiscal
year 2008-09 target of drilling is 52 wells. OGDCL’s operating environment will be a major factor in
allowing it to control its low cost structure. Within Pakistan, the Company’s leading position also
enables it to access economies of scale across its significant reserves base and operations. The
domestic expansion remains OGDCL’s core focus, the Company intends to grow and diversify its
portfolio through selective international expansion in the medium to long-term. OGDCL implements
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international best practices to ensure an efficient organizational structure and business processes that
are focused on core production. As part of OGDCL’S restructuring plan, OGDCL has established an
in-house technical services division, the Petroserv Directorate, which separates technical support
services from core E&P activities. OGDCL. (March 3, 2010). http://www.ogdcl.com/about-
us/Strategy.htm

1.4 Competition faced and level of technology used

Being one of the largest companies, OGDCL faces the competition of many other oil producing
companies. The major competition faced by the company is Pakistan State oil (PSO) as well as
foreign companies, such as MOL etc.

As OGDCL is exploratory and producer of Oil and Gas Company in nature, technology used in it is
very much complex and comprehensive. Technology used in OGDCl for the production and
exploration purpose is mostly imported from the foreign countries. Huge costs are incurred for
importing these machineries from outside. Besides importing technology from outside various plants
and machineries that are manufactured inside the country are also used. (A.Javed, personal
communication, march 3, 2010)
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Chapter 2
Human Resource Department

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

2.1 Functions of HR Department

The Company is focusing on the human resource department, as it aims to motivate its employees
through proper placement, employee recognition, effective appraisals, empowerment, and
communication and promoting employees skill development programs. Various human resource
polices are being reviewed and rationalized by taking into account the industry norms to bring about
an effective change in order to meet the challenges of highly competitive business environment. It
helps to understand and evaluate the different and sometimes ambiguous views of human resource
management by investigating its origins, explanatory models, technology and practice.
2.2 Number of employees in HR Department
In OGDCl, HR Department consists of number of employees under different job titles. There are
round about 13 officers and 97 total staff, as well as there are also data processing officers. Detailed
description is given below in HR Organogram ( for details, refer to appendix, figure 4)
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Chapter 3

Recruitment and selection

Recruitment process in OGDCL is conducted under the recruitment section, which generates pool of
potential candidates and acts as a real base to provide facilities of selection of new and old
employees.

3.1 Recruitment and selection policies

It is the company’s policy to implement an appropriate recruitment system base on careful
determination of the required competencies and objectives by implying effective search and selection
methods along with the efficient means of communication with potential candidates.

It is the policy of the company that, when ever possible, positions should be filled through internal
job posting and promotions.

All departments’ heads (EDs, GMs, Managers) are to fully participate and contribute to the hiring
process of their respective management staff in collaboration with HR Department. The hiring
process/procedures shall be specified by the HR Department.

All department heads are responsible for making respective description and job specification in
collaboration with an Hr Department, for the purpose of allowing Hr to set annual hiring plan.

All recruitment ( direct or through services contractors) shall be done through human resource
department in compliance with the company’s laid down procedures and standards, no individual
shall conduct recruitment or hiring activity without the specific knowledge and involvement of ED
human resources.

Candidates will be selected on the basis of applicable recruitment tests ( for entry level positions
only ), qualification, experiences, ability, interest, aptitude and adoptability to the specific job
recruitments, as already defined in the respective position description.

The salary offered will be with in approved salary policy guideline of the company (R. khattak,
personal communication, March 5, 2010)
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3.2 Functions of Recruitment Section

Recruitment section basically performs the following functions

When ever any department in OGDCL seems to require new employee, it informs the HR Department
to hire new employee for that. Then HR Department analyzes the real situation, whether there is real
need of new employee or not.

HR Department advertize the vacant position in the news paper and in the media to generate the pool
of potential candidates and through the recruitment process hire the new employee for the specific
required department.

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

3.3 Practices of recruitment

After circulation to every department they analyze that how many employees perform their duties and
how many are required and they take a deficiency with the scale.

After the completion of circulation or survey they take the official approval from chairman and give
advertisement through public relation department of the most required vacancies. The sources of
advertisements used by HR department are news papers, media and internet.

The recruitment procedure of the OGDCL is mostly related with CSS of Pakistan .i.e. as under:-

Punjab 50%

Sindh rural 11.4%

sindh urban 7.6%

N.w.f.p 11.5%

Merit 10%
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Baluchistan 3.5%

Fata 04%

A.j.k 02%

After the advertisement, they receive application from all over Pakistan and conducts written
examination. This examination is held in those departments, where the candidate want to join and that
department send the result to recruitment section. OGDCl also hire the external agencies, which
provide facilities of conducting examination of applicants.

The selection procedure is recently shortly changed and is as under:-

Written Test 40%weightage

Experience 30%weightage

Academic Qualification 30%weightage

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

3.4 Recruitment types

Regular employees

Contract Basis employees

Trainees – Special Trainees

Hiring through Contractor

Classified appointment (R. khattak, personal communication, March 5, 2010)

Selection

3.5 Selection Practices

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Selection process in OGDCL starts with preliminary interview of the applicant who qualified the test.
Depending upon the position, preliminary interviews board is formed, who conduct the preliminary
interview. An applicant’s knowledge, skills and attitude is judged on the basis of following factors.

Education (academic and Professional), Previous experience, Applicable tests (for entry level position
only), Interviews References

The results of the candidates interviewed are compiled in the order of merit. After conducting the
preliminary interview, the successful candidates are preceded for the selection interviews, conducted
by selection board. This selection board is formed while considering the positions required. After
selection interview, the successful candidates are required for pre-employment medical examination
arranged by the HR department. In this way HR department completes the selection process and
formulates the job offer. Job offer or appointment letter is delivered to the successful candidates. This
letter clearly spells out the terms and the conditions of employment and the benefits applicable to the
position. All management position offer letters are signed by ED (executive director HR), while
Executive Director’s position letters are signed by the chairman and CEO.

When there is no suitable replacement available within the company and when all sources has been
utilized with no results to fill the vacancy with highly potential candidate, then company rehire an ex-
employee on merit.

For the requirement of certain position the company re-engaged the retired employees who are
beyond the age of 60, after mutually agreed terms and conditions.

In order to keep the track of attrition, to know the reasons leaving job and to collect the feed of
leaving employee, the exit interview is conducted by the HR Department. This is also done in order to
reduce employee turn over, because greater the employee turn over, greater will be the cost of
employment. All these practices seem to be aligned with above mentioned policies. (R. khattak,
personal communication, March 5, 2010)

3.6 Analysis

To recruit the employees both internal and external methods are used with in the OGDCL, but
analysis reveals that the corporation gives preference to the internal method. The main draw back of
this method is that it blocks the way for new generation which carry new ideas and knowledge.
Further more the recruitment system is also influenced by the nepotism of politicians. Not only
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recruitment of employees is influenced by the nepotism of politicians, but selection also. Employees
for high positions are selected on the basis of personal relations and blood relationship. Though
OGDCL is the largest and very multifaceted organization, in spite of that there is no computerized
data based system to record the data of employees.
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Chapter 4

Socialization and Orientation

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

4.1 Policy

All newly inducted employees shall undergo a comprehensive orientation program of up to one week
duration comprising of class room presentation on all professional and organizational aspects by the
various department heads or their nominees, along with field visits( If any). (A.Javed, personal
communication, march 15, 2010)

4.2 Socialization

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

4.3 Orientation

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

4.4 Analysis
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There is the informal system of socialization and orientation practiced in the OGDCL. It means that
there is no proper way of guiding their new hired employees. Less expenses are incurred by OGDCL
to introduce their new employees with peers, bosses, and over all environment. Here Socialization
and orientation is not considered an essential part of the system. It seems that orientation practices are
not aligned with its policies
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Chapter 5

Training

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

5.1Training policies

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

The HRD department training coordinators shall work with Department Head and finalize a list of
well reputed training sources both local and foreign in all disciplines of organizational development.
The vendors shall then be prequalified by the HR Department.

The HRD department training coordinator, in vendors shall make a discipline wise local/foreign
training calendar covering the professional and the organization development aspects through a TNA
(training need assessment). The same shall be emailed to each department head by July 15 th each
year.

In case of foreign program, the HRD department training coordinators are to ensure that proper lead
time is forecasted for processing, keeping in view the visa/travel arrangements.

The respective department head would be required to forward names with number of officers/staff
that qualify the prescribed training benchmarks with in the announced deadlines, though an email to
the HRD Department.

The HRD Department training coordinators shall carry out due diligent, process the received names
as per the prescribed parameters, get the required approvals and prepare the qualifying list. (R.
khattak, personal communication, March 30, 2010)

5.2 Practices of trainings in OGDCL

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To implement its policies OGDCL use the following practices:

5.2.1OGTI

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

5.2.2 Local training programs

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

5.2.3Leadership training program

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

5.2.3 Advance management program

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

5.2.4 Conferences

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

5.2.6 Others

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

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

Chapter 6
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Development and Promotion

6.1Career planning and development

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

8.1.1 Promotions

6.1.1.1 Promotion policies

Promotion is the mixture of both merit and seniority in OGDCL.

The company reserves its rights to promote or not to promote any functionary, with in the specified
guidelines

HR department shall prepare and finalize a list of all employees who are eligible for promotions along
with options, by end of June each year the same shall be communicated to respective department’s
heads for consents, review remarks. Under mentioned criteria shall be adhered to for processing of all
promotion cases.

All promotions would henceforth be on the basis of merit. All eligible employees at the time of
submission of promotion proposals should be considered and the employees securing highest points
would be promoted subject to availability of vacancies.

All positions are too benchmarked according to the educational qualification, number of years of
relevant experiment and trainings/certification, required to efficiently carry out that particular
function, minimum/maximum level that could be attained in that position, cross functional roles, care
path etc.

An employee to become eligible for promotion must physically complete two years services in the
grade for promotion up to EG-VI and three years for promotion to EG-VII and exceptions can be
when hire vacancy to be filled internally and available employees is of “Outstanding” profile.

All promotions will be linked with the future organizational development needs of the company.
 22
There is no maximum limit of the services in one grade.

The employees who are superseded twice for the promotion to the next grade will be considered to
have been permanently superseded. However, their annual increment shall continue to be linked to
their respective performance rating up to maximum of that level only. Their length of services shall
be determined by the number of the years benchmarked for that position. For contractual employees
to consecutive below average ratings, no contract extension shall be made after due diligence by HR.
(T.Ahmad, personal communication, April 5, 2010)

6.1.1.2 Promotion practices

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

Promotion Criteria in OGDCL for officers was adopted in 1994. Its main components are:

ACRs : 60%

Qualification : 15%
Technical Publications : 05%
Relevant Experience : 20%

Seniority come fitness is the guiding principal in promotions

The promotion cases of Staff are evaluated as per Promotion Criteria of 1991 its highlights are:

ACRs : 25%
Qualification : 15%
Seniority : 05%
Experience : 15%
Evaluations : 40%

(Refer to promotion chart in appendix)

(T.Ahmad, personal communication, May 5, 2010)

6.1.1.3 Important factors for promotion

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

6.2 Organizational Development

In OGDCL just like any other organization, organization is developed when its missionary objectives
are met. To achieve missionary objectives goals are set up with in the organization. To achieve the
goals certain strategies are formulated and finally strategies require actions and tasks to be
implemented in the form of project (T.Ahmad, personal communication, April 5, 2010)

6.3 Management Development

Management development is linked with career development. Management development is done in

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

6.4 Analysis:

Analysis reveals that career planning section works in close collaboration with the human resource
department for planning career of their employees however not much time is given by the section to
guide the employees for developing their career. They are usually guided in an informal way.
OGDCL is only organization in the field of exploration and development of oil and gas resources of
the country, but unfortunately does not use scientific techniques in career planning of employees
promotions are major source of career development here. However is also analyzed that promotion
process is comparatively slow which some times create a feeling of demotivation among employees.
An organization is developed when its missionary objectives are met. So 0GDCL meets its
missionary objectives through mega projects for organizational development
 24

Chapter 7

Performance Appraisal System

Performance review helps supervisors feel more honest in their relationship with their subordinates
and feel better about themselves in their supervisory roles. Subordinates are assured clear
understanding of what is expected from them, their own personal strengths and areas for development
 25
and a solid sense of their relationship with their supervisor. Avoiding performance issues ultimately
decrease morale, credibility of management, the organizations overall effectiveness and wastes more
of management’s time to do what isn’t being done properly.

7.1 Performance appraisal policies

Appraisals based on balance score card model taking in facts the employees professional output as
well as personal traits that may affects his performance.

All company employee will be appraised at the time of completion of trial (period will be of six
months as per the recruitment policy). In case of satisfactory performance their services will be
confirmed, and confirmation letter will be issued by the human resource department. At the time of
the confirmation, management/ HR may consider salary adjustment. In case of UN satisfactory
performance,

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

7.2 Practices

The scoring system is having a major impact on effective performance appraisals. The accuracy and
reliability of any scoring system increases with full descriptions or definitions and still better with
examples for each score band. This gives everyone the same objective scientific reference points, and
reduces subjectivity.

All the departments at OGDCL are enforced to follow following performance rating

Outstanding 05%

Very Good 20%

Normal 50%

Marginal 20%

Poor 05%
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In OGDCL Issuance of ACR forms toke place to all departments according to time schedule usually
15th December of each year. And reception of the ACR forms toke place at the date of 1st March of
each year. After receiving the forms proper record is maintained, because its secrecy and integrity is
very important. (R. khattak, personal communication, April 7, 2010)

7.2.1 Activities (ACR)

ACR evaluate employees on the basis of perception and judgment.ACR was used to provide
comprehensive instructions from time to time to educate and clear ambiguities. ACR forms have been
serialized for officers to minimize duplication/ misuse.
Actually ACRs were not filled or /returned according to the notified schedule. Lot of time and efforts
were involved in correspondence. Over-writing, use of fluid, mere marking instead of initials were
the most commonly observed problems. There was lack of consistency in various parts of ACR that is
frequently noticed. (R. khattak, personal communication, April 7, 2010)

7.2.2 ACR replaced by PER

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

7.2.3 Relative and Absolute standards

. In the beginning ACR use relative standards to evaluate employees. They evaluate employees more
on the basis of perception and judgment. However now a days it was replaced by absolute standards
in PER. PER evaluates employees performance keeping in view job description of any specific
employee i.e., performance is evaluated on the basis of pre assigned tasks checking whether they are
fulfilled or not. On the basis of evaluation employees are promoted and given rewards.

Basic component of the promotion criteria with their relatives weight age would be as under;-

1. Qualification 15%

2. ACR’s 25%

3. Seniority 05%

4. Relevant experience including

 27
Experience outside OGDCL 15%

5. Assessment by the promotion

Committee 40%

-------------------

Total 100%

---------------------

These five basic components are analyzed before promotion criteria. When any employee qualifies
these components then he will be promoted with the approval of the chairman. For every employee it
is necessary to get minimum 60% marks in above components. (R. khattak, personal communication,
March 7, 2010)

7.2.4 Classification method

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

7.3 Analysis

After analyzing the performance appraisal system it becomes clear that though PER is replaced by
ACR which is more judgmental based and PER evaluates employees on the basis of certain assigned
tasks but here also sometimes performance evaluation is influenced by personal relation and
perception of the person who is being evaluated. Any body that has personal relations with his boss
get high marks and is evaluated more positively.
 28

Chapter 8

Rewards and Compensation

8.1 Reward policy

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

8.2 Practices

In OGDCL, both financial based and non financial based type of rewards are provided to employees.
Financial rewards are actually performance based rewards, which include bonuses, one month
additional salary etc, while non financial rewards are mostly letters of appreciation and recognition.
 29
Additionally rewards in the form of honorarium are also provided, allotting separate parking space
serve as recognition and reward to high level positions. These rewards actually seem to motivate the
employees to show the commitment with the organization. (A.Javed, personal communication, April
26, 2010)

8.3 Pay plans

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

8.4 Compensation

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

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

8.5 Other Benefits

OGDCL develops appropriate retirement plan to benefit its employees

In addition various kind of medical benefits are also provided

X-ray and laboratory diagnostic facilities are available at M.C Islamabad. Patients are referred for
hospitalization as and when required to hospital/nursing, homes /specialist on the panel of the
corporation and re-imbursement is allowed when such facilities are not availed. Medicines are
provided to patients from entitle panelist chemist through prescription. Vaccination facilities for
children are available at both medical centers and every Monday is specially fixed for this purpose.
Ambulance equipped with first aid kit is available at medical centre Islamabad for 24 hours duty.
(A.ali,personal communication, may 11,2010)

Residential facility is also provided to facilitate its employees

8.6 Analysis
 30
It is analyzed that there is an injustice system of distribution of rewards to employees. The senior
positions are rewarded higher as compared to rewards given to workers and junior positions. It also
leads to demodulation among employees when they see and feel such big differences. Being a public
sector organization it is also analyzed that OGDCL provides a number of facilities to its employees
and try to retain its employees using this policy.

Chapter 9

Safety measures and collective bargaining

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

9.2 Collective bargaining

In OGDCL two main labor unions are found as maintained below:

All Employees Labor Union

 31
All Mazdoor Ittahad Union

These unions negotiate with each other to settle disputes. (R. khattak, personal communication,
March 5, 2010)

9.3 Objectives of union

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

9.4 Analysis

As OGDCl is one of the largest and leading Oil and Gas production and Exploration Company in
Pakistan so if employees don’t work for an hour, the company has to face the loss of millions of
rupees. So it is analyzed that labor union actively negotiate with each other to settle disputes. These
unions have a lot of authority here.
 32

Chapter 10

Analysis

In-depth analysis reveals following weaknesses in.OGDCL

To recruit the employees both internal and external methods are used with in the OGDCl, but the
corporation gives preference to the internal method. The main draw back of this method is that it
blocks the way for new generation which carry new ideas and knowledge. Further more the
recruitment system is also influenced by the nepotism of politicians. Not only recruitment of
employees is influenced by the nepotism of politicians, but selection also. Employees are selected on
the basis of blood relationship and personal relations.OGDCL is the largest and very complex
organization, in spite of that there is no computerized data based system to record the data of
employees. The old system of recording employee information in the form of files is used and those
file are sent to different officers by their personal assistance. this not only consume the large amount
of time while carrying files from floor to other floor, but also affects the efficiency of the work.
Unofficial system of orientation is used to introduce new employees ignored mostly with the
 33
organizational culture, employees etc.this function is at times ignored in OGDCL.Training is used to
develop the skills of the employees. In this regard lot of expenditure is made but unfortunately
training facilities are awarded to the employees based on nepotism. As OGDCL has it training
institute to facilitate employees, unluckily training sessions are held for reference based employees
only. In addition, they don’t use the efficient and effective training methods and techniques to build
above mentioned attributes of the employees, such as no simulation techniques are adopted to train
employees
Career planning section does not give adequate time in guiding employees how to develop their
career. OGDCL is only organization in the field of exploration and development of oil and gas
resources of the country, but unfortunately does not use scientific techniques in career planning of
employees promotions are major source of career development here. However it is also analyzed that
promotion process is comparatively slow which some times create a feeling of demotivation among
employees. Promotion policy is the mixture of both merit and seniority, although PER is in place but
in practice emphasis is given to ACR and can say that where there is ACR there an idea of
favoritisms. So there is no proper way to monitor the performance of employees. In addition PER is
also influenced by favoritism and nepotism.OGDCL is only organization in the field of exploration
and development of oil and gas resources of the country, but unfortunately does not use scientific
techniques in career planning of employees. For the promotion first CPC invites recommendations to
reach end February and end August each year. They are seldom received according to schedule.
Consequently, CPC has great difficulty in meeting the promotion dates of 1st July and 1st December
each year. Seconded the cases are received with inadequate information causing wastage of time and
un-necessary correspondence. Third, there is lack of effective communication among departments
which causes un-necessary wastage in time and efforts. Forth, there is absence or lack of clarity of
promotion channels. There is no check and balance in awarding the rewards and benefits, because
upper level position employees are awarded high rewards as compared to other positions. This
injustice demotivates employees and affects their performance. While working in HR department it is
also analyzed that the overall environment of OGDCL is imitative killer.employees.it does not
appreciate the employees coming up with their own ideas. It is also seen that attitude of employees is
not prudent because of job security factor. They have fair idea that no body can expel them from here.
 34

Chapter 11

Recommendations
Following recommendations can be helpful to get rid of the weaknesses of the functioning of human
resource department.

Equal opportunities should be given to external employees during hiring process. This will bring new
ideas, knowledge and experience to the organization. In addition recruitment should be done totally
on merit basis.favorotism and nepotism should be avoided. In this modern area computerization of
record is very much essential. There should be computerization of record because it is of great
essence for speedy disposal and accuracy of record. Although OGDCL usually import technology
from outside however to meet the changing needs it must take actions and allocate higher budget for
hiring it. Formal method of orientation should be used. Training should be provided on the basis of
requirement. Equal opportunities should be given to employees to train them. Full attention should be
given to intensive professional training of staff in related fields. . The department can organize
professional training at OGDC or with outside agencies etc and latest literature newspapers and
magazines etc of professional interest should be provided at sites free of cost. Career planning section
 35
must give adequate time in guiding employees how to develop their career. Appraiser must appraise
employees on the basis of actual performance. Performance evaluation on the basis of judgment
should be avoided. To encourage the employees to take interest in their work rewards should be
provided but there should be fair means of distribution of awards. Unjust distribution of awards must
be avoided.empolyees should be encouraged to come up with their own ideas. Initiative killer
environment must be removed. In the end it is strongly recommended to eliminate the government
influence on each and every function of HR department at OGDCL

Conclusion

From this whole discussion we conclude here that though HR department has well formulated
policies. There is strong need for the just implementation of such policies. Though each and every
thing is written in papers about these policies but unfortunately practices in some cases are quite
different. So practices must be in accordance of the policies and government should not use its
influence and provide freedom for the proper functioning of Human resource department.
 36

References

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

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

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

 37

Appendix

Figure 1:

Board of directors

Not announced by the ministry Chairman

Of the petroleum

Mr. Shah Mahboob Alam Managing director/ CEO

Mr. Muhammad Aijaz Chaudhry- Director

Mr. Waqar A Malik- Director

Mr. Isikander Muhammad khan- Director

Mr. Tariq Faruque- Director

Mr. Tariq iqbal khan- Director

Mr Waseem A Zuberi- Director

 38
Mr. Shagufta Jumani- Director

Mr. Rafique Dawood- Director

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

Table 1

No of employees in OGDCL

 PAY DOMICILE TOTAL

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

MANAGEMENT CADRE

 
M-1 0 0 0 0 0 1 0 0 0 1
EG IX  0 2 1 0 1 0 1 0 0 4
EG VIII 4 3 0 1 11 0 0 0 0 9

EXECUTIVE CADRE

 
EG VII 3 37 6 1 7 11 1 1 0 60
EG VI 12 102 18 13 31 31 10 4 5 195
EG V 19 116 36 49 85 28 11 10 5 274
EG IV 28 109 29 36 65 34 6 14 6 262
EG III 28 178 57 46 103 28 9 7 3 356
EG II 22 204 17 39 56 38 7 8 3 338
EG I 15 132 28 47 75 18 7 3 2 252
TRAINEES12 69 13 20 33 15 11 8 6 154
TOTAL 143 952 205 252 457 205 63 55 30 1905

OVERALL STAFF
 39
PAY TOTAL
DOMICILE
GROUP IN THE
MeritPUNJAB SINDH NWFP BALUC- FATA AK
GROUP
URBAN RURAL TOTAL
HISTAN

NON EXECUTIVE CADRE

16 2 163 49 14 63 22 2 1 5 258
15 2 106 12 25 37 20 0 0 5 170
14 0 253 58 109 167 58 7 6 13 504
13 0 4 2 0 2 1 0 0 0 7
12 15 623 59 60 119 113 14 5 31 920
11 0 1 0 0 0 0 0 0 0 1
10 4 148 24 56 80 34 6 2 12 286
9 3 425 45 67 112 79 20 2 12 653
8 5 164 35 95 130 30 11 2 9 351
7 0 93 11 16 27 5 8 0 3 136
6 3 670 94 166 260 102 50 7 17 1109
5 0 99 19 9 28 23 5 0 13 168
4 0 264 28 79 107 30 63 0 17 481
3 0 198 39 31 70 25 29 2 26 350
2 0 324 70 220 290 41 128 1 14 798
1 0 1392 103 705 808 136 566 2 45 2949
TRAINEE6 27 1 2 3 8 8 0 1 53
TOTAL 40 4954 649 1654 2303 727 917 30 223 9194
Source:(A.Javed, personal communication, march 3, 2010)
 40
Figure 2

Promotions – Flow Chart

Recommendations of the Head of the Department

Incomplete/Pre-mature cases returned. Cases in order retained for processing

Evaluation Sheet, Seniority, ACR Synopsis, Disciplinary Profile and other formalities
completed

Completed case submitte d before Departmental Promotion Committee

Approval of the Managing Director/Board of the Directors

Promotion Notification

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

Figure 3
 41

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

Figure 4
 42

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

Figure 5

Main Offices

The overall organizational structure / organogram is as under

Following are the main offices located throughout Pakistan

OGDCL Head Office, Jinnah Avenue Islamabad.

Pirkoh Gas Company Private Limited, Islamabad.

OGDCL Regional Office, Shafi Chamber, Karachi

OGDCL Regional Office, Multan

OGDCL Liaison Office, Quetta

OGDCL Liaison Office, Sukkur

OGDCL West Wharf Office, Karachi

OGDCL Base Store, Islamabad

OGDCL Base Store, Khadiji, Karachi

OGDCL Base Store, Korangi

OGDCL Base Store, Kot Addu

OGDCL Base Store, Kot Sarang

Medical Centers, Islamabad, Rawalpindi & Karachi

OGDCL Workshops, Islamabad

 43
Oil & Gas Training Institute, Islamabad.

Main departments

Corporate Department

Administration Department
Human Resource Department
Communication Department
Personnel Department
Procurement Department
Legal / Regulation Department
Finance & Accounts Department
Audit Department
Security Department
Stores Department
E&P Departments

Exploration Department
Exploitation Department
Process Department
Production Department
Technical Services Department

Engineering Department
Drilling Department
Data Logging Department
Wire line Logging Department
Mud Engineering Department
Geological Department
Geological Well Supervision Department
Well Services Department
Cementation Department
Data Processing Department
Source: A.Javed, personal communication, March 3, 2010)
44