"HRM is relatively new phenomena in Oman, indicating that there are many organizations in both public and private sectors with no HRM departments" (Al Hamadi, 2007).
This was the conclusion of all the a few recent studies of HRM in Oman (Katou, Budhwar, Woldu and Al Hamadi, 2010), (Budhwar, Al Yahmadi and Debrah, 2002), (Christopher and Althakhri, 2008) and (Moideenkutty, Al Lamki and Murthy, 2009). Rather, the common style of HRM was imported from the big neighbor that affects the Omani business in all aspects, India. Because of geography and history, strong relationships established between Oman and India hundreds of years ago. Most of the richest families in Oman have started their business to trade with India (e.g. Bahwan brothers) and many of the current businessmen in Oman are originally Indians (e.g. Kimji Ramdas, Towell and Mohsen Haidar Darwish). They brought the Indian style which is purely hard HRM that use personnel management to use human resource as one of the organizational resources to achieve the organizational goals. However, after the Omani renaissance in 1970 and the enhanced oil operations in Oman, all aspects of Omanis life were improved (Christopher and Althakhri, 2008). His Majesty Sultan Qaboos promised Omanis in his first speech that he will concentrate on improving their life style and will focus on the educational part of it (find ref). Immediately, Oman started sending students abroad to western nations (Europe and USA) and at the same time PDO accelerated its operations to increase the Oil production to help the government to fulfill HM's promise. Also, foreign companies saw Oman as a new strategic market and competed to start their business in Oman (Budhwar, Al Yahmadi and Debrah, 2002). All these reasons were behind bringing the HRM to Oman. Nowadays, most of Omani organizations are either applying the HRM or in process of adopting the HRM in HR functions. Oxy Oman is one of these organizations that use its experience from different business units all over the world to feed the HRM in Omani market.
Key Skills that Oxy needs to Retain:
In order to achieve the desired performance and organization's goals, there are certain characteristics which employees have to acquire and use. These characteristics build the value of the human capital for the organization. It includes the knowledge, information, skills, ideas and ways of thinking, acting and feeling. As an oil and gas company working in steam flood project, Oxy needs to hire and retain employees with technical and interpersonal skills with strong self management and team working. These skills can help Oxy to adapt in the dynamic changes in the oil field industry and achieve the competitive advantage through its people.
"Talent consists of those individuals who can make a difference to organizational performance, either through their immediate contribution or in the longer term by demonstrating the highest level of potential. Managing talent is about the process of identifying, developing, recruiting, retaining and deploying talented people" (Armstrong, 2008).
Michaels et al (2001) suggested five things that organization need to do to win the war for talent:
- Creating an attractive working environment.
- Building recruitment strategy.
- Developing potential future managers.
- Investing in A players, developing B players and acting decisively on C players.
- Spreading the talent management approach to all levels.
McKinsey argues that competitive advantage can be achieved by having talented people at all levels. Jeffery Pfeffer (2001) believes that organizations adopting the war for talent can end up ignoring the existing talent already in the organization.
SHRM practices in Occidental Oman Inc:
Before exploring the SHRM practices in Oxy Oman it is crucial to have a look at the Omani context and what does affect SHRM in Oman.
Christopher and Althakhri (2008) argue that Islam, tribal system and family are the main factors which affect the Arabian culture. Islam instructs followers to be just, honest, cooperative and respective to each other (Hashim, 2010). All these values can provide the organization an excellent context to work in. The tribe and family reinforce the concept of consultative and participative decision making style. However, people in different societies vary in to what extend the apply the religious instructions in their lives.
Now, we will go through the SHRM practices and how Oxy use them to retain the key people and will examine the influence of these factors:
- Recruitment and Selection:
Recruitment is "searching for and obtaining potential job candidates in sufficient number and quality so that the organization can select the most appropriate people to fill its job needs". Selection is "predicting which candidates will make the most appropriate contribution to the organization (Beardwell and Claydon, 2010).
These two processes are the first two stages in the talent management and retention. They are very critical and always used by organizations which apply the SHRM to identify, attract and choose the most suitable candidates to meet the organizations human resource requirements.
In its mission of SHRM, Occidental Oman Inc is aiming to be the second oil producer but the first attractive company in oil and gas industry in Oman. Obviously, Oxy have achieved its mission being the employer of choice in Oman because of its employer branding strategy that have successfully made people to look at Oxy as a distinctive employer. This successful branding is because of the social context it provides and making employees proud working for Oxy and enhancing the oil production and increasing the nation's wealth.
Oxy uses different recruitment techniques to make sure to reach the maximum possible number of applicants. These techniques include advertising of vacancies in Oxy web site and newspapers and the annual jobs exhibition organized by Sultan Qaboos University (SQU). The advertisements include job title, description and requirements. In online application system Oxy uses job reviews and killer questions as short listing technique. Also, Oxy encourages employees to advise good candidates for vacancies and it offers financial incentives for good references.
Selection of most appropriate candidates based on their knowledge, skills and personality is done in Oxy through the following techniques:
i. Interviews: The hiring team and HR team form an interview group to test the personality, problem solving and communication skills of the candidates.
ii. Tests: This is usually used to examine the technical knowledge of the candidates.
iii. Assessments: Usually used with summer interns to measure their skills and knowledge and how the internship improved them. Good summer interns have the priority to be hired in case of vacancies.
Omanization is a programme working toward replacing expatriates with trained Omani personnel. This programme has the full support of HM Sultan Qaboos and has been in operations since 1988 targeting both public and private sectors. The Sultanate encourages companies to adopt this programme by tax exemptions and green cards in order to achieve the target of Oman vision 2020. The reason behind this programme was the obvious increase in number of expatriates against locals which was driven by shortage of workforce in Oman with high demand for workforce to implement various development projects across the Sultanate. According to the Ministry of National Economy, the population of Sultanate of Oman in December 2010 is 2,694 thousands, of whom 1,951 thousands Omanis and 743 thousands expatriates, that is, 27.6% of the total population which is increase by 3.6% compared to 2003 census (National Census, 2010). Moreover, due to the recent political situations and the demonstrations in some parts of Oman in March 2011, HM announced that public and private sectors will provide 50,000 jobs as soon as possible. All these reasons are considered by Oxy and reflected in its SHRM policies in a way or another and Omanization team in Oxy is the best example. The goals of this team are:
- Get the best fresh Omani graduates from different sources which are: Ministry of education, Higher Education, Social Affairs, Labour and Vocational Training and Sultan Qaboos University (Budhwar, Al Yahmadi and Debrah, 2002).
- Replace expatriates with the existing Omani employees after making sure that they have the required knowledge and skills. Mentoring and two in a box situation is commonly used to transfer the knowledge between expatriates and locals. Omani General Manager and President, two VPs and six Managers are good indicator of the success of the Omanization in Oxy.
- Make sure that all major contracts have a clear percentage of Omanization to be targeted by the contractors and evaluate them periodically.
- Support to Local Community Contractors to help them to start business in their areas and encourage them to hire Omanis.
Currently, 76% of Oxy employees are Omanis and it is targeting 88% by 2014.
The reward system is on of the most important and successful tools that organizations use to retain their treasure of talents. Employees get motivated by financial and non-financial compensation. In recognition of this fact, Occidental Oman developed very competitive financial and non-financial package. The financial package includes:
- Competitive base salary based on the experience and qualifications.
- Transportation, food, housing, rotational allowance (for field based employees) and recently introduced cost of living allowance.
- 13th month salary and 14th month gross salary for field based employees to compensate their annual leave.
- Annual bonus based on the overall organizational performance.
- Flexible benefits based on the salary grade to be used to pay for kids education, car insurance, personal computer and furniture, otherwise, to be transferred to the employee saving plan.
- Field based employees get additional reward and motivation like room in secured camp with daily service and three meals a day, personal protective equipment, gym and entertainment facilities.
- Free of interest housing loan equals sixty salaries.
- Medical insurance that covers the eligible dependents all over the world.
The non-financial reward in Oxy is demonstrated in the empowerment plans and high employee involvement in decision making facilitated by the team working style of management where all the team is encouraged to contribute in carrying out the assigned tasks. In Oxy there is nothing called "department", rather, there are "teams", "team players" and "team leaders". Effective training and development plan is one of the non-financial reward tools that Oxy use, training and development will be discussed in the next topic.