National Refinery Limited

Human Resource Management Assignment

Contents
Introduction .................................................................................................................................................. 3 Management................................................................................................................................................. 3 Production..................................................................................................................................................... 3 HR Practices .................................................................................................................................................. 4 Organization Chart ........................................................................................................................................ 6 Recommendations ........................................................................................................................................ 6 Challenges ..................................................................................................................................................... 8 How we went about the task ......................................................................... Error! Bookmark not defined.

Introduction
National Refinery Limited (NRL) is a petroleum refinery and petrochemical complex engaged in the manufacture and supplies of asphalts, BTX, fuel products and lubes for domestic consumption and export. NRL stands to be the second largest refinery of Pakistan in term of crude oil processing facility and the only lube oil refinery of the country. The company operates within fuel and lube business segments. Fuel segment is primarily a diverse supplier of fuel products offering furnace oil, high speed diesel (HSD), jet fuels, liquefied petroleum gas, motor gasoline, and it exports naphtha. Lube segment mainly provides different types of lube base oils, asphalts, some fuel products, waxes and rubber process oil, while it also exports lube base oils. NRL is listed in Karachi, Lahore and Islamabad stock exchanges and the company's shares are traded under the stock code NRL in these exchanges.

Management
National Refinery Limited was incorporated on August 19, 1963 as a public limited company. Government of Pakistan took over the management of NRL under the Economic Reforms Order, 1972 under the Ministry of Production, which was exercising control through its shareholding in State Petroleum Refining and Petrochemical Corporation (PERAC). The Government of Pakistan had decided to place the National Refinery Limited under the administrative control of Ministry of Petroleum & Natural Resources in November 1998. In June 2003 the Government of Pakistan decided to include NRL in its privatization programme. The selling of 51% equity and transfer of management control to a strategic investor had been proposed accordingly, the due diligence process for the privatisation was initiated. After competitive bidding NRL was acquired by Attock Oil Group in July 2005. The Company has been privatized and the management handed over to the new owner (Attock Oil Group) on July 7, 2005.

Production
The refinery complex of the Company comprises of three refineries, consisting of two lube refineries and one fuel refinery. First Lube Refinery commissioned in 1966 with designed capacity of 539,700 tons per annum of Crude Processing and 76,200 tons per annum of

Lube Base Oils. Second Lube Refinery commissioned in 1985 with designed capacity of 100,000 tons per annum of Lube Base Oils. The Fuel Refinery commissioned in 1977 with designed capacity of 1,500,800 tons per annum of Crude processing and after revamp the designed capacity comes to 2,170,800 tons per annum of Crude processing. The BTX unit was commissioned in 1985 with design capacity of 25,000 tons per annum of BTX. NRL enjoys a competitive edge, as it is the only refinery producing LBO in Pakistan. Specialties Asphalts, LBO, Fuel

HR Practices
Petroleum Refining involves complex and hazardous operations; therefore, a high degree of skill and efficiency is required for its safe operation. In order to meet this requirement, freshly qualified professional degree holders are employed as Trainees under a Management Trainees Scheme. The duration of Training is normally one year which may be increased or decreased depending upon performance of the Trainee during training. Initially, the Trainees are acquainted with theoretical concepts involved in Petroleum Refining and then they are deputed to different functional areas for practical training. The lectures on theoretical concepts are delivered by professionals working in Refinery having extensive experience besides possessing professional degree in the relevant field. The Trainees are periodically evaluated to gauge their level of knowledge and skill attained and accordingly their training program is reviewed and also revised if necessary. Similarly, there is an Apprenticeship scheme whereby professional Diploma Holders and Intermediates in Science are provided Training in Refinery Operations and Maintenance. The duration of training in this scheme is 2 years for Diploma Holders and 3 years for Intermediates. Besides training of fresh professionals, the professionals already working in NRL are also provided training in order to update their knowledge with the latest developments in their field by conducting Continuing Professional Development Programs. At National Refinery Limited, the management each year conducts performance management of all the employees. This way they are able to keep a track of all the employees, promote and find the future leaders of the company.

Human Resource is the most valuable asset of Refinery as professionals trained in Refinery Operations and Maintenance are not easily available. The human resource consists of Management and Non-Management staff and their total present strength is more than 800. One of the company mission statements is to provide human resource development by upgrading training facilities and exposure to modern technologies and management techniques. Also they try to achieve highest standards of occupational health, safety and environmental care In order to meet their genuine needs for maintaining good living standard and good health, there are various benefit schemes besides Salary, notable among those are: Medical Assistance for Self and Family Leave Fare Assistance Childrens Education Scholarship for Workmen Car Loan (Interest Free) Club Membership for Managers and above Membership of Professional Institution Hajj on Company expenses for Workmen Housing Assistance Scheme (Interest Free) Pension and Gratuity

Organization Chart

Recommendations
National Refinery Limited being a corporation that is not in direct contact with final consumers but deals with petroleum retailing organization gets a higher opportunity to focus on its HR functions and production as marketing plays a small part for the organization. Their sales are heavily dependent on the people they have in the organization as it has to get into B2B (business to business) marketing, where communication is mostly done through meetings rather than advertisements used for B2C (business to consumer) companies. Having the right people, at the right positions, who can actually communicate NRLs motive and strategy to the potential customer, plays a vital role in business progress. The work force gets the sales for the company, so need to be hired, trained and retained in a way which would benefit both, the employee as well as the company. The satisfaction

derived from the returns of the job should be reflected in the job being done by the employee. Employees should get a positive work environment where they are motivated to help the organization prosper, not only for their self interest but also for the organization itself. Employees in NRL are highly well versed with the industrys practices and are trained to understand what their respective jobs require them to do. These employees are in the position to come up with really helpful and bright suggestions for the organization, thus communication should be two way, where the leaders encourage suggestions from employees and they are made to feel that every job is important regardless of the rank it hold on the organizational chart. This would help in employee empowerment and motivation.

Training of employees is an integral part of the organization, but this training should not just be limited to the past experiences, learning and what has always been taught but It should change with time and be adaptive of new policies and way of working inspired by industries abroad. The compensation plan is quite efficient as it takes into account the basic needs of an employee. So the room for improvement lies within the internal working of the organization and the way the employees feel at work. Happy employees are easily retained and encouraged to do better and remuneration with benefits are not enough to keep an employee happy. Employees should be made to work in teams and groups so that they can know their peers better instead of them being close to some employees and being in no contact with others. They need to be made to work with different people in different situations. Problems like conflict of opinions might arise in the beginning but experience only will make them work their way out and learn to cooperate with one and other. Respect, interactions with peers and recognition are needs to a normal human being, these needs have to be fulfilled in organization to help run business smoothly. In Pakistan there is high power distance, where top level managers look down upon people of a lower cadre. This is very disrespectful and de-motivating for employees, such organizations can only retain employees who get jobs nowhere else. NRL being a government organization earlier, still has a bit of this element where not every job is given equal respect, this is not a flaw that exists only in NRL but is within the whole society. Performance appraisal currently is very subjective, where personal opinions and biases of the management matter a lot in employee evaluation. They should now introduced a forced

ranking performance evaluation system, where it is made more objective and employees can be evaluated on predefined categories and standards against what they perform rather than in competition with other employees. NRL should also have a formally structured organizational chart where every employee can be placed so that everyone knows their standing in the organization. This would also help employees work more systematically as they would know exactly which rank their job hold, who they are accountable to, what jobs they supervise and also what their promotion path could be. This systematic job ranks also help in making a career path for employees, which serves to be a motivator too, as people are well aware of what they need to do next.

Challenges
The challenges faced by NRL vary according to the level of the employees in consideration. White collar workers are likely to pose fewer obstacles as opposed to blue collar workers, who might be resistant to change and might feel hard done by at times. Since NRL has been privatized not that long ago, a firm hand needs to be employed to deal with the workers and some hard decisions might need to be made. The company needs to stand tall in the face of resistance and make sure that they always take the right decision. Personal issues, considerations, viewpoints should matter only a little and should not stop the company from moving forward. Nepotism is one issue that might more or less be prominent in this organization due to privatization. On one hand, it is impossible to eliminate the possibility of nepotism already having been present in the organization. It does exist to some extent in every organization. Due to privatization, it is possible that the managers might favour people they know over those whom they are not that familiar with and merit might be sacrificed for familiarity and friendship. This is something that National should guard against in the future and they should ensure that no matter what, the productivity of the organization is not sacrificed. Trade Unions and their actions are something that NRL needs to guard against and the HR board needs to put its foot down in terms of policies and if faced with a particularly demanding Charter of Demand. They need to ensure that people who are strong and apt negotiators should face the union and the HR Department as well as the Board of Directors should clarify the concession policies and how far the company is willing to extend its leash. They should ensure that at any point, any unreasonable demands are not entertained. Likewise, contingency strategies need to be developed for extraordinary situations that dont occur on a day to day basis. Any events that managers would not have to deal with everyday should not catch them off guard and they should be prepared for any setbacks that may come their way. Not only will this avoid unnecessary conflicts and reduced

productivity but it will also send out a clear message. That said, NRL is very likely to face such issues, both from the blue and white collar workers. Strikes are expected since the work is manufacturing and operations-based. Strikes and uprisings are something the company needs to guard itself against because they can disrupt the workflow directly. Attrition and employee turnover is something expected as a challenge for the HR company. When employees are forced to work in groups and in tandem with each other, issues are bound to arise and conflicts may sometimes may impossible to resolve. In such cases, the company should be prepared to let people go and have new people ready who can replace them on a long-term basis. To start off with, the company should be careful with their grouping. While ice-breaking is good, some combinations just dont go well together and National would be well advised to recognize such partnerships and avoid them at all costs. The HR department needs to communicate clearly that performance appraisal is there to help the employees and not to reprimand them. Performance-measuring techniques and employee of the month awards can easily turn into competitions that in some cases end up being anti-productive. Such behavior is not conducive to a healthy environment and should be avoided to ensure that the healthy atmosphere is maintained. Productivity should be valued over pride and employees should be trained to take feedback constructively and in a positive manner. The structured format of the organization might put some people off who prefer freedom, so NRL needs to ensure that structure isnt mistaken with rigidity. People need to be given their working space and the working environment should be conducive to creativity and freedom. Although the tasks here can be relatively monotonous, National should ensure that workers dont feel bored with their jobs as they are likely to. Job rotation and enrichment should continuously be practiced to give the company the best chance of moving forward. National also needs to ensure that each employee feels motivated and that his/her individuality is respected and promoted. The trainings should be designed and tailored to suit each process specifically. This is an especially important point if trainers are outsourced and not from within the company (which should happen to ensure as much input as possible). The employees might not feel like they need training or they need updating and they might feel insulted if they are put into training programs while some of their peers arent. This will particularly be a problem if there is an age gap among the employees. The older employees need to feel respected and this part should be very carefully handled within the organization.