Human Resources value proposition of GASCO

Introduction:

The report presented here is regarding the HR value proposition of GASCO. GASCO is also known as Abu Dhabi Gas Industries Ltd. The company was born in the year 1978, in the very heart of the UAE (United Arab Emirates) in its capital Abu Dhabi. Value proposition is best explained by Ulrich’s model which shows the factors one should look for to check whether the HR system helps to realize any value to the organization. The report will find out the same with the help of questionnaire analysis from the HRs in the company.

GASCO:

GASCO is also known as Abu Dhabi Gas Industries Ltd. The company was born in the year 1978, in the very heart of the UAE (United Arab Emirates) in its capital Abu Dhabi. Replying to a question about the vision of the founder of the company, late “Sheik Zayed bin Sultan Al Nayhan” he replied that he believed in the sound operation of the Emirate’s important gas assets.

The amalgamation and establishment of Abu Dhabi Gas Industries Ltd or GASCO as a combined venture among the ADNOC (known as Abu Dhabi National Oil Company), Total, Partex, and Shell, and the addition of a wholly owned ADNOC Company named ATHEER in the year 2001, supported GASCO in appreciating the vision to be among the one of the most inventive, caring and respected companies in the hydrocarbon and gas industry. (Author, 2010)

GASCO’s promise in meeting the prospect of its diverse stakeholders – employees, community, shareholders, non governmental bodies and regulatory bodies, was freshly recognized through the restitution of the combined Venture contract originally signed in the year 1978.

The new contract, which is now contracted to run until the year 2028, September 30th, will permit GASCO to grasp the peculiarity of being one of the chief players in the worldwide gas and hydrocarbons industry, conducting the transportation of liquid and gas products, onshore gas processing and contributing to the economy’s GDP of in a responsible and sustainable manner. (Author, 2010)

Literature Review:

A HR value proposition is a proposal that defines the measurable and quantifiable gains that an organizations or individuals making the proposal promise to deliver. The development procedure of a HR value proposition is based on the reviews and analysis results of the gains, prices and values to be delivered to the customers by an organization, potential customers, and other constitutive groups working within and outside of the organization. It can also be viewed as positioning of a value, where term Value can be defined as = Benefits / Costs (where costs include all the risks taken). (Becker, 2002)

Value is said to be added to a HR proposition when the work done by the HR professionals helps people to accomplish their goals and targets. What matters most is the benefits a person receives from this work and not design or the way the program was made or the policies used in declaration. The actions which do not fulfill these goals are not pursued. Hence HR value proposition can be viewed as the exercises, professionals involved and departments which work to achieve this aim and work to obtain productive and positive results for all the stake-holders like people working, managers, etc. (Spickett-Jones, 2003)

Regrettably, in some organizations HR proposition is not seen as a group of people brought together to build something productive, rather it is seen as a cost centre. As such many of such groups are closed down during cost cutting processes. In order safeguard their position in an organization; they should increase their influence over their customers and stakeholders. They should emphasize less on their procedure and processes and more on the results and benefits they are providing. They should be in line with the productivity and their stakeholders. (Tuominen, 2004)

Nowadays HR personnel are becoming redundant and it’s ironic that the services that they deliver are more focused on business performance improvements from central goals. With the shift in societies from an old era of business to the new knowledge and service oriented business goals and economies, having a better HR deliverable at ones exposure would become an added advantage and necessity to combat the increasing competition for an organization. (Winfried Daun, 2005)

Such HR proposition values are largely effected by intangibles and managing these intangible properties of an organization. These intangible properties include : research and developments, leadership, brand positioning and strength, quality of service, speed, governance, tacit knowledge, loyalty of customers and the employees, reputation, informal processes, innovation , plant flexibility, trusted networks. Managing these intangible is important because they have deep impact on the shareholder values and are necessary regarding the future growth and expectations of the investors from the organization. (Winfried Daun, 2005)

A comprehensive study by Ulrich and Brochbank shows the necessary steps required so as to deliver the required competencies to the stakeholders in a new economy. The figure below shows the systematic display of what should be done and how it should be done. This is the mapping out of HR value proposition, showing how to deliver desired stakeholder values. (Becker, 2002)

Figure 1: The Ulrich and Brochbank HR Value Proposition

There are 14 HR transformation criteria which have been derived from HR value proposition transformation. These are listed below:

HR value proposition element:

Knowing the realities of external business world

Criterion 1 An efficient and efficient HR function is one which one which HR professionals who can acknowledge the external business environments and realities and adapt measures in such a way to combat these situation, allocating HR resources and apply HR practices accordingly. (Becker, 2002)

Serving both the internal as well as external stakeholders

Criterion 1- an efficient HR function is generating market value for its investors by increasing intangibles.

Criterion 2- A good HR function increases the customer share by connecting with its target customers.

Criterion 3- An efficient HR function assists its line managers to deliver strategies by developing capabilities of an organization.

Criterion 4: A good HR function elucidates and lays down base for employee value proposition and improves individual abilities. (Aughton, 2005)

Creating efficient HR practices

Criterion 1: A good HR function can manage people, processes and practices such that it adds value.

Criterion 2: An efficient HR function can manage performance management process and practices such that it adds value.

Criterion 3: An efficient HR function can manage information process and practices such that it adds value. (Aughton, 2005)

Developing HR resources

Criterion 1: An efficient HR function can manage work flow design and processes such that it adds value HR value proposition element: Developing HR resources HR transformation criteria.

Criterion 2: An efficient HR function adjusts its organization in accordance with the strategies of the business.

Criterion 3: An efficient HR function makes a clear strategic plan for coordinating the HR investments with the goals of business. (Aughton, 2005)

Ensuring Professionalism of the HR environment

Criterion 1: An efficient HR function consists of HR professionals who carry out their duties and responsibilities accurately.

Criterion 2: An efficient HR function develops HR professionals who display HR competencies.

Criterion 3: An efficient HR function would invest in training, development and growth of its HR professionals.

Nowadays, HR professionals make use of systemic-based competencies in order to map defined set of the HR Value Proposition and hence enhance and improve the strategies delineated by Ulrich and Brockbank so as to deliver appropriate value to stakeholders. The efforts taken by the HR professional put in action the HR proposition model by having casual link between initiatives taken by the HRs and business results desired. Instead of having a line of sight with the key stakeholders expressed in words and tables, an orderly among the HR Value Propositions provide HR professionals a clear vision as to how they should actually act so as to deliver stakeholder values. (Stuart E Woodhead, 2000)

Mapping out the HR Value Proposition model provides a clear vision and framework that formulates the role of HR professionals as the service key business driver that delivers the proper stakeholder value, going beyond just theoretical model and language. It provides a fabric that generates a shared interpretation of the business, significantly assisting the communication efforts. Hence with the proper programs and policies available, it facilitates a desired environment and culture.

Thus by using relevant tools and techniques required to corroborate the systemic-based competencies, the HR professionals can link the fourteen criteria of HR Value Proposition model and incorporates them into well functioning systematic HR business model. (Becker, 2002)

In order to understand the working and mapping of Ulrich and Brockbank 14 criteria can be mapped using application of 2 mapping techniques, which are:

â€¢ System Dynamics mapping

â€¢ Socio-ecological mapping.

System Dynamics mapping is centre to the growth of stakeholders’ driver model which makes the visible connections between employee growths, capabilities of an organization, experience of customers and returns of the investor. (Tuominen, 2004)

Socio-ecological mapping is needed to carry on strategic reviews and growth in the surroundings which have become unpredictable due to intangibles. It is required to represent social trends between and within an organization and its surroundings.

Diagram below gives a perspective of a high level system of the HR Value Proposition and extent of these two mapping techniques.

Figure 2: System viewpoint of HR Value Proposition

System dynamic mapping:

System Dynamics mapping gives a technique of describing the underlying structure which establishes a blueprint of events that can more often than not contemplate changes in the efficiency of intangibles like increasing waste, cyclic phenomena in supply chains, lack of innovation, declining sales, worker burnout, and so on. (Spickett-Jones, 2003)

The uses of system dynamic mapping for a HR professional are as follows:

1. Modeling and mapping the delivery of the stakeholder values over a particular frame of time (productivity, profitability, customer share etc.) in accordance with the levels of availability of tangible and intangible resources (knowledge, customers, staff, relationship management, suppliers, innovation, reputation, etc.)

2. Exploring and researching new business options – like, developing a business case for practicing a new learning and growth initiative by figuring the effects of top line i.e. revenue and bottom line i.e. cost on the business performance.

3. Researching and exploring methods to solve a given problem – like, exploring different options for improving the falling service quality.

Socio-ecological mapping:

Socio ecological mapping refers to the people in the concerned environment. Socio-ecological mapping is necessary for understanding relationships between the people in the system through different time frames.

From time to time, expectations and values of an organization change around the globe. They need to act through their plans in their environments. This leads to creation of an external environment which has discontinuous and dramatic shifts in its social values and expectations from the community. This leads to a situation when people continuously change their minds regarding the choices about certain services and products. HR professionals should be able to recognize any significant changes socially that can affect their organization because such unsettling and unpredictable surrounding acts upon their industry or concerned organization. Hence, they will need to direct their strategic planning process and plans in accordance with these changes and need to build an organizational environment around, which has continuous learning and information about the surroundings in case their organizations have to be successful for the long term.

In order to understand which technique should be used in what environment let us consider two situations.

The first situation considers the end results of HR personnel not following socio-ecological representation in an area that’s part of the HR Value Proposition as the External Business Realities element. It has not been made explicit by Brochbank and Ulrich. Regardless, this area is necessary for survival of business in the new era of service or knowledge oriented economy.

The second situation studies a position in which HR professionals use Systems Dynamics representation to display how their efforts add stakeholder value. Both situations involve System Dynamics mapping for the criteria titled as ‘Serving external and internal stakeholder’ in the HR Value Proposition Model. In one case, the contribution was important and distinct while in other case was not so significant.

Figure 3: Organization in framework with its surroundings

Figure 4: Organization in situation with its Industry surroundings

The term ‘extended social field’ addresses to the area beyond the organization’s industry environment. This is also in reference with the wider or global community as in contextual environment.

According to criterion 1: An efficient and efficient HR function is one which one which HR professionals who can acknowledge the external business environments and realities and adapt measures in such a way to combat these situation, allocating HR resources and apply HR practices accordingly.

It insists on the fact that organization should pay attention to its environment outside the firm. The HR professionals should be able to engage in conversation regarding the changes in external surroundings like changes in economy, rates technologies and so on.

In order to keep them informed about the new information, HR professionals should conduct environmental scans using processes which have been transformed from OST (Open Systems Theory).

OST is social science knowledge body that manages people and their organizations and should have an open, clear, adaptive and active relationship with their surroundings over time so as to ensure viability and good results. It also says that people can be seen as purposeful and informative open systems that can change and generate systems and their surroundings.

Serving external and internal stakeholders other criteria are:

Criterion 2- an efficient HR function is generating market value for its investors by increasing intangibles.

Criterion 3- A good HR function increases the customer share by connecting with its target customers.

Criterion 4- An efficient HR function assists its line managers to deliver strategies by developing capabilities of an organization.

Criterion 5: A good HR function elucidates and lays down base for employee value proposition and improves individual abilities.

These criteria are being depicted in Figure 4 which concerns the Organization in context with the industry environment.

Hence we can see that representing the information in form a systematic form makes it easier for organization-industry interface to provide HR professionals with chances to make clear, significant and visible necessary contributions to performance of business forming a unique view; so as to adapt with increasingly significant and emerging new service or knowledge oriented economy.

Research Questions

The concern here is to verify the extent till which, GASCO’s HR system delivers value proposition. For this purpose, we will use the Ulrich model as shown in literature review and will verify the 5 dimensions of the model in GASCO.

In this report, we will check whether the five dimensions in Ulrich model are satisfied in GASCO and will comment on the value proposition of company’s HR system. The concerned objectives would be as follows:

Ulrich’s Value proposition dimension

Criteria’s to check for

Knowing the external business realities

Checking for ‘HRM’s efficiency in understanding realities of external business and thus adding value.

Serving External and Internal Stakeholders

Any increase in the value of investor’s money by HR system.

HR capacity to increase customer share

HR’s capacity to motivate line mangers to participate in strategic issue.

Enhancing individual’s ability

Creating HR practices

Management of employees in such a way that add to value

Managing performance of the employees

Information is correctly managed and utilized

Hr manages work flow design and adds value to the organization.

Building HR resources

HR alignment to strategic objectives of the business

HR’s clear strategic planning process and alignment of strategic business objectives with HR objectives

Ensuring Professionalism

To check the presence of a professional HR system

Training and development’s presence in the organization.

Methodology

The methodology involves conducing survey analysis to test the research questions in GASCO as presented in above section. The methodology is divided into two parts:

Strongly Agree

Strongly Agree

Result for knowing the external business realities

Do you keep the track of competitors’ strategies and use the information in forming HR practices?

Do you keep the track of quality of Human resource existing in the market?

Do you conduct regular meeting (formal or informal) with the HRs of competitors so that you can get aware of the external environment of the HR system in the industry?

Do you aware yourself with the rules and regulation of the government that are existing and that can exit in future to make a better HR policy?

Do you choose employees taking into consideration the relations with the suppliers, contractors, clients etc?

Do you consider the cultural aspect of the employees in your HR systems?

Taking the example of the giant recession which the world recently faced, did you took any steps like shortening of work force, reduction of pay to respond to the situation and cut the cost?

As GASCO is an exploration firm, do you intake scientist and other post of employees taking into mind the kind of work going on in the industry?

Technology keeps on changing, when you hire an employee, do you keep in mind the present and future techno skills which the employee should know?

Do you conduct regular training to bridge the gap between present skills and those required as according to recent external environment characteristics?

Result for serving internal and external stakeholders

Do you keep an eye on company’s intangibles and try to increase these in GASCO?

Do you conduct regular training for the employees to increase their capabilities?

Do your staff is in contact of the customers?

Do you keep an eye on the organizational suppliers and try to maintain and build strong relationships with the suppliers?

Do you take the feedback of your distributors and other stakeholders and then apply them in modifying your HR strategies?

Do you encourage your line managers to come up with a solution on their own and appreciate employee participation?

Do your staff make regular visit at customer end and try their best to understand the need of the customers and deliver them on time?

As GASCO is an exploration firm, do you intake scientist and other post of employee’s feedback in aligning the need of the organization with current trend in the market?

Do you keep an awareness of investor’s attitude towards the company?

Do you make changes in your policy as to consider the investor’s reaction?

Result for creating HR practices

Do you keep try to create policies that helps in building up a culture rather than making just a profitable entity?

Do you conduct performance appraisal of employees on regular basis so that possible value addition action can be taken?

Do you appreciate any value addition in employee by proving certifications or by rewarding the employees adding some value in the firm?

Do you manages the work flow so that every step, the value can be recognized?

Do you use value chain analysis in your system?

Do you encourage performance management techniques at the workplace?

Do your ensure work life balance so that more satisfaction can be creating for employees and the job turnover rate can be enhances?

Do you take employee feedback and try to use these feedbacks in ways that ensure value addition to the organization?

Do you keep information about the employees, their skills, areas of expertise, potential etc?

Do you create a culture of learning and learning sharing?

Building HR resources:

Are you aware of Strategic plans of the business?

Do you make adjustment in the organizational human resource, in terms of number of employees, posts in firm etc?

Do you make a periodic diagnosis of the firm’s requirement and then predict future requirements?

Do you enter into practices like Knowledge management or Learning Management system that can give you a strategic advantage?

Do you hire employees keeping in mind future need of the organization?

Do you take steps to store the knowledge of the present employees so that even in the case these employees do not remain the part of the firm, but still there best practices can be stores in a knowledge base?

Do you have a position like KMO or Knowledge management officer so look after the suture aspect of the company?

Are your plans for strategic Human Resource planning transparent and everyone is aware with the same?

Do you considered the case where GASCO enters into another strategic partnership with a new firm and to deal with issues like cross cultural management, work force diversification etc?

Do you have a clear strategic planning process?

Result for ensuring HR professionalism

Does HR system in the company have clear roles?

Do you have a clear documented HR policy which is well structured and is comparable to best practices in the industry?

As the workforce is UAE is devised in terms of religion background, educational history, culture etc. do your policies are neutral for all of the employees and are you can equal opportunity employer?

Do you follow a well framed system for recruitment and selection?

Do you have a policy document for various aspect of Human Resource Management in the organization?

Do you keep the record of previous training and development of employees and make provision for future training according to that only?

Do you think that HR practices in GASCO helps employees to find their core competencies and which in turn, help the company to generate its own competencies?

Do you conduct training for recruiters and other HR staff regularly?

Are you connected to any professional HR practice organization which provides you regular guidelines to work and helps you to standardize your HR system and practices?

Do you have a clear strategic planning process?

Analysis of Results

Knowing External Business Realities:

With reference to the charts presented in the previous sections, we can conclude the following results:

Creating HR practices

With reference to the charts presented in the previous sections, we can conclude the following results:

HR department in the company keep on trying to create policies that helps in building up a culture rather than making just a profitable entity

HR in company conducts performance appraisal of employees on regular basis so that possible value addition action can be taken.

It appreciates any value addition in employee by proving certifications or by rewarding the employees adding some value in the firm.

Work flow is not managed properly

HR does not utilize value chain analysis to identify periodic and step by step value addition.

HR does not ensure work life balance and thus satisfaction cannot be creating for employees and the job turnover rate can go magnified.

Employee feedback is taken

Knowledge is not managed and learning system is not well developed.

Here we received mixed results. Most of the activities of HRD in GASCO help in creating HR practices. The place where it lacks is managing the knowledge in the system. The company lacks a proper KM strategy and performance management policies. So talking about the Ulrich’s HR value proposition dimension of creating HR practices, we can say that GASCO creates HR practices but lack KM initiatives.

Serving internal and external stakeholders

With reference to the charts presented in the previous sections, we can conclude the following results:

The HR in company keeps an eye on company’s intangibles and tries to increase these in GASCO.

Conduct training .

HR staff keeps a touch with the customers.

HR in GASCO keeps an eye on the organizational suppliers and tries to maintain and build strong relationships with the suppliers.

Feedbacks from stakeholders are utilized and thus add value to the organization.

Line managers are encouraged to participate in decision making process.

HR intake scientist and other post of employee’s feedback in aligning the need of the organization with current trend in the market.

The company’s HR helps in serving internal and external stakeholder and thus adds value to the organization.

Building HR resources

From the chars shown in the data representation section, it is clear that the organization lacks strategic outlook.

GASCO do not have a clear strategic process.

Cross cultural management and work force diversification is not addressed properly in the company.

Strategic Human Resource planning is not at all transparent and not everyone in the organization is aware with the same.

The organization does not have a post of KMO who can preserve the knowledge base of the organization.

GASCO do not take steps to store the knowledge of the present employees so that in the case these employees do not remain the part of the firm, their best practices cannot be stored in a knowledge base.

Employees are not hired taking in mind, the future need, performance parameters for the workforce.

Clearly GASCO is not able to build HR resource which is a requirement of HR value proposition by Ulrich.

Ensuring HR professionalism

The analysis is as follows:

HR system in the company has clear roles.

HR has a clear documented HR policy which is well structured and is comparable to best practices in the industry.

HR policies are neutral for all of the employees and are can be said as equal opportunity employer.

Recruitment and selection is well framed.

HR system keeps the record of previous training and development of employees and makes provision for future training according to that only.

HR practices in GASCO helps employees to find their core competencies and which in turn help the company to generate its own competencies.

GASCO is connected to a professional HR practice organization which provides regular guidelines to work and helps GASCO’s HR to standardize your HR system and practices.

So, on the basis of above results, we can say that HR adds value to the organization with respect to professionalism concern of the Ulrich’s model.

Conclusion

The study takes data from the people who are responsible for creating and managing the HR system in the organization, so we can expect that the analysis based on the data deliverers the actual picture of the firm. We found that The Company understands the external business realties and thus HR adds value proposition in terms of this dimensions. Most of the activities of HRD in GASCO help in creating HR practices. The place where it lacks is managing the knowledge in the system. The company lacks a proper KM strategy and performance management policies. So talking about the Ulrich’s HR value proposition dimension of creating HR practices, we can say that GASCO creates HR practices but lack KM initiatives.

The company’s HR helps in serving internal and external stakeholder and thus adds value to the organization. GASCO is not able to build HR resource which is a requirement dimension of HR value proposition by Ulrich

Recommendations

As we saw in result section, GASCO is very successful in managing 3 out of 5 dimensions of HR value proposition. If it implements a Knowledge management system, it will be able to fulfill another dimension of value proposition which is creating HR practices. Thus, first recommendation to GASCO is to appoint a KMO who can take care of firm’s knowledge management related activity.

Another drawback is failure to create HR resources. The company should take necessary action to overcome this problem which can be as follows:

Making a clear HR Strategic Plan.

Forecast the future need so that the necessary steps can be taken in terms of gathering Human Resource for future.

Convey the strategic plans of the firm to employees so that they can prepare themselves at individual level too for future company needs.

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