Motivation at Saudi Aramco
This paper will evaluate the various motivational tools and techniques employed by Saudi Aramco Company (where I am currently an employee) and their effectiveness.
Saudi Aramco-An overview
Saudi Aramco is an oil company located in Saudi Arabia and fully owned by the state. Currently, this company is the worlds largest corporation in terms of oil production and crude oil reserves. The headquarters of Saudi Aramco are in Saudi Arabia, Dhahran. Apart from being the biggest oil corporation globally, the single hydrocarbon network in the world known as the master gas system is also operated by Saudi Aramco. Since its introduction in the year 1933 until the year 1988, this company was simply known as Aramco which was an acronym for Arabian American Oil Company (Marcel Mitchell, 2006, pp 45). Saudi Aramco was established in the year 1933 following the signing of a concessionary agreement between the Socal or the standard oil of California and the government of Saudi Arabia. This agreement allowed Socal to explore oil for Saudi Arabia. Socal later assigned the concession to one of its subsidiary known as Casoc or the California-Arabian standard oil. However, the subsidiary or Casoc failed to locate any oil in Saudi Arabia. In the year 1936, 50 of the concessions stake was sold to Texas Oil Company. In the year 1938, four years after the signing of the concession, the first oil site was located at Dammam near Dhahran. This was the major breakthrough for Aramco Company and many investors joined in and became investors (Hazarika, 1998, pp 122).
In the year 1973, the government of Saudi Arabia bought 25 of Aramco shares after the United States supported Israel in the Yom Kippur war. The government raised its shareholding in Aramco to 60 in the year 1974 and in the year 1980, Saudi Arabian government fully acquired control of Aramco. Towards the close of the year 1988, Aramcos name was changed from Arabian American Oil Company (Aramco) to todays Saudi Arabian oil company (Saudi Aramco). Today, Saudi Aramco performs most of the tasks that had previously been performed by the American oil companies during the introduction and explorations stages. Towards the close of the year 2006, this company produced over three billion barrels of crude oil. It was also managing over one hundred gas and oil fields within the country with an oil reserve of over 260 billion barrels and gas reserves amounting to over 250 quadrillion scf (Saudi Arabian Oil Co., 2010, para 2-4). The largest oil field in the world, Ghawar field, is fully owned by Saudi Aramco Company. Other assets of the company include Safaniya field which is also the largest offshore field in the world and Shaybah field also ranked the worlds largest. Currently, Saudi Aramco is believed to be the most profitable oil company in the world. The company has over 54,000 employees from all over the world distributed across fifty six nationalities where the company operates (Aramco Services Company, 2006, para 1-2).
Motivational tools and techniques employed by Saudi Aramco Company
Being a multinational company, human resource management in this company is a challenging task for managers in different subsidiaries as well as the entire company. Saudi Aramco recruits employees from all over the world given that they have the necessary requirements considered vital by the company for its future growth and profitability. As such, the workforce is characterised by individuals or employees from different countries thus diverse cultures, beliefs and traditions (Cordesman, 2004, pp 167). Motivating such a workforce is a challenging encounter but human resource managers at this company in conjunction with the top management has been quite effective in ensuring that employees are fully motivated to work. Currently, I am an employee at Saudi Aramco working in the shipping department as the operations manager. I have worked in this company for five years now and the level of motivation among employees that I have so far experienced for all this time is very high. The company employs several motivational tools and techniques to ensure that its workforce is continually motivated and enthusiastic about their work. This, I would say, is the major cause of success that the company has enjoyed for so long. Saudi Aramco treats its employees like a community and a team hence the success of the company is also the success of the employees (Mababaya, 2003, pp 213).
Training
Training is one of the techniques employed by Saudi Aramco Company while motivating its employees. Saudi Aramco believes in advancing the talents, abilities, experience and expertise of the employees. Career advancement is a key aspiration of almost all employees and an effective motivational tool. One of the major motivation factors that theorists have agreed on is the need for advancement and self actualisation. According to Abraham Maslow, in his needs theory, he placed self actualisation as the highest needs among all other needs and the ultimate goal of every human being (Baldoni, 2005, pp 78). For self actualisation to occur, an individual must perfect his skills and increase his knowledge through continuous learning and career advancement. Fredrick Hertzberg is another theorist who also brought about the issue of need for advancement and achievement as some of job satisfying factors. In his two factor model, Hertzberg outlined achievement and advancement as some of the motivators and job satisfying factors. These are two motivational theorists among others who have outlined career advancement as a major motivation tool. With this in mind, Saudi Aramco puts more emphasis on the need for employees to continually train not only to increase their output but also for motivational purposes. Upon being hired at Saudi Aramco Company, recruits are subjected to a 90 days internshiporientation program where by they are allowed to work with more experienced employees in their fields and to learn from them. The 90 days program helps in introducing the newly recruited employees to the working environment of the company as well as familiarise them with the policies, procedures, regulations and culture of the company. During this period, employees learning attitude is noted down as well as their performance.
The 90 days orientation program, as it is referred as at Saudi Aramco is a training session where newly recruited employees are given a chance to prove that they are willing to learn and work for the company. This program is quite educative and informative and forms a basis or foundation for the employees to understand the roles they are required to carry out once fully certified as employees. Saudi Aramco usually hires new graduates, fresh from college most of whom have no background or work experience in their fields of study or specialization. This program gives them a footing in their future career and it is an interactive program. It motivates the newly recruited employees to learn and be creative and innovative in carrying out their tasks. Since the success of this program determines whether an employee stays or leaves the company, individuals are highly motivated to give their best during this process. Following the completion of this program, the performance of all newly recruited persons is evaluated and based on the performance appraisal, the best candidates are chosen for further training known as the academic or technical training. This entails thorough training of employees in different areas of speciality including vocational or technical, academic or even business skills programs so as to ensure that they are well endowed with skills and expertise to enable them to be effective in their work. Training programs may include clerical skills, operator courses, science, math, English and instrument and electrical skills training. These training are either carried out within the company or by outside trainers at the full expense of the company. Successful completion of the technical and academic training enables an employee to be fully certified whereby he or she undergoes further training and mentoring programs. Mastery skills of the area of specialty or discipline are impacted during this stage. To do this, the company assigns senior managers to coach and mentor the newly certified employees until the employee gains some proficiency in his field. This motivates employees and it has been an effective tool in Saudi Aramco Company. The company also offers professional training vital for leadership and competencies development to its professionals and supervisors. This is done via workshops, seminars, conferences, courses and design. Saudi Aramco Company prides its self as being a learning company that is dedicated to the career advancement of its workforce and it has succeeded not only in improving the knowledge base of its employees but also in improving their productivity and performance.
Compensation
Compensation is another tool or technique employed by Saudi Aramco in motivating its employees. While companies and organisations have deviated from the traditional management theories of motivation that asserted that money was the only motivating factor, money or compensation still plays a vital role in motivating, attracting top talent and retaining experienced employees today. Financial needs are some of the reasons why people seek employment and it is thus essential to ensure that these needs are met alongside other motivating factors. Compensation serves to meet the basic needs of employees such as shelter, food and clothing. For it to act as a motivating factor, compensation package must be attractive, fair and associated with experience and career advancement. In Saudi Arabia today, Saudi Aramco is one of the best employers in terms of compensation packages for its employees. This company offers highly competitive compensation packages to its employees thus motivating them to work and be creative. Compensation increment once in employment at Saudi Aramco comes alongside proven performance and career advancement via training or innovativeness of an employee. Salaries or compensation at Saudi Aramco is given depending on the step an employee is in and salary increment is based on the performance of employees evaluated after every twelve months upon certification. Excellent performers are given a higher percentage of salary increment, rising to the next higher step while good performers are awarded lesser percentage of salary increment as compared to excellent performers. Non-performers or unsatisfactory work is not awarded any salary increment.
The above mode of awarding performance has been a major source of motivation, creativity and innovativeness of employees at Saudi Aramco Company. The salary increment program based on performance of individual employees has created free and fair promotion criteria in this company hence building trust between the management and the workforce. Also, since this increment is based on individual effort, employees, even within a team are motivated to work hard so as to be given the salary rise or be promoted to the next step or position. While no positions are vacant for promotions, performance appraisal and reward system of this company allows employees to earn higher returns without having to wait to be promoted to higher positions. This is a major motivational technique that has proved to be quite effective and efficient at Saudi Aramco Company.
Benefits
Saudi Aramco has some of the best benefit companies in petroleum production industry. The benefit packages have enabled this company to attract, motivate and retain some of the best competencies, expertise and skills from expatriates from different parts of the world. Most of the long serving employees assert to this that the employment benefits they receive from Saudi Aramco company serves as a motivating factor for them to continue working in this company. On top of the base salary given to employees, overbase premiums or payments are also offered to act as motivating factor especially for expatriates on assignment. This company recruits employees or expatriates from various parts of the country as well as the world and the attractive employment benefit packages acts as incentives to motivate such expatriates to be more productive. Another major benefit package offered by Saudi Aramco Company to its employees is the retirement, insurance and savings plan. This is given depending on each individuals payroll. Some employees are given company funded retirement plan while others are offered company matched savings plan. Several insurance range plan options are offered to employees. Annual cash payments equivalent to seventeen to nineteen percent of base salary per annum is also granted. This gives flexibility to employees to choose their own insurance or make saving decisions that are consistent with their needs. Repatriation allowances are other benefits offered to employees of Saudi Aramco Company and which have motivated employees. This is payment given to employees on annual basis for travel costs to areas of origin from Saudi Arabia and their eligible dependents who resides in Saudi Arabia. Saudi Aramco also offers educational assistant to the employees. In addition to giving schooling options, Saudi Aramco also reimburses employees the cost they incur in enrolling their dependants that are eligible to private schools in other overseas countries. Other benefits that act as motivating factors include company holidays, annual vacation, specified location allowance, personal effects shipments and shift or overtime premium. Giving attractive payment benefits package is a mechanism that Saudi Aramco has perfected in its endeavours to motivate its employees and that has had tremendous positive effect on employee performance.
Team spirit
Team spirit is another motivational technique that Saudi Aramco has cultivated over the years. As mentioned earlier, this company despite its size still considers itself one big community comprised of employees and their employer. The company has a diverse workforce with most senior managers and branch managers being from different countries and nationalities. However, the company has been able to raise the team spirit and employees of this company feel part and parcel of this company. The company not only includes the employees in their community but also their families or dependants. The company offers its employees great lifestyles and it has established or built what it refers to as communities. These are residential areas which are provided to employees and their families without any charge. Within these communities, the Saudi Aramco has built schools and athletic facilities and it has buses operating in them. All services offered by these services are not charged, that is, they are offered for free to the employees and their dependants. Other services that carry no charge include local telephone service, water and electricity. The communities also have golf courses, grocery stores, swimming pools among others for use by employees. Currently, the company owns four family communities with the largest one being in Dhahran. This community has a population of eleven thousand people. Other communities include Tanura with a population of about 3200 people and Udhailiyah and Abqaiq which hosts about 1950 residents.
Saudi Aramco is a unique company that has ensured that despite its diverse operations, it still brings its employees together and creates a sense of belonging, recognition, and appreciation. By so doing, Saudi Aramco has been able to create and enhance cohesiveness and team spirit which is translated in the various working departments and stations. Employees feel that they have an obligation of making the company better together thus acting as a motivating tools or technique. Communities have also taught employees to live with and appreciate one another despite their tasks and backgrounds. Team spirit is a major motivational tool that any company willing to succeed should adopt.
Communication
Effective communication is another key tool that is very effective in motivating employees. At Saudi Aramco Company, employees inputs during strategy formulation and the making of key decisions especially those affecting them is highly valued by the management. Saudi Aramco operates as one big family which encourages dialogue and open discussions. Saudi Aramco is made up of few hierarchies thus enabling amalgamation of the management and support staff. The company has instituted IT technologies to enable employees gain information and communicate with management in events where face to face communication is not possible. The group policy has centralised the control of network thus simplifying information technology infrastructure (Saudi Arabian Oil Co., 2010, para 12). This has not only helped in increasing the motivation of employees as they can easily access files and documents but it has also led to a notable increase in their productivity. Sync centre used by this company has also helped in increasing employee collaboration both on the road and in office as a result of data synchronization management. Saudi Aramco Company has a policy that supervisors and managers have a responsibility of constantly being in touch with the supporting staff and the functional staff. This has led to creation of strong interpersonal relationships between the management and the employees hence soliciting loyalty and increasing motivation. Communication channels between different channels and departments are also effective and this ensures that any conflict that may arise if effectively handled. Effective communication makes employees feel a sense of belonging and also aids in increasing motivation. Communication is a technique the management of Saudi Aramco has well mastered and perfected in and it has helped in improving motivation and job satisfaction (Pakka, 2006, pp 144).
Conducive working environment
Working environment is a major determinant of the productivity and creativity of employees in any organisation. The working environment in an organisation determines whether the employees are happy or not, that is, it dictates their motivation level. Saudi Aramco deals with the drilling and processing of oil and petroleum products among other things. This work is at times very dangerous given the high level of fire risk and intoxication from the gases produced during this process. To ensure that the employees are well equipped and protected while carrying their various duties around the company, Saudi Aramco has provided safety equipment to the employees which they are required to put on while working. The employees are also constantly trained on better protection techniques while in job. This helps in boosting the morale of the employees while working and to ensure that all doubts concerning their security are eliminated. At Saudi Aramco, employees find work more interesting despite the fact that some departments are risky to work with. As Abraham Maslow noted in his needs theory, psychological needs must be satisfied first for motivation to occur. Some of the psychological concerns of employees revolve around their health and security and that of their dependents. Offering a working environment that is conducive is one way of eliminating the fear associated with working in risky areas and helps in improving their morale. Also, by organisation being more concerned about the welfare of the employees, employees feel valued and part of the company. This in turn motivates them to work towards achievement of this companys goals.
Employees are also allowed to put forward their complaints relating to the working environment. In cases where the environment for working is not conducive, employees are required to report that to the immediate supervisor who in turn reports the same to the managers or takes corrective action to ensure that the employees are comfortable while working. The welfare of employees at Saudi Aramco Company comes first and this is a major motivating factor or tool.
Creativity and innovation
Another technique that is employed by Saudi Aramco Company in motivating its employees is by encouraging and insisting on creativity and innovation and providing necessary resources required for making sure that this is achieved. Currently, Saudi Aramco is ranked among the most innovative oil companies around the world. This company insists on creativity and innovation and employees are provided with all the resources they require as well as management support in their innovation undertakings. The company is known for taking and training young individuals who are talented and creative. Creativity and innovation are some of the tools that enable employees reach their self actualisation goals. Nurturing them thus improves morale and motivation and also helps in improving productivity.
Summary
Motivating the human resource of an entity is the key to organisational success. Saudi Aramco has perfected on its motivational tools and this has been the backbone of its continued success over the years. One of the major techniques or motivational tools that this company has employed is to invest some of its resources as well as time to training the employees to become professionals. Career advancement is a major motivating factor to employees and it also helps in improving the overall performance and productivity of employees. Compensations and benefits also contribute largely to the high level of motivation and retention level at Saudi Aramco Company. The payment benefits and compensation offered by this company are very competitive and attractive helping the company to attract some of the best expatriates from all over the world. This in turn ensures that high quality goods and services are produced by the company. Communication and team spirit are also other factors that motivate employees in Saudi Aramco. The company has put in place effective IT infrastructures that enables information to be retrieved easily and on time and eases collaboration amongst employees. This helps in cementing the team spirit that exists in this company. Also, providing employees with an environment that is conducive to work in and that encourages creativity and innovativeness are major sources of motivation in Saudi Aramco Company. Employee motivation is the backbone on which Saudi Aramco and its success is built upon.
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