Business Report in Case Study: Human Resource Management: British Petroleum (BP)
Table of Contents
Training and development, reward management, and employee relations management are significant functions of any human resource management (HRM). The three functions aim at achieving organizational goals, increasing employee satisfaction, and obtaining a competitive advantage. BP is a British multinational company headquartered in London, England. With more than 15000 employees within the UK alone, the company requires effective HRM practices to make it have a competitive advantage and remain sustainable in the short and long run. The following paper will examine training and development, reward management, and employee relations management in relation to British Petroleum (BP).
2.0. Employee Training, Learning, and Development
Employee training and development is an important function of organizational human resource management that aims at ensuring that individuals and groups have better performances within their respective organizational settings. In all sectors, the accomplishment of organizational objectives relies on the capabilities of employees. Training programmes provide an organized learning and development method that can expand the efficiencies of individuals, groups, and an entire organisation. Aguinis and Kraiger (2009) argue that training and development programmes provide organized education that enables the sharing of organizational culture. Training differs from one workplace skill to another and involves developing leadership, problems solving, and innovative thinking. Training programmes enable employees to learn specific knowledge and expertise that can help them improve the roles they currently do. Employee development is an expansive term that encompasses employee growth and the way the employees will perform in the future. Development involves the accomplishments that enable an individual to gain new skills and abilities for personal growth. BP should have employees with capabilities to swiftly adjust to the changing business environment and to accomplish this. Therefore, the company should invest its resources in employee training and development.
Good training, learning and development programmes will enable BP to keep employee talents and grow its business profits. Hiring top talents may cost a lot of time and money. Unless appropriate training and development strategies are put in place, retaining those talents may prove futile, and an organisation may not grow. Therefore, most organisations use training and learning programmes as a form of competitive advantage. According to Armstrong and Taylor (2014), most enterprises with high-impact training, learning and development record more profits than competitors who do not emphasise employee training, learning and development.
Many organisations use employee training and development as a tool for gaining organizational success. BP can implement a variety of employee training development programmes such as teaching techniques, helping learning environment, and schedule that can help employees improve their skills and apply those skills in the workplace.
A perfect employee training, learning and development plan must be a mixture of knowledge, goal setting, and career development. Currently, most organisations are using information technologies to accomplish their employee training and development needs. Career planning training programmes support employees and enable them to manage different characteristics of their lives. 70 per cent of learning on the job takes place informally, and this gives employees more freedom to learn faster (Dessler 2016, p. 39). In addition, career planning allows employees to gain skills and knowledge that can help them remain sustainable in the job market. Goal setting is an essential component of career planning.
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Employee learning and development result in several benefits for both the employees and BP Company. The programmes can help employees gain career competencies as they learn about the technical and soft skills required in various jobs. For example, Dessler (2016, p. 43) suggests that 76 per cent of employees need career growth which they can only obtain through effective training and development strategies. Secondly, individual BP employees can record high levels of job satisfaction when they feel that the company cares for them and gives them value to the work they provide. 25 per cent of employees feel more satisfied when given freedom to do what they do best (Dessler 2016). Consequently, employees can start performing highly as they improve their behaviours and skills through training, learning and development. BP, in turn, can record growth in market share that can enable it remain solvent and gain a competitive advantage. Moreover, the company will be in a position to retain the most talented sales people, engineers, and scientists.
Making the right investment in employee learning and development is an important though a challenging business for human resource management. According to Noe (2010), ensuring that a company is a learning organisation is the best way BP can learn faster than competition and gain a competitive advantage.
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BP must become a learning organisation with a continuous learning culture. Most successful multinational companies describe themselves as learning organisations. BP must, therefore, create vice presidents with responsibilities of creating knowledge, learning and intellectual capital. According to Noe (2010), a learning organisation is both a user and a creator of knowledge. As a learning organisation, there will be a free flow of knowledge. It can be distinguished by its knowledge and ability to pass this knowledge across organizational levels. BP can also gain a competitive advantage if it learns faster than its competitors. The HRM should motivate the exchange of information between its employees. For example, the company must encourage the scientists to share their knowledge with the engineers, and the engineers should also share their knowledge with other staff such as sales people. According to Dessler (2016), developing BP as a learning organisation will enable people within the company to develop greater motivation, flexibility, creativity, and improve their social interaction. In the process, BP will have better-working teams and groups.
However, the process of making BP a learning organisation may be met with resistance from employees and the top management. The HR manager can solve this problem by ensuring that all the stakeholders, especially employees, are involved and engaged in the process of determining adequate training and learning programmes.
3.0. Reward Management
Currently, employees articulate about their wants and needs. They desire the best of everything. Employees want competitive salaries, job security, aspirational and comfortable lifestyles, work-life balance, career enhancement options among others (Giancola 2010). The increasing competition for talents drives organisations to develop strategies that can help them recruit and retain the best talents. While many companies are struggling to obtain innovative ways to accomplish this goal, BP should develop robust reward management practices that can be goal long way to impacting the lives of its employees. Currently, 86 per cent of business organisations have reward systems in place, and 70 per cent of them offer between 3 and 6 different rewards programmes (Dessler 2016, p. 76).
A reward system refers to the monetary and non-monetary as well as psychological payments and benefits that BP provides to its employees as a result of work they have done. Rewards may include both intrinsic and extrinsic ones. According to Giancola (2010), extrinsic rewards include items such as working conditions and financial payments that employees may receive. Intrinsic rewards, on the other hand, involve the satisfaction that BP employees may derive due to performing particular jobs within the company. Employees within BP may feel a sense of personal fulfilment, and may just be satisfied by contributing towards something within the enterprise. According to Armstrong and Taylor (2014), effective rewards programmes are aimed at accomplishing the main objectives. First, effective reward systems positively reinforce and sustain employees’ desirable behaviours and actions, which, in turn, can contribute to competitive advantage regarding sustained excellence and performances. In addition, an effective reward system can enable BP to retain the best talents that it requires for its growth and continued success. Lastly, effective recruitment strategies can help BP attract the best and sustainable talents from the talent market.
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According to Giancola (2010), most individuals can perceive an effective reward and recognition system concerning fairness, justice, and equity. Equity feature is both internal within the organisation and external in comparison to what other employees from competing firms earn. Employees within BP can consider significant aspects of justice and fairness, the absence of which the BP’s reward system will be hurt significantly, namely distributive justice, procedural justice, and interactional justice. Distributive justice involves the financial resources and gains distributed among the different stakeholders within BP. The company should ensure that the parties concerned are not disproportionately rewarded, and that differentiation should only reflect regarding different performances between employees. Interactional justice in reward system refers to the extent to which employees within BP feel genuinely appreciated and thanked for their efforts.
BP should implement a total reward system. Effective reward system will enable the company to recruit and retain top talents within the petroleum and gas industry. In addition, most organisations have started to implement a total reward system and strategies. A total reward system encompasses compensation and benefits as well as personal and professional growth strategy (Armstrong & Taylor 2014). It will enable BP to create a positive and motivating work environment that recognises and values all employees. Compensation includes base pay, merit pay, promotions, incentives, and pay increases. Base pay includes wages and salaries. Merit pay comprises increases in base pay based on an employee’s performances. Incentives include the cash bonuses given to staff due to employee performances. Promotions involve increases on base pay due to performing new jobs. Finally, pay increases contain the increases on base pay as a consequence of the length of services an employee renders to BP.
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Benefits are an important component of a total reward system that comprise of employee health and welfare benefits, part-time offs, and retirement benefits. BP can pay for injuries and illnesses its employees obtain on and off the job. Part-time offs or benefits include paying for an employee’s vacation time or giving an employee the days off from work. Retirement benefits are paying employees for work they no longer perform based on the length of service they rendered to the company.
The total reward system consists of personal growth benefits such as employee training, career development, and performance management. Training involves the development of skills through off- and on-the-job instructions. Career development requires on-the-job coaching that enables employees to develop their abilities. Performance management embodies goal setting and feedback that allow employees to develop skills.
An effective reward and recognition system should reflect BP’s culture and core values and beliefs. The strategies must also integrate well with the company’s business line, goals, and strategies. The HR manager can enhance the perceptions of employees by increasing high levels of fairness in its reward structure. Sufficient perceptions of fairness sin the reward system will ensure that the company can avoid insufficient external parity, inadequate internal equity, and inadequate transparency.
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The Hershey Company is an example of organisations that have implemented an effective total reward system. The company’s total rewards consist of compensation and recognition, family benefits, medical benefits, financial benefits, employee career development, and income protection and security benefits (The Hershey Company 2012).
4.0. Employee Relation
Employee relations refer to the ability of BP’s HRM to manage the relationship between employees and the top management. An effective employee relation program can allow BP to provide consistent and fair treatment to all its employees in order for them to increase their commitment and loyalty to the company. Singh and Kumar (2011), on the other hand, argue that employee relations mean communication between the employees and the management concerning decisions, grievances, unions, collective bargain, conflicts, and problem-solving at the workplace. According to Armstrong and Taylor (2014), employee relations programmes are essential parts of human resource strategies ensuring that people are effectively used to accomplish BP’s mission.
An effective employee relations plan should start with clear policies. The BP employee relations policies describe the company’s philosophy, procedures, and rules that can be used to address employee-related issues and solving problems at the workplace. According to Armstrong and Taylor (2014), employee relations provide oversights and directions for a variety of employment matters such as leave absence and staff performances. 57 per cent of employees indicate that they would like their organisations implementing a total reward system.
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According to the human relations theory, organizational tension can be reduced when individuals have the capability to achieve self-fulfilment in their places of work. Employee relations require BP to regard all its employees as qualitatively different from other production resources. Therefore, if the company denies its workers autonomy on the job and reduces them into mere production extensions of the machines they operate, they will try and find ways to subvert the methods of control that enforce such conditions. Therefore, BP’s HR manager should manipulate the workplace relations in order for employees to feel personal satisfaction when they are involved in the organisation. The HRM should recognise that employees have a right to say on how they are governed. Additionally, the HRM should take an active interest to develop the skills of its employees as a way of demonstrating the company’s commitment to the personal well-being of its employees. Managing personal relations this way will enable employees within BP to experience less internal tensions due to a well-developed workplace that brings satisfaction.
However, decision making can take unnecessarily longer time for companies that must seek the decisions of employees of while making decisions that concern them. An organisation can solve this problem deciding to use workers’ representatives who can make decisions on behalf of the employees.
Training, learning and development management, reward system management, and employment relations are the functions of HRM aimed at obtaining competitive advantages in the competitive talent market. All the strategies are important because they can result in increased employee satisfaction, increased employee performance, and improved organizational performance. To improve training and learning within BP, the company’s HR can improve training and learning by ensuring that the organisation is a learning organisation where training, learning and development are continuously undertaken. To improve its reward management system, BP can implement a total reward system that provides a holistic approach to customer compensation and benefits. The company can enhance its employee relations by adopting the employee relations theory that requires the organisation to view employees as autonomous human beings with capabilities and rights to make decisions concerning the way they are governed.