Need of the HR

How BPCL is reorienting its human resource strategy

More than 12,000 employees. The threat of impending competition. And all the unwanted baggage that comes with being in the public sector.

When Bharat Petroleum Corporation Limited (BPCL) decided to realign its human resources to be more in line with the changed market reality, it had its work cut out.

Still, the Rs 47,000-crore petroleum enterprise has come a long way in improving its HR practices. BPCL was the only public sector undertaking (PSU) to feature in the first Indian survey of top 25 Great Places To Work (GPTW) released in September 2003.

According to Grow Talent, the company that conducted the GPTW study in India, 500 BPCL employees were interviewed for this study. Says Shivi Sheoran, consultant, Grow Talent, "The competence of the management and genuine care for the workforce was highlighted by the employees."

The initiatives on the HR front have also helped the petroleum giant expand its operations without adding to the employee roster.

In fact, between 1999 and 2003, BPCL's LPG plants "" to cite just one example "" increased from 32 to 40, while the workforce strength decreased marginally, from 12,638 to 12,494. And the company's compounded annual growth rate was more than 28 per cent for the same period.

Of course, it's taken BPCL close to a decade to reach this point. The PSU's decision to rejig its HR practices came in the mid-1990s, after it became clear that the petroleum sector would no longer be the preserve of government companies.

Consultants like PricewaterhouseCoopers were brought in to help streamline processes and, in 1999-2000, the organisation was sliced into six strategic business units (SBUs) such as retail, liquefied petroleum gas (LPG), aviation, industrial and commercial divisions and refinery. This gave a fix on how much each SBU contributed to the overall profitability.

"The SBU head was responsible for all aspects of the business. He took control of how to optimally utilise technology and manpower," explains S Mohan, executive director, human resource development, BPCL.

This led to a three-part objective for human resources "" ensuring the right amount of resources in the right place; providing employees a platform to share views; and review performance management systems.

Previously, employees were promoted or given perks on the basis of the years they had put into the company; now promotions were to be based on performance.

Of course, it wasn't easy convincing employees of the need to change "" they were too comfortable in the rut of underemployment. So BPCL took groups of employees (across categories and divisions, including workers) to oil companies in other countries. One group visited multinational oil giant, Shell's Malaysian operations.

Another group from BPCL's aviation business went to London's Heathrow airport to understand the finer aspects of aircraft refuelling. BPCL HR executives say the teams returning from foreign visits spread the good word of efficiency to others.

The problem of overstaffing, though, remained. Depending on the location, BPCL had between 5 and 20 per cent excess employees.

And with initiatives like enterprise resource planning (ERP) "" where technology took care of manual tasks "" being implemented across 350 locations in the late 1990s, the problem was only increasing.

Downsizing is a minefield for most PSUs, and BPCL was no different: it instead chose to create more jobs, to ensure that all employees had enough work.

Once the decision was taken, it was up to each SBU to create its own strategy to streamline manpower. At BPCL's Wadi Bunder lube blending plant in Mumbai, for instance, the records department was rendered superfluous by the ERP exercise.

But since their regular job involved production planning and materials management, these employees had sufficient knowledge of the lubricants business to qualify for jobs in sales. They were, therefore, sent for sales training, which included trade visits along with senior salesmen.

Where employees could not be accomodated at the same location, they were relocated to new plants close by. For example, two years ago when BPCL Jaipur's LPG bottling plant was automated, the extra employees from Jaipur were given the option of relocating to a setup at Ajmer.

But it wasn't enough to just offer employees a chance to relocate or retrain: BPCL has to ensure that it was getting the right worker for the right job.

"How you deploy your talent is important," says D M Reddy, general manager, corporate human resource services, BPCL, who used to head the human resource function in the refinery. Which was why, in 1999, the Bangalore-based HR firm Credo Consultancy was brought on board to evaluate managerial potential at BPCL's refinery unit. Close to 300 managers were part of the exercise in which they were shown videos on potential business situations and their individual reactions noted.

Assessments were made on 12 competencies, eight personal values and two management styles, and were compiled on nine grids: lowest on the scale was "derailed", which comprised managers who were in jobs unsuited to their potential; and at the opposite end of the scale were the "stars", where managers were tailormade for their responsibilities.

The results were scary. Thirty six per cent of the managers evaluated ended up in the "derailed" grid, which meant they were doing the wrong job. Only 14 per cent of managers were "stars" while 13 per cent had a high potential.

The path ahead was clear to BPCL: having identified a set of competencies its managers require, "we will bridge the gap between what we have and what we need through training," says Reddy.

But training has been pretty low on the agenda of the company so far. "In the thick of the change process, training was given a backseat," admits Mohan. That's changing now, claim company officials.

Instead, BPCL has been keeping involvement levels high with the annual award scheme, which was started in 2000. The awards recognise the contribution of bright sparks who come up with ideas that help the organisation "" only ideas that have been implemented are eligible for nomination.

In the past three years, claim BPCL officials, over 700 ideas have been implemented across the company; in 2002, 26 awards were given for the best ideas across four categories "" technical, sales and marketing, process improvements and human resources.

The scheme has inspired employees to find innovative solutions to some operational problems. One example is the LPG filling line. Since metal cylinders are handled badly at distribution points (delivery men throw them down from trucks), the base is invariably damaged.

And when the damaged cylinder is placed on the conveyor belt for refuelling, it topples over and jams the line. Two BPCL employees developed a sensor that would identify damaged cylinders and support the base while it is refilled.

Meanwhile, BPCL has also had its share of lessons and mid-course corrections. One instance was when BPCL set up cross-business governing councils at the corporate level so that each SBU worked towards a single objective.

But because this did not percolate to the local operational levels, the company has set up local cross-business councils that work together so that best practices are easily transferred. For example, in local sales promotions, the LPG unit can plan cross-promotions with the lubricant division.

Apart from this BPCL has also been flirting with incentives and performance management systems since the last fiscal. "The anxiety was on how to grade and yet ensure that you are fair," says Mohan. That incentives will be a forerunner in the future is clear. "Implementing economic value added (EVA) is an option," he adds.

Despite these initiatives, the biggest threat will be to control employee exodus once the private players enter with jumbo-sized paycheques.

A senior BPCL executive claims the company can combat this by creating a large pool of quality managers. "Even if some leave for better opportunities it will not matter," he says. Will the recently introduced incentive schemes be an added attraction?