Question

MOTIVATION: A CHALLENGE FOR OIL AND GAS COMPANIES- AN OMANI CASE STUDY

The Society of Petroleum Engineers (SPE) usually reflects the most challenging issues that face the oil and gas industry in their meetings and conferences. A couple of years back, a shortage of labor skills was not even an issue to be discussed in the SPE meetings and conferences, however, this issue has emerged in the oil and gas industry, and retaining top-performing employees is becoming a major concern for many oil and gas companies. Recently most of SPE conferences have in their agenda discussions on the shortage of labor skills which really reflect the magnitude and the size of this issue.

Motivation comes from the word move and action. Retention cannot be achieved without motivation; in order to retain an employee, he needs to be motivated. A key ingredient in both performance and retention is the motivation (Tealdi and Bruni, 2005). A key insight regarding motivation that many managers in the oil and gas companies miss is that motivation comes from self and within. Motivation is not about forcing people to do something; it is about creating an environment where employees will be motivated (Nicholson, 2003).  

Many managers in the oil and gas companies when asked what motivates their employees and how to retain them always answer with confidence money, money, and money as the only retention factor. It is because of this limited view that many companies are having high turnover rates. Money is necessary but it is not sufficient to retain an employee. An oil company needs to do more than increasing salary, in addition, it has more options that are non-monetary and are highly effective to retain and motivate employees.

What motivates employees in the oil and gas industry? Before addressing this question, it is important to point out the reasons why the oil and gas industry is facing this problem. In other words, why motivation is becoming a challenging issue now, and what are the recent changes in the oil and gas industry that precipitated motivation to become a challenge?

THE EXTERNAL FACTORS: To understand why motivation is becoming an issue in the oil and gas companies in Oman, there is a need to understand the recent changes in this industry. A critical analysis shows that there are many external factors that lead to this issue, first, a few years back there used to be only one large oil company which is the National Oil Company. There was no competition in the market at that timer.

However with the new government initiative to increase production, now there are many local and international oil and gas companies and several related industries entering the Omani market.  As the level of competition increased, employees started leaving national companies and even Government employment to these new companies. It is important to indicate that national companies have restrictions on salary increases and cannot compete easily with private and international companies. Second, the increased number of local and international oil companies entering the Omani market, meant that a shortage of labor skills in the Omani market became more critical. This phenomenon is not only excluded from the Omani market, but it is a worldwide phenomenon. Third, the cost of hiring an Omani with an experience of 10 years is approximately half of that recruiting an expatriate; this increased the demand for the Omani in the local market. All these factors combined have led many employees to leave their employers and hence the issue of motivation and retention has emerged.

Question:

1.       If you are the Director for Human Resources for a government-owned Omani petroleum company what kind of strategy would you adopt to solve the issue of high employee turnover rates? Discuss how you are going to implement your strategy.

2.       Which theory or theories of employee motivation is/are applicable in the above case? Discuss the appropriateness of the theory.

Answer 1

Question 1

Starategy to solve the problem

If I am the Director for Human Resources of a government-owned Omani petroleum company. I would do the following.

• I would take more care while recruiting employees. I will try to recruit people who fits with the culture of the company.
• I will offere the employees a competitive remuneration incorporating different elements including insurance,
• I will promote participative decision making in the company so that the employees would feel that they are recognized and heard.
• I would regularly conduct a performance review and a portion of the remuneration would be linked to the performance. It will definitely motivate hardworking and talented employees.
• A flexible working hour policy will be adopted so that the work-life balance of employees could be possible.
• I will recommend the company to share a portion of the profit among the employees in the form of bonus, it helps in improving the morale of employees.
• Proper training will be given to employees so that the employees could climb the career ladder within the company.

Question 2

Applicable Motivational Theory

The following motivational theory would have relevance in this context.

Maslow's need hierarchy Theory

Maslow's need hierarchy theory is an applicable theory in this situation. It addresses all the important aspects of employee motivation. Maslow's need hierarchy Theory has five levels starting from physiological needs to self-actualization needs. For satisfying physiological needs, the company could provide some facilities like canteen facilities, water purifiers, and other basic necessities. For satisfying safety needs the company could provide safety equipment to its employees. For satisfying the social needs the company shall create a conducive work environment. For satisfying the esteem needs, the company shall give promotions, awards, etc. to the performing staff. For meeting self-actualization needs the company shall provide challenging works to its employees.

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