Human Resource Management Ethics - Case Study Example

Human Resource Management Table of Contents Table of Contents 1 Introduction 1 Problem statement 2 Current situation 3 Root causes 4 An action plan to resolve the issue 5 The underpinning data 13 Conclusion 14 Recommendation 15 Introduction Being one of the Royal Dutch subsidiaries, the Shell Oil Company is part of the largest companies that deal with oil and other energy products located in the United States. With its major operating offices headquartered in Houston, Texas, Shell Oil Company has an approximate number of employees of 24,000 and net revenue of US$ 2.147 billion. Shell Oil Company, in addition to its share equity firms as well as consolidated companies, produces both natural gas, oil, and is one of the largest natural gas and gasoline marketers in the United States (Aswathappa, and Sadhna 56). Besides that, this company manufactures petrochemical products and has about 25,000 Shell branded stations of gas within the US. According to business analysts, huge business responsibilities come along with some managerial and administrative hurdles. This paper will seek to select and explain a human resource management problem that Shell Oil Company is having and describes its adverse effect on the organization's effectiveness. Additionally, the paper will critically examine the current situation and its root causes, and formulate an action plan to resolve it. Make relevant reference to relevant literature, research findings, and examples of good practice (Daft, Martyn, and Natalia 45). Problem statement Prospects indicate that, failure to establish some basic employee management rules and regulations and thereafter enforce them may cause a company some serious problems that may range from managerial to performance (Kaufman 57). At Shell Oil Company, there seems to be a bit of hiccups when it comes to employee development. Shell has a construed employee development program that does not match the standards of a huge oil and energy dealer like itself, which makes it hard for both the company and the employees to attain the suitable performance levels. As of today, Shell Oil Company is one of the largest subsidiaries held by the Royal Dutch Shell and headquartered in Houston signifying that it should be the best performer in this line of business. However, this is not the case given that the company holds a relaxed system of employee development, which does not help exploit all what a specific employee, can offer (Aswathappa, and Sadhna 57). Failure to have such a platform that can see employees deliver to the fullest is a key problem hindering the company’s ability to cater for all its suppliers, distributors, and customers’ needs effectively hence resulting to under performance. According to many business analysts, under performance makes a company fail to deliver effectively which in turn causes problems within the company’s chain of supply and management system. At Shell, employees perform in accordance to their abilities, but a closer outlook into the research findings of various researchers maintain that Shell lags behind in the area of exploiting the potentials of all its employees (Daft, Martyn, and Natalia 47). For that, the company has had many abilities, potentials and talents go to waste making it hard for the company to perform effectively. Since Shell Oil Company is a large energy and oil as well as petroleum supplier, it must have many outlets or rather stations in many different countries within different continents. This indicates that failure to develop employees in these diverse areas affects adversely its overall effectiveness resulting to under-performance. Current situation For now, Shell Oil Company appears to be performing according to the set standards but, with reference to business analysis, this reflects to underperformance, which such a conglomerate should be portrayed. A speech delivered by the Legal Director of the Royal Dutch Shell, which is the mother company of Shell Oil Company on May 08, 2012 at the Toronto University Club, stated that the company was facing legal infringement against employees working in the Niger Delta and in the back hills of New Zealand (Kaufman 57). From the report, it is deducible that the company is experiencing a foreseeable suit against failure to develop ways of protecting employees while at work. This is so because the New York Times wrote that men in these areas dug deep into the ground in bare chests while others spend hundreds of hours in the cold under waters of the sea in search of a common product that makes the world’s wheels spin round and round (Aswathappa, and Sadhna 58). In his appeal, Rees claimed that the company was undertaking measures to prevent such news in the future. Analysis of his speech posits that the company will seek to set up measures whose aim is to block such news from reaching the public as opposed to bringing about some special ways of protecting the company’s employees (Ehnert 51). Additionally, there have been reports that some employees have died of chest and other physical problems in Nigerian wells while drilling oil for this company yet the company seems to do very little about the situation. Indeed, as of now, the company is in a dilemma when employee development is the subject and if this pattern continues, it might face other challenges including lawsuits since the cases are as serious as they seem (Daft, Martyn, and Natalia 48). Nevertheless, it is important to set out that, as much as Shell Oil Company continues to face detrimental challenges when it comes to employee development, it has resolved to set up certain measures aimed at improving the performance, skills, knowledge, and abilities among others of its employees in different countries. All these efforts seek to attain a substantial level of performance within its staff and the entire oil supply chain since without the relevant knowledge, it becomes a challenge to deliver the required services. Currently, the company is organizing sequential training programs for its employees, especially from those countries where technology is deemed to be of low standards. The purpose of this initiative, according to the company’s current president Marvin E. Odum, is to focus on generating more abilities of its employees and regain its grip in the oil market (Aswathappa, and Sadhna 59). Root causes Shell Oil Company has been involved in lawsuits emanating from environmental rules violation to the legal regulation violation. Prior to October 1, 1998, Shell Oil Company found itself at the heart of prosecution for violating the Clean Air Act where it loaded 28.4 million gasoline gallons onto barges. The suit followed after the investigation officials found out that Shell had loaded such amount of gallons without using the vapor recovery equipment. Well, according to the US Environmental Protection Agency, loading gasoline gallons into a barge requires the presence of vapor recovery equipments which helps protect those involved in the entire loading, transport, storage, and delivery processes. This environmental violation issue resulted from failure to have a structural system of employee development. Systemically, if this company had resorted to introduce employee development in its working programs, it would not have a victim of such circumstances (Daft, Martyn, and Natalia 49). Therefore, it is true to implicate that the root cause of all the problems facing Shell Oil Company that range from under performance cases to lawsuit for failure to exploit employee talents results from inadequate employee development. Investigations show that the company did not have a systemic employee-training program nor did it have a conscious employee motivation initiative. Pertinently, failure to train or improve the knowledge and skills of employees result in deteriorated working performance, which in turn sparks a prolonged laxity within the entire company (Ehnert 52). Failure to follow the set environmental regulations in the Bridgeport deport in Connecticut resulted from laxity between and among the employees, the management board, and the suppliers. Nonetheless, the environmental agents from EPA were alert and followed their working regulations to the letter, they were able to apprehend those involved in the loading of the gallons and allowed the law to take its course (Aswathappa, and Sadhna 60). An action plan to resolve the issue Agreeably, working in the gas and oil industry comes along with a price, which may be in the form of rewards or losses. This means that before one chooses to study, work, and/or deal in this line of business, he or she needs to have a heads up in order to avoid the losses that result from lack of inadequate information. Both oil and natural gas requires not only subsistent knowledge, but also experience in the industry to evade the collateral damages that may occur in case of an explosion, theft, or leakage. With that respect, it is seeable that whoever wishes to enter this industry must exercise a huge level of care and cautiousness given that the level of damage or loss is always whenever it occurs. On the other end, the rewards and other packages that come along with working in the gas and oil industry are enticing and provide those interested a huge level of morale. As described, Shell Oil Company has a large network of functionalities and in all its stations, it has employees whom it verifies and when found fit, it absorbs them (Ehnert 54). This approach reflects to a specific platform for hiring and absorbing employees in almost every aspect of its activities. However, the company faces several lawsuits and cases relating to the violation of certain rules, laws, and regulations, it is agreeable to ascertain that the company’s system of hiring is either vague or it does not follow the relevant hiring criteria set by the oil and gas industry. This is so because, not even a single individual who understands the gravity of the consequences that may befall a person or the entire company if found guilty of violating certain oil and gas handling rules, regulations, laws. Based on that argument, Shell Oil Company can put in place several strategies capable of revolutionizing its gas and oil among other products handling within its long chain of outlets. First, the company can set in place programs that are capable of improving the skills, knowledge, abilities, and talents of almost every single employee working with this company irrespective of the employee’s place of residence. Coming up with a training initiative or program can help employees ranging from those men working in the drilling wells to the management board members increase their knowledge in handling the said oil and gas products (Daft, Martyn, and Natalia 51). In addition, such a program can improve the abilities of all employees given that skills in the gas and oil business are very crucial aspects of improving employee performance. For instance, working in the storage tanks requires not just experience and knowledge, but also abilities. It requires the ability to understand the recommended levels of oil and gas storage and needs the undersigned persons to acquaint their selves with intuitive knowledge as well as skills (Aswathappa, and Sadhna 62). Bringing about an annual training program can facilitate both knowledge and remembrance of the items discussed in a previous training. Continued platform of showing the need to have frequent trainings can help make the employees develop and realize the vitality of the matter at hand and thereafter process the knowledge and remember it whenever needed. In the transport department, for example, drivers and their escorting team always require frequent trainings in order to avoid cases related to employee theft that can lower the amount of oil hence tampering with the required level of oil for transport within the transits. Analysts point out that most of the hazardous accidents involving oil transits result from the transits rolling over and exploding due to low levels of the oil in transport (Dowling, Marion, and Allen 59). Observations show that whenever the level of oil in transits lowers, it tampers with the gravity of the oil making it hard to hold together and starts to sway from one area to the other making the transits sway. If it sways while at a high speed, chances of rolling over are inevitable and whenever this happens, the damage is inexplicable (Daft, Martyn, and Natalia 54). Research findings depict that if the Shell Oil Company resolves to introduce training programs on the safety requirements and standards of oil and gas among other involved products within all its departments, it is understandable that the company will beat the cases of damages, accidents, lawsuits, and violation issues that befall it every now and then. Through training, the employees will get to understand the need to follow the set rules and regulations and they will be in a position to adhere to them, as they will be aware of the consequences for not following the required procedures (Aswathappa, and Sadhna 63). Employee training programs are essential in improving the standards of working and realizing effective performance because, according to the Hawthorne’s theory, individuals require rules and directions and need to be coerced if they ought to achieve the set objectives. This is so because, despite being aware of doing what is needful, humans tend to turn a blind eye on what is necessary and wait to be directed or forced into doing it. Nevertheless, as much as they try to ignore the issue, presence of stiff consequences for not following orders makes them deliver on their own. Succinctly, this research finds trainings where employees are reminded of the consequences that will befall them in case of violation of the company’s set rules and regulations has the capability to reduce cases of lawsuits, violation of the company rules, and laxity among employees (Daft, Martyn, and Natalia 55). Another action plan that Shell Oil Company may put into place and help improve its employee development paternities is introducing procedures, strategies, mottos, and other motivational emblems within each departmental board. The oil and gas sector is large and continues to face striking challenges from all its areas of operation with the legal, environmental, and political pressures mounting as the days goes by. Thus, if those involved in the industry wishes to have less or no cases of violation of the existing and upcoming regulations, they have no choice but to intensify their strategies. Based on the idea that frequent citation of the company or department’s strategies can help employees grasp and maintain the set working procedures, it can be easier to avoid problems that emanate from failure to follow the company rules. In many companies, departmental managers have the employees in their section recite the company’s mottos, strategies, and motivational emblems on either Monday and/or Friday. Business strategists maintain that consistent reminder of what an employee should do facilitates the ability to keep in mind the company’s requirements hence it becomes possible for them to follow the work rules to the latter (Kandula 67). Employee development issues result from failure to follow the company rules but if a company stresses on maintaining the set rules it becomes easier for it perform effectively. Hence, it is seeable that if the companies involving their selves in this industry such as Shell Oil Company can resolve to request their departmental supervisors to carry employees through reciting the set company rules and expectations, they can reduce or solve problems resulting from lack of employee development (Dowling, Marion, and Allen 61). In essence, rewards play a very great role in motivating and improving the abilities of performance among employees in a company. As such, it is substantial to seek for ways to acknowledge efforts employees put while functioning in different departments within an organization. At all times, companies operating in the gas and oil industry require to have their employees motivated and enticed and for that, they need to present their employees with rewarding opportunities in order to have such dream fulfilled. Passionately, setting up an opportunity for employees to demonstrate their abilities knowing that they will be rewarded as an advantage of increasing their working capabilities, which in turn results to development of employees (Snell 68). This indicates that presence of a rewarding stratagem within an organization has the capability and ability to increase both employee development and a company performance level (Aswathappa, and Sadhna 64). Petroleum companies can have their performance increased effectively if they can resolve to introduce contests directed towards improving the employees’ performance and tapping talents. Without a doubt, some people have certain talents that make them more effective in performing certain tasks when compared to others (Ehnert 52). In business studies, talents are very essential advantages that a company can utilize and realize special outcomes as well as improve on the said employee performance. However, failure to tap that special talent within an employee makes the company lose big time since the employee may not even know whether is talented in such a way or may not be willing to make it known that he or she is talented due to fear or lack of courage. Nonetheless, it would a very essential method of improving employee performance and increasing company performance effectiveness if those companies operating in the gas and oil industry like Shell Oil Company can resolve to introduce certain competitions with the aim of discovering talents. Upon discovering the talents, the company can therefore, apply the discovered talents for the benefit of both the company and the employee hence realize effectiveness on both parts (Daft, Martyn, and Natalia 55). Specifically, since the oil and gas industry is very broad, it requires people of different expertise, which may range from the Information Technology to danger and hazardous products handling to transport gurus (Lengnick-Hall 57). Within an industry that is so broad and requiring such large amounts of experts, it is not possible to lack persons with special abilities. Setting up strategies aimed at discovering them and developing them for company use is significant and can improve the effectiveness of the organization (Aswathappa, and Sadhna 65). In more than one case, researchers have documented that exchange programs within organizations that operate in different continents or countries facilitates transfer of knowledge and expertise between and among the employees, suppliers, and distributors. The level or kind of technology used in handling oil and gas products in the United States is different from the one used in the Niger Delta in a number of ways (Dowling, Marion, and Allen 63). That difference in technology creates a raft between the quality of products produced or refined within these two different areas. Economists and other business policymakers assert that if an organization manages to establish and maintain a knowledge exchange program in its departments or other areas of operation present in its long chain of operation, it is capable of influencing faster growth and effectiveness in its operations (Kaufman 58). Actually, the case may be costly but the rewards are enormous, have a prolonged technological and managerial success, and are therefore suitable for improving the employee development within the organization (Daft, Martyn, and Natalia 58). Attaining a situational development of employees within the gas and oil industry particularly Shell Oil Company, the world’s second largest handler of petroleum, gas, and oil products could prove to be detrimental. It could require the management team to make difficult judgments: legal, technical, moral, and financial judgments since the tensions involved are putting enormous pressure on the company’s performance (Ehnert 54). Analytical response to the existing pressure suggests that the future appears oblique when oil and gas are the topic in discussion. This is so because, in the future, the global demand energy will rise due to increase in the products in need of this essential product. More people will buy cars; others will have computers while others will acquire other energy demanding products. This aspect will put more pressure on the available energy sources (Kandula 68). In order to have both employee development issues and pressure on energy sources solved, those involved in this sector will have to make certain judgments whose outcome will determine whether the future is bright or oblique as it appears (Dessler and Jean 42). For a while the energy and its related products are salient in human welfare, the need to have employees equipped with the relevant knowledge is inevitable. Shell Oil Company and other companies operating in the oil and gas industry can improve their performance and develop their employees by enacting an action plan that involves development of technology. Allocating capital that can facilitate the development of sophisticated technology capable of resolving the tension between these competing needs of the humans can help improve the development of employees. As of today, the world is competing for energy products, which are putting enormous pressure on such natural affiliates like the social and environmental fabric (Dowling, Marion, and Allen 64). Development of advanced and sophisticated technology can facilitate employee development through certain means, which help develop specific measures of deriving energy products from energy sources such as liquid rich shale, advanced bio-fuels, solar, wind, hydrogen, shale gas, and oil sands among others (Ehnert 55). Deriving energy from these sources deems expensive and time consuming and therefore for the intended companies to make maximum use of the opportunity, they must seek to develop sophisticated technologies capable of facilitating energy-drilling processes (Deckop 64). The need or pressure to have sophisticated technologies for exploring and exploiting all these energy sources can help improve the gas and oil companies develop their employees’ abilities, knowledge, skills, and talents, which are essential requisites for an overall effective company performance. However, it is important to note that capital plays a major role in ensuring whether these activities are possible since, as mentioned, the processes are very exorbitant (Aswathappa, and Sadhna 65). The underpinning data Relevant information sources show that the oil and gas industry is demanding and its effects are felt across all boards. For example, when one of the largest gas and oil operating companies experiences problems within its sources, the chain of supply and distribution experience problems which in turn affects the end user irrespective of the his or her location. When there is uncertainty in the energy sector regarding distribution and supply of oil and gas products, those cartels within the chain of supply and distribution tend to withhold the available products (Deckop 65). They do so with the aim of hiking the products’ prices when the companies declare that they are experiencing shortage in the said products. This problem affects all people who depend on those products said to be in inadequate supply. The world shakes when energy problems start daunting it and according to energy policymakers, one of the best ways to reduce the energy crisis in this industry is to do away with those cartels that cease the opportunity to exploit consumers by pricing their energy products high whenever there is a shortage. Reliable data sources stipulate that lack of credibility in this long chain of operations is the key factor that contributes to this issue. Based on humanitarian grounds, it is very vital to have employee development from time to time since the aspect helps intensify safety and security in the process of handling and delivering oil and gas products (Dessler, and Jean 43). Shell Oil Company has suffered several financial hiccups for falling victim of lawsuits resulting from mistakes committed by employees who happen to have low or inadequate knowledge about some of the tasks entrusted unto them by the company. Some plaintiffs in Nigeria filed a case in court that, according to the underpinning data, cost the company US$ 15.5 million, as it had to settle the claim. As that was not enough, the plaintiffs also requested the court to force the Shell Oil Company to sign a petition holding it responsible for investing in the community’s social programs. Data sources maintain that the company suffered such huge losses and forced to enter into regional corporate responsibilities despite having the entire country corporate responsibility sector due to employee under development. Nevertheless, this may cease if the company could resolve to introduce its employees to specific employee training programs capable of equipping them with the relevant knowledge required in handling gas and oil products (Dowling, Marion, and Allen 66). This in turn can solve the issue of cases related to lack of inadequate employee training. Some of the places or sources of information regarding the subject matter are internet links, books, research materials, interactive programs, and seminars among others. Truthfully, the companies within the oil and gas sector can improve their entire performance and employee effectiveness through the development of several aspects of functioning (Ehnert 56). To some extent, the task may seem complex and hard but it is generally simple nowadays given that there are excess sources of information regarding human resource management and all that revolves around it. Internet links can serve as a basis for developing performance abilities while seminars can help improve internal integration of employees (Deckop 66). On the other hand, interactive programs can facilitate practical part of knowledge accumulation while research materials can act as a base for attending the unresolved areas of employee development within the company. Conclusion As described above, human management problems are rampant within many companies especially that deal highly risky products such as gas, oil, petrochemicals, and fertilizers among others. Employee development is a major issue daunting the performance of both the companies involved and the employees that they have. The research shows that the problems emanate from many areas and their consequences are enormous. However, findings depict that with subsistence efforts, companies and employees are able to overcome these problems. Moreover, the set action plans sets pace for a way towards achieving the desired objectives between the companies and employees. Ideally, development of employees in companies that explore, operate, maintain, and transport gas and oil products is inevitable since failure to do so can have traumatic results (Dowling, Marion, and Allen 68). The employees may have hard time mastering the requirements of the job while the company may take too long to achieve its set goals and objectives (Dessler, and Jean 44). Thus, just as explained, part of the measures that such companies can incorporate in their activities range from intensified employee trainings to transformation of company rules in order to suit the prevailing market demands. Rightfully, analysis of the collected information depicts that the Shell Oil Company may require introducing tougher stipulations for those employees found making mistakes yet the company is encountering such large expenses while training them (Deckop 67). The presence of a well-organized system for spearheading knowledge and skills among employees can appreciate the performance of the employees and increase the effectiveness of the company. Recommendation Having looked into the available literature regarding the procedures involved in developing employees operating in an oil and gas industry, it is recommendable for Shell Oil Company as well as the others within the same line of operation to assimilate, incorporate, integrate, and develop specific strategies for helping in the development of employees. Further, companies involved in this area should not despair but forge forward with investing in the employee development stratagem given that adequate knowledge and high level of skills in the operation, exploration, maintenance, and transportation of petrochemicals, fertilizer, and gas as well as oil is very essential. Setting up of certain developmental standards within the industry can still revolutionize the way in which those involved used to view the entire sector previously (Dessler, and Jean 46). That could be a basic way towards achieving a sentimental point for trading in the international market. Works citedTop of Form Aswathappa, K, and Sadhna Dash. International Human Resource Management: Text and Cases. New Delhi: Tata McGraw-Hill Pub, 2008. Print. Bottom of Form Daft, Richard L, Martyn Kendrick, and Natalia Vershinina. Management. Andover: South-Western/Cengage Learning, 2010. Print. Deckop, John R. Human Resource Management Ethics. Greenwich, CT: Information Age Pub. Inc, 2006. Print. Dessler, Gary, and Jean Phillips. Managing Now!Boston: Houghton Mifflin Co, 2008. Print. Dowling, Peter, Marion Festing, and Allen D. Engle. International Human Resource Management: Managing People in a Multinational Context. London: Thomson Learning, 2008. Print. Ehnert, Ina. Sustainable Human Resource Management: A Conceptual and Exploratory Analysis from a Paradox Perspective. Heidelberg: Physica-Verlag, 2009. Internet resource. Kandula, Srinivas R. Human Resource Management in Practice: With 300 Models, Techniques and Tools. New Delhi: Prentice-Hall of India, 2007. Print. Kaufman, Bruce E, Richard A. Beaumont, and Roy B. Helfgott. Industrial Relations to Human Resources and Beyond: The Evolving Process of Employee Relations Management. Armonk, N.Y: M.E. Sharpe, 2003. Print. Lengnick-Hall, Mark L, and Cynthia A. Lengnick-Hall. Human Resource Management in the Knowledge Economy: New Challenges, New Roles, New Capabilities. San Francisco, CA: Berrett-Koehler, 2003. Internet resource. Snell, Scott, and George W. Bohlander. Managing Human Resources. Mason, Ohio: South-Western, 2013. Print. Read More