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Cairn etches a success story in India
Rajiv Shirali | March 28, 2007
Edinburgh-headquartered Cairn Energy PLC has a presence in India dating back less than a dozen years; it moved headquarters from Chennai to Gurgaon only a year-and-a-half ago, which is when some serious strategising on the human resource policy front began; and an Indian entity named Cairn India Limited listed on the Bombay Stock Exchange and the National Stock Exchange as recently as January 9 this year.
The lack of historical baggage was coupled with an opportunity to fashion a new organisational culture. Processes and systems now in use at Cairn India (which has working interests in 15 blocks, including Ravva in Andhra Pradesh, Cambay Offshore in Gujarat and Mangala in Rajasthan) are the product of a cross-functional team that was tasked with drawing up new a new strategy, competency model, vision and ideology.
Has the fact that Cairn is one of the world's few independent players (it is not one of the large integrated oil firms) in oil exploration and production (E&P) worked to its advantage in India? Well, yes and no.
When the company first entered India, it found that talent in the E&P space was hardly plentiful, and it had to hire experienced people from ONGC and from the Middle East, and entry-level talent from the Indian School of Mines, Dhanbad and the University of Petroleum Studies, Dehra Dun.
But, as head of HR and administration P Senthil Kumar explains, the successive rounds of bidding for oil blocks under the New Exploration and Licensing Policy have drawn in more players: "Today the competition for talent is very high -- much higher than it was 10 years ago. Earlier we didn't have to fight for market share in talent. We knew where to get it and we got it. But today we have to fight for talent in a competitive marketplace."
That realisation was the catalyst for serious strategizing on HR policies, whose fundamentals Kumar says are based on 'three Rs' -- 'Recruit the best, Reward the best and Retain the best'.
Compensation is in the upper quartile, and consists of a fixed component, a performance bonus that may account for 15 - 30 per cent of total compensation, and stock options that vest only after a three-year period (and serve as a retention-cum-motivational tool).
Star performers among young executives are sponsored for study programmes at such leading technical institutions as Heriot Watt, Imperial College, London and Manchester University (all in the UK) after a rigorous selection process. Four young executives have been sponsored over the past two years.
Cairn also has a robust alumni 'connectivity' programme, whose aim is to gain a good idea of the positives and negatives that an employee who has resigned is taking away with him. Says Kumar: "Both HR and senior line management are in regular touch with alumni, and we try and inspire them to return. It's like giving them a multiple re-entry visa into this organisation."
It appears to have paid off; he reveals that of the company's seven general managers, two who had left Cairn India some years ago (one for the Middle East, the other for a consulting firm) have returned. Kumar recalls that the two returned because of what they called the company's 'superior work culture' -- comprising openness, empowerment and the image of a caring employer.
However, as Shalini Sarin, general manager (people development and strategic initiatives) affirms, the feedback from alumni includes dissatisfaction on the company's performance management system, and a feeling that there is little clarity on career progression plans.
Both gaps are now being plugged through collaborative efforts between her department (strategic HR) and the line management. Says Sarin: "We have tied up with the Indian School of Business, Hyderabad for senior management and with IIM, Ahmedabad for middle management."
ISB is to customise a week-long leadership development programme to be attended by 20-25 executives in June, while IIM-A is to do the same for middle management in July or August, which will be attended by 30-32 executives. Plans are also underway to hire a talent manager whose mandate will be to roll out career progression and personal development plans."The Cairn Energy PLC connection has helped a great deal, but we also had to re-invent many things," she sums up.