Training Development- IndianOil

Training and Development- Indian Oil________________________________________________________________________

Summer internship project at IOCL.In the Partial Fulfillment of Summer Internship ofMaster of Business administration (MBA)

BySANOOBER YASMEEN

Roll-04NALANDA COLLEGE, BIHARSHARIF

Under the Guidance of

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Introduction

Every organization needs to have well trained and experienced people

to perform the activities that have to be done. Training is a process of

learning a sequence of programmed behaviour. It is application of

knowledge. It gives people an awareness of the rules and procedures

to guide their behaviour. It attempts to improve their performance on

their current job and prepare them for an intended job. Development is

a related process. It covers not only those activities which improve job

performance, but also which bring about the growth of the personality;

help individuals in the progress towards maturity and actualization of

their potential capabilities so that they become not only good

employees but better men and women. In organizational terms, it is

intended to equip person to earn promotions and hold greater

responsibility.

Training a person for a bigger and higher job is development. And this

may well include not only imparting specific skills and knowledge but

also inculcating certain personality and mental attitudes. As the jobs

become more complex, the importance of employee development also

increases. In a rapidly changing society, employee training and

development are not only an activity that is desirable but also an

activity that an organization must commit resources to if it is to

maintain a viable and knowledgeable work force.

Training has played a very important role in helping the corporation to

reach the commanding heights of performance. Any training would be

considered to be successful only when the knowledge gained by the

participants is transferred to the job performance

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Training is the main function of HR. To enhance the Corporation's

growth and keep the Corporation ready to anticipate all types of

competition and face it too, there is a need that Human Resource

should play more active role for overall progress of the Corporation.

The impact of training programme is to mould the employee’s attitude

and help them to synergies individual goals with organizational goals.

It also helps in reducing dissatisfaction, complaints, absenteeism and

labour turnover.

Definition

According to Flippo, “Training is the act of increasing knowledge and

skills of an employee for doing a particular job" The major outcome of

training is learning. A trainee learns new habits, refined skills and

useful knowledge during their training programme, which helps them

to improve their performance. Training can also be defined as

activities designed to change the behaviour.

Another way of defining training would be a planned programme

designed to improve performance and bring about measurable

changes in knowledge, skills, attitudes and social behaviour of

employees.

Training imparts the ability to detect and correct error. Further more it

provides skills and abilities that may be called on in the future to

satisfy organisation’s human resources needs.

Management development

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Management development is an attempt at improving an individual’s

managerial effectiveness through a planned and deliberate process of

learning. For an individual this means a change through a process of

planned learning. This should be the common and significant aim of

development from the point of view of the trainer and the trainee in

an organisational setting.

“All development is self development. It must be generated within the

main himself. Development is highly individual. The development of an

individual is due to his day to day experience on a job. Hence,

emphasis should be on experiences from day to day work. Any activity

designed to improve the performance of existing managers and to

provide for a well planned growth of managers to meet future

organisational needs is management development.

The change in the individual must take place in those crucial areas

which can be considered as output variables:

Knowledge change;

Attitude change

Behaviour change

Performance change

End-operational results (the last two changes being the

result of the first three changes)

Training Philosophy:

Training constitutes an important component of overall Human

Resource Management (HRM) strategy. It is a part of the Human

Resource Management efforts of the organization that enables the

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employees of the organization to continuously update their functional

knowledge and skills in various disciplines.

The employees should be familiar with the latest technological

developments, organizational procedures and system as well as

various Management concepts. An opportunity should, therefore, be

provided by the organization to its employees, particularly in

management cadre, to attend the management training courses, who

in turns can share their knowledge and experience with the juniors in

the organization.

One of the basic philosophies of the training programmes is to bring

together participants of different disciplines from different regions so

that they can exchange their work experience and the problems being

encountered, with other participants.

After employees have been selected for various positions in an

organization, training them for specific task to which they have been

assigned, assumes great importance. Training is an important activity

in an organization.

Features of training

Increase knowledge and skill for doing a job.

Bridge the gap between job needs and employee skills.

Job oriented process, vocational in nature

Short-term activity designed especially for operatives.

Objectives of Training

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The overall training objective is to develop required knowledge, skills

and attitudes of our employees so that they can perform more

productively and achieve the business goals. It is recognized that the

employees learn primarily from on-the-job experience. Therefore, in

achieving this objective, the primarily contribution is from on-the-job

training and supporting contribution from the formal training effort.

1. To impart basic knowledge and skill to new entrants and

enable them to perform the job well.

2. To equip employee to meet the changing requirement of

the job and organization.

3. To teach the employees the new technique and ways of

performing the job or operations.

4. To prepare employees for higher level task and build up

a second line of competent managers.

Training has always played an important and integral part in furthering

many kinds of human learning and development. However, the fact

that training can make an important, if not crucial, contribution to

organizational effectiveness is only now being recognized fully.

Companies, organizations and government are beginning to appreciate

the value of adequate, consistent and long term investment in this

function.

Training and Development programmes help remove performance

deficiencies in employees. This is particularly true when –

The deficiency is caused by a lack of ability rather than a

lack of motivation to perform.

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The individual(s) involved have the aptitude and motivation

needed to learn to do the job better.

Supervisors and peers are supportive of the desired

behaviours.

There is greater stability, flexibility and capacity for growth in an

organization. Training contributes to employee stability in two ways.

Employees become efficient after undergoing training. Efficient

employees contribute to the growth of the organization. Growth

renders stability to the workforce. Further, trained employees tend to

stay with the organization. They seldom leave the company. Training

makes the employee versatile in operations. All rounder can be

transferred to any job. Flexibility is therefore ensured. Growth

indicates prosperity, which is reflected in increased profits from year to

year. Accidents, scrap and damage to machinery and equipment can

be avoided or minimized through training. Even dissatisfaction,

complaints can be reduced if employees are trained well.

Training is an investment in human resource with a promise of

better returns in futures.

A company’s training and development pays dividends to the

employee and the organization. Though no single training programme

yields all the benefits, the organization, which devotes itself to training

and development, enhances its human resource capabilities and

strengthens its competitive edge. At the same time, the employee’s

personal and career goals are furthered, generally adding to his

abilities and value to the employer.

Role and Scope of Training

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Training has been performing a very important role in helping the

Corporation to reach the commanding heights of performance over the

years. The vitality of an organization depends upon its capacity to

adapt itself to change. And the current changing environment calls for

this the most. Training plays a vital role in this regard. The primary

role of training is to assist the employees in their pursuit of knowledge

and self-actualization, expounding the belief that there are no limits to

human potential and growth and such potential should get transformed

into reality. Any training would be considered successful only when

the knowledge gained by the participants of various programmes is

transferred to their job performance.

All formal training activities conducted by the Training Centres at Head

Office and at Regional Offices are in line with the organizational needs.

Formal training efforts of the Training Centres are directed towards

supplementing the primary training process which takes place on-the-

job.

Need for basic purposes of training

The need for the training of employees would be clear from the

observations made by the authorities

1. To Increase Productivity: “Instruction can help employees

increase their level of performance on their present assignment.

Increased human performance often directly leads to increased

operational productivity and increased company profit.” Again, “

increased performance and productivity, because of training, are

most evident on the part of new employees who are not yet fully

aware of the most efficient and effective ways of performing the

jobs.”

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2. To Improve Quality: “Better informed workers are less likely

to make operational mistakes. Quality increase may be in

relationship to a company product or service, or in reference to

the intangible organisational employment atmosphere.”

3. To Help a Company Fulfill its Future Personnel Needs:

“Organisations that have a good internal education programme

will have to make less drastic manpower changes and

adjustments in the event of sudden personnel alterations. When

the need arises, organisational vacancies can more easily be

staffed from internal sources if a company initiates and maintain

an adequate instructional programme for both its non-

supervisory and managerial employees.”

4. To Improve Organisational Climate: “An endless chain of

positive reactions results from a well planned training

programme. Production and product quality may improve;

financial incentives may then be increased, internal promotions

become stressed, less supervisory pressure ensure and base pay

rate increase result. Increased morale may be due to many

factors, but one of the most important of these is the current

state of an organisation’s educational endeavour.”

5. To Improve Health and Safety: “Proper training can help

prevent industrial accidents. A safer work environment leads to

more stable mental attitudes on the part of employees.

Managerial mental state would also improve if supervisors know

that they can better themselves through company-designed

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development programmes.”

6. Obsolescence Prevention: “Training and development

programmes foster the initiative and creativity of employees and

help to prevent manpower obsolescence, which may be due to

age, temperament or motivation, or the inability of a person to

adapt himself to technological changes.’

7. Personal Growth: “Employees on a personal basis gain

individually from their exposure to educational experiences.”

Again, “Management development programmes seem to give

participants a wider awareness, an enlarged skill, and

enlightened altruistic philosophy, and make enhanced personal

growth possible.

Need for training

a) An increased use of technology in production;

b) Labour turnover arising from normal separations due to death or

physical incapacity, for accidents, disease, superannuation,

voluntary retirement, promotion within the organization and

change of occupation or job.

c) Need for additional hands to cope with an increased production

of goods and services;

d) Employment of inexperienced, new or badli labour requires

detailed instruction for an effective performance of a job.

e) Need for reducing grievances and minimizing accident rates.

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f) Need for maintaining the validity of an organization as a whole

and raising the morale of its employees.

Collectively, these purposes directly relate to and compromise the

ultimate purpose of organisational training programmes to enhance

overall organisational effectiveness.

Importance of training

Training is the corner-stone of sound management, for it makes

employees more effective and productive. It is actively and intimately

connected with all the personnel or managerial activities. It is an

integral part of the whole management programme, with all its many

activities functionally interrelated.

There is an ever present need for training men so that new and

changed techniques may be taken advantage of and improvements

affected in the old methods, which are woefully inefficient.

Training is a practical and vital necessity because, apart from the other

advantages, it enables employees to develop and rise within the

organization, and increase their “market value”, earning power and job

security. It enables management to resolve sources of friction arising

from parochialism, to bring home to the employees the fact that the

management is not divisible. It moulds the employees’ attitudes and

helps them to achieve a better co-operation with the company and a

greater loyalty to it.

Training, moreover, heightens the morale of the employees, for its

helps in reducing dissatisfaction, complaints, grievances and

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absenteeism, reduces the rate of turnover. Further, trained employees

make a better and economical use of materials and equipment;

therefore, wastage and spoilage are lessened, and the need for

constant supervision is reduced.

Training Methods/ Techniques

The forms and types of employee training methods are inter-related. It

is difficult, if not impossible, to say which of the method or combination

of methods is more useful than the other. Infact, methods are

multifaceted in scope and dimension, and each is suitable for a

particular situation. The best technique for one situation may not be

best for different groups or tasks. Care must be used in adapting the

technique/ method to the learner and the job. An effective training

technique generally fulfills this objective;

Provide motivation to the trainee to improve job

performance,

Develop a willingness to change, provide further trainee’s

active participation in the learning process.

Provide a knowledge of results about attempts to improve

(i.e. feedback), and permit practice where appropriate.

The various training techniques are as follows:

ON–THE-JOB- TRAINING:

Virtually every employee, from the clerk to the president, get “On-The-

Job Training”, when he joins a firm. It is primarily concerned with

developing in an employee’s skills and habits consistent with the

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existing practices of an organization, and orienting him with his

immediate problems. It is mostly given for unskilled and semi-skilled

jobs- clerical and sales jobs.

Employees are coached and instructed by skilled co-workers, by

supervisors, by the special training instructors. They learn the job by

personal observation and practice as well as occasionally handling it.

He is learning by doing, and it is most useful for jobs that are either

difficult to stimulate or can be learned quickly by watching and doing

it.

The main advantage of on-the-job training is that the trainee learns on

the actual equipment in use and in the true environment of his job. He,

therefore, gets a feel of the actual production conditions and

requirements. In this way, a transfer from a training centre or school to

the actual production conditions following the training period is

allowed. Secondly, it is highly economical since no additional personnel

or facilities are required for training. Thirdly, the trainee learns the

rules, regulations procedures by observing their day to day

applications. He can, therefore be easily sized up by the management.

VESTIBULE TRAINING

This method attempts to duplicate on-the-job situations in a company

classroom. Its is a class room training which is often imparted with the

help of the equipment and machines which are identical with those in

use in the place of work. This technique enables the trainee to

concentrate on learning the new skills rather than on performing on

the actual job. In other words, it is geared to job duties. Theoretical

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training is given in the class room, while the practical work in

conducted on the production line.

It is a very efficient method of training semi-skilled personnel,

particularly when many employees have to be trained for the same

kind of work at the same time. It is often used to train clerks, bank

tellers, inspectors, machine operators, testers, typists, etc. It is most

useful when philosophic concepts, attitudes, theories and problem

solving abilities have to be learned.

Training is generally given in the form of lectures, conferences, case

studies, role playing and discussion.

The various advantages of vestibule training are:

As training is given in a separate room, distractions are

minimized.

A trained instructor, who knows how to teach, can be more

effectively utilized.

The correct method can be taught without interrupting

production.

It permits the trainee to practice without the fear of the

supervisors/ co-workers observation and their possible

ridicule.

OF-THE-JOB METHODS:

“Of-the-job training” simply means that training is not a part of

everyday job activity. The actual location may be in the company

classroom or in the places which are owned by the company, or in

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universities or in associations which have no connection with the

company.

This method consists of:

1. Lectures

2. Conferences

3. Group Discussions

4. Case Studies

5. Programmed Instructions

1. Lectures:

Lectures are regarded as one of the simplest ways of imparting

knowledge to the trainees, esp. when facts, concepts, or principles,

attitudes, theories and problems-solving abilities are to be taught.

Lectures are formal organized talks by the training specialists, the

formal superior or other individual specific topics.

The lecture methods can be used for very large groups which are to

be trained within a short time, thus reducing the cost per training. It

can be organized rigorously so that ideas and principles relate

properly. Lectures are essential when it is a question of imparting

technical or special information of a complex nature. They are

usually enlivened with discussions, film shows, case studies, role-

playing and demonstrations.

In training, the most important uses of lectures include:

Reducing anxiety about upcoming training programmes or

organisational changes by explaining their purposes.

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Introducing a subject and presenting an overview of its

scope.

Presenting basic material that will provide a common

background for subsequent activities.

Illustrating the application of rules, principles; reviewing,

clarifying and summarizing.

The main advantage of lecture system is that it is simple

and efficient and though it is more materialistic it can be

presented within a given time.

2. Conference method:

In this method, the participating individuals ‘confer’ to discuss point

of common interest to each other. A conference is basic to most

participative group-centered methods of development. It is a formal

meeting, conducted in accordance with an organized plan, in which

the leader seeks to develop knowledge and understanding by

obtaining an considerable amount of oral participation of the

trainees. It lays emphasis on small group discussions, on organized

subject matter, and on the active participation of the members

involved. Learning is facilitated by building up on the ideas

contributed by the conferees.

The conference is ideally suited for the purpose of analyzing

problems and issues and examining them from different view

points. It is an excellent method for development of conceptual

knowledge and for reducing dogmatism and modifying attitudes

because the participants develops solutions and reach conclusions,

which they often willingly accept.

3. Group discussions:

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This is an established method for training. A group discussion is

conducted in many ways:

It may be based on a paper prepared by one or more

trainees on a subject selected in consultation with the

person incharge of the group discussion. It may be a part of

a study or related to theoretical studies or practical

problems. The trainees read their papers, and this is

followed by critical discussion.

It may be based on the statement made by the person

incharge of the group discussion or on a document prepared

by an expert, who is invited to participate in the discussion.

The person incharge of the group discussion distributes in

advance the material to be analysed in the form of required

readings. The group discussion compares the reaction of

trainees, encourages discussion, defines the general trends

and guides the participant to certain conclusions.

4. Case studies:

“The case study is based on the belief that the managerial

competence can best be attained through study, contemplation and

discussion of concrete cases.” The ‘case’ is the set of data, written

or oral miniature, description and summary of such data that

present issues and problem calling for solutions or action on the

part of trainee. When the trainees are given cases to analyse, they

are asked to identify the problem and recommend tentative solution

for it. This method offers to the trainees matter for reflection and

brings home to them a sense of complexity of life as oppose to

theoretical simplifications of, and practices in the decision-making

process. The case study is primarily useful as a training technique

for supervisors and is specially valuable as the technique of

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developing decision-making skills and for broadening the

perspective of the training.

5. Programmed instruction:

Programmed instruction involves a sequence of steps which are

often set up through the central panel of an electric computer as

guides in the performance of a desired operation or series of

operations. It incorporates a pre-arranged, proposed, or desired

course of proceedings pertaining to the learning or acquisitions of

some specific skills or general knowledge. A programmed

instruction involves breaking information down into meaningful

units and then arranging these in a proper way to form a logical and

sequential learning programme or package.

Evaluation of training programme

Objectives of training evaluation is to determine the ability of the

participant in the training programme to perform jobs for which they

were trained, the specific nature of training deficiencies, whether the

trainees required any additional on the job training, and the extent of

training not needed for the participants to meet the job requirements.

Evaluation of the training programme must be based on the following

principles:

Evaluation specialist must be clear about the goals and

purpose of evaluation.

Evaluation must be continuous.

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Evaluation must provide the means and focus for trainers to

be able to appraise themselves, their practices, and their

products.

Evaluation must be based on objective methods and

standards.

Realistic target dates must be set for each phase of the

evaluation process. A sense of urgency must be developed,

but deadlines that are unreasonably high will result in poor

evaluation.

There are various approaches to training evaluation. To get a valid

measure of training effectiveness, the personnel manager should

accurately assess trainee’s job performance two or four months

after completion of training.

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CASE STUDY

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The Indian Petroleum Industry

The Petroleum industry in India stands out as an example of the strides

made by the country in its march towards economic self-reliance. At

the time of independence in 1947, international companies controlled

the industry. Today, a little over 50 years later, the industry is largely

in the public domain with skills and technical know-how comparable to

the highest international standards. The testimony of its vigour and

success during the past five and half decades is the significant

increase in crude oil production from 0.25 to 0.33 million tonnes per

annum and refining capacity from 0.3 to 103 million metric tonnes per

annum. The consumption of petroleum products has grown 30 times

in the last 50 years from 3 million tonnes during 1948-49 to about

107.7 million tonnes in 2003-04, an increase of 3.5% over 104.1 million

tonnes registered in 2002-03. A vast network of over 29,000

dealerships and distributorships has been developed backed by over

400 storage points over the years to serve the people even in the

remote and once-inaccessible areas.

Oil production & consumption in India(Million tons)

1997 1998 1999 2000 2001

Crude oil production 32.9 33.9 32.7 32 32.5

Crude oil consumption 62.9 65.2 68.5 86 103.5

Deficit (Met by Imports) (33.9) (34.5) (39.8) (54.0) (71.0)

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In order to understand the level of Indian demand for petroleum

products in a global perspective, the following table furnishes a

comparison of per capita consumption of petroleum products in the

various parts of the world.

(Kilograms per annum)

* India 98

* China 165

* North America 2,610

* World average 585

With the per capita consumption level in India being only about 60% of

that in China, a strong growth potential exists in India, given

particularly a large population base of over a billion.

Growth

In the 50 years since independence India has witnesses a significant

growth in the refining facilities and increase in the number of refineries

from one to eighteen now. The first decade of Independence (1947-

57) saw the establishment of three costal refineries by multinational oil

companies operating in India at that time, viz. Burmah Shell, Esso

Stanvac and Caltex; the first two at Mumbai and the third at

Vishakhapatnam. A major boost to the oil industry came in pursuance

of the Industrial Policy Resolution, 1956 that intended to promote

growth of the vital sectors such as petroleum under the State control.

ONGC, which was formed a Directorate in 1955, became a Commission

in 1956.

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The second decade (1957-67) witnessed the setting up of the Indian

Refineries Ltd. in 1985, a wholly owned public sector Government

Company. Under its banner three refineries were set up at Guwahati

(Assam), Barauni (Bihar) and Koyali (Gujarat) essentially to process the

indigenous crude discovered in Assam and Gujarat. In 1959, the Indian

Oil Company (INDIANOIL), again a wholly owned Government

company, was formed for marketing of petroleum products. Indian

Refineries Ltd. was merged with Indian Oil Company Ltd. to form Indian

Oil Corporation Ltd. on 1st September 1964.

The next ten years period (1967-77) witnessed the establishment of

two refineries, one with equity participation from America and Iranian

companies at Chennai and another in the public sector at Haldia by

Indian Oil.

The Period 1977-87 saw the commissioning of two more refineries in

the public sector. The refinery at Bongaigaon was the first experiment

in having an integrated petroleum refinery-cum-petrochemicals unit.

The other refinery was set up at Mathura in 1982. Major expansions of

the coastal refineries at Mumbai, Cochin, Chennai and Vishakhapatnam

were also completed during this period. The notable feature of the

capacity additions during this decade have been the extensive

utilization of the process design capabilities of M/s. Engineers India Ltd.

and installation of Secondary Processing Facilities to increase the

production of much required kerosene, diesel and LPG.

During the fifth decade (1987-97), a small refinery of 0.5 MMTpa

(Million metric tonnes per annum) at Nagapatinnam was built in Tamil

Nadu. It is based on crude from adjoining fields. In 1996, a MMTpa

refinery was built in the joint sector at Mangalore between HPCL and

Indian Rayon. This decade also saw significant expansion to the

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capacities of the existing refineries, thereby raising the refining

capacity to about 62 MMTpa.

However, the production of crude oil increased to over 35 million

tonnes per annum in the year 1997-98. This represents only less than

50% of country’s requirement of petroleum. The balance had to be

made good by imports putting our foreign exchange to a great strain.

Considering the ever-growing demand of petroleum at the rate of

about 7% per annum, and the dwindling reliance on indigenous

production of oil and natural gas, the Government of India, in 1991

decided to open up the exploration and production of oil and natural

gas to the private sector.

The ministry of petroleum invited bids from the private parties /

consortiums, in a number of bidding rounds. Consequently, as many

as 21 small oil-gas fields and more than a dozen exploration blocks

were awarded to private parties, for exploration and production work.

It was also decided by government to import Liquefied Natural Gas, to

meet the ever-growing requirement of natural gas in the country. The

government also decided to open up oil exploration in the deeper

continental shelf by private parties.

With the setting up of Panipat Refinery in 1999-2000, there are 18

refineries operating in the country, 15 in the public sector, one in the

joint sector and one in the private sector, with an installed capacity of

102 million metric tonnes per annum.

The year 2003-04 saw important developments in Government policy

as well a concerted efforts by individual companies to align their plans

and progress with the free market scenario.

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On the disinvestments front, the Government of India successfully sold

10% of its equity in Oil & Natural Gas Corporation Ltd.(ONGC) and GAIL

(India) Ltd. during the year. The Government also sold its residual

equity of 26% in IBP Co. Ltd. through public offer. Earlier in 2002,

IndianOil had acquired 33.58% of Government of India’s equity in IBP

through competitive bidding process, and thereafter acquired another

20% through open offer to the public.

In the upstream sector, the Government of India signed 20 contracts

for oil & gas exploration under the fourth round of New Exploration

Licensing Policy (NELP) and eight contracts under the second round of

the Coal Bed Methane (CBM) Policy. Significant hydrocarbon

discoveries in the blocks awarded earlier enhanced the prospects of

finding more oil & gas reserves in the country. For enhancing the

country’s oil security, the Government decided to set up 5 million

tonnes of strategic crude oil storage in the country at Mangalore and

Vishakhapatnam, which will be built and operated by IndianOil.

Demand for Petroleum Products

Demand growth from 1991 - 2001

The Indian GDP and energy consumption have each grown at the rate of about 6% per annum from 1991 to 2001. Correspondingly the demand for petroleum products has been growing steadily as shown below:

Growth rates: Crude processing & demand for petroleum products (1990-91 to 2000-01)

Consumption in year ended 31.03.1991

Consumption in year ended 31.03.2001

Compound Avg. growth rate

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* Crude oil processing52 million tons

103 million tons

5.1 %

* Demand for total Petroleum products

55 million tons

94 million tons 5.5 %

Threats:

Towards end of the year, the major concern of the petroleum industry

was the rising cost of crude oil. While the uprising in gross refining

margins helped improve the bottom line, Indian refiners were severely

impacted by the ever-rising and fluctuation price of crude oil and

products in the international market. Since our country is still

dependent on imports to the extent of 70% of its requirement, we shall

continue to be subject to volatility in the international prices of oil. The

strengthening of the Indian Rupee against the US Dollar helped limit

the impact partially. Concerted steps taken by the Government to

augment indigenous production through the NELP rounds, and

encouragement to Indian companies in acquiring equity oil and gas

abroad, are therefore steps in the right direction

Introduction:

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Petroleum is one of the most valuable natural resource in the world.

Some people call it as “Black Gold”, but it may be better described as

the Life Blood of Industrialised Countries.

The Indian oil sector is in the threshold of major changes. The

Government of India had already decanalised some products like

Furnace Oil, Aviation Turbine Fuel etc and also trying to decontrol High

Speed Diesel, Motor Spirit, Liquefied Petroleum Gas, Superior Kerosene

Oil etc in the near future. In spite of Government regulations there

exists an intense competition among the existing oil companies. The

flexibility of grabbing more market share will intensify after decontrol

of these products from the Government.

Consumption of Petroleum products is an index of a country’s

development, industrialisation and economic well-being. From an

annual consumption of less than 3 Million Tonnes in 1948-1949 India’s

Petroleum products consumption has grown to 107.7 Million Tonnes in

2003-2004. It shows the growth rate of Petroleum Industry in the

country in the post independence period.

In order to protect national interest, the Government of India decided

to establish a nationally owned and controlled Oil Industry in the India

under the Ministry of Petroleum and Natural Gas.

IndianOil Corporation as an idea was born out of the Industrial Policy

Resolution of 1956 and since then has emerged as one of the largest

and leading corporations in the world.

Indian Oil Corporation Limited (INDIANOIL) is the 18th largest

Petroleum Company in the World. INDIANOIL is ranked 153rd among

the 500 largest companies in the world. (as per the Fortune Listing). It

is the only Public Sector Undertaking among ‘India’s Top 10

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Companies’ listed by the Far Eastern Economic Review in 2004.

IndianOil has also been adjudged No.1 in petroleum trading among the

national oil companies in the Asia-Pacific region.

In another major feat, IndianOil was ranked among the top 10 ‘Best

Employers in India–2004’ in a joint survey conducted by Business

Today and Hewitt Associates across 220 organizations.

For 15th consecutive year, IndianOil earned ‘Excellent’ rating for its

performance in its MOU with the Government of India for the year

2003-04.

IndianOil started with a sales turnover of Rs. 109 crores and a profit of

1 crore in 1964-65. In the year 2005-06 INDIANOIL has achieved a

sales turnover of Rs.1,83,204/-crores (profits of Rs. 4,915 crores for

2005-06). The total sales volume (inclusive of export sales) increased

from 47.56MMT in 2002-03 to 48.61MMT in 2003-04, registering a

growth of 2.2 %. The Corporation recorded the highest ever Profit

Before Tax of Rs.9,691 crore (Rs.2,686 crore tax) during 2003-04 as

against Rs.8,414 crore (Rs. 2,299 crore Tax) in 2002-03, registering a

growth of 15.2 %. The Profit before tax for the year ending 2005-06

was 6,706/-crores.

IndianOil deals with various petroleum products. The Companies main

products are:

1. Fuel and Feedstock

2. Lubes and Greases

3. Petrochemicals and specialties

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4. Liquefied Petroleum Gas / LPG

5. Motor Spirit / Gasoline

6. Superior Kerosene Oil / Kero

7. High Speed Diesel / Gas Oil

8. Aviation Turbine Fuel / Jet Kero

9. Lubricants

History

In the late 1950s Indian oil industry was dominated by three Multi

national Companies, viz., Shell, Esso and Caltex. The country was

dependant on refined petroleum products imported into the country by

these companies.

In the year 1956, Parliament passed an Industrial Policy Resolution

bringing Oil under the purview of the State sector as a step to bring all

the industries of basic and strategic importance into the Public Sector.

In 1958, a Public Sector Company called Indian Refineries Limited was

set up, followed by a marketing organisation called Indian Oil Company

Limited In 1959. By September 1964 both these companies were

merged and Indian Oil Corporation was formed.

In 1970, the Multinational Oil Companies were nationalized and this led

to the emergence of Bharat Petroleum Corporation Limited (BPCL)

(from Shell) and Hindustan Petroleum Corporation Limited (HPCL) (from

Esso and Caltex). Apart from this Government also formed Indo-Burma

Petroleum (IBP) Limited. While the three oil majors have their own

refineries, IBP relied only on marketing. Later Assam Oil Company was

merged with INDIANOIL, and a separate division known as Assam Oil

Division (of INDIANOIL) was formed.

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Apart from this other public and private sector companies like Madras

Refineries Limited, Cochin Refineries Limited, Bongaigaon Refineries

and Petrochemicals Limited, IPCL, Reliance Petroleum, Essar Oil

Limited also entered the market at later stages. Initially they were not

given any marketing rights for the controlled oil products but could

refine crude oil and sell through the nationalized oil companies. But,

after the withdrawal of Administered Pricing Mechanism (APM), (in

2002) these oil companies were allowed to sell these decontrolled

products through the Retail Outlets or by bulk to direct customers.

IndianOil holds over 33% of the country's refining share (42%, if the

capacity of recently acquired subsidiaries is also added). All refinery

units are accredited with ISO 9002 and ISO 14001 certifications. It’s

Mathura refinery is the first refinery in Asia and the third in the world

to earn the British Standard (BS: 7750) and ISO-14001 certifications in

environmental management.

The refinery network is presented with its installed refining capacity:

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IndianOil Refineries: Installed Capacities(In MMTPA)

Refinery As on 1.4.2000

As on 1.4.2001

As on 1.4.2002

As on 1.4.2003

As on 1.4.2004

As on1.4. 2005

IOC

IOC- Guwahati 1.0 1.0 1.0 1.0 1.0 1.0

IOC- Barauni 3.3 4.2 4.2 6.0 6.0 6.0

IOC- Koyali 13.0 13.7 13.7 13.7 13.7 13.7

IOC- Haldia 4.6 4.6 4.6 4.6 6.0 6.0

IOC- Mathura 7.5 8.0 8.0 8.0 8.0 8.00

IOC- Digboi 0.65 0.65 0.65 0.65 0.65 0.65

IOC- Panipat 6.0 6.0 6.0 6.0 6.0 6.0

Sub-Total IOC 36.05 38.15 38.15 39.95 41.35 41.35

IOC Subsidiaries CPCL- Chennai 6.5 6.5 6.5 6.5 9.5 9.5

CPCL- Narimanam

0.50 0.50 0.50 1.0 1.0 1.0

BRPL- Bongaigaon

2.35 2.35 2.35 2.35 2.35 2.35

Sub-Total IOC Subisdiaries

9.35 9.35 9.35 9.85 12.85 12.85

IOC-Total(With- Subsidiaries)

45.40 47.50 47.50 49.80 54.20 54.20

IndianOil holds over 33% of the country's refining share (42%, if the

capacity of recently acquired subsidiaries is also added). All refinery

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units are accredited with ISO 9002 and ISO 14001 certifications. It’s

Mathura refinery is the first refinery in Asia and the third in the world

to earn the British Standard (BS: 7750) and ISO-14001 certifications in

environmental management. The refinery network is presented below

with its installed refining capacity.

The IndianOil group of companies owns and operates 10 out of 18 Oil

refineries in the country with a current combined rated capacity of

57.80 million metric tonnes per annum (MMTPA) or one million barrels

per day (bpd). These include two refineries of subsidiary Chennai

Petroleum Corporation Limited and Bongaigaon Refinery &

Petrochemicals limited to increase its refining capacity . These are

located at Guwahati and Digboi (Assam), Barauni (Bihar), Koyali

(Baroda,Gujarat), Haldia (West Bengal), Mathura (Uttar Pradesh) and

Panipat (Haryana). Continuous innovation and up gradation of

technology have resulted in high efficiency and optimum capacity

utilization.

With sales of 49.61 Million Tonnes in 2005-06, Indian Oil holds over

51.2 % of Market share. (with the acquisition of IBP it holds around 60

% of the market in India)

The Corporation’s employee strength as on March 31, 2006 was

30,801, including 10,437 officers. There are 2,406 women employees

including 775 officers, constituting 7.8% of the total manpower. These

employees are engaged in Crude Oil Refining, Pipeline Transportation

and Marketing of Petroleum Products. It is the sole canalizing agency

for the import and export of Crude Oil and Finished Petroleum

products.

INDIANOIL has five divisions:

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1) Refineries Division

2) Pipelines Division

3) Marketing Division

4) Research and Development Division and

5) Assam Oil division.

As the name suggests Refineries division is into refining of imported

and local crude which is available in India. In maximum cases it crosses

the installed capacity utilization. Research and development division is

into developing new lubes and lube formulations required for the

current market. From its inception it has formulated more than 2000

lube formulations. Assam Oil division is into refining and also

marketing of oil products in the northeast part of India.

The marketing division has its Head Office at Mumbai. It controls a

network of over 22,000 sales points spread over India (the largest in

the country). These include Retail Outlets of MS/HSD, SKO/LDO

dealers, LPG distributors, SERVO shops etc.

INDIANOIL constantly strives to develop its nationwide pipeline

network. It transports Crude Oil and Finished Products through over

7,575 kms of Cross-country pipelines (country’s largest network). It

keeps abreast of the latest technology when laying new systems and

inducts the same into existing systems too.

Twelve Joint ventures are now operational in partnership with leading

companies like Mobil and Lubrizol Corporation (USA), Oil tanking GmbH

(Germany), Petronas (Malaysia), Marubeni (Japan), Bharat Petroleum

Corporation Limited (BPCL), Oil and Natural Gas Corporation Limited

(ONGC), IBP, Reliance Petroleum Limited (RPL), Essar Oil Limited (EOL),

Gas Authority of India Limited (GAIL) etc of India.

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In addition to products refined at its own plants, INDIANOIL also

markets the products refined by the following refineries :

i. Madras Refineries Limited

ii. Reliance Petroleum Limited

iii. Cochin Refineries Limited

iv. Bongaigaon Refineries & Petrochemicals Limited.

The famous Brands under IndianOil

IndianOil's branded fuels XtraMile and

XtraPremium have made a significant impact in the petroleum retail

market. XtraMile, IndianOil's new generation High Speed Diesel with

world-class additives has taken a leadership position in the market.

The launch of premium fuels - XtraPremium and XtraMile (originally

IOC Premium and Diesel Super respectively), marks a new beginning

for IndianOil and its customers. XtraPremium is, in fact, the only petrol

in India with 91 Octane and doped with Multifunctional Additives. The

maiden launch of these branded fuels took place in Delhi on Sept. 24,

2002. Subsequently, XtraPremiuem sales have been extended to 200

cities and 750 petrol & diesel stations, and XtraMile to 850 cities and

1750 petrol and diesel stations by the end of

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SERVO is India's largest selling lubricant

brand. SERVO ranges of lubricants enjoy approvals from major Original

Equipment Manufacturers (OEMs) including new generation cars. 9,000

Retail Outlets and a countrywide network of SERVO SSls and SSAs

Bazaar traders offer servo range of lubricants to customers.

The Servo range of lubricants is used in almost every application

covering automotive, industrial and marine sectors. Servo range of

lubricants is fast emerging as a Global Brand. Servo has been

designated as a superbrand. Servo has genuine oil tie ups with a

wide range of companies like Hyundai, Maruti, Bajaj, Lancer. Anil

Kumble, the ever dependable sporting icon is servo Brand

Ambassador.

Developed exclusively at IndianOil's world-class R&D Centre at

Faridabad, there is a Servo lubricant for virtually every single

application. With over 42% market share and 450 grades, the country's

leading Servo brand lubricants from IndianOil are sold through over

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8,100 IndianOil petrol/diesel stations, over 1,300 Servo Shops and a

countrywide network of bazaar traders.

IndianOil Indane LPGas is used in 40

Million homes as cooking fuel and commands over 48% market share

in India. Indane LPGas is marketed through a network of 4350 Indane

distributors. Widely used in commercial sectors like industries, hotels &

restaurants, medical labs, etc. 87 Indane Bottling Plants are spread

across the country with a combined bottling capacity of 3.77 MMTPA.

New and convenient 5 kg Indane LPGas cylinders introduced in rural

and hilly regions for wider use by economically weaker sections.

IndianOil's auto LPG brand Autogas is the leader in the segment.

Marketed through a network 48 stations out of an industry total of 103

Auto LPG Dispensing Stations.

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Autogas (LPG) has been introduced in Hyderabad,

Bangalore and Mumbai markets. This alternative fuel is a good business proposition in

the long term, and IndianOil intends to further expand its marketing in a big way

INDIANOIL SERVES CUSTOMERS FROM KARGIL TO

KANYAKUMARI:

IndianOil’s remarkable marketing and distribution network extends

from Kargil to Kanyakumari, catering to a vast spectrum of customers

including households, industries, agriculture, transport, and defence

forces, with total sales crossing 49.61 Million Metric Tonnes in 2005-06.

The Marketing Division of the Corporation has its headquarters located

in Mumbai. It has FOUR Regional Offices located at Mumbai, Delhi,

Chennai and Kolkata. There are 15 State Offices and 44 Divisional

Offices including 2 of Assam Oil Division. A large network of 9,138

Retail Outlets including 82 Jubilee Retail Outlets serve the retail

market. A total of 3,521 Kerosene/ Light Diesel Oil (LDO) dealers reach

the products to the customers throughout the country. They are fed by

162 Bulk storage depots/terminals all over the country.

INDIANOIL has 35 Area Offices to deal with the marketing of LPG.

Indane Cooking Gas is distributed to over 375 lakh customers in 2,177

towns through 4,350 distributors. The Corporation has 87 LPG Bottling

plants with a total capacity of 36, 74,000 tonnes per annum.

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INDIANOIL has 94 Aviation Fuel Stations catering to Civil and Defence

Aircrafts with a market share of 68 %. INDIANOIL meets around 89 %

requirements of Air Force whereas total needs of Army and Navy.

The company has a ISO-9001 certified, modern Research and

Development Centre at Faridabad with facilities matching international

standards. The centre has developed over 2000 Lubricant/Grease

formulations and introduced multigrade fuel-efficient lubricants for

modern vehicles and is constantly trying new ways of improving fuel

efficiency and quality. INDIANOIL has launched genuine lubricating oils

for almost all brands and makes of vehicles. A wholly owned

subsidiary, Indian Oil Blending Ltd. manufactures over 450 grades of

the country’s leading SERVO brand of lubricants and greases with 42 %

market share, and are sold through more than 9,100 Company retail

outlets, besides a countrywide network of bazaar traders.

INDIANOIL- IMPROVING THE QUALITY OF LIFE:

INDIANOIL provides welfare schemes including housing, medical,

sports and recreation facilities to its employees and their families.

INDIANOIL has also given top priority to its customers’ interests. Be it

peace time or war, drought or floods, INDIANOIL has carried oil

requirements to remote hamlets, provided fuel for transport and

fulfilled energy needs of the Defence forces. INDIANOIL has always

been keen supporter of worthy causes such as family planning and

welfare and rehabilitation of handicapped and under privileged.

INDIANOIL views energy as a means of achieving self-reliance and

healthy economy. So it continuously strives to bring energy to life.

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Projects :

IndianOil accords high priority to timely project implementation. The

details of various major projects are as follows:

Completed Projects :

Diesel Hydrotreating and Solvent De-waxing units at Digboi

Refinery.

Viramgam – Koyali crude oil pipeline (148 km).

Koyali-Viramgam-Sidhpur product pipeline (102 km).

Kurukshetra-Roorkee-Najibabad product pipeline (167 km).

LPG bottling plants at eight locations.

Port terminal at Mauritius with a tankage of 15.5 TMT.

Ongoing Project :

Linear Alkyl Benzene unit at Koyali Refinery.

Diesel Hydrotreating unit at Mathura Refinery.

MS quality improvement projects at Mathura, Koyali and

Haldia refineries.

Paraxylene/Purified Terephthallic Acid unit at Panipat

Refinery.

Panipat Refinery expansion from 6 MMT per annum to 12

MMT per annum.

Grassroots refinery at Paradip

Mundra-Kandla crude oil pipeline (73 km) and conversion of

the Kandla – Panipat section of KBPL to crude oil service.

Paradip – Haldia crude oil pipeline (353 km).

Sidhpur – Sanganer product pipeline (506 km).

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Chennai – Trichy – Madurai product pipeline (683 km).

Capacity augmentation of LPG bottling plants at Chengalpet

and Tikrikalan.

Naphtha transfer pipeline from Asaoti to NTPC, Faridabad.

Hydrocracker Laboratory – Phase-II – at R&D Centre.

New Project :

Naphtha Cracker project and downstream polymer units at

Panipat.

Branch pipelines to Raxaul and Baitalpur from Barauni –

Kanpur product pipeline.

Koyali - Ratlam (274 km) and Koyali – Dahej (112 km) product

pipeline.

Dadri – Panipat gas pipeline.

7 depots at various locations.

Dockline at Narimanam (8 km).

Construction of grassroots LPG bottling plants at Raipur and

Virudhachalam.

Divisions of Indian Oil

Corporate :

IndianOil is India’s Flagship national oil company, accounting for 51.2%

petroleum products market share, 42% national refining capacity and

67% downstream pipeline transportation network. In 2005-06 , Indian

Oil sold 46.22 million metric tonnes (MMT) of petroleum products,

while its seven own refineries achieves a throughput of 37.66 MMT,

40


and pipeline network transported 44.50 MMT of crude oil and

petroleum products.

IndianOil is the country’s largest commercial enterprise – also the first

and only company to cross Rs.1 lakh crore turnover – with a Gross

Turnover of Rs. 1,83,204/- crore (approx US$ 41,059 million), and a net

profit of Rs.4915 crore (approx US$ 1,603 million) for 2003-04.

IndianOil is the sole Indian presence in Fortune’s prestigious listing of

the world’s 500 largest corporations, ranked 153 and is the 18th largest

petroleum company in the world. It has been adjudged No.1 in

petroleum trading among the national oil companies in the Asia-Pacific

region, and is ranked 325th in the current Forbes’ “Global 500” listing of

the largest public companies.

IndianOil operates under the aegis of the Ministry of Petroleum &

Natural Gas (MOP&NG), Government of India, with the VISION to be

a major, diversified, transnational, integrated energy company,

with national leadership and a strong environment conscience,

playing a national role in oil security & public distribution.

MISSION STATEMENT:

To achieve international standards of excellence in all aspects of

energy and diversified business with focus on customer delight through

value of products and services, and cost reduction.

1 To maximize creation of wealth, value and satisfaction for the

stakeholders.

2 To attain leadership in developing, adopting and assimilating

state-of-the-art technology for competitive advantage.

3 To provide technology and services through sustained Research

and Development.

41


4 To foster a culture of participation and innovation for employee

growth and contribution.

5 To cultivate high standards of business ethics and Total Quality

Management for a strong corporate identity and brand equity.

6 To help enrich the quality of life of the community and preserve

ecological balance and heritage through a strong environment

conscience.

Objectives and Obligations of the Company

Objectives of the company

To serve the national interests in the oil and related sectors

in accordance and consistent with Government policies.

To ensure and maintain continuous and smooth supplies of

petroleum products by way of crude refining, transportation

and marketing activities and to provide appropriate

assistance to the consumer to conserve and use petroleum

products efficiently.

To earn a reasonable rate of interest on investment.

To work towards the achievement of self-sufficiency in the

field of oil refining by setting up adequate capacity and to

build up expertise in laying of crude and petroleum product

pipelines.

To create a strong research and development base in the

field of oil refining and stimulate the development of new

product formulations with a view to minimize/eliminate their

imports and to have next generation products.

42


To maximize utilization of the existing facilities in order to

improve efficiency and increase productivity.

To optimize utilization of its refining capacity and maximize

distillate yield from refining of crude to minimize foreign

exchange outgo.

To minimize fuel consumption in refineries and stock losses

in marketing operations to effect energy conservation.

To further enhance distribution network for providing

assured service to customers throughout the country

through expansion of reseller network as per Marketing

Plan/Government approval.

To avail of all viable opportunities, both national and global,

arising out of the liberalization policies being pursued by the

Government of India.

To achieve higher growth through integration, mergers,

acquisitions and diversification by harnessing new business

opportunities like petrochemicals, power, lube business,

consultancy abroad and exploration & production.

Financial Objectives

To ensure adequate return on the capital employed and

maintain a reasonable annual Dividend on its equity capital.

To ensure maximum economy in expenditure.

To manage and operate the facilities in an efficient manner

so as to generate adequate internal resources to meet

revenue cost and requirements for project investment,

without budgetary support.

To develop long-term corporate plans to provide for

adequate growth of the activities of the Corporations.

43


To endeavour to reduce the cost of production of petroleum

products by means of systematic cost control measures.

To endeavour to complete all planned projects within the

stipulated time and cost estimates.

Performance Graphs 2005-06

Obligations :

Towards customers and dealers :

44


To provide prompt, courteous and efficient service and

quality products at fair and reasonable prices.

Towards suppliers:

To ensure prompt dealings with integrity, impartiality and

courtesy and promote ancillary industries.

Towards employees:

Develop their capability and advancement through

appropriate training and career planning.

Expeditious redressal of grievances:

Fair dealings with recognized representatives of employees

in pursuance of healthy trade union practice and sound

personnel policies.

Towards community:

To develop techno-economically viable and environment-

friendly products for the benefit of the people.

To encourage progressive indigenous manufacture of

products and materials so as to substitute imports.

To ensure safety in operations and highest standards of

environment protection in its manufacturing plants and

townships by taking suitable and effective measures.

Towards Defence Services:

45


To maintain adequate supplies to Defence Services during normal and

emergency situations as per their requirement at different locations.

Areas Of Focus :

1 Strategic resitement of Retail Outlet, specially for Diesel Oil, to

sites outside town area to facilitate better/improved Gasoline

facilities in metros/major towns.

2 Bigger site for Retail Outlets on highways.

3 Promote / inculcate dealers as IndianOil family member and

ensure that they are “working dealers” and not “absentee

dealers”.

4 Profit maximization through

Sale of “Free Trade Product”.

Import Parity Pricing.

Project Management for faster completion of on-going

project.

Faster commissioning of Retail Outlets.

5 Quickly create infrastructural facilities at supply locations /

Divisional Offices to improve customer service through:

Faster loading of Railway Tank Wagons / Tank Trucks.

Quick and accurate billing.

Computerized and modernized accounting system.

Improved communication facilities.

6 Areas of improvement as per “Customer Satisfaction

Measurement and Management” study :

Finance.

46


Supply Point.

Maintenance.

Strengths

Wide field network.

Dealership network to assist in our direct efforts.

Up-country storages nearer to the market.

Lower cost of production from old Refineries.

Strength on international trade.

Eight existing Refineries.

Spreading Wings :

IndianOil has overseas offices in Sri Lanka, Dubai, Kuala Lumpur and

Mauritius to co-ordinate business activities. It has also set up

subsidiaries in Mauritius and Sri Lanka for implementing business

expansion project. SERVO lubricants are being exported to Dubai,

Nepal, Bhutan, Kuwait, Malaysia, Bahrain, Indonesia, Sri Lanka,

Mauritius, Bangladesh etc.

Marketing

The marketing of petroleum products in India today is dominated by

the four state-owned oil companies. Their market shares as on 31st

March 2001 were as follows:

* Indian Oil Corporation 55 % approx.*

47


* Bharat Petroleum Corporation 21 % approx.*

* Hindustan Petroleum Corporation 19.5 % approx.*

* IBP Company 4.5 % approx.*

IndianOil has the maximum market share with 55% followed by Bharat

Petroleum Corporation with 21% and Hindustan Petroleum Corporation

with 19.5%

Training At IndianOil

INDIANOILL is the largest industrial corporation in India in terms of

sales turnover. As per the ranking by the Fortune500 magazine, it is

ranked 153rd largest Industrial Corporation in the world. The training

department of Head Office and the Regional Office look after the

formal training requirements of about 17000 employees in the

Marketing Division of the corporation. The Head Office training center

looks after the management training activity of over 2000 managers in

Marketing Division. In addition it also receives nominations from

Refinery and Pipelines Divisions, R & D Center, Assam Oil Division,

Indian Oil Blending Limited (IOBL), Oil Co-ordination Committee (OCC),

PCRA, PII and defence personnel. It also offers an opportunity for

participation in training programme to managers of organization from

developing countries with whom it has co-operation agreements.

The Corporation has not only established its leadership in this field, but

has also gained unquestionable credibility at the international level.

The credit for this achievement goes to its most potent and vital force

48


that is the dedicated efforts of the Indian Oil employees. Indian Oils

aims at world-class excellence, which requires top-notch managerial

training and development of their human resource. That is the reason

why INDIANOIL has given the highest importance to training right from

its inception, which has enabled it to maintain and perpetuate its

profitable and efficient existence.

Evolution of Training in INDIANOIL :

Prior to 1964, the individual companies had their own training schemes

patterned on the erstwhile oil companies approach. The early focus

was on supervisory development. Since the organization was designed

along divisional lines, the training activities were also carried out

almost independently division-wise. The training in Marketing Division

started with programmes organized by them for the Defence Personnel

for handling of petroleum products called the Petrol Oil and Lubricants

(POL) courses. Even as early as 1963-64 technical programmes on fuel

engineering were conducted for the sales force with the help of MOBIL,

USA. In 1965, the Administrative Staff College (ASC) was set up in

Bombay to conduct functional programmes in areas such as Personnel

Management and Productivity for INDIANOIL personnel in addition to

the POL programmes for the Defence Personnel. The first few

programmes were adapted from those being conducted by the Burma

Shell with guest faculty and later on with the help of internal faculty.

Emphasis in the organization on training programmes was largely in

the areas of handling of Petroleum products, Liquid Petroleum Gas

(LPG) and a few bahavioural programmes.

49


A few years later, in 1967-68 as more programmes were added,

training was taken up at the regional levels with four regional training

centers, each set up headed by a Branch Training Officer.

Training activities in the R&D Division started in early 1960s in the

Guwahati Refinery. In the initial years the United Nations experts

helped in organizing supervisory development programmes. Full

fledged training centers were set up in all the refineries – Guwahati,

Barauni, Gujarat, Haldia, Digboi – Assam Oil Division(AOD) and Mathura

with major emphasis on technical and skill-development programmes

in the initial years of their existence

In the 1970s, with the help of the Marketing Division, General

Management Programmes and behavioural programmes were

organized in the Refinery training centers. For increased

understanding and coordination between the two divisions a series of

interface programmes were organized since 1975-76.

The IndianOil Management Academy (IMA) started functioning in

August 1979 to meet the emerging training needs at selected

managerial levels. The IMA was to conduct specific functional and

developmental programmes for officers of the R&P Division. The AOD

by itself has a long history of emphasis on training even prior to its

nationalization and integration with INDIANOIL. Various technical and

skill development programmes were conducted by AOD for officers and

staff at all levels. The refinery at Digboi being peculiar to itself in

terms of the technology and operations, specific training programmes

in operations and maintenance were organized. The AOD had a strong

and systematic approach to training with major emphasis on planned

on-the-job training.

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In the mid-1970s, the performance appraisal forms were amended in

INDIANOIL to introduce a component of training to help in the

identification of training needs. In early 1980s, the INDIANOIL

reviewed its corporate plans as a result of which the need was felt to

give a different orientation to the training activity keeping in view the

organisation’s development. It was also decided to have an

organization development (OD) intervention by an outside consultant

with a view to develop a proper linkage between the corporate plans

and human resources development. Accordingly, Professor M. Athreya

was invited as an OD interventionist. Based on the suggestions made

by the consultant, emphasis was given to Human Resources

Development and it became a subsystem of the Personnel function.

Consequently, there were certain organizational changes in the

Personnel function. The Personnel function was regrouped and,

reorganized into three subsystems – Personnel and Administration,

Training and HRD. The HRD group was specifically assigned the task of

integrating the identified corporate mission with the department and

individual goals, which included appropriate career planning and role

analysis.

Consequently, further changes were introduced in the Annual

Performance Appraisal (APA) System. The APA form was redesigned

and training need identification was given more importance. In 1990,

the personnel department was redesigned as Human Resource

Management to reflect the greater emphasis on HRD though the basic

set up continued as earlier. Thus, the training also got a fillip with

introduction of general management and leadership courses and

interface programmes.

At the same time, there was considerable technical upgradation, which

necessitated greater emphasis on technical training. As a result of the

51


HRD outlook in the organization, eight disciplines were identified in the

Marketing Division namely, Marketing, LPG, Operations, Technical

Services, Personnel, Finance, Sales, Aviation and appropriate career

path models drawn. The interdisciplinary programmes were introduced

to expose the officers to function other than their parent discipline. -

The concept of the staple programmes – all officers to be exposed to

them was simultaneously introduced.

Coinciding with this, in keeping with the corporate objective closer /

greater interface was envisaged between the divisions. In 1987, the

Tata Management Training Centre (TMTC) was invited to study the

training activities in INDIANOIL. The TMTC offered suggestions to

improve the training infrastructural facilities and better utilization of

manpower for training within the organization.

In Indian Oil Corporation today, training committees at the Corporate

office level, Head Office (Division) level, Regional/unit level play an

active role in formulating training plans, review of ongoing course, etc.

In the Marketing Division, the training activity is organized with set ups

at selected locations, at each regional headquarter level and at the

head office. The workmen training is organized at the selected

locations while officers’ training and some workmen training are

organized at regional headquarters, apart from the training

programmes for direct recruits and promotee officers and the middle

and senior level officers at the HO.

In the Refineries and Pipelines Divisions, each refinery has a

comprehensive training set up taking care of both workmen training,

officer training for junior and mid level officers and management

training programmes for direct recruits while the Indian Management

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Academy (IMA) organizes programmes for middle and senior level

officers in addition to the Junior Executive Development programmes

for Promottee officers.

The Pipeline training activities are also organized on a three-tier basis

with unit/location, regional office and head office handling workmen

training, middle and junior level officer training programmes and

external and middle and senior level officers training respectively. The

internal training programmes at the head office level for mid/senior

level officers is taken up by the IMA.

Over the past few years there has been a substantial increase in the

number of employees exposed to training in the various divisions of

INDIANOIL.

In addition to the efforts of the training department in INDIANOIL,

certain training programmes are conducted by other departments like

Fire & Safety Department and Inspection etc.

Over the years the INDIANOIL has invested substantial amount of

financial resources into training.

Training MISSION :

1 To facilitate the process of integration of personal ambitions and

aspirations of employees with the corporate objectives through

training interventions.

2 To continuously scan the environment, review training

programmes and design need-based inputs to ensure

achievement of high level of excellence in customer satisfaction.

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Equip work-force with skills to make IndianOil Corporation a

global player.

3 Assist / guide the employees in their pursuit of knowledge and

self-actualization, expounding the belief that there are no limits

to human potential and growth.

4 Facilitate the induction of new employees into IndianOil

Corporation through suitable orientation programmes.

5 Enable through training, Defence Services to efficiently handle

storage, distribution and consumption of petroleum products,

which shall also play a vital role in building customer relations

over a long term.

TRAINING PROCESS

TRAINING COMMITTEES

ROLE OF TRAINING COMMITTEES:

The main role of the Training Committees is to oversee the training

functions and the training needs of the organization keeping in view

the environmental changes.

Based on the need identified, training programmes focused towards

specific area of interest are approved by the committee for

implementation. The training committee also reviews the training

activities on a half-yearly basis.

HO TRAINING COMMITTEE

Chairman - Director (M)

Members - Executive Director, and General Managers I/C.

In addition one Regional ED is invited to the HO training Committee.

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Convenor - DGM (T&D)

REGIONAL TRAINING COMMITTEE

Chairman - ED of the Regional.

Members - General Managers / Dy. General Managers (HOD) of the

Region.

Convenor - Training In-charge of the Region (Senior / Manager

(T&D))

In Indian Oil Corporation :

Training Department has a training calendar, which is sent

to all the departments.

Basically two types of training programmes are conducted

by the training department :

a. Functional Programme

b. Developmental Programme

Training department makes use of in-house personnel for

functional programmes and employs people from outside for

development programmes

The current system provides consultation with concerned

officers by his superior to ascertain the training needs.

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Similarly, the superior in consultation with the Unit level co-

coordinators identifies training needs of the workmen and

Regional Training Heads and new need based programmes

are mounted.

Each employee’s training needs are identified through

system of Annual Performance Appraisal (APA).

Nomination for Regional course is as per the eligibility

criterion laid down for each programme.

Once the nominations are identified and course

announcement made, withdrawal of nomination is normally

not permitted.

Participants at the end of each programme do the overall

course evaluation and the courses are modified depending

upon the feedback received.

Participants attending external training are required to make

a formal presentation regarding the training received along

with action plan for implementation. This ensures transfer of

knowledge for on job performance.

Role of training :

1 Training has been performing a very important role in helping

the Corporation to reach the commanding heights of

performance over the years.

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2 Training has played a pivotal role in helping the organization

adapt itself to change, which is the most important thing called

for in the current changing environment.

3 To assist the employees in their pursuit of knowledge and self-

actualization.

Training Linkage to Corporate / Divisional Objectives

The training policies have been developed for 4 main reasons :

1 To define the relationship between the organization objectives

and its commitment to the training function.

2 To provide operational guidelines for management, for example

to state management’s responsibilities for planning and

implementing training and in particular to ensure that training

resources are allocated to priority and statutory requirements.

3 To provide information for employees. For example, to stress the

performance standards expected; to indicate the organisation’s

commitment to training and development and to inform

employees of the opportunities of training development

(including willingness to grant time off, and/or payment of fees

for External courses).

4 To enhance public relations for example, to help recruit high

caliber recruits; to reassure clients and public at large about the

quality of products or services or to project an image as a caring

and progressive employer by taking part in government

sponsored “Social” training programmes.

Need for Training :

IndianOil Corporation is involved in refining and marketing of POL.

Here, training becomes a core function for the following reasons :

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1 Training is necessary for new employees to get an idea about the

job and to do it effectively.

2 Junior employees need training before they take the position of

their seniors.

3 It is necessary for the company to fulfill its future personnel

needs and to train the employee in the company culture pattern.

4 It is necessary for old employees to enable them to keep abreast

of changing methods, techniques and technology.

5 It is needed to improve the quality and quantity of output by an

employee and raising their morale.

6 Training is required to revise the specialized skills learnt in the

past.

7 Job Rotation practice in IndianOil demands training.

8 It reduces wastage and accidents.

9 For self – development.

Importance Of Training

The main importance is to mould the employees attitude and help

them to achieve better co-operation with company. It also helps in

reducing dissatisfaction, complaints, absenteeism and labour turnover.

A successful training programme can be made by creating a good

environment for it.

Participants’ Expectations from a training programme

:

Improving and solving specific problems confronted in job

functions.

As a means to improve promotional aspects.

For professional growth in organization.

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To develop understanding of specific subjects covered in the

training programme

As a change for routine job schedule.

To get acquainted with new technology.

For personal growth

To gain new and pertinent knowledge

Acquire specific approaches, skills or techniques that can be

applied on the job.

Help and confirm some earlier ideas.

Acquaint with problems, ideas and solutions from other

departments

Look at oneself and one’s job objectively.

Training process of IndianOil involves several steps :

1. Defining organizational objectives and strategies

2. Assessment of the training needs

3. Establishing training goals

4. Devising the training programme

5. Implementation of the programme

6. Evaluation of the results

Training procedure in INDIANOIL

1. Identification of training needs.

2. Training Nominations

3. Training Facilities

4. Training Techniques

5. Training Faculty

6. Preparation of the Trainee

7. Evaluation Effectiveness of training in IndianOil.

8. Follow – up.

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1) Identification of training needs :

Identification of training needs is the stepping-stone in the appropriate

management training system on which the entire edifice of training

programme is built. Like the prevalent management development and

training programmes, appropriate management training system does

not take a generalized view of training needs. It attempts to take a

specialized individualized view of training needs of different categories

of managers performing more or less similar job in similar

organizations. Under this system, assessing training needs is treated

as an important and crucial training function before designing and

conducting a programme.

An organization normally employs sufficient number of managerial and

non-managerial personnel with required competence to perform given

jobs leading to the accomplishment of organizational objectives.

Effective performance of a job requires a standard of competence in

the job holder consisting of vital areas such as job related knowledge,

skill and attitude. But due to one or other reasons the existing

competence of the jobholder may fall short of the standard

competence required in the job. The processing of assessing and

finding the gap between the standard competence required in a job

and the existing competences in turns of vital knowledge and skill and

attitude in the job holder may be called as the identification of the

areas of deficiencies and the resultant inventory of gaps in the job

holder in terms of knowledge and skill and attitude may be said as his

training needs.

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This logic highlights two processes :

1. Identification and definition of standards of knowledge, skill and

attitude required in a job.

2. Assessing existing level of knowledge, skill, attitude of the job

holder.

These two processes are of critical importance and should be carried

out as accurately as possible because the outcome of the comparison

between the two provides the information from which an appropriate

training programme is developed.

A training programme should be established only when it is felt that it

would assist in the solution of specified operational problems. The

most important step in the first place is to make a thorough analysis of

the entire organization, its operations and manpower resources

available in order to find out the ‘trouble spots’ where training may be

needed.

In IndianOil, training needs are identified by the Training committees at

HO/Regional level keeping in view the changing environment and the

objectives and the mission of the organization. Based on this new

training also gets identified year after year. Traditional programmes

are redesigned so as to be effective utilized.

Each officers training are identified in the “Training needs Exercise”

which is covered every two years. Prior to identifying needs of each

officer, their current system provides consultation with concerned

officers by his superior to ascertain the training needs.

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The training need for officers are identified in the “Training need” form

that constitutes the basis on which the nominations are accepted by

the training centers for the various in-house training progrmmes. The

nominations to external training programmes are encouraged only for

such progrmmes where in-house training programmes are not

available, and there is a self/organizational need.

The training needs of workmen in employees category are identified by

the superiors in consultation with the unit level coordinators and the

Regional Training Heads and new based in-house programmes are

mounted.

Employees do write in their Annual Performance Appraisal (APA) forms

about the training they would like to undergo.

2)Training Nominations

As far as possible opportunity is given to the officers to attend HO

training programmes of their choice once every two years.

Nominations for regional courses are as per the eligibility criteria laid

down for each programme.

The main thrust of training activities at regional level is improving

functional competency. The nominations for workmen category are

finalized at the regional training centers keeping in view the specific

needs of each employee segment.

Withdrawal of nomination – once the nominations are identified by the

training department and course announcement is made, withdrawal of

nomination is normally not permitted. However, in extreme

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unavoidable circumstances, this is permitted subject to prior approval

of the competent authority.

3)Training Facilities

The non residential training programmes are conducted in the training

halls located in the HO/Regional head quarters. The training halls have

been carefully designed keeping acoustic requirement in view. The

training halls are equipped with the latest and most sophisticated

audio-visual equipments to ensure training effectiveness.

Management training courses / supervisory development courses are

conducted in some of the reputed nominated hotels. They have also

acquired latest electronic gadget like liquid Crystal Display, Videorama,

Electronic Board (Panaboard), direct projector, for improving training

efficiency.

The training center at HO has well equipped reference library. It has

an excellent collection of books and CDs on various aspects of

Management, Information Technology, Petroleum Industry and Energy

Management besides general disciplines.

4)Training Techniques

Depending on the course objectives, training methodology mix is

carefully designed. In the training courses the management provides

ample opportunity to the employees to take active part in the learning

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process. In the management training courses emphasis is placed on

the use of state-of-the art training technologies like simulation

exercises, computer aided Management Games, live video recording,

structured experiential instruments, case study method etc. Syndicate

project studies are also given in most of the courses to study the live

organizational problems and give recommendations, which are then

duly considered by the management for implementation. The

participants of various training programmes are also required to

prepare reports and make formal presentations. This aids in the

process of learning for workmen training. Adequate emphasis is given

to hands-on-training.

5)Training Faculty

The trainer has to be prepared for the job for he is the key figure in the

entire programme.

The strength of the Training in INDIANOIL lies in the faculty being

generated from within. In-house faculty imparts a lot of credibility to

the training efforts. The training faculty members are selected on the

basis of their positive attitude towards training assignment and their

ability to communicate effectively with others. Each faculty member is

required to have thorough knowledge of his subject. The training

faculty is responsible for ensuring that the formal training activities are

in line with the organisational requirements.

The functional managers from various departments are invited as part-

time faculty members to share their knowledge pertaining to their

disciplines. It also helps the functional managers to remain up-to-date

in their specialized functions. On a very selective basis, they invite

guest speakers in the training programmes in such areas where they

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do not have sufficient expertise within the organization. This is done

with the selection of names from CEOs of top corporate houses and

professional institutes like IIMs and IITs.

The training center is also well equipped with professionally qualified

trainer who are competent to conduct the management development

programmes, both at HO/Regional level.

6)Preparation of the Trainee (participants):

This step consists of

1 Putting the learner(trainee) at ease.

2 Stating the importance and the ingredients of the job and its

relationship to work flow.

3 Explaining why he is being taught.

4 Creating interest and encouraging questions, finding out what

the learner already knows about his job.

5 Explaining “why” of the whole job and relating it to some other

job the worker already knows.

6 Placing the learner as close to his normal working position as

possible.

7 Familiarizing him with equipment, materials, tools and trade

terms.

7)Evaluation Effectiveness of training in Indian Oil.

Different approaches could be adopted to evaluate the effects, impact

and effectiveness of training. The methods may vary from an

evaluation of the perceptions on training of the trainees, supervisors,

subordinates and trainers to studying the entire training function itself.

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The study could encompass the cost benefit analysis of the training or

the impact it has had on productivity and efficiency of the organization.

To understand the knowledge gained from the training and thereafter,

the transferability of this learning on the job situation and its effect on

rise or fall of productivity necessitates the availability of certain

information. It is essential to understand the level of knowledge of

participants before the initiation of training process to calculate the

possible gains from training.

On the other hand, a study which comes in after the event of training

is necessarily constrained to study the perceptions of the trainees,

trainers and the organization with regard to effectiveness of the

training effort. The perception study is principally an after the event

evaluation. The approach here is to elicit the perception of

participants after attending training programmes, on various aspects

of the programme, the learning he/she has derived from the

programme and any change in attitude, knowledge or skill level and its

transferability to on-the-job situation. The perceptions expressed by

the participants are further checked out with their superiors,

subordinates and peers.

For management training courses, session-wise evaluation is done for

each session. The overall course evaluation is done by the participants

at the end of each programme and the courses are modified

depending upon the feedback received. At periodic intervals,

evaluation of training effectiveness is conducted by reputed outside

professional agencies like Tata Management Training Centre,

Administrative staff college of India etc. The participants attending the

external training and are required to make a formal presentation

regarding the training received along with an action plan for

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implementation. This ensures transfer of knowledge for on-the-job

performance. Training function also enjoys adequate support from top

management to monitor various programmes and upgrade the same

from time to time.

The post course evaluation and monitoring of functional courses is

done with the support of the respective functional groups. A high

degree of innovation in training efforts is ensured due to the above

interventions.

8)Follow-up

This step is undertaken with a view to trusting the effectiveness of

training efforts. This consist of-

Putting trainee ‘on his own’.

Checking frequently to be sure that he/she has followed

instructions.

Tapering off extra supervision and close follow-up until he is

qualified to work with normal supervision.

Basically two types of training programmes are conducted by the

training department :

a. Functional Programme

b. Developmental Programme

Nature / Methods of TRAINING :

After the employee has been recruited, selected and inducted he must

next be developed to better job and the organization. No one is

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perfect fit at the time of hiring and some training and education is

essential. No organization has a choice of whether to develop

employees or not, the only choice it has is that of method of

development. If no organized programmes exist then development will

largely be self-development, while learning on the job. Development

would include both training to increase skill in performing a specific job

and education to increase general knowledge and understanding of the

total environment. Planned development programmes will return

values to the organization in terms of increased productivity,

heightened morale, reduced costs and greater organizational stability

and flexibility to adapt to changing external requirements. Such

programmes will also help meet the needs of individuals in their search

for work assignments that can add up to life-long careers.

There are mainly two reasons for functioning training:

1. Training programmes for non managers to develop skills to perform

a job.

2. Training and educational programmes designed to develop

organizational units as entities.

Classification of training methods :

1. ON-THE-JOB TRAINING :

Virtually, every employee, from the assistant to company’s chairman

gets some on-the-job training when he joins a firm. Since most jobs in

an industry can be learnt is a relatively shorter period of time this

method is widely used. It has the advantage of strongly motivating the

trainee to learn since it is not located in the artificial situation of a class

room. The fact that the success of the system depends almost entirely

upon the immediate supervisor, the trainer, means that the personnel

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unit has a major responsibility for making a good effective teacher out

of every supervisor.

There are a variety of on the job methods such as coaching or under

study; job rotation and special assignment under coaching or under

study method (which is also known as internship and apprenticeship

method), the employee is trained on the job by his immediate

supervisor. Internship is usually applied to managerial personnel and

provide a wide variety of job experience. Apprenticeship is generally

used to impart skills requiring long periods of practice as found in

trade, crafts and other technical fields. In job rotation a management

trainee is made to move from job at certain intervals. The jobs vary in

content. Special assignments or committees are other methods used

to provide lower level executives with first hand experience in working

on actual problems.

2. OFF-THE-JOB METHODS OR CLASS ROOM :

Off-the-job training simply means that training is not a part of every

day activity. The actual location may be in

the company class rooms or in places which are owned by the

company or in universities or associations which have no connection

with the company. These methods consist of

i. Lectures

ii. Conferences

iii. Group Discussions

iv. Case studies

v. Role playing

vi. Programmed instructions

vii. T-group training

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i. Lectures

Lectures are regarded as one of the simplest ways of imparting

knowledge to the trainees especially when facts, concepts or

principles, attitudes, theories and problems solving abilities are to be

taught. Lectures are formal organized talks by the training specialist,

the formal superior or other individual specific topics. The lecture

method can be used for very large groups which are to be trained

within a short time thus reducing the cost per trainee. It can be

organized rigorously so that ideas and principles relate properly.

ii. Conference method

In this method, the participating individuals confer to discuss points of

common interests to each other. A conference is basic to most

participative group centered methods of development. It is a formal

meeting; conducted in accordance with an organized plan in which the

leader seems to develop knowledge and understanding by obtaining a

considerable amount of oral participation of the trainees. It lays

emphasis on small group discussions, on organized subject matter and

on the active participation of the members involved.

iii.Seminar or team discussion

This is an established method for training, a seminar is conducted in

many ways. It may be based on paper prepared by one or more

trainees or on a subject selected in consultation with a person in

charge of the seminar. It may be part of the study or related to the

critical studies or practical problems.

It may be based on the statement made by the person in charge of the

seminar or on a document prepared by an expert who is invited to

participate in the discussion.

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The person in charge of the seminar distributes in advance the

material to be analysed in the form of required readings. The seminar

compares the reactions of trainees, encourages discussions, defines

the general trends and guides the participants to certain conclusions.

iv.Case studies

This method was first developed by Christopher Lanzdell in the 1880s

at the Harward Law School to help students to learn for themselves by

independent thinking. Case study is based on the belief that

managerial competence can best be attained through the study,

contemplation and discussion of concrete cases. A case is a set of

data, real or fictional, written or oral miniature description and

summary of such data that present issue and problems calling for

solutions or actions on the part of the trainee. When the trainees are

given case to analyse they are asked to identify the problems and to

recommend tentative solutions for it. In Case study method, the

trainee is expected to

Master the facts, become acquainted with the content of the

case.

Define the objectives sought in dealing with the issues in the

case.

Identify the problems in the case and uncover their probable

causes.

Develop alternative courses of action.

Screen the alternatives using the objectives as criteria.

Select the alternative that is most in keeping with the stated

objectives.

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v. Role – playing

In role-playing trainees act out a given role as they would in a stage

play. Two or more trainees are assigned parts to play before the rest

of the class. These parts do not involve any memorization of lines or

any rehearsals. The role players are simply informed of the situation

and of the respective roles they have to play. Sometimes after the

preliminarily involves employee-employer relations, hiring, firing,

discussing a grievance procedure, conducting a post appraisal

interview or disciplining a subordinate or a salesman making a

representation to a customer.

vi.Programmed Instruction (teaching by the machine

method)

Programmed Instruction involves a sequence of steps which are often

set up through the central panel of an electronic computer as guides in

the performance of desired operation or series of operations. It

incorporates a pre-arranged, proposed or desired course of

proceedings pertaining to the learning or the acquisition of some

specific skills or general knowledge, a programmed instruction involves

breaking information down into meaningful units and arranging these

in a proper way to form a logical and sequential learning programme or

package.

vii. T-Group Training

This usually comprises association, audio-visual aids and planned

reading programmes. Members of a professional association receive

training by it in new techniques and ideas pertaining to their own

vocations through a regular supply of professional journals and

informal social contacts or gatherings, members are kept informed of

the latest development in their particular fields. Audio-visual aids-

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records, tapes and films are generally used in conjunction with other

conventional teaching methods. Planned and supervised reading

programmes are conducted, technical publications and the latest

journals are kept in the library for the use of the trainees.

3. VESTIBULE TRAINING :

This method attempts to duplicate on the job situations in a company

class room. It is a class room training which is often imparted with the

help of the equipment and machines which are identical with those in

use in the work place. This techniques enables the trainee to

concentrate on learning the new skill rather than on performing an

actual job. It is a very essential method of training semi-skilled

personnel, particularly when many employees have to be trained for

the same kind of work at the same time.

Conclusion:

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Training has played a very important role in helping IndianOil to reach

the commanding heights of performance. Any training would be

considered to be successful only when the knowledge gained by the

participants is transferred to the job performance. And IndianOil is

been very successful in doing that.

IndianOil has a very strong base of human resource development and

training and it has percolated right form the top to the bottom levels

and this had played a role in more systematic organization

development. The training programmes have helped their employees

to improve their skill and efficiency as a result of which they are able

to undertake new challenges in their work. The training and

development programmes held in IndianOil helped their employees to

know theirs strength and weaknesses and helped them to work on

their weaknesses

BIBLIOGRAPHY

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Training Development- IndianOil

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