Monday, October 31, 2016

The Emiratization of HRM Practices at a Petroleum Company

Programs to encourage employment of nationals in preference over expatriates have become a key feature in the Gulf countries. The United Arab Emirates (UAE) relies heavily on foreign workers. In 2007, Emiratis represented only 13.5% of the UAE population. Expatriate workers occupy 98% of private-sector jobs (more than 52% of the total jobs in the UAE), and 91 % in the public sector. The unemployment rate for UAE nationals is around 13%. To enforce Emiratization, the government has centrally determined employment quotas for nationals within specific sectors. EMI/ PETROL is a UAE company operating in the petroleum industry. In 1998, its board formally approved the "Workforce Nationalization Project." In 1999, EMI/PETROL became a leader in Emiratization by allocating a bud­get of $13.5 million (approximately 50 million AED) to cover Emiratization expenses, created a dedicated "Nationals' Development Team" (NDT), set a goal to achieve 50% Emiratization of non-retail staff over a 5-year period, and publicized its plan through the local press. In 1999, Emiratis represented 11 % of the company's workforce. After an initial assessment, EMI/PETROL set measurable Emiratization objectives and policies.

The NDT designed proactive recruitment strategies to generate well qualified UAE applications, developed competency profiles used to select local nationals and identify their individual development needs, and created individual training and development plans for each UAE employee. Once a national trainee was competent in the core competencies of the target position, the trainee would replace an expatriate employee. To facilitate cooperation with expatriates, re­placed staff could choose redeployment within the group or an attrac­tive redundancy package. Emiratization became a key indicator in the company's performance management cycle. The numbers of newly employed and promoted Emirati employees, per year, were used to evaluate the progress. In 2003, after the first Emiratization process review, EMI/PETROL discovered it was vulnerable to the "poaching" of high-caliber nationals. It responded with a strong retention strategy (providing preferential terms and conditions for nationals, including competitive salaries as determined by benchmarking with other orga­nizations) and implemented specific succession planning. The human resources policy manual states that recruitment preference is given to citizens of the UAE, and where a vacancy provides a promotion op­portunity and/or development opportunity, national candidates are re­viewed and receive priority. Today, EMI/PETROL is known as one of the Emiratization leaders in the UAE. Even if it did not succeed in its initial objective, it did manage to achieve 50% Emiratization of jobs at the professional and management levels.
2-24. What characteristics of diversity and affirmative action
programs do you recognize in this case?
2-25. How is the Emiratization program different?
2-26. What qualitative and quantitative indicators could compa­nies like EMI/PETROL use to evaluate their nationalization progress?
2-27. Would you speak, in this case, of reverse discrimination?

Sources: C. Rees, A. Mamman, and A. Bin Braik, "Emiratisation as a Strategic HRM Change Initiative: Case Study Evidence from a UAE Petroleum Company," International Journal of Human Resource Management 18, no. 1 (2007) pp. 33-53).

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