The Role Of A Compensation At ARAMCO On Motivating Employees (Essay Sample)

The Role of Compensation at ARAMCO on Motivating Employees Student Name Institution Instructor Date Abstract The main objective of the study is to establish the role of compensation as a motivating tool in Aramco – Saudi company. The study utilized both the primary and secondary data collection methods of data collection while majoring on the questionnaire, oral interview and observation. In conducting the analysis, the research capitalized on selecting 100 employees of the organization as a sample that filled the open-ended questionnaires to address the research questions. Out of 100 workers, the research develops five levels of 20 employees each, aimed at classifying according to authority to make decisions, supervisory capacity and the skills level. The five levels included the new employees, multi specialized employees no supervision authority, and employees specialized in a single area, determinant employees as well as the experienced and super skilled employees. The questionnaires focused on the research question, which was whether compensation at Aramco motivates the workforce and creates job satisfaction. The outcome of the analysis indicated that employees at Aramco Company received numerous compensation packages, the factor that enabled them to remain long-term workers in the organization. The findings indicated that most employees in Aramco are contented with the compensation scheme, which serves as a major influencing factor towards job satisfaction and retention of workers in the organization. Table of contents 1 Abstract……………………………………………………………………. 2 2 Table of Contents………………………………………………………… 3 3 Introduction....................................................................................................4 4 Literature Review………………………………………………………… 5 1 Historical background of the Aramco Saudi Oil Company…………………6 2 Compensation Management……………………………… ………………..7 5 Research Methodology………………………………………………. ……11 6 Research Findings………………………………………………………….12 7 Analysis of the Information ……………………………………………….14 8 Conclusion and Recommendations………………………………………...15 9 References…………………………………………………………………17 3. Introduction The modern revolution of business environment and the art of globalization require an organization to establish an effective human resource management for it to attain success in their daily operations. Efficient human resource management determines the achievement of the crucial goals of the organization through effectively utilizing labor and other resources to maximize the performance as well as retain the clients for the offered products (Vitalis, 2007). Among the key factors that the human resource uphold include the motivation and job satisfaction since they reveal the level of productivity of a employees. Unfortunately, most organizations have failed to establish an effective human resource management, the factor that has led to the fall due to employee turnover and other labor related issues thus yielding into low productivity in the labor sector (Venn, 2008). Compensation is among the motivational factors that enhance employee satisfaction and job productivity in various societies and organization. While capitalizing on compensation as way of motivation the research aims at examining the packages that Aramco offers to its employees as a way of motivating and retaining the workforce (Dysvik & Kuvaas, 2010). Aramco is a famous oil company in Saudi Arabia, which is a state owned and consists of various workers from all parts of the world. Aramco dominates in the entire globe as the largest organization producing oil with vast crude oil reserves than any other. The company is the most profitable organization in the world, and harbors about 54, 000 employees in total. Among the salary, packages the organization offers to retain its workers include the base salary paid on a monthly basis, housing allowances, Saudi Aramco Incentive Plan(SAIP), Ramadan Bonus and the settling allowance for newly hired employees to establish themselves (Venn, 2008). Other types of compensation include the specified location allowance and the overtime or shift premium allowance for the employees working during non-standard hours. The objective of the research is to examine the employee satisfaction in relation to the compensation packaged offered by Aramco Company as well as examine the correlations existing between worker satisfaction and the employment characterizes in Aramco (Dysvik & Kuvaas, 2010). Analysis and recommendations shall be critical in the analysis since they serve as remedial approaches that will enable the organization realize more success as well as suggest some efficient methods of attracting new workers to the organization. The recommendations will also help other organization to develop a competent human resource department that will enhance quality production through improving labor by creating job satisfaction and maximum production amongst the employees (Azizi & Liang, 2013). For the success of the analysis, various areas will be critical. The research shall commence with the literature review, which will focus upon the general effect of compensation as a motivational tool in an organization. Next is the research methodology, which will encompass the conduction of personal interview as well as the filling of the questionnaires to determine the impact of compensation on motivating the employees. The findings shall be vital since they will serve as a guide towards making the analysis as well as the development of the recommendations based on the research. 4. Literature Review In this chapter, the study will review five literatures namely the Historical background of the Aramco Saudi Oil Company, the literature review on compensation management and the compensation management strategies. 4.1 Historical background of the Aramco Saudi Oil Company Saudi Aramco Oil Company is the world’s largest oil producing firms, situated at Saudi Arabia. The company is a state owned property and has the largest oil reserve in the globe. The headquarters of the company is located at Dhahran, Saudi Arabia from which the organization operates its daily routine activities (Vitalis, 2007). Other than its fame for producing large quantities of oil more than any other nation in the world, the company boasts in controlling the single hydrocarbon network known as the master gas system. According to Marcel Mitchell (2006), Aramco has never changed its name since its inception in 1933, the Initials that stands for Arabian American Oil Company (Venn, 2008). The establishment of the organization became effective in the year 1933 after an American oil company known as the Standard Oil California entered into agreement terms with the government of Saudi Arabia to explore oil for them. After the concessionary agreement, Standard Oil California (SOCAL), orders its subsidiary oil company by the name California- Arabian standard oil to proceed with oil exploration. Due to low expertise, the subsidiary company did not identify any oil site in Saudi Arabia. However, the success downed when 50 of the concessions stake became in possession of Texas Oil Company through selling (Vitalis, 2007). It took four years for the Texas Oil company to discover the oil reserve at Dammam, the site located next to Dhahran. According to Hazarika (1988), the discovery of oil reserve in Dammam was the commencement of the success of Aramco Oil Company since it is the time when more investors joined the extraction process for the purposes of making profits. Marcel Mitchell (2006) explains that in 1973, about 30% of the shares of Aramco attracted the interest of the government. The Saudi government was not for the idea of America supporting Israel during the Yom Kippur war. The possession of the shares by the government increased from 30 to 65 in 1974, and later gained full control in 1982. The acquisition of the company by the government led to the changing of the name of the organization, which now became Saudi Aramco. In the event, the government controlled all the roles played by the Americans during the period of inception (Vitalis, 2007). According to reliable sources, the company produces more than 250 billion barrels of crude oil in a single year. Again, the organization possesses about 100 gas and oil fields scattered all over the country and amounts to about 250 quadrillion. It is critical to note that Saudi Arabia government controls Ghawar field, which is the largest oil reserve in the entire globe. According to the statistics from the Saudi Arabia Oil Company (2010), other assets are critical in the organization such as the Safanya field and Shaybah, the fields that rank higher in the globe. It is critical to note that the company operates over 50 nationalities and enjoys the services of about 60, 000 employees who contribute towards the success of the organization. Despite the organization being a multinational company, the human resource management in the subsidiary branches has improvised creative techniques and approaches to motivation, as a means of retaining the workers and maximizing production (Vitalis, 2007). The workers, who originate from different cultural backgrounds requires that their organization satisfy their needs for them to maintain as the long term employees. 4.2 Compensation Management The compensation management is among the critical processes that an organization utilizes to retain its talent workforce as well as attract competent personnel as a means of improvi...