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The Saudi Aramco’s Security Company Outsourcing Strategy Report (Assessment)

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Updated: May 16th, 2020

Cheap and reliable labor is a significant problem in the modern day business practice. When a company does not have an effective way of attracting new employees, it might engage itself in outsourcing practices. In line with the effectiveness of these practices, companies are turning to outsourcing as an approach to improving operational efficiency. Such customer-centered initiatives are fit for the utility segment since they help in reducing operational costs, improving business efficiencies to stay in touch with the increased customer satisfaction, regulatory pressure, as well as competition.

One of the greatest failures of outsourcing in Saudi Arabia was at the Saudi Aramco’s Security. In 2010, the company’s value estimated to be 7,000 billion USD. From the intellectual property point of view, Saudi Aramco has over 100 subsidiaries across the globe (Elsayed, 2014). The company has also employed over 500 scientists and engineers. Despite the enterprise’s success, there is a broad range of issue that a proof failure of its outsourcing strategy. One of the major mistakes made by Aramco is that it redirected all its services to the SAP system. Through this approach, an employee can get employment accreditation through the SAP system. At the same time, the same employee can have access to the same system through using a gate pass. While one of the approaches has security functionalities, the other one is an EIS function. Besides, doctors use the SAP systems to provide medication.

Another mistake that resulted in the company’s failure is that the company trusted its contractors on not only the administration but also security of its system. Instead of entrusting these duties to its IT experts, the company ignored their ability. The downside of using the contractors was that they utilized temporary workforce for managing the company’s network (Elsayed, 2014). The contractors that Aramco hired were from the newly established local firms. The company gave the contractors unique duties. For instance, while one contractor was in charge of installing, the other was in charge of the applications. In case of an issue, employees were required “904” to report a problem.

There are many threats that arise from these approaches. To begin with, the contracted companied hired their workforce from another Asian workforce. When employees have a better deal, they could abandon their functions for new employment opportunities (Elsayed, 2014). Since these employees know more about the Saudi Aramco system, they can easily share the company’s secrets to the competitors. Another issue that arose was the increased corruption in the outsourcing contracts. Since its inception in the mid-nineties, corruption in outsourcing is a product of corporate management. Outsourcing of contractors faces serious verification challenged.

The two problems combined gave the company unique challenges. Worse enough, the company’s management has been targeting the loyal workers to assume the responsibility of the poor security practices (Elsayed, 2014). Despite the challenges the mistakes might present, the presented challenges are irreversible if the company’s president can take use more informed strategies when outsourcing its workforce.

Improving Performance of an Existing Job

Regardless the size of the company, every manager has the responsibility of ensuring that employees are consistently motivated to work. At a power and water utility company, employees have a crucial role since they have a direct contact with the customers. As argued by Gupta & Shaw (2014), employee’s productivity highly depends on their motivation to work. In line with these factors, a business will attain a competitive edge when it improves its employee’s performance. By improving employee performance, managers have the opportunity to maintain loyal employees and keep the challenged to be productive. The many approaches to improving employee performance include reviewing employee performance, motivating employees, using incentives, as well as coaching these employees.

Reviewing Employee Performance

Conducting an evaluation of employee performance is one of the primary practices of improving employee performance. According to Gupta & Shaw (2014), the importance of conducting a periodic review of employee performance is that it aligns the desired business practices with the company’s objectives. It also prepares employees for training, promotion, as well as development and addresses the performance challenges.

Despite the importance of performance feedback, a periodic review of the employee performance will help the company to become more valuable (Gupta & Shaw, 2014). Although there is no standard approach to conducting employee performance, it is important for a business to take particular employee competencies and skills for improving performance. In most cases, employees are required to fill a checklist on their competencies. Once they have filled the checklist, the manager is required to meet these employees and discuss on how to improve their performance (Heizer & Render, 2014).

Coaching

In most cases, coaching practices are collaborative, and for the open-minded. According to Gupta & Shaw (2014), the human resource department has performance plans in two areas. In the course of working period, a coach can not only question but also listen to employees, provide them with feedback, as well as to provide support as needed (Heizer & Render, 2014). The importance of a coach in a performance improvement strategy is that he helps the average performance to determine employee understanding and performance.

Employee motivation

Organizational leaders play a critical role in ensuring that poor performing employees are not only motivated but also perform the assigned task and become more discipline. These leaders motivate employees through ensuring there is a clear communication on how to improve employee performance (Rao, 2014). How a leader behaves will help employees realize the importance of their work. It is important for leaders to develop a sense of teamwork with the employees. Creating a team will help employees contribute towards setting the company’s objectives as well as resolving conflicts within the organization.

Incentives

Giving employees incentives is one of the primary ways through which employers can effectively improve organization’s performance. Financial awards such as bonuses motivate employees to perform efficiently. One of the main reasons for introducing incentives in a company is that it provides employees the opportunity to improve their confidence (Gupta & Shaw, 2014). Besides offering the top performers, an incentive will help in motivating employees to deliver their best performance. When managers sincerely praise their employees, they can easily motivate them to improve their performance. Despite the importance of incentives, managers have the responsibility to understand the most valuable to the employees.

References

Elsayed, A. M. (2014). Outsourcing digitization projects in Saudi Arabia: an overview of current practices. Library Collections, Acquisitions & Technical Services, 38(1-2), 37-46.

Gupta, N., & Shaw, J. D. (2014). Employee compensation: The neglected area of HRM research. Human Resource Management Review, 24(1), 1-4. Web.

Heizer, J. H., & Render, B. (2014). Principles of Operations Management: Sustainability and Supply Chain Management. Prentice Hall. Web.

Rao, T. V. (2014). HRD Audit: Evaluating the human resource function for business improvement. India: SAGE Publications. Web.

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