BP’s staffing philosophy for managerial employees seems inclined towards the polycentric staffing model. With this model, organizations prefer employees from the host country to those from their home country or other countries. The reason is that such employees are believed to be better placed to understand the local market, culture and business challenges than nonlocal managers.
This staffing philosophy seems to be the root cause of BP’s problems in Singapore. First of all, philosophy is not good for multinational corporations in recruiting executive and managerial employees. The reason is that managerial employees are supposed to be people who understand their organizations in and out. They are also supposed to be people whose character is well known by their organizations. Above all, they should be people who should have demonstrated some degree of loyalty and commitment in their organizations as well as people who are well informed about their organization’s short term and long term development agenda.
If BP had recruited parent country managers to oversee its business in Singapore, it could have lost on the aspect of understanding the culture and local market, but it would have gained by having loyal employees managing its business in Singapore. The reason is that the six managers seemed not to have the interest of BP at heart. That is the reason why they engaged in actions which were aimed at sabotaging BP’s success in Singapore.
The organization should, therefore, adopt the ethnocentric staffing model in recruiting executive and management employees and reserve the polycentric staffing philosophy for its nonmanagerial staff. In order to overcome the challenge of poor understanding of the local market and culture, the organization should invest resources in training its expatriate managers on cultures and markets of different countries before they are dispatched for expatriate assignments.
The other issue related to BP’s problem in Singapore has to do with employee performance appraisal, which is the process of evaluating employees in an ongoing manner to know their progress. Performance appraisal is also aimed at giving the employees an opportunity to disclose their job-related concerns and their input on how best to improve on performance. It also gives the organization an opportunity to understand the kind of people who are working for it. The results of performance appraisal are supposed to give an organization a sense of direction and inform any changes which may be necessary in order to keep the organization on course of making profits or attaining its goals and objectives.
Even though Quek Chin was a highly respected manager who had worked for BP since 1992, he was accused of engaging in bad practice by recruiting employees to work for a rival organization in Singapore. If BP had been doing performance appraisals on a regular basis, it could have understood the levels of commitment and loyalty of its managers. Consequently, it could have addressed the concerns which made the managers have a low commitment by coming up with remedies such as incentives to motivate them or even sacking them and replacing them with expatriate ones.
The employee performance appraisal could also have made the managers understand that their job was depended on their performance and levels of commitment to the organization. Such an understanding could have made them either quit employment early or dedicate all their energy and loyalty to it. This could have eventually averted the crisis which befell the organization.
Retention and Turnover
The third issue related to the case study has to do with the retention of employees and how to deal with turnover. Retention has to do with making sure that employees do not quit their employment for whatever reasons, real or perceived. It is achieved by having good management practices such as good remuneration, having a good working environment, teamwork and good relationships between top management and middle-level management. Turnover is the reverse of retention and has to do with the rate at which employees leave their jobs in an organization. It is caused by various reasons key among them the poor working environment, low remuneration and lack of cohesiveness in an organization.
To enhance retention and avert turnover, BP should establish a cohesive organizational culture which is very critical in the retention of employees. Many organizational researchers agree that a cohesive organizational culture is one in which all members of an organization hold similar beliefs and values which bond the organization together. These beliefs and values may be implicit or explicit to the organization, meaning that they may be or not be outlined in the organizational core values.
In this kind of culture, the organizational structure does not matter, but what matters most is the commitment of every member of the organization to these beliefs and values. For example, an organization may value hard work, honesty, and teamwork and believe in transparency, utmost good faith, ethics, and morality.
Cohesive organizational culture also facilitates the alignment of organizations for the achievement of their objectives, mission, and vision without much difficulty. This is because the employees are not only fully aware of the mission, vision, and objectives but have also internalized them. This makes employees motivated to accomplish the set organizational goals, targets, or objectives. To avert turnover in the future, BP’s top management should conduct exit interviews to understand the reasons for employees’ resignations.