Case for Strategic

HRM at Castrol
India Limited
Submitted by Soumitra Bengeri (F006)

Abstract:
Castrol India Limited is an automotive and industrial lubricant manufacturing company. Castrol
India is the 2nd largest manufacturer of automotive and industrial lubricants in the Indian
lubricant market and owns around 22% market share in the overall Indian lubricant market. It is
part of Castrol Limited UK (part of BP Group). It has 5 manufacturing plants that are networked
with 270 distributors, serving over 70,000 retail outlets
Castrol offers lubricants for virtually all domestic, commercial and industrial applications. For
automotive lubrication (including motorcycles 2-stroke and 4-stroke engines, car petrol and
diesel engines), Castrol products include an extensive range of manual and automatic
transmission fluids, chain lubricants and waxes, coolants, suspension fluids, brake fluids,
greases, cleaners and maintenance products. Castrol also produces products for agricultural
machinery, plant, general industry and marine engineering uses. All their products have a global
chemical registration status and meet compliance in all locations where the product is used.

Automotive lubricants: developed for consumers, supplying lubricants, specialities (gear

Aviation, industrial, marine and energy lubricants: developed for the business to business
community, supplying solutions to the manufacturing, mining, shipping, aviation and oil
and exploration industries. Castrol global business operations provide worldwide
assurance, improved productivity, improved environmental products and trusted advice
focused on optimizing our customers production processes.

At the forefront of pioneering technology are their 13 R&D centers globally, where they develop
and test hundreds of new products every year. Castrol works closely with leading industry
OEMs, with whom they supply a broad range of lubricants designed for particular operating
conditions and environments. Many of Castrol products are recommended by and co-engineered
with major OEMs, including Audi, BMW, Ford, MAN, Honda, JLR, Volvo, Seat, Skoda, Tata
and Volkswagen, for their new to the world powertrains.

Strategic Focus:
For Castrol India, the five years between 2005 and 2010 were like a dream run, riding on the
back of the growth of the Indian economy which helped fuel higher demand for automobiles.
Castrol's revenues grew at an average 14-15%, while profits vaulted to an annualised average of
30% - tripling in five years.
It was at the start of 2011 that the company felt something was amiss. In 2011 two things started
to happen. The economy, which was growing at close to 8-8.5% in FY11 slowed down to 6-6.5%
in FY12. Secondly, the cost of base oil, which is the principal ingredient, increased dramatically
by almost 30%.
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The company was able to meet the challenges squarely as it closed calendar year 2011 with
barely a marginal decline in profits thanks to its strong brand, best in the class distribution
network and a track record of innovation.
This meant a lot of research on price elasticity of demand for its products and how much of cost
increases it could pass on to consumers. The company also refocused on its relationship with
dealers and mechanics, who can advocate which brands to use. The management also decided to
strengthen the company's distribution since demand from rural India was growing strong.
Castrol's efforts to stay ahead of the technology curve by launching newer and better products
consistently has also helped. It also chose not to apply the brakes on its advertising and brandbuilding exercises. In 2011, Castrol became a global partner to International Cricket Council
(ICC) to foster its long-standing association with India's most followed sport.
Key Trends
Fall in Global Crude Prices: Assuming the government funds 60 per cent of the fuel subsidy
burden in FY16 (Rs.16,200 crore), successful implementation of the modified Direct Benefit
Transfer (DBT) program is likely to help cut the governments fuel subsidy burden further by
over 65 per cent by FY18. Oil marketing companies will then turn out to be medium to long-term
gainers as the DBT program gains traction. Stocks of oil majors, which have almost doubled in
the last a few months are set for further gains.
Significant change in HR Policies after BP Oil Spill: The BP Oil spill and the subsequent
effect on the brand value of the company have affected the HR practices of its Indian arm
Castrol as well. The company is ever increasingly focused on practices that make sure their
facilities and employees are the safest across the industry. Employees are not allowed for field
visits unless they travel by company certified cars and in remote areas public transport by buses
is encouraged, no two/three wheelers are allowed. At the office, there are checks and measures in
place to ensure that in case of any slight emergency, the employees are able to exit the facility
easily.
Need for strategic management of human resources
The Human Resource function of the organisation needs to actively support the organisation in
its strategic objectives. Key HR processes and practices need to be strengthened and streamlined
in order to support the global scale of the organisation. The HR staff must be freed from
transactional and administrative aspects of their jobs by implementing technology solutions, so
that they can provide engagement and leadership they need to provide
Employee Engagement:
The key focus areas of 2013 were employee engagement and recognition. These were actively
driven through an inclusive process of dialogue and articulation of the employee value
proposition. In the spirit of continuous learning and building capability to support the business
and people strategy, another initiative has been to pilot programs to help line managers get better
at people processes by building their awareness and capability to be better people managers and
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coaches. It also launched the Castrol Learning Academy which incorporates internal and external
best practices and is based on a philosophy that development is a function of learning, experience
and application on the job.
The year also marked the launch of SAP within your Company to support the automation of
Human Resource (HR) processes and ensure efficient and effective HR process management.
In 2013, Castrol launched an internal survey to calculate employee engagement and it turned out
that 78% of Castrol employees were reported to be engaged with their job profile and
description.
Health, Safety, Security, Environment:
Castrol has been steadily progressing in implementing BPs Operating Management System
(OMS) to continuously improve the delivery of safe, responsible and reliable operations. The
OMS has helped the Company to manage four key elements of operating People, Plant,
Processes and Performance, effectively.
The Company has been regularly providing annual preventive health checks for all employees at
its own cost. Further, to enable employees manage work-life balance and related stress, if any,
the Company has taken several initiatives, including:
Agile Working:
A core component of the working options that enables employees to work flexibly at full
potential. Part time working, job-share, home working and flexible hours are some options
granted under this initiative.
Career Break and Maternity/Paternity leave:
These benefits are available to employees of the Company irrespective of the level that they
operate at.
PRISM-Gender Diversity Offer:
The Company has introduced a specific offer for women managers in sales and marketing
function called PRISM (Progress through Sales and Marketing), to empower and enable them to
be successful by creating an inclusive workplace.
Workplace facilities:
At all offices and facilities of the Company, attention is paid to ergonomics to ensure a
comfortable work environment.

Leadership Development:
Building both, people and functional capability is one of the key elements of our investment in
people. Last year, the Company took concrete steps to embed BPs global leadership framework
that requires leaders to demonstrate capabilities in managing culture, performance, talent and
development. Further, this year, the capability calendar was designed to look at the leadership
development requirements around different stages of an employees career, viz New Joiners,
Leading Self, Leading Others, Leading Managers and Leading a Function or Business. Discover
BP, Preparing to Lead,
Leading the BP Way, Responsible Leadership, Leading the Charge were some of the key
leadership development programs successfully implemented by the Company this year.
Diversity and Inclusion:
As a part of a large multinational group, Castrol wants the workforce to represent the societies in
which it operates. Companys commitment to Diversity and Inclusion enables it to be creative,
competitive and thrive in our environment. Improving gender diversity continues to be the focus
area for the Company and has taken several initiatives like PRISM, Agile Working and ran
various empowering and educational events through our International Womens network
(BPWIN). Workshops were also held to equip managers with knowledge and skills to manage a
multigenerational workforce and enable women to succeed in the workplace. Refresher courses
on Diversity & Inclusion were also held. Both in the industry and outside, BP has been
recognized for its work on gender diversity. It has been awarded a citation as an Employer
Conclusion:
In an ever growing competitive industry of Oil and Gas, Castrol seems to be taking all the right
steps in ensuring that it becomes the preferred employer of choice for people wishing to join the
sector. With a low attrition rate (the best across the industry) and great employee engagement,
Castrol has ensured that it uses all the Strategic Human Resource Management Practices well to
ensure that it stays ahead of the curve.
Having personally interacted with the employees and observed the HR practices, I feel Castrol is
the market leader not only because of its superior product quality but also because of its focus on
its employees and their development.
References
A personal interview was conducted with Ms. Radhika Khattar (HR Advisor and Sourcing
Manager), insights from which have been incorporated in the report.
1. http://www.wiaaindia.com/wiaa-castrol-institute-of-motoring
2. http://www.castrol.com/content/dam/castrolcountry/en_in/About
%20Us/Financials/Castrol_India_Ltd_Annual_Report_2013_Low.pdf
3. http://info.shine.com/article/castrol-india-limited-our-people-go-home-happy/680.html
4. http://www.peoplematters.in/article/2011/05/15/outsourcing/hr-transformation-industry-viewk-s-kumar-vp-hr-castrol-india/980
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