Introduction to the Company: Mubadala Investment
Mubadala Investment is a company that works in the sphere of global investment to boost economic growth and achieve the long-term prosperity of Abu Dhabi, for which it is the key strategic investors. Moreover, Mubadala operates in more than thirty countries across the globe to create “lasting value for our shareholder, the Government of Abu Dhabi” (Mubadala, 2017, para. 1). The company’s work is focused on the development of successful industrial companies in spheres such as mining, renewable energy, aerospace, financial holdings, and many more. However, the key focus of the company is establishing expertise in the oil and gas sector for future investment and the enhancement of the potential growth of the UAE.
The organizational chart of the HR Department is the following:
Mubadala’s vision is to become “a catalyst that facilitates Abu Dhabi’s ambition to diversify and transform its economy, to develop a new generation of business leaders and to build a prosperous future for its people” (Mubadala, 2008, p. 2). The company’s mission, according to its Annual Report, is to “generate sustainable financial returns and build businesses, clusters of expertise and even whole new industries. We bring together and manage a diverse portfolio of opportunities, investing for the long term as an active and diligent partner” (Mubadala, 2008, p. 2). Based on its general mission and vision, Mubadala is working on Human Resource-specific vision and mission for addressing the needs of the company and its employees.
For the company to complete its mission, the HR department of Mubadala divided its functions into four key areas of operation, such as retention of workers, their development, organizational culture, and effective staffing. All four of these areas represent the key functions of the company’s HR department. Goals and Objectives of Mubadala’s HR department also tie in with the mentioned above aspects; they are the following:
- Facilitate an effective organizational culture;
- Use up-to-date recruiting tools to hire quality over quantity;
- Contribute to employee development to help them perform at the highest level possible, be able to manage both external and internal changes, facilitate promotability, and bring value to the company;
- Ensure employee retention through the culture based on performance;
- Reward workers for their efforts to boost productivity.
Environmental Factors Affecting Mubadala’s HR Strategy
Under the Six Component Model, a company’s Human Resources can be affected by such external factors as customers, labor market changes, society, technology, economic conditions, and shareholders. It is crucial to mention that Mubadala is a company with a commercial focus; however, it invests in both financial and socio-economic returns. Therefore, key external factors that change the way the company’s HR Department operates relate to the stability/instability at the UAE market of investment, changes in societal needs and demands, as well as attitudes of shareholders towards investing in socioeconomic and financial returns. If the mentioned factors show positive indicators, the HR efforts of the company will likely be rewarded. The internal factors that influence the decision-making with regards to Mubadala’s HR strategies relate to the organizational structure, budget, compliance, productivity, and the skill level of HR professionals. It must be stated that all of these factors are on a high level at Mubadala, which means that external factors present more challenges than internal.
It is also important to determine the challenges that the HR of Mubadala has to manage regularly. Among the most prominent challenges are the following:
- Learning and development. This challenge is high on the agenda of Middle Eastern businesses as leaders indicated that their companies lack the desired tools and programs for meeting the challenges of human capital.
- Leadership. Within the context of HR management in companies such as Mubadala, the demand for effective leadership practices is constantly growing. Leadership is a challenge because the company cannot identify the appropriate steps to develop successful HR leaders. This also influences retention because without effective leadership on the part of HR managers, they rarely feel valued and supported.
HR Balanced Scorecard
The balanced scorecard below shows the key roles and objectives of the HR Department and Mubadala and offers metrics that can be measured for assessing whether the objectives are achieved and whether the roles of HR managers are fulfilled. It was proposed to include such roles as organizational values and ethical standards, recruitment, engagement, compensation, and professional development.
The absence rate is calculated with the help of the following formula: the total number of days of absence in a specific period/(total number of employees)*(total number of workdays). For the assignment, it was chosen to calculate the monthly absence rate: 100/300*22=0,15 (15%).
Cost per hire is calculated in the following way: total internal+external recruiting costs/total number of hires in a given time frame. Again, the cost per hire will be calculated every month: ($1000+$500)/3=$500.
The monthly turnover rate will be calculated with the help of the following formula: several employees leaving/average number employed*100%=5/30*100%=16%.
Turnover costs per employee include pre-departure costs, vacancy costs, costs on training and orientation, additional hiring costs, and administrative costs. It can be estimated that a turnover cost per employee is: $1000+$300+$200+$500+$200=$2200.
The company’s HR department encourages its workers to understand that they serve a unique purpose: in everything they do, they contribute to the creation of new opportunities for Abu Dhabi, as well as its business partners and citizens. Human Resource strategies targeted at ensuring that Mubadala’s employees bring benefits to the company are associated with the principles of high impact, work environment, and culture, a team of professionals, rewards and benefits, as well as learning and development. Below is the explanation of HR strategies that link to the mentioned above principles. All of these principles also along with procedures of staffing, training, and development, compensation, and benefits, as well as performance management.
- The strategy of high impact. Within this strategy, the HR Department of Mubadala makes sure that the work that employees do makes a difference. When working in the company, employees’ responsibilities can include supplying global producers with airplane parts made in the UAE or working on a renewable energy project. This means that jobs at Mubadala are those jobs that add value to communities, and the HR department is focused on hiring employees that will serve a specific purpose (“Life at Mubadala,” n.d.).
- The strategy of the work environment and culture. Because Mubadala has a highly diverse workforce that consists of representatives of different cultures, the HR Department works on communicating the company’s values targeted at improving collaboration. The HR partners with professional teams for reaching the best solutions. As a unified workforce, the company facilitates a culture of excellence to create a positive impact (“Life at Mubadala,” n.d.).
- The strategy of professional teams. At Mubadala, managers try to ensure that new employees are teamed up with talented staff who are at the peak of their performance. This allows newcomers to access the best practices of the industry and collect first-hand knowledge. Through bringing together people with various visions and skillsets, the company exercises ideas of passion and enthusiasm for what they do (“Life at Mubadala,” n.d.).
- The strategy of rewards and benefits. The HR Department of Mubadala believes in rewarding workers whose performance puts the company closer to its strategic objectives. Based on the role of workers, the organization provides workers with bonuses and benefits to thank them for their contributions (“Life at Mubadala,” n.d.).
- The strategy of learning and development. The HR Department positions this strategy as the most important with regards to achieving the strategic objectives of the organization. Mubadala continuously works on developing professional skills of their workers; ranging from tailored training courses to web-based learning conferences; the company ensures that its employees are provided with the required support and tools that help them reach their professional goals on current and future positions (“Life at Mubadala,” n.d.).
- The strategy of growth opportunities. The HR Department of Mubadala believes that opportunities that their employees have benefits and opportunities open to them. As workers add value and contribute to the company’s development, they are always challenged by showing their capabilities that boost professional performance (“Life at Mubadala,” n.d.).
Employee Retention Strategies
Traditional employee retention strategies are targeted at keeping productive workers who add value to their organization in their positions. Because Mubadala works with the UAE government and foreign countries and requires the expertise of professionals in this sphere, their retention is essential for the maintenance of competitive advantage. The interview revealed that Mubadala uses the following innovative strategies for employee retention:
- Ensuring that the right candidates are chosen from the beginning. HR officers focus on asking applicants specific questions about their goals, accomplishments, weaknesses, and other points that directly affect employees’ contributions to the company’s vision, mission, and goals.
- Ensuring a “conducive” work environment. A conductive work environment means that the management is aware of where the goals and the strategy of a company are going. Importantly, within such an environment, work-related stress is managed effectively by communicating to employees that they belong in Mubadara and that they should work cooperatively towards the common goal of maintaining a competitive advantage.
- Ensuring that managers fit the personnel they manage. As a rule, employees usually quit their managers rather than jobs. Therefore, the HR Department of the company works hard on selecting managers who will not only fit the job description but also become mentors and leaders for employees thus achieving mutual understanding.
- Ensuring a balance between personal and work life. The interview revealed that HR officers often struggled with understanding that their employees should not work continuously but also have a full personal life that may inspire them in their careers. Because of this, Mubadala gives its workers some time off, allows them to leave the workplace early when needed, and overall accepts the need of employees to unwind and clear their mind to come back to the workplace rejuvenated and inspired.
- Ensuring continuous growth and training of employees. This employee retention strategy ties in directly with the HR strategy of growth and opportunities. At Mubadala, the HR department makes sure that workers are given appropriate training through coaching sessions, workshops, and other tools that are associated with their current positions. Cross-functional training, ethics, and cultural competence are all important points to teach employees for achieving their potential growth.
- Ensuring transparency in the workplace. Workers should be enlightened about why they are paid what they are paid as well as what goes ‘behind the scenes’ of corporate decisionmaking. These points are important because workers usually resign because they are not paid enough or because they are resentful of their managers who tell them nothing about how important decisions are made. Mubadala exercises an ‘open door’ policy to offer employees the freedom to express their concerns that may inhibit effective performance. Within such a policy, the company’s managers make sure that both minor and prominent concerns are addressed, and that action is taken to improve employees’ performance.
To conclude, all strategies mentioned above are essential with regards to maintaining skilled personnel on a high level of their performance and making sure that they do not leave the company and cause financial issues due to the lack of experts in their respective fields. However, it is always important to remember that without innovative solutions and introductions of new ways of employee retention, the company will be unable to continuously maintain low retention levels because work circumstances may change and thus lead to new issues that require resolving. Later in this assessment, necessary recommendations will be made as to how to improve the HR strategy of Mubadara for attaining competitive advantage and ensuring employee satisfaction.
As Mubadala grows and extends its reach to new areas and thus new communities and employees, it is dedicated to maintaining high levels of ethical standards. It was revealed that the collaboration between the management and employees contributed to ethically conducting business to ensure a prosperous and sustainable future of the company. In the Code of Conduct, Mubadala outlined some of its key principles on how to follow ethical practices in the workplace to allow employees to reach the established objectives and maintain corporate values. This means that the key purpose of the Code of Conduct is describing the commitment of the organization to act in a compliant and ethical manner and thus avoid ethical problems in the workplace. Key questions that employees and their managers ask themselves include the following:
- Is this action legal?
- Does this action maintain the reputation of the company as an ethical business?
- Is this action consistent with the values of Mubadala and its Code of Conduct?
- What accountability measures are associated with this action?
Mubadala recognizes that its workers (including managers and CEOs) are held accountable to a high standard of ethics when fulfilling their duties. The Mubadala Board of Directors is the body that is responsible for making sure that all workers comply with the ethical standards of the company. Compliance officers are hired to help the organization maintain high ethical standards; however, there are other responsibilities such as:
- Preventing unethical or unlawful conduct in the workplace and detecting its occurrence;
- Assessing existing risks of compliance and making sure that the internal structure of the company can address them when needed;
- Providing employees and their managers with appropriate compliance training and support during the process of communication (Mubadala, 2010).
When discussing Mubadala’s ethical practices, it is important to mention integrity as a fundamental principle that guides employees’ work with the company’s partners. As mentioned by Samer Halawa, Chief Legal Counsel, “integrity is the foundation of our business, and we are committed to acting in an ethical and compliant manner” (as cited in Mubadala, 2010, p. 26). It is expected that the company’s employees treat potential customers, suppliers, partners, and governments with a high level of respect and that all issues that arise during collaboration are managed in a compliant and ethical manner. To be exact, employees are expected to follow the following rules of compliance and ethics:
- Collecting information necessary for conducting business only from verified and legitimate sources;
- Guarding themselves against using or being exposed to confidential information that does not belong to the company;
- Avoiding using confidential information that came into possession in the last occupation;
- Checking the status of competitive information with the representatives of the Legal or Compliance boards before using it (Mubadala, 2010).
Therefore, Mubadala pays extra attention to whether its employees comply with the ethical standards of the organization so that the business they do does not undermine the integrity of the company. The use of confidential information, avoiding unethical conduct in the workplace, and ensuring that integrity guides every business process of the organization are all important indicators that show whether Mubadala is an ethical company that cares about the way it handles its operations. Apart from specific procedures targeted at ensuring ethicality in the workplace, the company also invests time and finances into giving back to communities, which is another point for discussion when it comes to ethical practices at Mubadala.
Based on the interview, it was shown that employees at Mubadala play the role of representatives of the UAE nation, which calls for them to operate on the highest level of ethical and professional standards (Mubadala, 2015). Interviewees indicated that the management teaches its employees a strong culture of integrity and business practices that maintain the company’s reputation as an ethical workplace. It was indicated that the company’s values with regards to ethics begin with high expectations and the support for their workers and end in an all-encompassing asset portfolio that helps employees understand how to communicate with communities and supply chains involved in the business process of Mubadala (Mubadala, 2015).
If to mention what executives say about the ethical practices of the company, Samer Halawa stated, “the concept that a commercially focused organization can invest for both financial and social returns is a powerful idea. We have a responsibility to ensure that Mubadala upholds our culture of integrity and responsible business practices across our global footprint” (as cited in Mubadala, 2015, para. 2). Also, the Communications and Public Affairs Manager of Mubadala Petroleum, Angela Soeteber mentioned, “responsible investing was core to Mubadala’s business. As we build globally integrated industries for Abu Dhabi, we apply an approach to business in the UAR and abroad based on the highest standards of corporate governance and close relationships with key stakeholders” (as cited in Mubadala, 2015, para. 4). Therefore, it can be summarized that Mubadala is a company that sets high standards of ethical behaviors, corporate governance, and sustainable practices of business to ensure alignment with the existing values.
For example, Mubadala Petroleum, the key player in the corporation’s business strategy, pays extra attention to maintaining a long-term competence of sustainable development of communities, in which it operates. As an ethical company, Mubadala makes sure that it invests in environmental, educational, and community initiatives on development along with activities to boost the engagement of its employees. Importantly, a key component of the company’s ethical operations refers to establishing a consistent approach toward communicating with communities and making sure that key stakeholders from those communities understand Mubadala’s purpose and aid in their accomplishment. This means that the company has close relationships with communities to listen to their needs and be able to resolve any issues when they arise (Mubadala, 2015).
Also, a critical component of Mubadala’s ethical practices is partnering up with stakeholders from the community such as non-governmental organizations, local authorities, and politicians for understanding what communities need and how these needs can be addressed through the implementation of various projects and programs associated with investing in communities. For example, the work of Mubadala Petroleum with communities in Thailand is an example of how the company brings value to citizens and practices ethical attitudes. During its work in Thailand, Mubadala managed to make significant contributions to the economy of local areas through collaborating with non-governmental organizations of the region to make a positive change when it comes to the prosperity of communities.
Also, it is essential to mention the company’s contributions to developing sustainable solutions for the educational development of new generations who live in impoverished communities. In collaboration with such organizations as the Education for Development Foundation, Mubadala managed to provide children in need with appropriate schooling and scholarships. Moreover, the company paid for the improvement of poor educational environments through improving conditions of existing school facilities. According to the Annual Review of Mubadala (2015), the educational program for children in need made a positive change for around eleven thousand students, community members, and teachers.
Therefore, key ethical practices of the company not only relate to making sure that their employees are treated well but also relate to contributing to local communities by providing them with means for further development and prosperity. Mubadala has shown that it is as important to treat employees well as it is to help those in need of financial support to address community-related issues. A combination of community support and having an ethical attitude towards employees ensures that Mubadala contributes not only to its financial prosperity as a profit organization but also makes a positive change in the lives of people who are directly affected by its operations.
Since the general ethical environment at Mubadala has been discussed, it is now important to analyze HR-specific ethical practices. During the processes of hiring, training, performance reviewing, and firing of workers, HR professionals at Mubadala usually encounter a range of ethical issues that can impact the overall effectiveness of a company. Because of this, employees that work for the HR Department of Mubadala are usually encouraged to follow the ethical standards and the Code of Conduct for guiding their performance. Ethical principles that relate to the practice of HR managers are differentiated into several categories, such as professional responsibility, professional development, ethical leadership, fairness and justice, information use, and conflicts of interest.
Similar to the principles outlined in the Code of Conduct, HR professionals are held accountable for preserving information confidentiality since it is among the most important issues that relate to human resources. When hiring and then managing employees’ cases, the HR has to prevent from disclosure social security numbers, bank or credit information, medical records, and other documentation that contains personal information about workers. HR managers at Mubadala conduct continuous reviews of the labor relations act as well as the Health Insurance Portability Accountability Act to guarantee that they preserve the integrity of employees’ personal information. When it comes to conflicts of interest, HR professionals in the company make sure to avoid such things as bias and favoritism, which are usually discouraged in the workplace. Because of this, the company has produced a handbook that guides the conduct of both employees and HR professionals.
It is important to understand that justice and fairness are complex topics, opinions on which constantly change and evolve. In Mubadala, HR managers try to familiarize themselves with ethical conduct to facilitate better negotiation practices about decision-making. Social justice is currently becoming a relevant (and essential) component for businesses and their HR personnel to understand for ensuring the progression of such concepts as affirmative action. Therefore, the human resource department is responsible for creating an atmosphere, in which employees will be supported and appreciated.
Lastly, when it comes to ethical leadership and professional development, the HR at Mubadala is responsible for contributing to the ethical integrity of the company through updating their knowledge on the ethical practices that they should enforce to achieve effectiveness. As to ethical integrity, HR professionals at Mubadala comply with the established law of ethics, make decisions on staff ethically, act as advocates for employees, as well as have an overall positive influence on the productivity of their organization. These actions align with high standards of their responsibilities as professionals. The continuous professional development allows them to become advanced in their knowledge about employees that work in the organization as well as potential partners. HR’s professional development is essential for continuing their work at the company while bringing value to employees that they supervise.
It has been shown that the appropriate management of Human Resources at such influential organizations as Mubadala is essential in achieving the established business objectives and promote the overall success of the company. Conversely, if Mubadala fails to enforce successful HR strategies due to the lack of planning and inadequate implementation of such strategies, it is likely to encounter decreased profits and overall productivity. The following is a list of recommendations for Mubadala to implement within its HR strategies to attain a competitive advantage:
Setting a budget
Since Mubadala is a finance-oriented business, it cares about achieving cost leadership as an essential component of competitive advantage. HR management-related costs are linked to effective recruitment, compensation, and training of employees, which usually have a significant impact on how a firm can spend its money. Therefore, it is recommended for Mubadala to create a set budget (which should not be exceeded) to guide its expenditures with regards to human resource management.
Monitoring employee satisfaction
For human resource managers, making sure that workers are satisfied with their roles and positions within a company is essential. It is recommended for Mubadala’s HR department to perform a regular assessment of employee satisfaction rates through anonymous surveys or face-to-face interviews. The efforts of the HR management to understand whether there are any issues related to the satisfaction of Mubadala’s workers that require improving.
Focusing on employee-centered outcomes for achieving organization-centered outcomes
For the HR management of Mubadala, the management should focus on providing employees with the necessary support and guidance to lead them towards achieving outcomes that will be relevant to the entire organization. This recommendation ties in directly to the previous recommendation of monitoring employee satisfaction since the improvement of employee-centered outcomes usually relates to fair pay, empowerment of workers, professional opportunities for learning and growth, as well as a commitment to organizational integrity.
Understanding and communicating the company’s competitive advantage
Beginning from the process of hiring, the HR management of Mubadala should communicate the importance of competitive advantage to employees and suggest ways in which prospective workers can contribute to the accomplishment of their goals.
Mubadala Investment is a company with massive opportunities and potential. With the successful implementation of such HR strategies as high impact, work environment and culture, professional teams, rewards and benefits, learning and development, as well as growth opportunities, the company will be able to collect a team of professionals who will contribute with their knowledge and expertise to the competitive advantage and achieve long-term results. It was advised to Mubadala to pay extra attention to employee satisfaction rates, set a budget for HRM efforts, and focus on employee-centered outcomes for reaching organization-centered objectives. Overall, the assessment was a successful attempt at analyzing what effective HR strategies large companies such as Mubadala implement for attaining a competitive advantage, keeping employee turnover at the lowest rate possible, and ensuring the maintenance of its reputation as an ethical organization that cares not only about financial profits but also about the well-being of its employees and communities where it operates.
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