Introduction

Royal Dutch Shell, popularly known as Shell Plc, represents one of the prominent oil and
gas multinational companies in the world. It is a global oil and gas corporation with its
headquarters in Hague, Netherland and has its major listings on the London Stock Exchange
(Shell Plc, 2022). The operation of Shell Plc is continuously affected by both internal and
external factors that need to be analysed. Using the STEEPLE analysis, this report analyses a
range of social, technological, ethical, economic, political, legal and environmental (Farnham,
2015) factors that may affect human resource management practices in Shell Plc. This report will
make an attempt to identify the external and internal drivers that might impact the HR strategy
and HR practices of Shell Plc. This report will evaluate different approaches to developing HR
strategies based on the findings of the strategic STEEPLE analysis of Shell Plc. In addition, the
key priority HR issues will be considered as it is required to develop an effective HR strategy for
the company (CIPD, 2021). The report will culminate with a set of recommendations that will
demonstrate how Shell Plc might respond to the priority issues in the next three years.

Different approaches to developing HR strategy

Best fit approach

The best-fit model often referred to as the "matching model" in human resources
management, is regarded as a variant from precedent models of Michigan, Harvard, and York
(Farnham, 2010). The best-fit model is based on formulating human resource management
policies in line with the organization's strategy. Here, organization’s strategy may “include
making plans for upcoming activities, setting performance goals, and implementing policies to
fulfil the organization's mission and vision” as indicated by Ansoff et al. (2018). Additionally,
the best-fit approach questions the universality hypothesis of the best practice perspective (Iqbal
2018). As a part of its best-fit approach, Shell Plc has focused on selective hiring by recruiting
the appropriate candidate from local communities (CIPD, 2022).
Best practice approach

Glaister et al. (2018) stated that regardless of the environment or sector an organization
operates in, the best practice approach can be utilised. The best practice approach asserts that
there are specific bundles of human resources management activities that support the
organization internationally in achieving a competitive advantage. The best practice model
suggests “a close link between HR activities and organisational performance, and it is frequently
connected to high-commitment management” (Paauwe and Boon 2018). Empirical research in
the best practice field demonstrates similar groups of HR policies that are suitable for boosting
performance irrespective of the organisation’s product and marketing strategies. It has been
identified that the public opinion of Shell’s ethical behaviour has affected its ability to recruit
highly skilled candidates (Duttagupta et al. 2021).

Resource-based view approach

The resource-based view (RBV) of an organisation provides a domineering point of view

of the continuing debate about human resource management and organisational success (Alvarez
and Barney 2017). Moreover, the RBV is referred to as a strategic theory that “helps theorists
and researchers to understand why some organisations outpace others” (Dubey et al. 2019).
Research into this theory has demonstrated that “RBV is a strong investigative tool which can be
used to explain the competitive assortment among firms as it is based on the conventions that
firms are able to develop as well as withstand a competitive advantage by generating value in a
way that is complex and uncommon for the other competitors to replicate” (Nason and Wiklund
2018).

Evaluation of Shell HR strategy

Proper implementation of strategic human resources management remains a sure ay to

achieve organization’s objectives (Fenech, Baguant and Ivanov (2019). Marchington et al.
(2016) also agreed that “an effective HRM practice provides the company with an enhanced
chance to succeed in the competitive marketplace.” In this section, this report evaluates the
strategic human resources management of Shell Plc as follows.
Recruitment

We start by looking at the recruitment process in Shell Plc. By recruitment, we “the

process of attracting and engaging right people the organisation needs” (Armstrong and Taylor
2020). It can also be known as staffing which is referred to “as an organizational function which
is the method of acquiring, deploying and retaining the workforce so that a positive impact can
be created on the organization’s effectiveness” (Shell.com 2021). The recruitment process in
Shell Plc is done through the website of the company. There are job openings mentioned on the
website and candidates can apply accordingly (Shell.com 2020). This method of recruitment
allows Shell to conveniently reach applicants across the country or around the globe (Meyers et
al (2020). It further increases applicant convenience as they can easily find job lists and apply for
job with ease. It is understood that “potential applicants who take advantage of web-based
support for the recruitment cycle find out about the company, its culture and opportunities
online” (Boxall and Purcell, 2011).

In their words, MacLeod and Clarke (2009), argued that “the online recruitment expands
the reach of recruiting initiatives, the overall quality and fit of applicants may be lower than is
found in traditional recruiting methods, due to the ease of submission.” Be that as it may, the
implementation of online recruitment brings with it the need to assess the diversity of the
applicant pool and the risk for adverse impact; there is a risk that those from lower socio-
economic backgrounds and minorities will be underrepresented in applicant pools generated via
web-based applications, as compared with traditional recruiting methods. A major reason for this
potential underrepresentation is that these groups may lack access to the Internet. It is important
to note that online recruitment has become a central aspect of successful recruiting strategies.

In Shell Plc, four categories of role are available for people to apply. These roles are for
early career and students, experienced professionals, business operators and machines operators.
Shell Plc often attracts the people by calling themselves as the most innovative energy
companies (Shell.com 2021). The Internships/traineeships represent optional or compulsory
training programme during studies (typically in upper-secondary or tertiary) or upon their
completion with the aim of gathering documented practical experience and improving
employability (Kaushik, 1996). They last less than one year (typically 3-6 months) and
sometimes include financial compensation as provided by Shell Plc.
 Internship is utilised by Shell Plc for many purposes. As opined by Bailey, Hughes and
Barr (2000), Shell Plc can use internship to “screen and identify potential future employees who
know the company, require less training, and are more likely to stay with the firm.” Similarly,
O’Higgins and Pinedo (2018) argued that “internships can be a useful tool to save costs in terms
of recruitment and subsequent training, and can lead to higher productivity as a result of
investing in interns’ skills.” As it must be noted, that interns can support workers in Shell Plc to
actively contribute to existing tasks and projects, while also bringing “fresh ideas” into the
company (Comyn and Brewer, 2018). Despite the potential benefits of internships, there are
often too few internship opportunities available Nigeria possibly as a result of existing informal
employment arrangements in the country (Stewart et al., 2018). Moreover, employers sometimes
use internships as a way to obtain temporary cheap labour and replace regular staff (Ecorys, IES
and IRS, 2013; Stewart et al., 2018).

Internal recruitment

Internal recruitment is an important feature of the Shell Plc. Shell Plc is known for
recruiting oftentimes within the company thus retaining a large part of the talent pool. As
believed by Shell Plc, the internal recruitment provides a gateway for career development
opportunities for existing staff (Torrington et a., 2017). Opportunities are advertised for
employees in the specialist and generalist roles. This enables employees to explore a horde of
opportunities (Friday and Sunday 2019). Chances are provided by the company in multiple areas
of business and to try different types of roles. Through this method, Shell achieves the dual
purpose of retaining talent and ascertaining that each employee is mapped to the job role
corresponding to their abilities (Howes and Taylor 2020). This boosts “the performance of the
company while also saving extra costs required for attracting, recruiting and training talent
assimilated from outside” (Howes and Taylor 2020). The rationale for this method of
recruitment is that the candidate is likely to succeed on the job and the method is less expensive
(Stonner, Freeman and Gilbert, 2000).

While the internal recruitment method is said to be cost effective on one hand, the
method has been criticized for so many reasons. For example, Banfield (2011) pinpointed that
the “major setback of the internal recruitment is the discrimination that surfaces when the
vacancy was shared by word-of-mouth.” The ethical implication of this practice is that the
company technically restricted themselves the pool of outstanding candidate outside the
organization jurisdiction and mediocre ideas and points of view which may reduce performance
of the company (Stonner, Freeman and Gilbert, 2000).

Training and Development

Another notable strategic human resources management practice in Shell Plc is training
and development. In the view of Kassim and Ndegwa (2017) training can be explained “as a
systematic process objectified to reinforce employee’s behavior, knowledge, and skills in line
with achieving the organization’s goals.” There are more training and development opportunities
within Shell Plc for its employees. However, the graduate training program of Shell Plc is the
most effective one which is having subjects like organizational effectiveness, business partnering
and the overview of critical process along with Shell Oil human resources (Shell.com 2020). The
adoption of training and development programme by Shell Plc is better justified by Tsai et.al
(2007) and Varma (2020) who both opined that “effective training improves staff performances,
the valuable network gets developed and there are contracts for the students for their career
opportunities” (Shell.com 2020).

Knowledge-Sharing
One of the vital objectives of Shell Oil human resources management is providing
adequate and meticulous training to employees in each department. There is relentless on-job
training to upgrade the respective skills of employees. This kind of training is useful because it
“enables trainees to learn and apply new skills and knowledge in a safe working context”
(Kempton, 1995). This human resource management practice is good for Shell Plc as it gives
minimizes the training cost and saves time (Ruth Taylor et al., 2004). This method has been
criticized on the ground that it is not all the organization training and development requirement
that can be acquired or learned within the company premises (Onah, 2008). However, this type
of training is suitable when a large number of employees have a similar training requirement
(Rothwell, 2005).
Off-the-job training as the advantages of bringing new ideas into a business; the trainer is
more likely to provide high quality training, as they will be a skilled expert in this specific area
(Tannenbaum et al., 1998). Moreover, off the job training is the most common form of training
used by Shell Plc. the company ensures that there is access to a host of networking professionals
and experts with rich experience (Wibisana and Indrajaya 2019). The knowledge sharing about
complex business-related issues affirms that employees at Shell are able to tackle obstacles to
daily operations independently.

Organization commitment
Organizational commitment has been defined “as the strength of relationship between
employee and the organization” (Upchurch, Dipietro, Curtis and Hahm, 2010). This human
resource management practice enables employees in an organization to be highly committed to
the performance of the company. Organization commitment is used by Shell Plc to ensure that all
the employees are working as a team (Shell.com 2020). They are having a commitment to the
well-being of each other and also gaining success. The culture is converted into collaboration,
common values and respect.
Various factors were found to be correlated with the magnitude of organizational
commitment. Maxwell and Steele (2003) found “that workload, interpersonal relationship,
recognition and pay expectation have impact to the level of commitment.” For instance, the more
conflicts and worse interpersonal relationship exist, the lower organizational commitment the
employees possess. In the study conducted by Lee (2000), the author found that perceived
organizational justice also had a positive correlation with organizational commitment. In
addition, Schuler and Jackson (1999) commented “that by including the employees as part of the
organizational process, the magnitude of employees’ organizational commitment will increase.”
Milkovich and Newman (2002) argued that only highly committed employees would remain in
the organization, even though they were offered a better pay by competitors. This explains why
Shell Plc give great importance to organization commitment.

Compensation

Shell provides a range of benefits to acquire and retain talented personnel. Many
locations of Shell offer free car parking, medical care and sports facilities to the workforce
(Masood 2019). Compensation is the core component of the production-reward exchange process
and the employment relationship in Shell Plc. The company is aware that “once the employees
perceive that their employers cannot offer their expected level of compensation, they may leave
the organization” (Mondy, 2010). As Milkovich and Newman (2002) observed, “employees
tended to leave the company when a competing company has a better compensation offer.” Poor
compensation was widely acknowledged as one of the downsides in the hospitality industry
(Brien, 2004; Getz, 1994; Richardson, 2008). Some past studies indicated that employees would
be attracted, retained and motivated to achieve organizational goals when the employers used
money to be the incentive (Milkovich & Newman, 2002).

Inclusive culture

The inclusive culture of the company has been similarly successful in attracting highly
skilled people in individual fields in each nation. There is no dearth of expertise or knowledge
leading to agile designs and equipment handling required in each project of the company. It can
also be inferred that the company adopts a transparent and open change management process
(Gardas et al. 2019). Shell Oil human resources is directly involved with the employee in
dialogue about changing any process and managing the capabilities associated with it. To support
changes a customized human performance based on neuroscience and positive psychology has
been synthesized in co-ordination with Shell Health (Shujahat et al. 2020). This has aided Shell
in taking up new projects and orienting teams as per the requirements. Shell has thus been able to
retain its position in the market

Line managers and Employees Relationship

In order to improve the relationship between employees and Line Managers, the Shell Oil
human resources portal technology was developed by the HRD of Shell (Shell.com, 2020). There
were facilities for navigating important content for managing various operations of the oil and
gas industry. Virtual support tendered was critical in terms of performance management
empowering employees across global units to perform their responsibilities independently
(Shell.com, 2020). Interaction between superior, subordinate or co-workers is unavoidable and
so is the existence of conflicts (West, 2007). The interpersonal relationship between employees
among the same level and across different levels is critical to the operation. The satisfaction of
relationship with superiors is found negatively correlated with turnover rate (Gerstner & Day,
1997, cited in Harris, Wheeler & Kacmar, 2009). According to Eatough (2010), “work-related
behaviour and situations such as management style, limited resources availability, incorrect job
instruction and fairness are the causes of interpersonal conflict with supervisors.”

Identification of HR issues

Many organizations including Shell Plc do face a number of human resources issues that
cannot be left unresolved. Kochan, Lansbury and MacDuffie (2018) have stated that several
organisations face numerous issues related to its HRM strategy that has restricted them from
attaining a competitive advantage in their area of operations. This section will discuss the major
issues related to HRM at Shell plc which have been identified as follows:

The future vision of human resource of the company is to contribute towards the
transition. However, it can be found that the human resource of the company is facing challenges
in hiring and managing the right people with the right skills to address energy challenges
(Shell.com, 2020). As per the CEO of the company, the highly skilled jobs in the energy industry
makes finding the right people a particular challenge. Hence, in the year of 2015, the company
has hired around 9000 people worldwide where two-thirds of people only had technical
backgrounds (Shell.com, 2020).

Inaccurate job descriptions and hasty hires are sometimes done at shell. As suggested by
the CIPD, “a good job analysis should be focus on the internal, external, human, growth and
motivational factors” (CIPD, 2021). This is because job analysis, when not perfectly done, can
lead to error because of little or lack of the managers experience (Driver & Streufert, 1969;
Gaugler and Thornton, 1989). Supporting this view, Johnston (1999) agreed that “a poor job
analysis has the capacity to impair job description and job specification; thus consequently
decrease the quantity and quality of applicants.” Furthermore, the successful applicants may feel
deceived and leave shell if the job doesn’t meet their expectations (Carbery and Cross, 2018).
Also, when the recruitment is hastily done, discrimination is high likely to happen (Banfield,
2011). In year 2015, Shell Plc hired over 9000 applicants and this statistics became a major
concern for the CEO of shell about how this would not create succession problem and a huge
knowledge gaps in the future. The implication of this is that the organization may collapse in the
long term especially the one-man business because the successor is not prepared and ready for
the position (Mattone, 2013). It is presumed that “when succession planning is completely left
out of the organization strategy or the current successors are mediocre, the current job holders
maybe grooming successors based on likeness, personal benefits and value, thus creating low
morale, performance and high employees turnover” (Loughlin, 2000; Rothwell, 1994).
Similarly, Wolfred (2008:3) concluded that grooming and promoting employees to the
organization ladder is now based on allies and friendship rather than merits, talent, good track
record and qualification.

It is also observed that Shell plc has been involved in bribery, alteration of policies,
environmental pollution, and several other issues, which are majorly caused by the organisation’s
top management team (Kalu and Ott 2019). These unethical practices of the organisation have
made several customers and its employees think about their association with the organisation.
Moreover, Lu et al. (2019) have stated that Shell plc is also facing issues related to attracting and
retaining its skilled workforce as the employees do not want to remain associated with an
unethical organisation.

Recommendations

It is recommended that shell must understand the importance of recruiting candidates

based on the organization needs and required skillsets and qualification. Also company needs to
understand the importance of recruiting ethical employees. The behavior of a single
compromised person who acts in an unethical way can ruin the whole of company’s branding
reputation as suggested by Ashkanasy, Windsor, and Treviño, (2006). Therefore, shell must
work towards reducing unethical behavior and the company recruitment team should be ethical
gatekeepers of the company and pursue ethical recruitment process (Alder and Gilbert, 2006).

The job analysis and description at shell should well-articulated and handle by the
experts. This is because “a good job description will not only increase the pool of audience or
applicants but also attract the quality candidates needed by the company to perform excellently”
(Driver and Streufert, 1969).
 Nayak et al. (2021) have stated that an unethical behaviour can plague a work
environment whether it is about an executive that steals money from the organisation or an
associate falsifying document. Quade, Greenbaum and Petrenko (2017) have opined that
unethical behaviours can negatively impact the trustworthiness of a firm and ultimately lead to
loss of profitability and shutdown.

Succession planning, if strict followed and implemented by shell can go a long in helping
them achieve their objectives and stand out without the incumbent skills, knowledge, charisma
and experience (Mattone, 2013). Also, having succession planning through effective talent
management will make shell continue to exist or perform well with the inevitable exit of their
senior staff and top executives (Akbar et al. 2019).

Conclusion

Contemporary markets in oil and gas are extremely erratic. The manner in which the
workforces perform the tasks is salient to the smooth running of the business. It can be
concluded that Shell plc has been operating successfully in the oil production industry and have
gained huge brand awareness by becoming a global leader in the oil and gas industry. However,
as identified from the STEEPLE analysis, the company has been facing several challenges in
terms of its human resource management strategy. These challenges have restricted the company
to gain a sustainable competitive advantage that can guarantee a long-term success to the
company. Different approaches to develop HR strategy has been provided, which includes the
best-fit approach, best practice approach and resource-based view approach. These approaches
have highlighted the fact that the company needs to improve and implement effective human
resource management strategies to attract and retain skilled labourers for the industry.
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