Petro-Canada, like any major petroleum company, faces a number of significant process risks associated the extraction of oil from the ground or ocean. Below are several example risks likely impacting extraction of oil for Petro-Canada. Using the same format as provided in Figure 7-6, list controls that might be in place at PetroCanada for each process risk and possible performance measures that might signal control effectiveness or the level of residual risk.

a. Natural disasters disrupt oil production capabilities.

b. Employees are seriously injured during production.

c. Oil reserves are significantly lower than expected.

d. Business disruption caused by public unrest associated with environmental impacts of oil production.

e. Oil production equipment breakdowns cause oil production disruptions.

Figure 7-6

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Process Risks PR1: Lack of personnel with appropriate skills. PR2: Excess or unneeded personnel. PR3: Discriminatory employment practices. PR4: Excess costs of recruiting and hiring. PR5: Errors in payroll authorizations (pay rates, taxes, time). PR6: Errors in payroll processing. PR7: Low employee morale. PR8: Violations of employment laws. PR9: Failure to provide adequate feedback or training for improvement. PR10: Unplanned loss of critical personnel or excessive turnover. Controls Linked to Risks Formal job descriptions for all positions. Systematic approach to recruiting. Monitor market and demographic conditions. Establish strategic relationships with potential suppliers of labor (e.g., universities, schools, head hunters). Planning and budgeting procedures. Formal assessment of labor needs. New positions approved by appropriate management. Procedures for reassigning excess personnel to different functions. Establish and monitor hiring policies and procedures. Interviews with those who turned down offered positions. Exit interviews with employees leaving the company. Establish communication channel for work force complaints. Establish budget for recruiting. Monitor recruiting costs. Appropriate approval of recruiting functions. Appropriate approval of hiring bonuses and moving cost allocations. Performance Measures Number of unfilled positions. Time-to-fill vacant positions. Employee chargeable time. Employee down time. Unassigned personnel. Labor force demographics. Frequency of complaints from recruits. Frequency of complaints from employees. Cost per new hire. Bonuses paid to new hires. Moving costs per new hire. Ratio of accept- ances to offers. Obtain written authorizations for all Number of payroll adjustments. Changes in payroll authorizations are properly authorized. Overtime approved in advance. Maintain and update master payroll files on a timely basis. Process payroll on a timely basis. Use time cards to report time worked. Use time reports to allocate labor costs. Review all time cards, reports, and payroll records. Use prenumbered payroll documents in sequence. File tax reports on a timely basis. Monitor employee satisfaction. Belief systems (e.g., core values, mission statement) Institute programs for improving morale (e.g., business casual dress codes, special functions, work-life balance programs). Establish formal policies and procedures for hiring and workplace behavior including acceptable Internet use policies. Establish appropriate privacy policies with respect to employee information. Monitor workforce behavior. Establish communication channel for work force complaints. Timely and effective response to complaints. Establish formal policies and procedures for employee evaluation. Require employee signoff on evaluations. Require management to perform evaluations as part of core duties. Establish formal policies for employee training. Monitor employee satisfaction. Monitor and maintain competitive compensation and benefit packages. Monitor and establish procedures for improving employee morale. Conduct exit interviews with departing employees. processing errors. Dollar value of pay discrepancies. Frequency of discrepancies in employment documents. Number of processing errors. Number of exceptions caught by system. Size of transaction adjustments. Employee absenteeism. Employee satisfaction. Number of citations by enforcement agencies. Percent of labor force completing training on employment laws. Frequency of employee complaints. Training hours per employee. Frequency of employee evaluations. Ratings of training programs. Percent of employees receiving "poor" evaluations. Timeliness of required evaluations. Employee turnover rates. Results from exit interviews. Turnover rates for key personnel.