Transcript
RELATIONSHIP BETWEEN PERFORMANCE MANAGEMENT SYSTEM
AND CORPORATE PERFORMANCE
PRESENTED BY: Jarrar Mehdi, Farhan Fayyaz, Adnan Ali Fateh, Shankar Lal, Shahneel Ahmed
Companies
Industry overview (Pharma)
Pakistan has about 400 pharmaceutical manufacturing units including those operated by 25 multinationals present in the country.
meets around 70% of the country's demand of Finished Medicine.
The industry has invested substantially to upgrade itself in the last few years
Private spending accounts for 65% of total healthcare expenditure
Future potential exists.
METHODOLOGY
we had to select 01 multinational and 02 local companies working in Pakistan.
The tool for research was a questionnaire. This questionnaire was comprehensively designed to cover all aspects related to the research objectives.
The companies selected were:
Glaxo Smith KlineSearle PakistanPharmatec Pakistan (pvt) ltd
GlaxoSmithKline Pakistan Limited was created on January 1st 2002 through the merger of SmithKline and French of Pakistan Limited, Beecham Pakistan (Private) Limited and Welcome (Pakistan) Limited- standing today as the largest pharmaceutical company in Pakistan.
GSK leads the industry in value, volume and prescription market shares. GSK are proud of our consistency and stability in sales, profits and growth.
Some of their key brands include;Augmentin, Panadol, Seretide, Betnovate, Zantac and
Calpol in medicine and renowned consumer healthcare brands include Horlicks, Aquafresh, Macleans and ENO.
Searle Pakistan Limited (SPL) was incorporated in Pakistan as a Private Limited Company on October 5, 1965 as a subsidiary of G.D. Searle & Co., U.S.A. In 1966
manufacturing facility in S.I.T.E. and production of Aldactone, Lomotil, Diodoquin, Ovulen, Neomycin Sulphate, Probanthine and Hydryllin,
Pharmatec is proud to be recognized as one of the rapidly growing, most modern pharmaceutical manufacturing and marketing companies in Pakistan
The plant consisting of latest expanded manufacturing and laboratory facilities, warehouses and offices covers a floor area of about 7,000 square meters in S.I.T.E., the developed industrial area of Karachi.
QUESTIONNAIRE ANALYSIS
1. Does your company have a Performance Management System for its employee?
COMPANY NAME YES NO
1. Glaxo Smith Kline Yes
1. Searle Pakistan Yes
1. Pharmatec Pakistan yes
1. Does your company have a Performance Management System for its employee?
Glaxo Smith Kline: yes .it is conducted by HR department in collaboration with line managers of the concerned department
Performance Development Plan (PDP), MBO method (yearly)
Talent preview sessionLearning needs analysis:
1. Does your company have a Performance Management System for its employee?
Searle PakistanYes. performance management is part of HR
department’s function. The HR conducts it and results are shared with the line managers of concerned departments.
Pharmatec Pakistan: In Pharmatec performance management system
does exist but little importance is given to this system. It is a function of HR department.
2. Is the performance management system for all employees of your company?
Glaxo Smith Kline Searle Pharmatec
a) For all employees For all For all
a) For selected employees selected
2. Is the performance management system for all employees of your company?
Glaxo Smith Kline:for all employees throughout the organizationIt is conducted for throughout all departments
which include sales, operations, finance, and HR. Inter department comparison is also done by comparing appraisals of two different departments.
The HR department of GSK is open to accept any recommendation and suggestion from their employees.
2. Is the performance management system for all employees of your company?
Searle Pakistan:to make a succession plan for all the employees
and therefore Performance Management System deals with all the employees.
performance at all groundsPharmatec Pakistan:only for selected employees and it serves as
one of its major lacking in the market.Upper management is more relax as their
shortcomings are avoided to some extent.
3.Is performance appraisal done annually or more frequently?
Glaxo Smith Kline Searle Pharmatec
a) Anually annualy annualy
a) Semianually Semi
a) Quaterly
3.Is performance appraisal done annually or more frequently?
Glaxo Smith Kline: Annually appraisal is done in GSK at the beginning of the year. In which targets given to each employee is matched with its performance.
Searle Pakistan: It is done twice per annum. This is so that the management does not have to wait for the whole year to take corrective action. The performance appraisal twice a year is most suitable for the company
Pharmatec Pakistan: performance management system at Pharmatec is done annually to review the set benchmarks regarding sales and production capacity.
4.What is the purpose of performance management system?
Glaxo Smith Kline: To Access the Performance:Basis for Reward (Increment Bonus):Basis for Promotion, Placement:Ascertain Training And Development Needs:
What is the purpose of performance management system?
Searle Pakistan: Usefulness of the employee. For the company, its most important assets are its employees. So the usefulness of the employees is tracked down through the performance appraisal and this serves as a basis for rewards, promotion, placement, succession planning etc of all the employees.
Pharmatec Pakistan: PMS is used for promotions of employees only.
5. Do you think that HR Performance Management System help your company
Glaxo Smith Kline: It increases Employee motivation and that
leads to increase in profit, sales, and reduce turn over. Employees are involved in decision making and they are empowered to take decision.
If an employee is underperforming he is given a time limit of 6-9 months to improve his performance.
5. Do you think that HR Performance Management System help your company
Searle Pakistan: Reducing HR turnover. Through the performance
management system, the management tracks down the areas where the employees are lacking behind and gives them the training accordingly. Through proper training the management helps the employees to perform well and thus the employee turnover is reduced.
Pharmatec Pakistan: This company although performing well financially but does not know the importance of PMS, therefore they are unable to identify core benefits of PMS for their organization.
6. How many numbers of employees give suggestions?
>10% GSK
5-10% Searle
1-4% Pharmatec
None
6. How many numbers of employees give suggestions?
Glaxo Smith Kline: GSK involves employees from grassroots level also in
evaluating and formulating strategies. Because it believes the fact that they are in direct contact with the customers.
Searle Pakistan: The top management from all of the departments is
involved in this processThe decision to promote or fire any employee is then
done by the head of the concerned department.Pharmatec Pakistan: They are not open to suggestion
and only executives and top management can take important decisions related to HR.
Glaxo Smith Kline Searle Pharmatec
a) Excellent Gsk
a) Good Searle
a) Poor Pharmatec
7. HR satisfaction level?
Searle2009 2008 2007
a) Net profit 400m 300m 60m
a) Sales 2.83b 3.5b 2.8b
a) HR turnover p.a 12% 14% 16%
a) Absenteeism % 8-10% 8-10% 8-10%
a) Suggestion received p.a Twice Twice Twice
a) No. of employees 1000 800 600
8. Summary of corporate performance for companies in the past year (last three years)?
Glaxo Smith Kline2009 2008 2007
a) Net profit 933.90m 1955.187m 1670.5m
a) Sales 14719.1m 13403.224m 10610.882m
a) HR turnover p.a 8% 8% 10%
a) Absenteeism % 5% 6% 6.5%
a) Suggestion received p.a - - -
a) No. of employees - - -
Summary for the corporate performance
Pharmatec2009 2008 2007
a) Net profit 96m 95m 45m
a) Sales - - -
a) HR turnover p.a 24% 21% 18%
a) Absenteeism % 10-12% 10-12% 12%
a) Suggestion received p.a - - -
a) No. of employees - - -
Summary for the corporate performance
2007 2008 2009
10610.882
13403.224
14719.1Sales (in Millions Rs) GSK
2007
2008
2009
1670.5 1955.187
933.9
Net Profit (in Millions Rs) GSK
2007
2008
2009
10%
8%
8%
HR turnover ratio at GSK
2007 2008 2009
7%
6%
5%
Absenteeism at GSK
2007 2008 2009
2.8
3.5
2.83
Sales (in Billion) SEARLE
2007 2008 2009
60
300
400
Net Profit(in Millions) SEARLE
2007
2008
2009
600800
1000
No. Of Empoyeess (SEARLE)
No. Of Empoyeess (SEARLE)
2007
2008
2009
16
14
12
HR Turn over p.a (SEARLE)
2009
2008
2007
96
95
45
Net Profit (in MIllions Rs)
2007 2008 2009
18
21
24
HR Turn over Pharmatec
RECOMMENDATION
For Pharmatec: implement Performance Management system on whole organization.
For Searle: their number of employees is increasing. So they have to properly manage the PMS. They can shift to quarterly performance management review so that information is available quickly and timely.
For Glaxo: firstly it is recommended to continue the
good work they are doing. They are a role model for other pharmaceutical companies. But having said that it is necessary for them to identify performance review on semiannual and quarterly basis also. More delegation should be given to employees.
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