Performance Appraisal & Hetero Drugs Ltd. - Copy (2)

INTRODUCTION

The history of performance appraisal is quite brief. It roots in the early 20th Century

can be traced to Taylor’s pioneering Time and motion studies. But this is not very helpful,

for the same may be said about almost everything in the field of modern human resources

management.

As a distinct and formal management procedure used in the evaluation of work

performance, appraisal really dates from the time of the second world war not more than 60

years ago.

Performance appraisal system began as simple methods of income justification. That

is, appraisal was used to decide whether or not the salary or wage of an individual employee

was justified.

The process was firmly linked to material outcomes. If an employee’s performance

was found to be less than “deal, a cut in pay would follow on the other hand, if their

performance was better than the superior expected, a pay rise was in orders.

Little consideration, if any, was given to the developmental possibilities of appraisal.

It was felt that a cut in pay, or rise, should provide the only required impetus for an employee

to either improve or continue to perform well. Sometimes this basic system succeeded in

getting the results that were intended, but more often than not, it failed.

For example, early motivational researchers were aware that different people with

roughly equal work abilities could be paid the same amount of money and yet have quite 1

Indirectly, to help determine reward out comes. That is, the appraisal results are used

to identify the better performing employees who should bet the majority of available merit

pay increases, bonuses, and promotions.

At the other extreme, there are many strong advocates of performance appraisal.

Some view it as potentiality “….. The most crucial aspect of organizational life”.

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On the other hand, there is a strong rival argument which claims that performance

appraisal must unequivocally be linked to reward outcomes.

Performance appraisal systems began as simple methods of income justification. That

is, appraisal was used to decline whether or not the salary or wage of an individual employee

was justified.

The process was firmly linked to material outcomes. If an employee’s performance

was found to be less than ideal, a cut in pay would follow on the other hand, if their

performance was better than the supervisor expected, a pay rise was in order.

In many organizations - but not all – appraisal results are used, either directly or

indirectly, to help determine reward outcomes. That is, the appraisal results are used to

identify the better performing employees who should get the majority of available merit pay

increases, bonuses, and promotions.

MEANING:-

Performance appraisal is a method of evaluating the behaviour of employees in the

work sport, normally including both the quantitative aspects of job performance.

Performance here refers to the degree of accomplishment of the tasks that make up an

individual’s Job. It indicates how well an individual is fulfilling the job demands. Often the

term is confused with effort, but performance is always measured in terms of results and not

efforts.

Definitions:-

“Managers often believe that the most significant P/HR outcomes involve the

contributions employers make to the organization’s goal attainment. These contributions are

called employee performance, meaning how effectively employees carryout their job

responsibility - Herbert G Heneman

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“Performance appraisal has many facts. It is an exercise in observation and judgment.

It is a feedback process, and it is an organizational interventions. It is a measurement

process as well as an intensely emotional process. Above all, it is an inexact, human process.

While it is fairly easy to prescribe how the process should work, descriptions of how it

actually works in practice are rather discouraging”.

- Wayne Cascio

“Performance appraisal is the process of evaluating the performance and

qualifications of the employees in terms of the requirements of the Job for which he is

employed for purposes of administration including placement, selection for promotions,

providing financial rewards and other actions which require differential treatment among the

members of a group as distinguished from actions affecting all members equally”.

- Heyel.

NEED FOR PERFORMANCE APPRAISAL:-

• They provide systematic judgments to backup Salary increases, transfers, demotions

or terminations.

• Provide information about the performance ranks basing on which decision regarding

salary fixation, confirmation, promotions, transfer and demotion are taken.

• They are means of telling a subordinate how he is doing and suggesting needed

changes in his behaviour attitude, stills, or job knowledge. They let him know where

he stands with the boss.

• The superior uses them as a base for coaching and counselling the individual.

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PURPOSE OF PERFORMANCE APPRAISAL:-

Performance appraisal aims at attaining the different purposes. They are:

• To create and maintain a satisfactory leave of performance.

• To contribute to the employee growth and development though training and

development.

• To help the superior to have a proper understanding about their subordinates.

• To facilitate fair and equitable compensation based on performance.

• To facilitate for testing and validating selection tests, interview techniques through

comparing their scores with performance appraisal ranks.

• To provide information for making decisions regarding layoff, retrenchment etc.

• To ensure organizational electiveness through correcting employee for standard and

improved performance, and suggesting the change in employee behaviour.

IMPORTANCE OF PERFORMANCE APPRAISAL

• Provide information about the performance ranks basing on which decision regarding

salary fixation, confirmation, promotion, transfer and demotion are taken.

• Provide feedback information about the level of achievement and behaviour of

subordinates, rectifying performance deficiencies and to set new standards of work if

necessary.

• Provide information which helps to counsel the subordinate.

• Provide information to diagnosed deficiency in employee regarding skill, knowledge,

determine training and developmental needs and to prescribe the means for employee

growth provides information for correcting placement.

• To prevent grievance and disciplinary activities.

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ROLE OF PERFORMANCE APPRAISAL IN EFFECTIVE HRM:

Appraising the performance of individuals, groups and organizations is a common

practice performance appraisal is a method of evaluating the behaviour of employees in the

work spot, normally including both the quantitative and qualitative aspects of Job

performance. Performance is normally appraised by the superiors, but recently, peers,

subordinates and customers. Appraisal methods include both quantitative and qualitative.

Employee should be counselled after the appraisal of the performance in order to develop the

performance further.

OBJECTIVES OF PERFORMANCE APPRAISAL:-

• To enable an organization to maintain an inventory of the number and quality

of all managers and to identity and meet their training needs and aspirations.

• To determine increments rewards, and provide a reliable index for promotions

and transfers to positions of greater responsibility.

• To maintain individual and group development needs and to evaluate

effectiveness of training and development programs.

• To plan career development human resources planning based on potentialities.

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FUNCTIONS OF PERFORMANCE APPRAISAL:-

Levinson has given their functions of performance appraisal.

• It selects to provide an adequate feed back to each individual for his or her

performance.

• It purposes to serve as basis for improving or changing behaviour towards some more

effective working habits.

• It aims at providing data to managers with which they may judge future job

assignments and compensation. He stresses the fact that the existing systems of

performance appraisal don’t serve any of these functions effectively but focuses on

outcome of behaviour.

FEATURES OF PERFORMANCE APPRAISAL:-

• Performance appraisal is the systematic description of an employee’s job relevant

strength and weaknesses.

• To find out how well the employee is performing the Job and establish a plan of

improvement.

• Appraisal is arranged periodically according to definite plan.

• Performance appraisal is not Job evaluation, performance appraisal refers to how well

someone is doing the assigned job.

• Performance appraisal is continuous process in every large scale organization.

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CONTENTS WHICH AREA USED TO MEASURE THE

PERFORMANCE OF AN EMPLOYEE:-

• Regularity of Attendance.

• Self expression; written and oral.

• Ability to work with others.

• Leadership styles and abilities.

• Initiative.

• Technical skills.

• Technical ability / Knowledge.

• Ability to grasp new things.

• Ability to reason.

• Originality and Resourcefulness.

• Creative Skills.

• Area of Interest.

• Area of Suitability.

• Judgment skills.

• Integrity.

• Capability for assuring Responsibility.

• Level of acceptance by subordinates.

• Honesty and sincerity.

• Thoroughness in Job and organizational knowledge.

• Knowledge of systems and procedures.

• Quality of suggestion offered of improvement.

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When to Appraise?

Informal appraisals are conducted whenever the supervisor or personnel managers

feel it necessary. However, systematic appraisals are conducted on a regular basis, say for

example, every six months

THE EVALUATION PROCESS:-

Stole observes that “The p

rocess of performance appraisal follows a set pattern, viz., a man’s performance is

periodically appraised by his superiors”.

“Usually, the resulting plan is then reviewed of a higher echelon of management, was

it may be challenge, changed or added to, but of the discussion and debate emerges a

development plan tailored to the individual’s unique needs.

ESTABLISH PERFORMANCE STANDARDS

COMMUNICATE PERFORMANCE EXPECTATIONS TO EMPLOYEES

MEASURE ACTUAL PERFORMANCE

COMPARE ACTUAL PERFORMANCE WITH STANDARDS

DISCUSS THE APPRAISAL WITH THE EMPLOYEE

IF NECESSARY, INITIATE CORRECTIVE ACTIONS

METHODS/ TECHNIQUES OF PERFORMANCE

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APPRAISAL:

Several methods and techniques of appraisal are available for measurement of the

performance of an employee.

METHODS OF PERFORMANCE APPRAISAL

Traditional methods Modern Methods

TRADITIONAL METHODS:-

STRAIGHT RANKING METHOD :-

It is the oldest a simplest method of performance appraisal, by which the man and his

performance are considered as an entity by the rates. No attempt is made to fractionalize the

rate or his performance, the “whole man” is compared with the “whole man” i.e. the ranking

of a man in a work group is done against that of another. This is the simplest method of

separating the most efficient from the least efficient, and relatively easy to develop and use.

MAN TO MAN COMPARISON METHOD:

This technique was used but the USA army during the First World War. By this

method certain factory are selected for the purpose of analysis (such as leadership,

dependability and initiative), and a scale is designed but the rates for each factor. A scale of

man is also created for each selected factor. The each man to be rated is compared with the

man in the scale and certain scores for each factor are awarded to him.

GRADING METHOD:

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Under this system, the ratter considers certain features and marks them accordingly to

a scale certain categories of worth are first established and carefully detained. The selected

features may be analytical ability, cooperativeness, dependability, self-expression, job

knowledge, judgment, leadership and organizing ability, etc. They may be a) Outstanding, B)

Very good, C) Good or average, D) Fair.

GRAPHIC OR LINEAR RATING SCALE:

This is the most commonly used method of performance appraisal under it, a printed

form, one for each person to be rated.

Accordingly to Juices, these factors are: employee characteristics and employee

contribution. In employee characteristics are included such qualities as initiative, leadership,

co-cooperativeness, dependability, industry, attitude, enthusiasm, loyalty, creative ability etc.

The rating scale method is easy to understand and easy to use, and permits a statically

tabulation of scores. A ready comparison of score among the employee is possible. These

scores indicate the worth of every individual it is the most common evaluation tool in use

today.

FORCED CHOICE DESCRIPTION METHOD:-

This method was evolved after a great deal of research conducted for the military

services during world War-II. It attempts to correct a rates tendency to give consistently high

or consistently low ratings to all the employees.

The use of this method calls for objective reporting and minimum subjective

judgment. Under this method, the rating elements are several sets of pair phrases or

adjectives relating to Job proficiency or personal qualifications.

FORCED DISTRIBUTION METHOD:-

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Joseph Tiffin evolved this method after statistical work. This system is used to

eliminate or minimize rates bias, so that all personnel may not be placed at the higher and or

at the lower end of the scale. It requires the rates to appraise an employee according to a pre-

determine distribution scale.

The good point of this system is that by forcing the distribution in this manner, the

problem of different appraisers using different parts of the scale is avoided. The method is

highly simple to understand and very easy to apply in organizations.

CHECK LIST:

Under this method, the rate does not evaluate employee performance, he supplies

reports about it and final rating is done but the personnel department. A series of questions

are presented concerning an employee to his behaviour. The rates, then, check to indicate if

the answer to a question about an employee is positive or negative.

FREE ESSAY METHOD:

Under this method, the supervisor makes a free form, open-ended appraisal of an

employee in his own words and puts down his impression about the employee. He takes not

of these factors.

• Relations with fellow supervisors and personnel assigned to him.

• General organization and planning ability.

• Job knowledge and potential.

• Employee characteristics and attitude.

There are several advantages of this method. An essay can provide a deal of

information, especially if the supervisor is asked for instance, to give two or three

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examples of each judgment he makes. The explanations will give specific information

about the employee, and can reveal even more about the supervisor.

CRITICAL INCIDENT METHOD:

This method was developed following research conducted by the armed forces in the

United States during World War-II.

The basis of this method is the principle that “There are certain significant acts in

each employee behaviour and performance which make all the difference between success

and failure on the job.

This performance appraisal method provides an objective basis for conducting a

discussion of an individual’s performance.

GROUP APPRAISAL METHOD:

Under this method, an appraisal group rates employees, consisting of their supervisor

and three or four other supervisors who have some knowledge of their performance. The

supervisor explains to the group the nature of his subordinates duties.

The group then discusses the standards of performance for that Job, the actual

performance of the Job holders, and the causes of their particular level of performance and

offers suggestion for future improvement if any.

The advantage of this method is that it is through, very simple and is devoid of any

basis, for it involves multiple Judges. But it is very time counselling.

FIELD REVIEW METHOD:-

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Under this method, a trainer employees from the personnel department interviews line

supervisors to evaluate their respective subordinate. The appraiser is fully equipped with

definite test questions, usually memorized in advance, which puts to the supervisor.

This system is useful for a large organization and does not suffer from the

weaknesses, which are evident in other systems. The main defect is that it keeps two

management representatives busy with the appraisal.

CONFIDENTIAL REPORTS:-

Assessing the employee’s performance confidentially is a traditional method of

performance. Under this method, superior appraises the performance of his subordinates

based on his observations, Judgment and intuitions. The superior keeps his judgment and

reports confidentially. In other wards the superior does not allow the employee to know the

report and his performance. Superior writes the report about his subordinates strengths,

weakness, intelligence, attitude to work, sincerity, commitment, punctuality, attendance,

character, conduct, friendliness etc. This method suffers from a number of limitations.

MODERN METHODS:-

BEHAVIOURALLY ANCHORED RATING SCALE (BARS):-

The behaviourally Anchored Rating Scales (BARS) method combines elements of the

traditional rating scales and critical incident methods. Using BARS, Job behaviours from

critical incidents effective and ineffective behaviours are described more objectively. The

method employees’ individuals who are familiar with a particular job to identity its major

components.

ASSESSMNT CENTERS:-

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This method of appraising was first applied in German Army in 1930. Latter business

and industrial houses started using this method.

Under this method, many evaluators join together to Judge Employee performance in

several situations with the use of a variety of criteria. It is used mostly to help select

employees for the first level (The lowest) supervisory positions. Assessments are made to

determine employee potential for purposes of promotion.

HUMAN RESOURCE ACCOUNTING:-

Human resource accounting deals with cost of and contribution of human resources to

the organization cost of the employee includes cost of man power, planning, recruitment,

selection, induction, placement, training, development, wages and benefits etc.

This technique has not developed and still it is in the transition stage.

MANAGEMENT BY OBJECTIVES (MBO):-

Peter F Ducker’s has evolved this method. MBO is potentially a powerful philosophy

of managing and an effective way for operational sing the evaluation process. If was

described only recently as the ‘larger range’ in performance appraisal.

Management by objectives can be describes as “a process where by the superior and

subordinate manages of an organization jointly identify its common goals, define each

individuals major areas of responsibility in terms of results expected of him and use these

measures as guides for operating the unit and assessing the contributions of each of its

members”.

360 DEGREE PERFORMANCE APPRAISAL:-

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The appraisal may be any person who has through knowledge about the Job alone by

contents to be appraised, standards of contents and who observes the employee while

performing a Job. The appraiser should be capable of determining what is more important

and what is relatively less important. He should asses the performance without bias. The

Appraisers are supervisors, peers, subordinates employees themselves users of service and

consultants. Performance Appraisal by all these parties is called “3600 performance

appraisal”.

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INTRODUCTION

This chapter outlines the need, importance and scope of the study. Also the chapter

speaks about various objectives of the study. The chapter enlightens the methodology

adopted by the researcher in sampling and sample design, data collection methods and

tools used in data analysis and interpretation.

NEED FOR THE STUDY

• Provide information about the performance ranks basing on which decision regarding

salary fixation, confirmation, promotion, transfer and demotion are taken.

• Provide feedback information about the level of achievement and behaviour of

subordinate. This information helps to review the performance of the subordinate,

rectifying performance deficiencies and to set new standards of work if necessary.

• Provide information which helps to council the subordinate.

• Provide information to diagnosed deficiency in employee regarding skill, knowledge,

determine training and developmental needs and to prescribe the mean for employee

growth provides information for correcting placement.

• To prevent grievances and in disciplinary activities.

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SIGNIFICANCE OF THE STUDY:

It will help to find out the performance appraisal techniques which are used in

Organization

It improves the efficiency of an organization

It helps in knowing the opinion of the employees about performance appraisal

It provide information which helps to council the sub-ordinates

It prevent grievances and in-discipline

It provide information which helps in reviewing the performance of sub-ordinates

OBJECTIVES OF THE STUDY:

The major objectives of the present study are performance appraisal under taken by HETERO

DRUGS LTD.,

• The primary objective of performance appraisal is to help each man handle his current

job better.

• To find out the performance appraisal techniques which are used in the organization

• New employees are evaluated as a measure to recruit them as well as determined their

initial wage rates.

• Existing employees are evaluated with a view to ascertaining lay-off, transfers,

Promotions (Or) demotions, pay change allied issues.

• To improve the efficiency of an enterprise by attempting to mobilize the best possible

efforts from the individuals employed in it

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RESEARCH METHODOLOGY:

a) SAMPLING PROCEDURE:

Universe:

The universe of the present study constitutes the total numbers of employees is

5000 working in different departments with different designations.

Sample Size:-

A sample size of 150 employees are selected on purposive basis with due

consideration of executives and supervisors.

Sampling method:-

The sampling method used is questionnaire method to collect data from the

employees

b) SOURCES OF DATA COLLECTION :

Primary Data:-

The data regarding the opinion on performance appraisal was directly collected from

the employees of the firm. A questionnaire was prepared and about 50 employees as a

sample groups were interviewed. They were assured confidentiality of data provided by

them.

Secondary Data:-

The Secondary data i.e. established, location and capacity etc., were collected from

the managements annual reports, circulars and pay rolls. And some other data was collected

from web-site of HETERO DRUGS LTD.

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c) ANALYSIS OF DATA

The data collected has been analysed by using simple percentages and graphs.

d) PLAN OF THE STUDY:

Chapter 1 deals with the article frame work of performance appraisal.

Chapter 2 deals with the objectives and methodology.

Chapter 3 deals with the industry and company profile.

Chapter 4 deals with the data analysis and interpretation.

Chapter 5 deals with the finding and suggestions.

LIMITATIONS OF THE STUDY:

The study has been confined to 8 weeks and so it cannot reveal the exact trends of

performance appraisal.

This study is limited to a particular area of HETERO DRUGS LIMITED

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INDUSTRY PROFILE:

INTRODUCTION TO BULK DRUG INDUSTRY:

Since the achievement of independence, India pharmaceutical industry registered a

substantial progress and has become one of the country’s leading industries. India is now

providing large quantities of varied bulk drugs and pharmaceutical products of late.

Especially during 80’s India acquired a status of one of the major exports of drugs and

pharmaceutical in the international market.

Prior to the launching of second five-year plan, the manufacture of pharmaceuticals

was limited largely to processing of bulk-imported drugs in to tablets, capsules and other

formalities. Pharmaceuticals are medicinally effective chemicals, which are converted to

dosage forms suitable for patients to imbibe. In it basic chemical from, pharmaceuticals are

called bulk drugs and the final dosage forms are knows as formulations. Usage of

Pharmaceuticals is governed by the underlying medical science. The four primary medical

sciences are as under:

• Allopathic or modern medicine has gained global popularity.

• Ayurvedic, an ancient Indian science, mainly uses herbal remedies.

• Unany, having Chinese Origin is prevalent in South East Asia.

• Homeopathy, founded by a German Physician, was fairly popular in the early 19 th

century.

PATENTS:

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Patents are a vital aspect of the global pharmacy industry. Patent protection is

essential to spur basic R&D and make it commercially viable. But, only the developed

nations endorse product patents. Most third world countries have patent laws but enforcement

is totally less. Some developing matins like India, Egypt and Argentina allow only process

patent registration. As a result pharmacy R&D is concentrated amongst the pharmacy Mac’s

in USA, Japan, Europe. The leading MNC’s have geographically widespread market reach

spanning almost the entire globe. Here, their high R&D costs can be spread over a large user

base.

A researcher undertakes patent registration once a molecule shows some promise of

therapeutic effectiveness. Patent life counter starts running from the day the patent

application is made. The patent office then states the process establishing that the molecule is

unique. The steps involved are:

• Within 18 months of filing the application, a brief write up of the molecular

structure and its therapeutic utility is published as a public document.

• Patent office thereby invites objections, if any from third parties e.g. competitors.

• Objections received are conveyed to the applicant who has a chance to defend or

modify his claim to originality.

• The modified claims are republished and once again objections are invited.

• Once the patent office is satisfied about the applicant’s claim, it grants the patent.

The whole process takes 4-5 years due to significant backlog in the patent registration

office. Once a patent is granted on one of the developed nations. E.g. European patent office

covers a large part of the European subcontinent. NEW DRUG APPROVAL (NAB):

Prior to launching its products in any country, a pharmacy company undertakes patent

registration to protect its own interest. To protect the interests of the consumers, it is

necesssary that the drug authorities in the country approve the product. Mostly the process for

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seeking approval is initiated alongside the patent registration process. An NDA (New Drug

Application) is field with the drug authorities such a FDA in US or Drug controller in

India,detailing the new molecules therapeutic properties. The clinical trials are carried out in

3 stages.

• Animal toxicity (testing on animals)

• Trails on few select volunteers.

• Trails on large scale on hospitals/institutions.

Drug authorities’ approval has to be taken at each stage and only when all three trail

stages successfully completed can the product be launched. Once a new product has been

launched by developed countries like USA, Japan or Europe, it takes relatively lesser time to

get approval from drug authorities in another country.

Global price drug process varies from country to country for number of reasons

including patent regulations government controls, income difference, currency exchange

fluctuations etc…

Patent Regulations: Patents provide the innovator exclusivity of manufacture over the

life of the patent. To maximize gains pharmaceuticals companies charge high premium on

their under patent products. As patent laws are stringent only in the developed nations

accordingly formulations prices too are much higher in these markets. A comparison of

formulation prices between India, Pakistan, USA and UK is given in annexure.

Government control:- Due to lax of patent laws in develo-0ping counties, local players

are able to infringe upon the original patent holder’s right without payment of royalty. Hence,

the cost to manufacture of reverse engineered Pharmaceuticals is significantly reduced. To

prevent undue profiteering by local Pharmaceutical companies, the governments in such

countries often impose controls on popularly used drugs and formulations. Even some major

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industrialized countries of Europe distort the market mechanism by markets like USA, as

companies try to enhance sales / profits by charging what the traffic bears.

Income Disability:- In developing nations with low per capita income and low standard

of living, pharmacy MNC’s are faced with the choice of either selling products at artificially

low prices or denying patients the benefits of drug and its impact.

Due to fear of piracy and low product prices in third world countries, most MNC’s are

reluctant to introduce their top-of-the-line products in these places. So, patients in these

countries compulsory lose out on better treatment option.

Majority of the MNC’s conducts research on those diseases that affect the population

in developed nations while tropical diseases get low priority.

Wide variations in pharmacy prices between developing nations have resulted in

increased resistance to runaway healthcare costs in the developed nations, especially USA.

Within a therapeutic segment, generic substitutes to the under-patent drugs generally exist.

Though often lesser erective, they are able to reduce the most of treatment significantly. This

methodology has been gaining popularity in last few years. Managed Health care, as it called,

is akin to medical insurance and it usually follows the principle of encouraging generic

substitutes to curtail medical expenses. Developing nations that impose price controls reduce

the competitiveness of innovation. While price control low drugs prices, they do not

necessarily reduce health care costs.

WTO: - Due to pressure from the developed countries, across the worked uniformity in

patent laws is being implemented under WTO (World Trade Organization – earlier GATT i.e.

General Agreement on Tariffs & Trade). Presently, different countries have different patent

types and life period. WTO had decided upon a product patent life of 20 years in all

countries.

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However, to ensure a smooth transition and provide local players in the developing

countries, ample time from gearing themselves, a moratorium up to the year 2005/ AD has

accorded product patent protection even in countries like India or Argentina.

However,existing pharmaceuticals and new products that will be introduces in the interim

period will all continues to be reverse engineered in nations which do not have product patent

laws.

GLOBAL SCENARIO:-

ORGIN:

Quinine extracted from the cinchona tree bark was used to treat malaria way back in

the year 1619. But, sir Alexander Fleming’s of penicillin in 1929 can be considered the real

foundation of modern Pharmaceutical research. Next major breakthrough came in 1932 with

the syntheses of sulphonamides in Germany be klarer and mietzsch. The 15 years period

between 1938 and 1953 became known as the age of antibiotics, due to unprecedented

number of new anti-infect ant agents introduced during the period..

Benefit to Mankind:-

Between 1920 and 1960, the death rate, due to disease, in a year fell from 12,120

noses per million people to 8,800 no permission persons. Every 4 years since 1965, one

additional year has added to life expectancy at birth due to advances in pharmacy R&D.

Presently, in USA, the average life expectancy is over 75 years. As antibiotics enabled people

to survive more advanced ages, researches focused on cell biochemistry to fine cures for

more complex chronic diseases: Drug researches are now targeting to cure the underlying

causes of diseases that are rooted in the human molecular structure.

GROWTH:-

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Pharmaceutical is a continuous growth industry, immune to economic recession and

commodity cycles. Rising populations, new disease incidence or resurgence of certain

diseases spurs that growth. Therapeutic usage of Pharmaceuticals varies across the globe.

Hypertension and cardiac diseases like typhoid, tuberculosis etc., are largely prevented in

developing nations.

INDUSTRY SIZE:-

The global pharmaceuticals industry, presently valued as US $ 305 bin, is projected to

grow at a CAGR of 8% pa in the next 5 years. In 1998 market grew by 7% as against 6.6% in

the previous years. Growth rates differ across nations, with the developing nations like South

Korea, Taiwan, India etc., and notching high growth in the range of 12-15% pa. this can be

attributed to healthcare cost containment pressure keeping pharmaceuticals prices low like

developed countries, while export opportunities and low domestic per capita consumption

have provide higher growth potential in the developing nations.

INDIAN SCENARIO:

DRAWBACKS:

In the 50 years independence, the Indian pharmaceutical industry has evolved

significantly. Initially, the MNC’s had a near monopoly. They imported and marketed

formulations in India, mainly low cost generics for the masses and also few specialties, life

saving, high priced products. With the government increasing pressure against imports of

finished products, the MNC’s set up formulation units and continued importing the bulk

drugs. In the 60’s the Indian Government laid the foundation of the domestic’s

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pharmaceutical industry by promoting Hindustan Antibiotics Ltd., (HAL) and Indian drugs.

However, MNC’s maintained a lead due to backing of their global R&D. High cost for basic

research deterred local players (in the private sector).

1970 – A REVOLUTIONARY YEAR:-

The Indian patent act (IPA) was introduced. This has been one of the single most

important factors to spur the domestic pharmaceutical industry. Under the IPA (Refer

Annexure1), substances used ion foods and pharmaceutical could not be granted product

patents. Only process patents were allowed for a period of 5 years from date of patent grant

or 7 years from date of filing for patent, whichever was earlier. Process modifications to

develop MNC’s bulk drugs were far easier for the local players and there was an influx of

domestic manufactures, which first started making bulk drugs and then progress to

formulations. For local players a wide possible portfolio mix was possible portfolio mix was

possible while the MNC’s were constrained to their patent company’s product range. With

the IPA, cost of local manufacture reduced, so also, absence of royalty payments on reverse

engineered drugs.

The Indian Government also introduced Drug Price Control Order (DPCO) in 1970.

The DPCO effectively put a ceiling on process of version mass-usage bulk drugs and their

formulations so as to prevent any undue profiteering. This further deterred the MNC’s as

selling their products uproar in their home counters. So, MNC’s curtailed new product

launches, giving further scope to Indian players. FERA (LATE 70’s): MNC’s were

compelled to reduce holding in their Indian ventures to 40%, else comply with export

obligations to retain a maximum 51% stake. As a result some MNC’s curtailed the scope of

their operations. This further strengthened the position of local pharmaceutical companies.

PRESENT SCENARIO:

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Over 20,000 registered pharmaceutical manufactures exist in the country. The

market share of MNC’s has fallen from 75% in 1971 to around 35% in the Indian

pharmaceutical market, while the share if Indian companies have increased from 20% in 1971

to nearly 65%. Pusses have almost lost completely.

The secret has undergone several policy as well as attitudinal changes over the past

two years. It was one of the major beneficiaries from the budget proposals. Some of the

positive steps taken were:

• Pharmaceutical industry as knowledge based industry. The government has plans to

increase the investment in research and development.

• Rationalization of excise duty and reduction in interest rates in export financing.

• Additional deductions under income tax laws for R&D expense.

• Foreign direct investments permit unto 74% through automatic route.

• Setting up to high level committees to review the drug policy for strengthening

R&D capabilities, reducing the priced control regime.

Besides the Indian parliament has enacted the required changes in the Indian patent

act 1790 (IPR) regarding mailbox arrangement and Exclusive Marketing Right (EMR). For

while the main pharmacy companies have recorded a measure of 1.4% increase in sales and

7.4% fall in profits, the Indian pharmacy companies have recorded a 21% growth in sales

companies has decreased from 1.8% if sales to 1.6% in case of MNC pharmacy companies

has increased 3.8% to 4.4%.

So while the MNC companies did not make many new launches (make a hue & cry

about increasing competition from the generics, delay in patent regime, unfavourable price

cuts). But the Indian companies too, everything in stride and went out all cylinders firing-

launching new products, entering the generics market, reorganizing the marketing structure,

27

focusing on growth segments like Cardiac, Diabetic, and Psychiatry among a host of other

initiatives.

Indian pharmaceutical exports, among the top three contributors to the world

pharmacy trade, are poised to grow 25% this year to touch $ 1.5 billion, according to CII

estimates.

The country is potential to rank among top three in the world as suppliers of the

generic drugs by 2010, of the government paves way for creating a conductive business

environment by framing new policies for the sector, said Ranbaxy Chie Executive Officer

D.S. Barr.

SWOT ANALYSIS FOR THE INDIAN PHARMA INDUSTRY:-

STRENGTHS:

• Cost competitiveness.

• Well-developed industry with strong manufacturing base.

• Well Established Network of Laboratories and R&D Infrastructure.

• Access to pool of highly trained scientists, both in India and abroad.

• Strong marketing and distribution network.

• Rich Bio-Diversity.

• Competencies in chemistry and process developments.

WEAKNESS:

• Low investments in innovative R&D.

• Lack of resources to compete with other MNC’s for New Drug Discovery research

and to commercialize molecules on the world wide basis

• Lack of strong linkages between industry and academia.

• Lack of culture of innovation in industry.

28

• Low medical expenditure and healthcare spend in the country.

• Inadequate regulatory standards.

• Production of spurious and low quality Drugs tarnishes the image of the industry at

home.

OPPURTUNITIES:

• Significant export potential.

• Licensing deals with MNCs for NECs and NDDs.

• Marketing alliances to sell arrangements with MNCs.

• Contract manufacturing India as a centre for international clinical trail.

• Niche player in global pharmaceutical R&D.

THREATS:

• Products patent regime poses a serious challenge to domestic industry unless it

invests in research and development.

• R&D efforts of India pharmaceutical companies hampered by lack of enabling

regulatory requirement.

• Drug price control of India pharmaceutical companies from generating “inevitable”

surplus.

• Export effort by procedural hurdles in India as well as non-tariff barriers imposed

abroad.

• Lowering of tariff protection

29

COMPANY PROFILE:

Today HETRO DRUGS LIMITED is a name, epitomizes hard work, experience and

success.

A relatively young company that is making its presence felt and making rapid

progress nationally and internationally.

Involved in the manufacturing of active pharmaceutical ingredients and finished

dosage forms, Hetero is one of its kinds of the very few companies, which have been able to

carve a niche in the pharmaceutical industry, given the present scenario where it requires a

right blend of intellectual strength, core competencies and a precise foresight for the future.

Hetero has come a long way since its inception in the year 1993 to be recognized as a

strong player in the field of pharmaceutical, as a result of its combined strength in research,

manufacture and marking.

Established in the year 1993, with the motto to be the best in the API manufacturing,

Hetero today embodies the vision of a top notch player in developing and commercializing

products catering to a variety of therapeutic categories, integrating into a leading finished

dosage manufacturer.

30

True to the statement, “Where the Future Started Yesterday”, with a foresight on the

current trends in the pharmaceutical Market, Hetero has grown from strength to strength,

combining its Research strengths, Manufacturing capabilities and Human Resources and well

established quality management system.

With full-fledged marketing capabilities, the company has been able to market its

products in over 80 countries in Asia, Middle East, Eastern Europe and Latin America. With

its compliance to the most stringent requirements, Hetero has today gained foothold to market

several of its APIs in the United States, Canada and Europe.

With all nine manufacturing facilities supported by excellent infrastructure and

compliance to the GMP requirements, Hetero has crossed numerous milestones in a

comparatively short period since its inception.

HETERO GROUP

• HETERO DRUGS LIMETED

• HETERO LABS

• HETERO RESEARCH FOUNDATION

• SYMED LABS

• GENX PHARMA

• HETERO HELTH CARE

31

FOUNDER

The spirit and brain behind the story of hetero is its founder Dr. BPS Reddy, a

scientist who started the company drawing immense from the vast and rich experience he

gained during his stint laboratory where he was instrument in developing and

commercializing processes of several APIs.

The company was started by him with a vision to be recognized as an aggressive

company the combines its strength of R&D and manufacturing with definite advantages in

terms o f cost and chemistry with a strong emphasis on quality of products.

The untiring efforts of the chairman saw hetero develop process for several products

at relatively low cost, thus making it possible for several life saving drugs to be available at

affordable prices meeting all the regulatory and quality norms.

With the organization having reached a point where it is identified among the widely

recognized companies the chairman is now focusing on given new dimensions to the

company in terms of exploring possibilities of further growth, exploring new horizons field of

pharmaceutical development and evolving strategies to take the company to greater heights.

MILESTONES/AWARDS

The company has been scaling New Heights on a conditional basis. These

Achievements have been the result of concerted efforts on the part of different functions

within the organization to achieve the organizational goal of being a leader.

In its path to success. Hetero has seen many a milestone being crossed and achieved

many awards on various fronts. Awards for exemplary work in R&D and marketing are just a

few names.

32

A track of few events that saw hetero reaching its Zenith of glory are:

• National Award for best efforts in Research And Development from the department of

scientific and Industrial Research Ministry of Science and Technology Government of

India, in the year 1996.

• Highest Exporter award (for the year 1999) against stiff competition from

internationally recognized domestic competitors.

• Approval of the API facilities by USFDA for compliance to CGMP norms

Approval of the finished dosage facilities by who for the supply of Anti-retroviral

drugs.

VISION&VALUES

Hetero visualizes itself as an aggressive player in the global pharmaceutical scenario,

supplying generics developed, combining intellectual property, research strengths and strong

human resource input.

The company values the concept of having social responsibilities in the course of its

assent to greater heights. It strongly believes in focusing on customer requirements and

delivering the products at the right pace.

Hetero considers its human resources as the core of all its capabilities and believes in

tapping and honing the talents of its members to reach the zenith of success.

It believes in continuous evaluation and improvement in all the factors that contribute

in transforming the organization into a global force to reckon with.

Hetero takes due cognizance to the fact that the processes that it develops should be

all eco-friendly and should not result in and consequence that harms the ecological harmony.

33

MISSION

Hetero’s mission is to be a globally acclaimed pharmaceutical company, meeting

the requirements of healthcare imbibing the philosophy of both commercial and social

concerns, driven by research and manufacturing capabilities.

Hetero API Facilities are designed to meet the best of global standards for an API

Facility.

These states-of-the-art facilities cater to the growing demand of manufacturing a large

spectrum of APIS.

Hetero’s production muscle stems from its endeavours to install plant, equipment,

systems and personnel that portray the best in the Indian pharmaceutical industry.

Professional teams equipped with cutting-edge technology come together in developing,

commercializing and delivering latest intermediate and active pharmaceutical ingredients

across the globe.

Hetero’s state-of-the-art plant, which conforms to stringent CGMP guidelines,

facilitates pilot and large-scale production. This has enabled it to deliver a wide range of APIs

of international standard and intermediate chemicals for diverse healthcare applications.

34

FINISHED DOSAGES

The finished dosage flagellates of Hetero are designed to match the best globally.

The facilities house the best of the equipment in terms of design and capacity. The

approval by several regulatory authorities and the approval by WHO, Geneva stands a

testimony of the fast that serious efforts are made to ensure that every activity being taken up

in these facilities are in compliance with the requirements in terms of quality and integrity of

the products being manufactured.

MANUFACTURING CAPABILITIES

Type of Reactors Glass, Glass-Lined and Stainless Steel

Reactors sizes

250-10,000 LTR Commercial Plant

5-250 LTR Pilot Plant

Total Reactor Volume 1000 kilo litre

Temperature Range -800 c to 3000 c

Pressure Range Up to 50 KG/CM2

Analytical Strength of Hetero Group

1. HPLCs (with PDA facility)

2. GCs (with Head space facility)

3. Infer Red Spectrophotometers

4. Ultra violet Spectrophotometers

5. Particle size analyzer

6. Digital polar meters

35

7. Differential Scanning Calorimeters

8. P-XRD

9. NMR

10. GCMS

QUALITY

The approval of hetero’s API facility by USFDA and finished dosage facility buy

WHO bear a testimony to this fact.

All the activities at Hetero right from the receipt of raw materials to dispatch of the

finished products are carried out in accordance to a well-oiled quality management system.

The importance of having a strong quality based system has been recognized by the

organization due to which every individual in each department understands his/her

responsibilities and carries them out with utmost care avoiding any confusion, thus delivering

the best results.

In addition, talking about quality of the product itself, the company has evolved the

systems to implement GMP’s in the manufacture of the product to protect the safety, quality

and integrity. The approval of Hetero’s API Facility by USFDS and Finished Dosage Facility

by WHO bear a testimony to this fact.

36

RESEARCHES AND DEVELOPMENT

Hetero’s emphasis has always been on Research and Development. The emphasis was

to ensure that the processes being adopted for the products are cost effective, safe to handle

and with optimum advantage in terms of yield and quality.

Having laid solid foundation towards the end haters R&D approach has also taken

cognizance of the present scenario where stringent patent regime is under implementation

hetero’s team of scientists has been and is involved in developing non-in fringing process for

its products. With its ability to explore new heights and achieve the best hetero has been able

to file patents for several of its processes.

Given its research capabilities, Hetero has today initiated contract research. Towards

the end, the company has already evolved its strategies and is into discussions with renowned

companies for carrying out the contract research. Custom synthesis is one area where the

company has been concentrating on and is initiating work on several projects.

In addition to the above, the company is now on the threshold of commencing basic

research activities to develop and screen new chemical entities for different therapeutic

categories.

37

STTENGTHS:

• Strong emphasis on Research and Development

• Ability to develop processes for a large range of therapeutic categories.

• Ability to orient and adapt to the changing facets of industry, particularly in terms of

Regulations, Intellectual property and Manufacturing capabilities.

• Cohesive team of skilled professionals in all wings related to research, manufacture

and marketing.

A strong commitment towards the society to provide timely support by providing life

saving drugs at relatively low costs, short span of time.

TECHNOLOGY ABSORPTION, ADAPTION AND INNOVATION

The company’s R&D division is continuously engaged in the research of new

products and improving the process of existing products. Once the technology is developed

the R&D team will hand over the same to production team for the commercial production.

Benefits derived as a result of the above efforts e.g. process improvement, cost

reduction, product development, quality improvement, import substitution etc. the continuous

up gradation and adoption of technology, benefits the company in the form of good quality,

better yields and cost reduction.

SPECIFIC AREAS IN WHICH R&D CARRIED OUT BY THE

COMPANY

During the year 2006-2007, research and development activity is carried out in

respect of the following products:

Product Therapeutic Use

Donepezil Hcl Anti-Alzhemers

Nitazoxanide Antiriarrheals

Tolterodine Tartrate Urinary incontinence

38

BENEFITS DERIVED AS A RESULT OF THE ABOVE R&D

Perceptible reduction in costs and increase in productivity in respect of the

manufacture of certain bulk drugs and intermediaries. The R&D efforts have facilitative the

company to file several DMF’s in regulatory markets like U.S.A, Europe Union.

FUTURE PLAN OF ACTION

The company proposes to upgrade the R&D facilities continuously in live with

international standard and put more accent on the development of pharma products which are

cost effective and prevailing patent legislation. The R&D activates are also proposed to

diversity in to imitation of new drugs discovery. Custom synthesis and contract research in

the year to come. The company stared R&D activity on development of finished dosages for

regulatory markets.

KEY MANAGEMNT PERSONNEL:

Dr. B. Parthasaradhi Reddy (Chairman & Managing Director)

B. Nagi Reddy (Director-Executive)

M. Pera Reddy (Director-Finance)

A.V. Narasa Reddy (Director-Corp.Tech)

J. Sambi Reddy (Director-Production)

C. Bhaskar Reddy (Director-Quality Control)

M. Srinivasa Reddy (Director)

COMPANY SECRETARY

S. Vasu Reddy

All directors have been considered as key management personnel as they are involved

in planning, directing and controlling the activities of the reporting enterprises

39

BULK DRUGS:

Bulk drugs are medicinally effective chemicals. They are derived from 4 types

intermediate (Raw materials) namely:

• Plant derivatives (Herbal Products)

• Animal derivatives e.g. insulin extracted from bovine pancreas.

• Synthetic chemicals

• Biogenetic (Human) derivatives e.g. Human insulin

Bulk drug discovery requires intensive and expensive research, so new drugs are

patented by the innovator to ensure commercial gains on his R&D investment. When a drug

goes off patent it becomes generic. Bulk drugs can be broadly categorized as

• Under patent

• Generic of off patent.

A patent provides exclusivity of manufacturing / licensing to thee discoverer i.e.

patent holder for a stipulated time period.

FORMULATIONS:

Doctors, post-diagnosis to cure a disease or disorder in the patient primarily

prescribes formulations. To prevent misuse / incorrect administration, most formulations are

disabused by pharmacies only under medical prescription and these are called ethical

products. However, some formulations such as pain balms, health tonics etc can also be

purchased by user directly.

These are called over-the-counter (OTC) products. Formulations can be categorized as per

three route of administration to patients, viz.

• Oral i.e. tablets, syrups, capsules, powders etc., taken internally

• Topical i.e. ointment, creams, liquids, aerosols that are applied on the skin.

• Potentials i.e. sterile solutions injected in an intravenous or intramuscular fashion.

40

MANUFACTURING PROCESS:

Bulk drugs are prepared by appropriate chemical reactions of natural/Synthetic

intermediaries under controlled conditions.

Formulations manufacture is a branch mixing process. Right dosage of bulk drug

(active ingredient) is compounded with compatible substances, to make the formulations

palatable. Packed as per the physical form-bottle (for liquid), blister strips (for tablets /

capsules) or ampoules (for powers), each formulation pack has the expiry date and storage

instructions printed on it. Stringent quality control is exercised at all stage of Therapeutic

segments.

For ease of prescription, bulk drugs and their formulations are classified as per there

and use i.e. therapeutic effectiveness against a particular disease or ailment. .

41

1. Awareness of the performance appraisal system of their organization

S.N

o

OPTIONS NO. OF RESPONDENTS % OF RESPONDENTS

1. Yes 110 73.3%

2. No 40 26.6%

TOTAL 150 100%

42

Yes No0%

10%

20%

30%

40%

50%

60%

70%

80%

Interpretation

It was observed that 26.66% of respondents are not aware of the performance

appraisal system, 73.33% of them are aware of the performance appraisal system.

43

2. The feeling of an employee in their organization.

S.NO OPTIONS NO.OF

RESPONDENTS

% OF

RESPONDENTS

1. Proud 40 26.7%

2. Satisfactory 90 60%

3. Dissatisfactory 20 13.3%

Total 150 100%

44

Proud Satisfactory Dissatisfactory

0%

10%

20%

30%

40%

50%

60%

70%

Interpretation

It was observed that 26.7% of the respondents are feeling proud employees of their

organization, 60% of respondents are satisfactory and 13.3% are dissatisfactory.

3. Any monitory and non monitory benefits given for outstanding performance

45

S.NO OPTIONS NO.OF

RESPONDENTS

% OF

RESPONDENTS

1. Yes 120 80%

2. No 30 20%

Total 150 100%

46

Yes No0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

Interpretation

It was observed that 80% of the respondents are agreed and 20% of them are

disagreed, towards their monitory and nonmonetary benefits given for outstanding

performance.

4. Agreeing with the performance appraisal helping them to develop

47

S.NO OPTIONS NO.OF

RESPONDENTS

% OF

RESPONDENTS

1. Strongly agreed 90 60%

2 Agreed 20 13.3%

3. Disagreed 40 26.6%

4. Strongly Disagreed 0 0%

Total 150 100%

48

Strongly agree Agree Disagree0%

10%

20%

30%

40%

50%

60%

70%

Interpretation

It was observed that 60% of the respondents are agreed with the performance

appraisal helping them to develop, 13.3% of the respondents are disagreed, 26.7%

respondents are strongly agreed and no one has the strongly disagreed.

5. Opinion on the present performance appraisal system in their organization.

49

S.NO OPTIONSNO.OF

RESPONDENTS

% OF

RESPONDENTS

1. Excellent 35 23.3%

2. Good 80 53.3%

3. Neutral 20 13.3%

4. Bad 15 10%

Total 150 100%

50

Excellent Good Neutral Bad0%

10%

20%

30%

40%

50%

60%

Interpretation

It was observed that 23.3% of the respondents are feeling excellent 53.3% of

respondents feeling good, 13.3% of the respondents are feeling neutral and 10% of the

respondents are feeling bad.

6. Thinking performance appraisal improves motivation and job satisfaction

51

S.NO OPTIONSNO.OF

RESPONDENTS

% OF

RESPONDENTS

1. Yes 135 90%

2. No 1510%

Total 150 100%

52

Yes No0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Interpretation

It was observed that 90% of the respondents are feeling performance appraisal

improves motivation and job satisfaction and 10% are feeling that it is not so.

53

7. The satisfaction of an employee with the training and development programme in their

organization.

SL.

NO.OPTIONS

NO. OF

RESPONDENTS

% OF

RESPONDENTS

1. SATISFACTORY 25 16.7%

2. UNSATISFACTORY 15 10%

3. NEUTRAL 110 73.3%

TOTAL 150 100%

Interpretation

It was observed that 16.7% of the respondents are satisfactory, 10% of people are

feeling un-satisfactory and 73.3% of people are neutral.

54

Satisfactory Dissatisfactory Neutral0%

10%

20%

30%

40%

50%

60%

70%

80%

Interpretation

It was observed that 90% of the respondents are feeling performance appraisal

improves motivation and job satisfaction and 10% are feeling that it is not so.

55

8. Feeling about the team-work of their organization.

SL.

NO.OPTIONS

NO. OF

RESPONDENTS

% OF

RESPONDENTS

1. GOOD 35 23.3%

2. BAD 20 13.3%

3. SATISFIED 95 63.3%

TOTAL 150 100%

56

Good Bad Neutral0%

10%

20%

30%

40%

50%

60%

70%

Interpretation

It was observed that 23.3% respondents are feeling good, 13.3% of the

respondents are feeling bad and 63.3% are satisfied.

57

9. The satisfaction of an employee with communication process in their organization.

SL.

NO.OPTIONS

NO. OF

RESPONDENTS

% OF

RESPONDENTS

1. SATISFACTORY 40 26.6%

2. UNSATISFACTORY 25 16.6%

3. NEUTRAL 85 56.6%

TOTAL 150 100%

58

Satisfactory Dissatisfactory Neutral0%

10%

20%

30%

40%

50%

60%

Interpretation

It was observed that 26.6% of respondents are feeling satisfied, 16.6% of

people are feeling unsatisfied and 56.6% people are feeling neutral.

59

10. The performance of an employee improves after process of performance appraisal

S.NO OPTIONSNO. OF

RESPONDENTS

% OF

RESPONDENTS

1. Yes 130 86.7%

2. No 20 13.3%

Total 150 100 %

Interpretation

It was observed that 86.7% of the people improving talent and 13.3% are people

feeling not like that.

60

Yes No0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Interpretation

It was observed that 26.6% of respondents are feeling satisfied, 16.6% of

people are feeling unsatisfied and 56.6% people are feeling neutral.

61

11. The satisfaction of an employee with their performance rated by their superior.

S.NO OPTIONSNO. OF

RESPONDENTS

% OF

RESPONDENTS

1. Yes 125 83.3%

2. No 25 16.7%

Total 150 100 %

62

Interpretation

It was observed that 83.3% of people agreed and 16.7% are people feeling not like

that.

63

Yes No0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

12. Evaluating the worker appraisal in their company.

S.NO OPTIONSNO OF

RESPONDENTS

% OF

RESPONDENTS

1. Regular Attendance 43 28.6%

2. Leadership Qualities 15 10%

3. Sincerity 35 23.3%

4. Hard Working 57 38%

Total 150 100%

64

Regular attendence Leadership qualities Sincearity Hard working0%

5%

10%

15%

20%

25%

30%

35%

40%

Interpretation

It was observed that 28.6% of respondent are regular attendance, 10% of

people are having leadership qualities, 23.3% are having sincerity and 38% are hard working.

65

13. The thinking of an employee their organization policies are emissive.

S.NO OPTIONSNO OF

RESPONDENTS

% OF

RESPONDENTS

1. Nil 90 60%

2 25% 45 30%

3. 50% 15 10%

4. 75% 0 0%

Total 150 100%

66

Nil 25% 50%0%

10%

20%

30%

40%

50%

60%

70%

Interpretation

It was observed that 60% of respondents are feel no politics are there, 30% are

feel 10% politics in their company.

67

CHI-SQUIR TABLE

Gender Vs Designation

Gender Satisfied Non satisfied Total

Women 30 20 50

Men 70 30 70

Total 100 50 150

Oi Ei Oi-Ei (Oi-Ei)2 (Oi-Ei)

2

Ei

30 33.33 -3.33 11.08 0.33

20 66.66 -46.66 2177.15 32.66

32.99

68

Designation Vs Satisfaction

Designation Satisfied Unsatisfied Total

Chemist 60 20 80

Market

representative

40 30 70

Total 100 50 150

Oi Ei Oi-Ei (Oi-Ei)2 (Oi-Ei)

2

Ei

60 53.33 6.67 44.48 0.834

20 23.33 -3.33 11.08 0.474

1.308

69

70

SUMMARY:

INTRODUCTION:

Appraising the performance of Individuals, groups and organizations is a common

practice of all societies. While in some instances these appraisal processes are structured and

formally sanctioned, in other instances they are an informal and integral part of daily

activities. In social interactions, performance is conducted in systematic and planned manner

to achieve wide spread popularity in recent years.

OBJECTIVES OF THE STUDY:

The major objectives of the present study are performance appraisal under taken by HETERO

DRUGS LTD.,

• The primary objective of performance appraisal is to help each man handle his current

job better.

• To find out the performance appraisal techniques which are used in the organization

• New employees are evaluated as a measure to recruit them as well as determined their

initial wage rates.

• Existing employees are evaluated with a view to ascertaining lay-off, transfers,

Promotions (Or) demotions, pay change allied issues.

• To improve the efficiency of an enterprise by attempting to mobilize the best possible

efforts from the individuals employed in it

71

RESEARCH METHODOLOGY:

a) SAMPLING PROCEDURE:

Sample Size:-

A sample size of 50 employees are selected on purposive basis with due

consideration of executives and supervisors.

Sampling method:-

The sampling method used is questionnaire method to collect data from the

employees

b) SOURCES OF DATA COLLECTION :

Primary Data:-

The data regarding the opinion on performance appraisal was directly collected from

the employees of the firm. A questionnaire was prepared and about 50 employees as a

sample groups were interviewed. They were assured confidentiality of data provided by

them.

Secondary Data:-

The Secondary data i.e. established, location and capacity etc., were collected from

the managements annual reports, circulars and pay rolls. And some other data was collected

from web-site of HETERO DRUGS LTD.

c) ANALYSIS OF DATA;

Data analysis was done through simple percentages and graphs.

d) PLAN OF THE STUDY:

A study will bring the general opinion of the employees and employees about the

performance appraisal being used and to improve them according to the expectations of the

employees and employers.

72

FINDINGS:.

• 73.3% of the respondents said that they were aware of the performance appraisal

system of their organization

• 60% of the respondents said that they felt satisfied as an employee in their

organization

• 80% of samples said that monitory and non-monitory benefits given for outstanding

performance

• 60% of the respondents said that they agreed with the performance appraisal helping

them to develop

• 53.3% of the respondents said that they felt good about the performance appraisal

system in their organization

• 90% of the respondents said that their performance appraisal improves motivation and

job-satisfaction

• 73.3% of the respondents said that they were neutral with the training and

development program me in their organization

• 63.3% of the respondents said that they felt neutral about team work in their

organization

• 56.6% of the respondents said that they felt neutral with communication process in

their organization

• 86.7% of the respondents said that performance of employee improves after process

performance appraisal

• 83.3% of the respondents said that they satisfied with their performance rated by their

company

• 38% of the respondents said that evaluation of the works appraisal by hard working

• 60% of the respondents said that they felt that there is no politics in their company

73

Over all their contribution towards organizations is highly considerable which

generally results and maintain good human relation and monitoring personnel

development.

Finally we can conclude that employees are satisfied with HR and performance appraisal

of HETERO DRUGS LTD.

74

SUGGESTIONS:

• The organization should more focuses on training and development programmes.

• The organization should focus on more opportunities for personal growth of an

employee.

• The management should focuses on improving the team work of an employee.

• The management should focuses on improving the communication process of the

organization.

• The management should more focuses on performance appraisal system to develop

employee talent.

• The management also should focuses on the appraisal methods.

• The organization should focus on the total avoidance of the politics.

75

ANNEXURE

QUESTIONNAIRE

1. Name of the Employee :

2. Designation :

3. Department / Branch :

4. Age / Gender :

1. Are you aware of the performance appraisal system of your organization? [ ]a) Yesb) No

2. How do you feel as an employee in this organization? [ ]a) Proudb) Satisfactoryc) Dissatisfactory

3. Are any monitory and non-monitory benefits given for outstanding performance? [ ]a) Yesb) No

4. Do you agree with the performance appraisal helping you to develop? [ ] a) Agreed b) Disagreed c) Fully Agreed d) Fully disagreed

5. What is your opinion on the present performance appraisal system in the organization?

a) Qualification [ ] b) Experience c) Commitment d) Worthiness

6. Do you think performance appraisal improves motivation and job-satisfaction? [ ]

• Yes• No

.

76

7. Are you satisfied with the training and development programmed in Your organization?

[ ]• Satisfactory• Unsatisfactory• Neutral

8. How do you feel about Team-work in your organization? [ ]a) Goodb) Badc) Satisfied.

9. Do you satisfied with communication process in your [ ]Organization?

• Satisfactory• Dissatisfactory• Neutral

10. Do you think that performance of an employee improves after process of performance appraisal?

[ ]• Yes• No

11. Are you satisfied with your performance rated by your superior? [ ] a) Yes b) No

12. How do you evaluate the workers appraisal in your company? [ ]a) Regular attendanceb) Leadership qualitiesc) Sincerityd) Hardworking.

13. Do you think your organization politics is emissive? [ ]a) Nilb) 25%c) 50%

d) 75%

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BIBLIOGRAPHY

• C.B.MAMORIA & S.V.GANKAR, Personnel Management, Himalaya Publishing

House, Mumbai, 2007.

• K ASWTHAPPA, Human Resource & Personnel Management, Tata Mc Graw - Hill

Publishing Company Ltd, New Delhi, 2002.

• P.SUBBA RAO, Essentials of Human Resource Management and Industrial Relations,

Himalaya Publishing House, Mumbai, 2006.

OTHER INFORMATION:-

www.heterodrugs.com

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