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r ital to every operation is co-operation´. We all agree to this quotation put forth by
Mr. Frank Tyger. This project was successful due to the co -operation extended by
people who have truly contributed towards it.

I thank +
 ,- for bestowing upon me his choicest blessings and run ning all the
things in the right direction.

My endeavor stands incomplete without dedicating my gratitude to a few people who

have contributed a lot towards the successful completion of my project work.

First of all I would like to convey my thanks to Mr. Z.S. Dhaliwal (Internal Guide,
Faculty CMTR) for his constant suggestions which have resulted in successful
completion of project. It is a great privilege for me to express my sincere gratitude to
my reverend project guide Mr. Narendera Kumar Tripathi (A ccounts Dpt. & H.R.O.)
for his valuable guidance and overall help throughout the training period.

I am immensely thankful to Mr. Inderjeet Singh & Mr. Sanjay Gupta (H.R.O.) for his
their support and kind help which I get for the completion of this project .

Words are inadequate to express my indebtedness and gratitude to my parents for

their unending supports, blessing and tireless efforts that kept me motivated
throughout the completion of this project.

Thanks to all of you!

ABHISHEK THAKUR
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For the proper development of an organization Human Resource is must. An

organization¶s performance and resulting productivity are directly proportional to
quality and quantity of its Human Resources.

This project deals with the .



c
c/ which are
followed in c, Paonta Sahib (H.P.).

In the age of rapid development, globalization and liberalization private sector

companies need skilled manpower. Human is the basic requirement fo r the
organization¶s development so as to cope with this competitive world. Thus to keep
up the esteem of employees Performance Appraisal is needed. This also helps to
enhance the capabilities of employees.

So the choice of the Performance Appraisal Practices as my project was obvious for
the partial completion of my specialization in rMBA (HR)´.

During the course of my project I have gathered certain information, which has led to
some constructive facts in the areas of the company.
 0 1c

-


Employee development is the successful function of any company. If the employee
are skilled, capable and fit for the job they are expected to do; they will be satisfied
there will be minimum number of square pegs in the round hole of any company.
Ranbaxy Labs Ltd. is trying to make all the people working in the organization more
skilled and capable so that it may improve its products in terms of quality and
quantity and can build a mark upon its competitors.

In order to measure the capability of employee
$
  #+ is done. It
aims to measure the ability as well as weaknesses of an employee. A feedback is
given to every employee after hi/her performance is measured. This helps him to
know about his/her strengths and weakn esses. This also helps the management to
provide proper training to employees to upgrade their skills and performance.
Performance Appraisal is the base of promotions, increments, training and
development etc.

I today¶s competitive scenario, effective utilization of human resources has become

necessary and the primary task of organization is to measure the efficiency of their
employee in order to improve productivity and quality of work as well as products.

Appraisal is a continuous process and done annu ally as a formal exercise before
completion of the financial year. Appraisal has tremendous motivational impact on
people through the meaningful feedback and is a powerful tool for recognition. This
project explains performance appraisal system and tries t o find out how efficiently
Performance Appraisal is conducted. And if Performance Appraisal doesn¶t meet its
objectives, then what are the factors causing failure.





 "#-$
,
   +#

The earliest drugstores date back to the middle Ages. The first known drugstore was
opened by Arabian pharmacists in Baghdad in 754, and many more soon began
operating throughout the medieval Islamic world and eventually medieval Europe. By
the 19th century, many of the drug stores in Europe and North America had
eventually developed into larger pharmaceutical companies.

Most of today's major pharmaceutical companies were founded in the late 19th and
early 20th centuries. Key discoveries of the 1920s and 1930s, such as insulin and
penicillin, became mass-manufactured and distributed. Switzerlan d, Germany and
Italy had particularly strong industries, with the UK, US, Belgium and the Netherlands
following suit.

Legislation was enacted to test and approve drugs and to require appropriate
labelling. Prescription and non -prescription drugs became legally distinguished from
one another as the pharmaceutical industry matured. The industry got underway in
earnest from the 1950s, due to the development of systematic scientific approaches,
understanding of human biology (including DNA) and sophisticated manufacturing
techniques.

Numerous new drugs were developed during the 1950s and mass -produced and
marketed through the 1960s. These included the first oral contraceptive, "The Pill",
Cortisone, blood-pressure drugs and other heart medications. MAO Inhibitors,
chlorpromazine (Thorazine), Haldol (Haloperidol) and the tranquilizers ushered in the
age of psychiatric medication. alium (diazepam), discovered in 1960, was marketed
from 1963 and rapidly became the most prescribed drug in history, prior to
controversy over dependency and habituation.

Attempts were made to increase regulation and to limit financial links between
companies and prescribing physicians, including by the relatively new U.S. Food and
Drug Administration (FDA). Such calls increased in the 1960s after the thalidomide
tragedy came to light, in which the use of a new tranquilizer in pregnant women
caused severe birth defects. In 1964, the World Medical Association issued its
Declaration of Helsinki, which set standards for clinical research and demanded that
subjects give their informed consent before enrolling in an experiment.
Pharmaceutical companies became required to prove efficacy in clinical trials before
marketing drugs.

Cancer drugs were a feature of the 1970s. From 1978, India took over as the primary
centre of pharmaceutical production without patent protection.

The industry remained relatively small scale until the 1970s when it began to expand
at a greater rate. Legislation allowing for strong patents, to cover both the process of
manufacture and the specific products came in to force in most countries. By the
mid-1980s, small biotechnology firms were struggling for survival, which led to the
formation of mutually beneficial partnerships with large pharmaceutical companies
and a host of corporate buyouts of the smaller firms. Pharmaceutical manufacturing
became concentrated, with a few large companies holding a dominant position
throughout the world and with a few companies producing medicines within each
country.

The pharmaceutical industry entered the 1980s pressured by economics and a host
of new regulations, b oth safety and environmental, but also transformed by new DNA
chemistries and new technologies for analysis and computation. Drugs for heart
disease and for AIDS were a feature of the 1980s, involving challenges to regulatory
bodies and a faster approval p rocess.

Managed care and Health maintenance organizations (HMOs) spread during the
1980s as part of an effort to contain rising medical costs, and the development of
preventative and maintenance medications became more important. A new business
atmosphere became institutionalized in the 1990s, characterized by mergers and
takeovers, and by a dramatic increase in the use of contract research organizations
for clinical development and even for basic R&D. The pharmaceutical industry
confronted a new business climate and new regulations, born in part from dealing
with world market forces and protests by activists in developing countries. Animal
Rights activism was also a challenge.

Marketing changed dramatically in the 1990s, partly because of a new consumerism.

The Internet made possible the direct purchase of medicines by drug consumers and
of raw materials by drug producers, transforming the nature of business. In the US,
Direct-to-consumer advertising proliferated on radio and T because of new FD A
regulations in 1997 that liberalized requirements for the presentation of risks. The
new antidepressants, the SSRIs, notably Fluoxetine (Prozac), rapidly became
bestsellers and marketed for additional disorders.

Drug development progressed from a hit -and-miss approach to rational drug

discovery in both laboratory design and natural -product surveys. Demand for
nutritional supplements and so-called alternative medicines created new
opportunities and increased competition in the industry. Controversies emerged
around adverse effects, notably regarding ioxx in the US, and marketing tactics.
Pharmaceutical companies became increasingly accused of disease mongering or
over-medicalizing personal or social problems .
  
,
   + #-



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  , (#

The Indian Pharmaceutical Industry today is in the front rank of India¶s science -
based industries with wide ranging capabilities in the complex field of drug
manufacture and technology. A highly organized sector, the Indian Pharma Industry
is estimated to be worth $ 4.5 billion, growing at about 8 to 9 percent annually. It
ranks very high in the third world, in terms of technology, quality and range of
medicines manufactured. From simple headache pills to sophisticated antibiotics and
complex cardiac compounds, almost every type of medicine is now made
indigenously.

Playing a key role in promoting and sustaining development in the vital field of
medicines, Indian Pharma Industry boasts of quality producers and many units
approved by regulatory authorities in USA and UK. International companies
associated with this sector have stimulated, assisted and spearheaded this dynamic
development in the past 53 years and helped to put India on the ph armaceutical map
of the world.

The Indian Pharmaceutical sector is highly fragmented with more than 20,000
registered units. It has expanded drastically in the last two decades. The leading 250
pharmaceutical companies control 70% of the market with mark et leader holding
nearly 7% of the market share. It is an extremely fragmented market with severe
price competition and government price control .

The pharmaceutical industry in India meets around 70% of the country's demand for
bulk drugs, drug intermediates, pharmaceutical formulations, chemicals, tablets,
capsules, orals and injectibles. There are about 250 large units and about 8000
Small Scale Units, which form the core of the pharmaceutical industry in India
(including 5 Central Public Sector Units). These units produce the complete range of
pharmaceutical formulations, i.e., medicines ready for consumption by patients and
about 350 bulk drugs, i.e., chemicals having therapeutic value and used for
production of pharmaceutical formulations.

Following the de -licensing of the pharmaceutical industry, industrial licensing for

most of the drugs and pharmaceutical products has been done away with.
Manufacturers are free to produce any drug duly approved by the Drug Control
Authority. Technologically strong and totally self -reliant, the pharmaceutical industry
in India has low costs of production, low R&D costs, innovative scientific manpower,
strength of national laboratories and an increasing balance of trade. The
Pharmaceutical Industry, with its rich scientific talents and research capabilities,
supported by Intellectual Property Protection regime is well set to take on the
international market.

The Indian  pharmaceutical industry is the world's second-largest by volume and is

likely to lead the manufacturing sector of India. India's bio -tech industry clocked a 17
percent growth with revenues of Rs.137 billion ($3 billion) in the 2009 -10 financial
year over the previous fiscal. Bio -Pharma was the biggest contributor generating 60
percent of the industry's growth at Rs.8,829 crores, followed by bio -services at
Rs.2,639 crores and bio-agri at Rs.1,936 crores. The first pharmaceutical company
are Bengal Chemicals and Pharmaceutical Works, which still exists today as one of
5 government-owned drug manufacturers, appeared in Calcutta in 1930. For the next
60 years, most of the drugs in India were imported by multinationals either in fully-
formulated or bulk form. The government started to encourage the growth of drug
manufacturing by Indian companies in the early 1960s, and with the Patents Act in
1970, enabled the industry to become what it is today. This patent act removed
composition patents from food and drugs, and though it kept process patents, these
were shortened to a period of five to seven years. The lack of patent protection made
the Indian market undesirable to the multinational companies that had dominated the
market, and while they streamed out, Indian companies started to take their places.
They carved a niche in both the Indian and world markets with their expertise in
reverse-engineering new processes for manufacturing drugs at low costs. Although
some of the larger companies have taken baby steps towards drug innovation, the
industry as a whole has been following this business model until the present.

 1  

º 
23$ 4 India has a pool of personnel with high managerial and
technical competence as also skilled workforce. It has an educated work force
and English is commonly used. Professional services are easily available.

º #5$$ 1 ,
 +#-,##4 Its track record of development,

particularly in the area of improved cost -beneficial chemical synthesis for
various drug molecules is excellent. It provides a wide variety of bulk drugs and
exports sophisticated bulk drugs.

º  +) +
234 India has a 64 year old democracy and hence
has a solid legal framework and strong financial markets. There is already an
established international industry and business co mmunity.

º $
 )  ,+ -4 It has a good network of world-class educational

institutions and established strengths in Information Technology.
 º (++64 The country is committed to a free market economy and
globalization. Above all, it has a 70 million middle class market, which is
continuously growing.

º #+ 4 For the first time in many years, the international

pharmaceutical industry is finding great opportunities in India. The process of
consolidation, which has become a generalized phenomenon in the world
pharmaceutical industry, has started taking place in India . 






c+-##$ #-

|
The environment under which the Indian pharmaceutical industry is operating is
changing very slowly at present, but is likely to change significantly - and significantly
faster - in the future.

The Indian pharmaceutical industry grew at a very slow pace from 1947 to 1970,
largely due to the lack of incentives and the failure of the government to set -up a
concrete regulatory framework.

Today, the industry is characterized by numerous governmental regulations and

policy changes, stifling price controls, rigorous controls on formulations, and an
absence of international patent protection. During 1970, the Indian Patents Act (IPA)
and the Drug Price Control Order (DPCO) were passed. Although the DPCO acted
as a buffer against pharmaceutical companies making free pricing illegal, it fulfilled
the goal of providing quality drugs to the public at reasonable rates.

The introduction of the IPA - which did not recognize product patents but only
process patents - provided a major thrust to the industry and its companies, which,
through the process of reverse -engineering, began to produce bulk drugs and
formulations at lower costs. This led to high fragmentation in the industry, due to the
emergence of a number of small firms.
!-+-# 
,
   + #-
|
There are several national and international pharmaceutical companies that operate
in India. Most of the country's requirements for pharmaceutical products are met by
these companies. Some of them are briefly described below:

º 0-#
 is the biggest pharmaceutical manufacturing

company in India. The company is ranked at the 8th position among the
global generic pharmaceutical companies and has presence in 48 countries
including world class manufacturing facilities in 10 countries and s erves to
customers from over 125 countries. Ranbaxy Laboratories 2009 -2010 Q3 Net
Profit Results showed a profit of Rs 116.6 crores as compared to Rs 394.5
crores deficit, recorded during the corresponding period last fiscal.

º   -7# # manufactures and markets a wide range of
pharmaceuticals both in India and abroad. The company has 60 active
pharmaceutical ingredients to manufacture drugs, critical care products,
diagnostic kits and biotechnology products. The company has 6 FDA plants
that produce active pharma ingredients and 7 FDA inspected and ISO 9001
and ISO 14001 certified plants. Dr. Reddy's Q1 FY10 result shows the
revenues of the company at Rs. 18,189 million which is up by 21%. During
this quarter the company introduced 24 new gene ric products, applied for 22
new generic product registrations and filed 4 DMFs.

º + is an Indian pharmaceutical company renowned for the manufacture of

low cost anti AIDS drugs. The company's product range comprises of
anthelmintics, oncology, anti-bacterials, cardiovascular drugs, antibiotics,
nutritional supplements, anti -ulcerants, anti-asthmatics and corticosteroids.
Cipla also offers other services like quality control, engineering, project
appraisal, plant supply, consulting, commissioning and kn ow-how transfer,
support. For the financial year 2008 -09 the company registered an increase of
22% in sales and other income over the previous year.

º  ,+#

+ is the second largest pharmaceutical healthcare company
in India. The brands manufactured by the company include Gardenal, Ismo,
Stemetil, Rejoint, Supradyn, Phensedyl and Haemaccel. Nicholas Piramal has
entered into join ventures and alliances with sever al international corporations
like Cheissi, Italy; I AX Corp; UK, F. Hoffmann -La Roche Ltd., Allergan Inc.,
USA etc.
 º (+0 c
,3+ %(c!& is a United Kingdom based pharma company; it is
the world's second largest pharmaceutical company. The company's portfolio
of pharma products consist of central nervous system, respiratory, oncology,
vaccines, anti-infectives and gastro-intestinal/metabolic products among
others. On November 2009, the FDA had announced that the H1N1 vaccine
manufactured by GSK would join the list of the four vaccines approved.

º ü- #  + also known as Cadila Healthcare is an Indian pharmaceutical

company located in Gujarat. The company's 1QFY2010 results show the net
sales at Rs880.3cr which is higher than the estimated Rs773cr. T he net profit
was Rs124.8cr which was increase of 39%; the increase was on account of
higher sales and improvement in the OPM.

 7#
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,
   +3%89,#  : -9;;<& 


- c6%=++#& 3c,%>& (2,%>&

Total Pharma Market 6.9 100.0 9.9
Cipla .36 5.3 13.4
Ranbaxy .34 5.0 11.5
Glaxo Smithkline .29 4.3 -1.2
Piramal Healthcare .27 3.9 11.7
Zydus Cadila .24 3.6 6.8
Source: ORG IMS


  c |
With several companies slated to make investments in India, the future scenario of
the pharmaceutical industry in looks pretty promising. The country's pharmaceutical
industry has tremendous potential of growth considering all the projects that are in
the pipeline. Some of the future initiatives are:

º According to a study by FICCI-Ernst & Young India will open a probable US$
8 billion market for MNCs selling expensive drugs by 2015.
º The study also says that the domestic pharma market is likely to reach US$
20 billion by 2015.
º The Minister of Commerce estimates that US$ 6.31 billion will be invested in
the domestic pharmaceutical sector.
º Public spending on healthcare is likely to raise from 7 per cent of GDP in 2007
to 13 per cent of GDP by 2015.
º Dr Reddy's Laboratories has tied up with GlaxoSmithKline to develop and
market generics and formulations in upcoming markets overseas.
 º Lupin, a Mumbai based pharmaceutical company is looking to tap
opportunities of about US$ 200 million in the US oral contraceptives m arket.
º Due to the low cost of R&D, the Indian pharmaceutical off -shoring industry is
designated to turn out to be a US$ 2.5 billion opportunity by 2012.

„
|

|
|
To understand the implications of the environment on any industry it is imperative to
study the four cardinal influencers on the industry namely Political, Economic, Social
and Technological factors. It is rather unfortunate that in India these factors ha ve a
rather disproportionate influence on the functioning of a commercial organization.
From the days of independence the business environment has been overly regulated
by a handful of bureaucrats, middlemen, businessmen and politicians. Its only a
decade since the country has seen an emergence of a political thought that
encourages free enterprise. 2+ 
 ,   ?


„

 | |
|
1. Today there is political uncertainty in the air. A combination of diverse
political thought have got togethe r to cobble together a rag -tag coalition, that
is riddle with ideological contradictions. Therefore, any consistent political or
economic policy cannot be expected. This muddies the investment field.

2. The Minister in charge of the industry has been threatening to impose even
more stringent Price Control on the industry than before. This is throwing
many an investment plan into the doldrums.

3. DPCO which is the bible for the industry has in effect wo rked contrary to the
stated objectives. DPCO nullifies the market forces from encouraging
competitive pricing of goods dictated by the market. Now the pricing is
determined by the Government based on the approved costs irrespective of
the real costs.

4. Effective January, 2005 the country goes in for the IPR (Intellectual Property
Rights) regime, popularly known as the Patent Act. This Act will impact the
Pharmaceutical Industry the most. Thus far an Indian company could escape
paying a patent fee to the inventor of a drug by manufacturing it using a
different chemical route. Indian companies exploited this law and used the
reverse-engineering route to invent a lot of alternate manufacturing methods.
A lot of money was saved this way. This also encouraged competing
company to market their versions of the same drug. That meant that the
impurities and trace elements found in different brands of the same substance
were different both in qualification as well as in quantum.
 Therefore different brands o f the same medicine were truly different. Here
Branding actually meant quality and a purer brand actually had purer active
ingredient and lesser or less toxic impurities.

Product patent regime will eliminate all this. Now, a patented drug would be
manufactured using the same chemical route and would be manufactured by
the inventor or his licentiates using the chemicals with same specifications.
Therefore, all the brands of the same active ingredient would not have any
difference in purity and impuritie s. The different brands would have to
compete on the basis of non input-related innovations such as packaging,
color, flavors, Excipients etc.

This is the biggest change the environment is going to impose on the industry.
The marketing effort would be now focused on logistics, communications, and
economy of operation, extra-ingredient innovations and of course pricing.

5. In Pharma industry there is a huge PSU segment which is chronically sick and
highly inefficient. The Government puts the surpluses generated by efficient
units into the price equalization account of inefficient units thereby unduly
subsidizing them. On a long term basis this has made practically everybody
inefficient.

6. Effective the January, 2005 the Government has shifted from charging the
Excise Duty on the cost of manufacturing to the MRP thereby making the
finished products more costly. Just for a few extra bucks the current
government has made many a life saving drugs unaffordable to the poor.

7. The Government provides extra drawbacks to some units located in specified

area, providing them with subsidies that are unfair to the rest of the industry,
bringing in a skewed development of the industry. As a results Pharma units
have come up at place unsuitable for a best cost m anufacturing activity.

(1
1#

The government of India has undertaken several including policy initiatives and tax
breaks for the growth of the pharmaceutical business in India. Some of the measures
adopted are:

º Pharmaceutical units are eligible for weighted tax reduction at 150% for the
research and development expenditure obtained.
º Two new schemes namely, New Millennium Indian Technology Leadership
Initiative and the Drugs and Pharmaceuticals Research Program have been
launched by the Government.
º The Government is contemplating the creation of SR or special purpose
vehicles with an insurance cover to be used for funding new drug research.
º The Department of Pharmaceuticals is mulling the creation of drug research
facilities which can be used by private companies for research work on rent.
º
 
| |
|
º India spends a very small proportion of its GDP on healthcare (A mere 1%). This has
stunted the demand and therefore the growth of the industry.

º Per capita income of an average Indian is low (Rs. 12,890 ), therefore, spending on
the healthcare takes a low priority. An Indian would visit a doctor only when there is
an emergency. This has led to a mushrooming of unqualified doctors and spread of
non-standardized medication.

º The incidences of Taxes are very high. There is Excise Duty (State & Central),
Custom Duty, Service Tax, Profession Tax, License Fees, Royalty, Pollution
Clearance Tax, Hazardous substance (Storage & Handling) license, income tax,
Stamp Duty and a host of othe r levies and charges to be paid. On an average it
amounts to no less than 40 -45% of the costs.

º The number of Registered Medical practitioners is low. As a result the reach of

Pharmaceuticals is affected adversely.

º There are only 50, 00,000 Medical shop s. Again this affects adversely the
distribution of medicines and also adds to the distribution costs.

º India is a high interest rate regime. Therefore the cost of funds is double that in
America. This adds to the cost of goods.

º Adequate storage and tra nsportation facilities for special drugs are lacking. A study
had indicated that nearly 60% of the Retail Chemists do not have adequate
refrigeration facilities and store drugs under sub -optimal conditions. This affects the
quality of the drugs administe red and of course adds to the costs.

º India has poor roads and rail network. Therefore, the transportation time is higher.
This calls for higher inventory carrying costs and longer delivery time. All this adds to
the invisible costs. It¶s only during th e last couple of years that good quality highways
have been constructed.


,(2,c 

India's US$ 3.1 billion pharmaceutical industry is growing at the rate of 14 percent
per year. It is one of the largest and most advanced among the developing countries.

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

domestic pharmaceuticals industry output is expected to exceed Rs260 billion in the
financial year 2002, which accounts for merely 1.3% of the global pharmaceu tical
sector. Of this, bulk drugs will account for Rs 54 bn (21%) and formulations, the
remaining Rs 210 bn (79%). In financial year 2001, imports were Rs 20 bn while
exports were Rs87 bn.
 (


The pharmaceutical industry in India is among the most highly organized sectors.
This industry plays an important role in promoting and sustaining development in the
field of global medicine. Due to the presence of low cost manufacturing facilities,
educated and skilled manpower and cheap labor forc e among others, the industry is
set to scale new heights in the fields of production, development, manufacturing and
research. In 2008, the domestic pharma market in India was expected to be US$
10.76 billion and this is likely to increase at a compound an nual growth rate of 9.9
per cent until 2010 and subsequently at 9.5 per cent till the year 2015.

,
0#
In the recent years, despite the slowdown witnessed in the global economy, exports
from the pharmaceutical industry in India have shown good buoyancy in growth.
Export has become an important driving force for growth in this industry with more
than 50 % revenue coming from the overseas markets. For the financial year 2008 -
09 the export of drugs is estimated to be $8.25 billion as per the Pharma ceutical
Export Council of India, which is an organization, set up by the Government of India.
A survey undertaken by FICCI, the oldest industry chamber in India has predicted
16% growth in the export of India's pharmaceutical growth during 2009 -2010


  | |
|
1. Poverty and associated malnutrition dramatically exacerbate the incidence of
Malaria and TB, preventable diseases that continue to play havoc in India
decades after they were eradicated in other countries.

2. Poor Sanitation and po lluted water sources prematurely end the life of about 1
million children under the age of five every year.

3. In India people prefer using household treatments handed down for

generations for common ailments.

4. The use of magic/tantrics/ozhas/hakims is prevalent in India.

5. Increasing pollution is adding to the healthcare problem.

6. Smoking, gutka, drinking and poor oral hygiene is adding to the healthcare
problem.

7. Large joint families transmit communicable diseases amongst the members.

8. Cattle-rearing encourage diseases communicated by animals.

9. Early child bearing affects the health standards of women and children.
10. Ignorance of inoculation and vaccination has prevented the eradication of
diseases like polio, chicken -pox, small-pox, mumps and measles.

11. People don¶t go in for vaccination due superstitious beliefs and any sort of
ailment is considered as a curse from God for sins committed.

|
 
 | |
|
1. Advanced automated machines have increased the o utput and reduced the
cost.

2. Computerization has increased the efficiency of the Pharma Industry.

3. Newer medication, molecules and active ingredients are being discovered.

As of January 2005, the Government of India has more than 10,000
substances for patenting.

4. Ayurveda is a well recognized science and it is providing the industry with a

cutting edge.

5. Advances in Bio-technology, Stem-cell research have given India a step

forward.

6. Humano-Insulin, Hepatitis B vaccines, AIDS drugs and many such molecules

have given the industry a pioneering status.

7. Newer drug delivery systems are the innovations of the day.

8. The huge unemployment in India prevents industries from going fully

automatic as the Government as well as the Labor Unions voice complains
against such establishments.
c#c ,, #-

Indian companies need to attain the right product -mix for sustained future growth.
Core competencies will play an important role in determining the future of many
Indian pharmaceutical companies in the post product -patent regime after 2005.
Indian companies, in an effort to consolidate their position, will have to increasingly
look at merger and acquisition options of either companies or products. This would
help them to offset loss of new product options, improve their R&D efforts and
improve distribution to penetrate mark ets.

Research and development has always taken the back seat amongst Indian
pharmaceutical companies. In order to stay competitive in the future , Indian
companies will have to refocus and invest heavily in R&D.

The Indian pharmaceutical industry also needs to take advantage of the recent
advances in biotechnology and information technology. The future of the industry will
be determined by how well it markets its products to several regions and distributes
risks, its forward and backward integration capabilities, its R&D, its consolidation
through mergers and acquisitions, co -marketing and licensing agreements.

 #- #
º The pharma industry generally grows at about 1.5 -1.6 times the Gross
Domestic Product growth.

º Globally, India ranks third in terms of manufacturing pharma products by

volume.

º The Indian pharmaceutical industry is expected to grow at a rate of 9.9 % till

2010 and after that 9.5 % till 2015 .

º In 2007-08, India exported drugs worth US$7.2 billion in to the US and Europe
followed by Central and Eastern Europe, Africa and Latin America .

º The Indian vaccine market which was worth US$665 million in 2007 -08 is
growing at a rate of more than 20%.

º The retail pharmaceutical market in India is expected to cross US$ 12 -13

billion by 2012.

º The Indian drug and pharmaceuticals segment received foreign direct

investment to the tune of US$ 1.43 billion from April 2000 to December 2008.
,++ #

Every industry has its own sets of advantages and disadvantages under which they
have to work; the pharmaceutical industry is no exception to this. Some of the
challenges the industry faces are:

º Regulatory obstacles
º Lack of proper infra structure
º Lack of qualified professionals
º Expensive research equipments
º Lack of academic collaboration
º Underdeveloped molecular discovery program
º Divide between the industry and study curriculum

 #-c ,#
º Capital Investment in Technology: Owing to the availability of advanced
technology at low costs, the companies can produce drugs at lower costs.

º Cost Effective: The filing cost of ANDAS and DMFs is comparatively low for
the Indian companies.

º Manpower: There is a large pool of technical expe rts available at modest

salaries.

º Contract Research & Contract Manufacturing: There is a good scope for

contract research and contract manufacturing.

º Infrastructure: There is a well-developed infrastructure for the pharmaceutical

industry.

º Generic Drugs: In the last few years, the generic drug-manufacturing

segment has received huge investments, in the process making it more
competitive and efficient. 

 "c@'
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, $1+ #A, 
 
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$+-+3 # ,$2,6# /

Ranbaxy Laboratories Ltd. is one of the world¶s largest pharmaceutical

manufacturing companies. Ranbaxy headquartered in INDIA, is an integrated,
research based, international pharmaceutical company producing a wide range of
quality, affordable generic medicines, trusted by the healthcare professionals and
patients across geographies.

The company was founded in Amritsar in year 1937, when Ranjit Singh and Gurbux
Singh fused their names together to form Ranbaxy, accompany formed to distribute
medicine supplies by Japanese company Shionogi. It started as a distributor of
vitamins and anti-tuberculosis drugs. Bhai Mohan Singh joined the company as a
partner in 1952. rDIAZEPAM´ was the first product manufactured by Ranbaxy and
was most effective at that time to hit the Indian market and was vastly accepted.
Ranbaxy was established in June 16, 1961. In year 1973 Ranbaxy went public. After
the government¶s liberalization policy in year 1995, Ranbaxy was the 1 st Indian
company to become a MNC. Over the years, Ranbaxy has invested heavily and built
up considerable strength in manufacturing and marketing. Currently it has 14,000
strong team over 50 nationalities with sales over a 1 25 countries and manufacturing
in 7 countries.

Earlier in June 2008, Ranbaxy entered into an alliance with one of the largest
Japanese innovator companies, rDAIICHI SANKYO´. And the combined entity will be
catapulted to the no. 15 th position in the global pharmaceutical space. The company
is steadily moving towards its vision of becoming a 5 billion dollar company by the
year 2012. µDr. Tsutomu Une¶ and µMr. Arun SawhneyA| are the rChairman and
C.E.O´ of Ranbaxy respectively.



 C #

On June 11 2008, rDAIICHI SANKYO´ acquired a 34.8% stake in Ranbaxy, for a

value $2.4 billion. In November 2008, rDAIICHI SANKYO´ completed the takeover of
the company from the founding Singh family in a deal worth $4.6 billion by acquiring
a 63.92% stake in Ranbaxy. 

The addition of Ranbaxy Laboratories extends Daiichi -Sankyo's operations - already

comprising businesses in 21 countries. For Ranbaxy, the deal frees up its deb t and
imparts more flexibility into its growth plans. The combined company is worth about
$30 billion.
 c
|||

| | |

# 
'  c2,- 3#,c, 

Chairman Managing Director Non Executive &
Non Executive & Non Independent
| |

Non Independent Director

Director
| |

| |

| | |

,-"*+  #,@c,, 3,*

Independent Director Independent Director Independent Director
| | |

| |

| |
|


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Independent Director
|

##)@#

Ranbaxy's mission is µTo become a Research-based International Pharmaceutical

Company¶. The Company is driven by its vision to µAchieve significant business in
proprietary prescription products by 2012 with a strong presence in developed
markets¶.
c

º Employees are not just the resources, they are the very purpose. 
º Company hires the total men with body, mind and intellect, not just the hand. 
º Aim is to utilize the full potential of all employees. 



@'c

º Achieving customer satisfaction is fundamental of business.

º Provide products and services of the highest quality.

º Practice dignity and equity in relationship and provide

opportunities for our people to realize their full potential.

º Ensure profitable growth and enhance wealth of the shareholders.

º Foster mutually beneficial relations with all our business partners.

º Manage our operations with high concern for safety and environment.

º Be a responsible corporate citizen.



 +#

Ranbaxy was incorporated in 1961 and went public in 1973. For the year 2009, the
Company recorded Global Sales of Rs.73,441 Mn. ( US $ 1519 Mn). The Company
has a balanced mix of revenues from emerging and developed markets that
contribute 54% and 39% respectively. In 2009, North America, the Company's
largest market contributed sales of US $ 397 Mn, followed by Europe garnering US $
269 Mn and Asia clocking sales of around US $ 441 Mn. Earnings before tax were at
Rs.10,098 Mn. (US $ 209 Mn.) and earnings before tax were at Rs.3,107 Mn. (US $
64 Mn.), representing 4% margin to sales.

0-  ,1# 'c 8 ++ 1    'c 9D9 

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$  F8#+#AF9 2,99>

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º Consolidated sales were at USD 458 Mn (Rs 21,029 Mn), a growth of 22%
over Q2¶09. [Q2¶09: USD 368 Mn (Rs. 17,953 Mn)].
º Earnings before Interest, Tax, Depreciation & Amortization (EBIT DA) was at
USD 90 Mn (Rs. 4,168 Mn), a margin of 20% to sales. [Q2¶09: USD 11 Mn
(Rs. 568 Mn)].
º Profit after tax was USD 72 Mn (Rs. 3,320 Mn), a margin of 16%. [Q2¶09:
USD 139 Mn, (Rs. 6,931 Mn)]. Operational PAT, i.e. PAT excluding forex and
exceptional items was USD 100 Mn (Rs. 4,574 Mn). [Q2¶09: USD 2 Mn (Rs.
93 Mn)].

 +
$
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º Consolidated sales were at USD 999 Mn (Rs 45,931 Mn), a growth of 42%
over H1¶09. [H1¶09: USD 682 Mn (Rs. 33,537 Mn)].

º Earnings before Interest, Tax, Depreciation & Amortization (EBITDA) was

USD 313 Mn (Rs. 14,410 Mn), a margin of 31% to sales. [H1¶09: USD 2 Mn
(Rs. 106 Mn)].

º Profit after tax was USD 282 Mn (Rs. 12,951 Mn), a margin of 28%. [H1¶09:
loss of USD (14) Mn, (Rs. (679) Mn)]. Operational PAT, i.e. PAT excluding
forex and exceptional items was USD 205 Mn (Rs. 9,442 Mn). [H1¶09: USD
(13) Mn (Rs. (639) Mn)].

!-" ,+ ,#H1+
#

º The Company¶s operating margins improved during the Quarter vis -à-vis
corresponding previous quarter, on account of sales of First -to-File (FTF)
products in the USA, and balanced growth across markets.
º Most markets/businesses grew during the Quarter with robust growth across
some of the Company¶s key markets/ businesses, including USA; Europe, led
by Romania; CIS led by Russia, and India.
º To sharpen its focus on generics, the Company reached an agreement to
transfer its New Drug Discovery Research assets, to Daiichi Sankyo India
Pharma Pvt. Ltd (DSIN).
º Ranbaxy launched Atorvastatin in Canada and South Africa. The launch in
Canada was under the Company¶s global settlement with Pfizer. In South
Africa, Ranbaxy was the first to launch a generic version in the market.
 º alacyclovir, an FTF product in the USA, achieved a peak market share of
74% before the end of exclusivity during the Quarter.
º The Company introduced Daiichi Sankyo¶s innovative anti -platelet drug
PrasitaΠ(Prasugrel), in India. During the Quarter, Ranbaxy launched 31 new
products in India, including 3 in -licensed products.
º The Company made 32 filings and received 35 approvals for dosage forms
during the Quarter. For APIs, a total of 19 (15 APIs) filings were made, and 32
(15 APIs) approvals were received.
º The Company continues to co-operate with the US FDA and the Departmen t
of Justice, for early resolution of all outstanding issues. The Company¶s
facilities underwent inspections by other regulators, and Ranbaxy remains
compliant for supply.
º During the Quarter, emerging markets recorded sales of USD 230 Mn, a
growth of 6%, and contributed about 50% to global sales. Sales in developed
markets amounted to USD 203 Mn, a growth of 63%.
º North America region recorded sales of USD 160 Mn (Rs. 7,376 Mn) for the
Quarter, a growth of 100%. For H1¶10, revenues amounted to USD 424 Mn
(Rs. 19,482 Mn), a growth of 162% over the previous year, on the back of a
successful launch of alacyclovir.
º Europe recorded sales of USD 69 Mn (Rs. 3,195 Mn), a growth of 15% during
the Quarter. For H1, sales were at USD 137 Mn (Rs. 6,295 Mn), up 13% from
the previous year. In Romania, the growth momentum continued during the
Quarter, and the Company posted a strong increase of 27%, in revenue,
during Q2¶10.
º India sales were at Rs. 4,487 Mn (USD 98 Mn), almost at the same level as
previous corresponding quarter. Excluding tenders, sales grew by 11% during
the same period. For H1¶10, sales were at Rs. 8,375 Mn (USD 183 Mn).
Continuing its healthy performance, the Consumer Healthcare business
recorded a growth of 24% during H1¶10 and attained No. 1 rank in its
represented market during the Quarter.
º The CIS region recorded sales of USD 20 Mn (Rs. 927 Mn), a growth of 33%.
For H1¶10, sales were at USD 44 Mn (Rs. 2,024 Mn), up by 29% from
previous year.
º The Africa  region achieved sales of USD 39 Mn (Rs. 1,774 Mn), a growth of
6% during the Quarter. For H1¶10, sales were at USD 77 Mn (Rs. 3,544 Mn),
up 16% from the previous year.
º The API business recorded sales of USD 26 Mn (Rs. 1,197 Mn), and USD 51
Mn (Rs. 2,362 Mn) for H1¶10.
º Rest of the World sales were at USD 45 Mn (Rs. 2,072), a de-growth of 11%.
For H1¶10, sales were at USD 83 Mn (Rs. 3,849 Mn), a de-growth of 10%.
This was largely on account of divestment of certain businesses in China and
Japan. Growth, excluding divested businesses, was 8% for the Quar ter.


c -

Ranbaxy is focused on increasing the momentum in the generics business in its key
markets through organic and inorganic growth routes. Growth is well spread across
geographies with focus on developed and emerging markets. It is the Company¶s
constant endeavor to provide a wide basket of generic and innovator products,
leveraging the unique Hybrid Business Model with Daiichi Sankyo. The Company will
also increasingly focus in high growth potential segments like accines and
Biogenerics. These new areas will add significant depth to the existing product
pipeline. 

)

Ranbaxy views its R&D capabilities as a vital component of its business strategy that
will provide a sustainable, long -term competitive advantage. The Company has a
pool of over 1,200 R&D perso nnel engaged in path -breaking research.

Ranbaxy is among the few Indian pharmaceutical companies in India to have started
its research program in the late 70's, in support of its global ambitions. A first -of-its-
kind world class R&D centre was commissioned in 1994. Today, the Company has
multi-disciplinary R&D centers at Gurgaon, in India, with dedicated facilities for
generics research and innovative research. The R&D environment reflects its
commitment to be a leader in the generics space offering value added formulations
and development of NDA/ANDAs, based on its Novel Drug Delivery System (NDDS)
research capability.

The NDDS research at Ranbaxy focuses on maximizing the overall therapeutic and
commercial value of commonly prescribed pharmaceutical form ulations by
enhancing their performance and reducing their adverse event profile. Such
innovation also helps to improve the overall patient convenience and compliance .

The company's NDDS focus is mainly on the development of New Drug Applications
(NDA) / Abbreviated New Drug Applications (ANDAs) of oral controlled - release
products for the regulated markets. The Company's first significant international
success using the NDDS technology platform came in September 1999, when
Ranbaxy licensed its once-a-day Ciprofloxacin formulation on a worldwide basis to a
multinational Company.

Ranbaxy's in-house NDDS programs are primarily focused on the oral segment.
Inhalation (patented devices) and trans -dermal (patented adhesive polymers)
programs are also being pursu ed through collaborations.

In the oral NDDS space, Ranbaxy has already developed four platform technologies
namely Gastro Retentive, Modified Matrix, Multiparticulate and Aero Gel. Several
products leveraging these technologies have been successfully developed.
In July 2010, Ranbaxy¶s New Drug Discovery Research (NDDR) was transferred to
Daiichi Sankyo India Pharma Private Limited as part of the strategy to strengthen the
global Research and Development structure of the Daiichi Sankyo Group. While
NDDR will now become an integral part of Daiichi Sankyo Life Science Research
Center in India, based in Gurgaon, Ranbaxy will continue to independently develop
and later commercialize the anti -malarial new drug, Arterolane + PQP, which is
currently in Phase III trials, and will also explore the further development of late
stage programs developed by NDDR in the last few years, including the
development programs in the GSK collaboration.

Within Ranbaxy, R&D of Generics will now get a sharper focus, as the Compa ny is
increasingly working on more complex and specialist areas. 

+

The Company¶s business philosophy based on delivering value to its stakeholders

constantly inspires its people to innovate, achieve excellence and set new global
benchmarks. Driven by the passion of it¶s around 14,000 strong multicultural
workforce comprising of over 50 nationalities, Ranbaxy continues to aggressively
pursue its mission µTo become a Research -based International Pharmaceutical
Company¶.
 cI''@


c +##+-%c&

Corporate Social Commitment and Public Service is deeply embedded into the
cultural fabric of Ranbaxy. Over the years serious efforts have been directed towards
making a meaningful contribution to uplifting and transforming the lives of the
underprivileged . The Company is also extremely conscious of its duty and
responsibility towards the environment. We continue to make sincere efforts to
promote good health, social development and better environment, through various
Company programs that contribute to sustainable, all round growth.

In 1978, in the wake of the grim health scenario in India, Ranbaxy realized the
urgency to reach out to the underprivileged sections of society that had little or no
access to basic healthcare. The Company took a conscious decision to contribute
towards the national objective rHealth for All´. Towards this end, the rRanbaxy Rural
Development Trust´ was set up and the first well equipped mobile healthcare van
was introduced, in certain underserved areas of Punjab. As the programm e grew,
the Ranbaxy Community Healthcare Society (RCHS), an independent body, was
created, that is devoted to the health of the disadvantaged. Today, multiple well
equipped mobile healthcare vans and an urban family welfare centre, run by
Ranbaxy, benefit over 2 lakh people, in certain identified areas in the states of
Punjab, Haryana, Himachal Pradesh, Madhya Pradesh and Delhi. The programme is
based on an integrated approach of preventive, promotive and curative services,
covering areas of maternal child health, family planning, reproductive health,
adolescent health, health education including AIDS awareness.

During 2009, maternal and infant mortality were the focus of particular attention and
efforts in these areas were intensified in RCHS serviced area s. The results of these
interventions have been most encouraging and the general health profile of the local
community has shown further improvement in terms of coverage for immunization,
vitamin A deficiency and family planning. The problem of malnutritio n has been
addressed to a large extent and birth rates and infant mortality rates have declined
substantially. Amongst women, the risk of mortality due to pregnancy or child birth
has also been reduced when compared with the prevailing level of risk, in In dia and
other developing countries.

Ranbaxy has also dovetailed its CSR efforts in a manner that is synchronous with
the larger health goals of the State and Central Government. RCHS continued to
work actively on critical issues related to HI /AIDS, tuber culosis, malaria, polio, no
communicable chronic diseases and female foeticide. RCHS also continued its
partnership with the oluntary Health Association of Punjab for the project on
Reproductive Child Health (RCH), in the districts of Nawanshahar and Fate hgarh
Sahib, in Punjab and achieved the targets set under the RCH -II plan, of the
Government of India. Ranbaxy has entered into a Public Private Partnership (PPP)
with the Punjab State Government, to deliver healthcare services in identified
districts of Punjab.
c1 #
1 

º Maternal &Child health

› Antenatal Care
› Immunization ± (Tuberculosis, Diphtheria, Polio, Whooping Cough,
Tetanus & Measles)
› Growth Monitoring
› Safe Motherhood
› Post natal care
› Family Planning
› Sterilization (Referral and follow up)
› Provision of Family Planning Methods (Copper T, Oral Pills, Condoms)

º Prevention and Treatment of Sexually Transmitted Diseases & Reproductive

Tract Infections.

º Health Education including AIDS awareness .


''(


 $    

Ranbaxy established their plants in India at following locations:

1) Paonta Sahib (Himachal Pradesh)

2) Gurgaon (Haryana)
3) Devas (Madhya Pradesh)
4) Mohali (Punjab)
5) Tosana (Punjab)
6) Jejury (Maharashtra)
7) Goa
8) Baddi (Himachal Pradesh)
 $   1##

Some of the Ranbaxy plants are established in other countries:

1) U.S.A.
2) Ireland
3) Nigeria
4) China
5) Thailand
6) Malaysia

Ranbaxy has an expanding international portfolio of affiliates, joint ventures and

representative offices across the globe with a presence in to p 10 Pharma markets of
the world such as USA, Japan, Germany, France, UK, Italy, Spain, Canada, China
and Mexico along with strong operations in India, Brazil and South Africa.
Additionally, it has presence in 21 of the 25 European countries.

The efforts towards internationalization and expansion backed Ranbaxy¶s that

sustainable growth in the industry can be achieved only through continuous pursuit
of innovation. The company had successfully created a culture and infrastructure for
cutting-edge discovery, research with continued emphasis on invention research and
focused initiatives in New Drug Discovery (NDD) and Novel Drug Delivery System
(NDDS). This has reinforced the company¶s image as a research driven international
organization.

("F'c

º GURGAON [INDIA]

º JOHANNESBURG [SOUTH AFRICA]

º LONDON [UK]

º NEW JERSEY (USA)

º RIO DE JANERIO [BRAZIL]

 !(



!(c

º DOULA (CAMEROON)

º KIE (UKRAINE)

º HO CHI MINH CITY ( IETNAM)

º MOSCOW [RUSSIA]

º KAUNAS [LITHUANIA]

º NAIROBI [KENYA]

º ABIDJAN [I ORY COAST]

º YANGON [MYANMAR]

º ALMATY [KAZAKHSTAN]

º DUBAI [UAE]

º HARARE [ZIMBA E]

º CASABLANCA [MOROCCO]

º SOFIA [BULGARIA]



'c

Using the finest R&D and Manufacturing facilities, Ranbaxy Laboratories Limited
manufacture and markets generic pharmaceuticals, value added generic
pharmaceuticals, branded generics, active Pharmaceuticals (API) and intermediates.

The Company remains focused on ascending the value chain in the marketing of
pharmaceutical substances and is determined to bring in increased revenues from
dosage forms sales.

Ranbaxy's diverse product basket of over 5,000 SKUs available in over 125
countries worldwide encompasses a wide therape utic mix covering a majority of the
chronic and acute segments. Healthcare trends project that the chronic treatment
segments will outpace the acute treatment segments, primarily driven by a growing
aging population and dominance of lifestyle diseases. Our robust performance in
Cardiovasculars, Central Nervous System, Respiratory, Dermatology, Orthopaedics,
Nutritionals and Urology segments, clearly indicates that the Company has
strengthened its presence in the fast-growing chronic and lifestyle disease
segments.



8;
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º al acyclovir
º Simvastatin
º Co-Amoxyclav
º Ciprofloxacin and Combinations
º Amoxicillin and Combinations
º Isotretinion
º Ketorolac Tromethamine
º Loratadine and Combinations
º Ginseng + itamins
º Atorvastatin and Combinations
cc

º Project r IRAAT´ was launched to achieve top slot in the market.

º Sales for the year 2009 in domestic market were US $ 1.52 Bn (Rs 7,344
crores); PBT was US $ (Mn (over RS 1000 crores); PAT was US $64 Mn (Rs
311crores).

º Ranbaxy delivers global sa les for the year 2009 was US $ 1519 Mn (Rs
73,441 Mn) which reflects a modest growth over 2008 sales of RS. 72,555
Mn. There was a turnaround in the profitability of the company with Earnings
before Interest Tax Depreciation and Amortisation (EBITDA) for t he year 2009
at Rs. 11,991 Mn against a loss of Rs. 2,626 Mn for the year 2008. Where
emerging markets contributed 54% of sales, while developed markets
accounted for 39% and API was 7%.

3c,
Ranbaxy is one of the leading pharmaceutical Companies in India
commanding a market share of around 5%. The Company has clocked sales
of USD 293 Mn in 2009 in India. Growing ahead of the market, the Company
has enhanced its competitive position in the dome stic market through its
focused approach. The Company¶s business has been realigned to its
customer groups and investments have been made in high growth segments.
These efforts have resulted in strengthening its Chronic franchise (Life Style
led) as well as has reinforced its leading position in the Acute segment.

Ranbaxy is a strong player in the Novel Drug Delivery System (NDDS)

||
| segment. Its product portfolio spans across Acute & Chronic Business covering
Anti-infectives, Nutritionals, Gastro-intestinal, Pain Management (Acute)
Cardiovasculars, Dermatological, Central Nervous Systems (Chronic)
segments.

Company¶s India operations are a dominant force in a number of participating

therapeutic segments, for example Anti-infectives, Statins, Dermatology and
Pain Management. A publicly listed company, Ranbaxy India is also a member
of IPA (Indian Pharmaceutical Alliance) & OPPI (Organization of
Pharmaceutical Producers of India). |
||| ||
 (++#
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Moving up the value chain, Ranbaxy identified Consumer Healthcare as its

new business area in the year 2001. Subsequently, Ranbaxy Global
Consumer Healthcare (RGCH) business was initiated with the launch of 4
brands: Revital, Pepfiz, Gesdyp and Garlic Pearls.
These brands had a strong equity with consumers and represented the
leading common ailment categories like MS ( itamins & Minerals
Supplement), this portfolio was carefully crafted for the introduction of
Ranbaxy's consumer healthcare business in India.
Subsequently in 2004, RGCH launched its first herbal range of products
through New Age Herbals (NAH), with products offering remedies in
categories of Cough & Cold (Olesan Oil & Cough Syrups) and Appetite
Stimulant (Eat Ease).
In 2005, another popular brand, Chericof ± The complete cough formula was
introduced.
During 2009, the business registered sales of US $ 44 Mn registering a
growth of 12%.
Revital, the flagship brand continues to maintain leadership in its segment.

,2+

RGCH has chosen a unique Business Communication platform '|


|

|which is an integrated communication program targeted
at doctors at one end and consumers at the other.
In line with this approach, the business continues to reach out to the Doctors
to generate prescriptions flow and enhance doctor endorsements for RGCH
brands. Simultaneously consumer communication and widespread
availability of the product has helped in enhanced coverage
This Rainbow Coalition effort has resulted in sales and prescription growth .


c+# # 

RGCH pursued a differentiated sales & distribution Strategy of engaging,

FMCG distributors for its products, a first of its kind attempt at Ranbaxy.
The distribution infrastructure of RGCH continues to grow with about 600
Distributors and Distributor Sales Representatives (DSRs) represen ting
RGCH in the Indian market.

, , I$  +#

Organic and inorganic growth is planned through strategic alliances and/or

acquisitions in the large and exciting OTC and Herbal markets. These
expansions will serve the consumer and enhance value for its stakeholders
In its first phase of geographical expansion, RGCH continues to focus on
µgrowth countries¶ which include Russia, Ukraine, Romania, ietnam,
Myanmar and Malaysia. The next stage of expansion is planned in Central and
East European countries.
("
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c
 
 ( 
 ,  #


CHERICOF Complete Cough CCA - Cough, Cold &
1
COUGH SYRUP Syrup for family Allergy
CHERICOF Cough remedy CCA - Cough, Cold &
2
SOFTGEL capsules Allergy
Appetite enhancer-
3 EATEASE GI - Gastro-intestinals
Children (Herbal)
Garlic oil for all round
4 GARLIC PEARLS GI - Gastro-intestinal
health
5 GESDYP Digestive Enzymes GI - Gastro-intestinal
CCA - Cough, Cold &
6 OLESAN GEL Cold rub (Herbal)
Allergy
OLESAN Cough & sore throat CCA - Cough, Cold &
7
LOZENGES cure ( Herbal) Allergy
Nasal decongestant oil CCA - Cough, Cold &
8 OLESAN OIL
(Herbal) Allergy
Effervescent digestive
9 PEPFIZ GI - Gastro-intestinal
enzymes
RE ITAL Ginseng, vitamins & MS- itamins, Minerals
10
SOFTGELS minerals & Supplements
Ginseng, vitamins & MS- itamins, Minerals
11 RE ITAL LIQUID
minerals & Supplements
Soy Protein MS ± itamins,
12 RE ITALITE
Supplement Minerals & Supplements
Complete Pain relief
13 OLINI GEL ANALGESIC-Topical
Gel
Complete Pain relief
14 OLINI SPRAY ANALGESIC-Topical
Spray
Complete Pain relief
15 OLINI TABS ANALGESIC-Oral
tabs
 c*cc


c ,#

º Low cost of production.

º Large pool of installed capacities

º Efficient technologies for large number of Generics.

º Large pool of skilled technical manpower.

º Increasing liberalization of government policies.

*3##

º Low technology level of Capital Goods of this section.

º Non-availability of major intermediaries for bulk drugs.

º Lack of experience to exploit efficiently the new patent regime.

º ery low key R&D.

º Low share of India in World Pharmaceutical Production

º ery low level of Biotechnology in India and also for New Drug Discovery
Systems.

º Lack of experience in International Trade.

º Low level of strategic planning for future and also for technology forecasting.




 -

º Aging of the world population

º Growing incomes.
º Growing attention for health.
º New diagnoses and new social d iseases.
º Spreading prophylactic approaches.
º Saturation point of market is far away.
º New therapy approaches.
º New delivery systems.
º Spreading attitude for soft medication (OTC drugs).
º Spreading use of Generic Drugs.
º Globalization
º Easier international trading.
º New markets are opening.

,#

º Containment of rising health -care cost.

º High Cost of discovering new products and fewer discoveries.
º Stricter registration procedures.
º High entry cost in newer markets.
º High cost of sales and marketing.
º Competition, particularly from generic products. 
º More potential new drugs and more efficient therapies.
º Switching over form process patent to product patent.
 0-# 
c,



R 0-
+@++( 2+

º The plant of Ranbaxy Laboratories Ltd. (RLL) at Paonta Sahib was

established in year 1992. The location of the plant is spread over an area of
46 acres and is situated at village Ganguwala, near town Paonta Sahib. It is
surrounded by agricultural land on three side and river Yamuna on fourth side.

º The plant consists of two divisions :

a) Pharma Manufacturing Division
b) Fermentation Division

º The Pharma division is further divided into Administrative Block, Quality

Control Lab., Tablet and Capsule Block, Maintenance Depa rtment,
Warehouse, Packaging Lab., Soft Gel Block and Water Purification Plant.

º The Fermentation division is divided into Quality Control, Production

Department and Warehouse.

º Block µA¶ is used exclusively for manufacturing tablet products with an instal led
capacity of 240 million capsules per annum.

º Access to warehouse from both the blocks is through the separating corridors
and air locks.

º The persons working in various departments can be immediately identified by

the colour of uniform they wear.

º The access to warehouse from both the blocks is through the separating
corridors and air locks.

º The ranges of products which are manufactured in this plant are Quinolines,
Anti-Bacterial and Anti-Histamines.

º 90% of products which are manufactured in this pl ant are exported to various
countries like USA, U.K., Spain and Canada.
 $    #

This plant is licensed by the Department of Health and Family Welfare, Government
of Himachal Pradesh, the official licensing authority to manufacture and pack various
formulations (tablet and capsule dosage forms).



 #

The tablet products manufactured include a range of products like Quenelle
Antibacterial, Anti-Histaminic and Anti-Ulcerative. The brand names and the generic
names of the products are as under:-

+


º CIFRAN (CIPROFLOXACIN)
º HISTAC (RANITIDINE)
º NORBACTINE (NORFLOXACIN)
º TREXYL (TEREFENADIE)
º CLAMPOSE (DIAZEPAM)
º REXPAR
º PYLOBACT
º OPLOXACIN (OFLOXACIN)
º CIPRO ± OD (HISINOPREL MONOHYDRATE)



c(+ 3

º RE ITAL CAPSULES
º CHERRICOF SOFTGEL CAPSULES
º TARAXOCIN CAPSULES
º ISOTRETINOIN CAPSULES
º GARLIC PEARLS CAPSULES
º GINSENA CAPSULES



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º The second plant of Ranbaxy Laboratories Ltd. (RLL) is situated in village

Batamandi, city Paonta Sahib. RLL Batamandi was established in year 2005
and started manufacturing in year 2008. It is surrounded by agricultural land
on three side and river µBata¶ on fourth side.

º The plant is further divided into Administrative Block, Quality Control Lab.,
Tablet and Capsule Block, Maintenance Department, Warehouse, Packaging
Lab. And Effluents Treatment Plant (ETP).

º Access to warehouse from both the blocks is through the separating corrid ors
and air locks.

º The persons working in various departments can also be immediately

identified by the colour of uniform they wear.

º All the products manufactured in this plant are exported to the foreign markets
like USA, FRANCE, JAPAN and CANADA.

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The tablets and Capsules products manufactured there include a range of products
which are very costly in terms of money. As the API (Active Pharmaceutical
Ingredients) costs from Rs 80 lakhs to Rs 1.5 crores per kg. All the products are
manufactured for the foreign markets. The products manufactured are for the
treatment of µCancer¶ and for µLungs & Liver Transplant¶ the brand names and the
markets of the products are as under: -

S.no. Name of the Product Marketed

1 Sirolimus Tablets (0.5 mg) U.S.A.
2 Mycophenolate Mofetil Tablets (500 mg) Canada
3 Tacrolimus Capsules (0.5, 1, 5 mg) U.S.A.
4 Bicalutamide Tablets (50 mg) U.S.A., Japan
5 LetrozoleTablets (0.5 mg) France

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An organization¶s goals can be achieved only when people put in their efforts. How
to ascertain whether an employee has shown his or her best performance on a given
job?

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  #+ . Employee assessment is one of the
fundamental jobs of HRM, but an easy one though.

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A formal definition of Performance Appraisal is:

It is the systematic evaluation of the individual with respect to his or her performance
on his or her potential for the development.

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Performance appraisal is formal, structured system of measuring and evaluating an
employee¶s job.
Related behavior and outcome to discover how and why employee is presently
performing on the job and how the employee can perform more effectively in the
future so that the employee, organization, and society all benefits.

The #   $ includes employees behavior as part of the assessment.

Behavior can be active or passive. ± do something or do nothing. Either way
behavior affects the job result.

The other terms used for the performance appraisal are :

º Performing rating
º Employees assessment
º Employees performance review
º Personnel appraisal
º Performance evaluation
º Employees evaluation
º Merits rating
  3   

1. The concept of Performance Appraisal dates back to the First World War and was then
called rMerit Rating Programme´. Over a period of time, this concept has been through an
ocean of change. The areas of evaluation have also changed.
2. According to Carl Heyel, author/editor on management, philosopher and teacher,
rperformance appraisal is the process of evaluating the performance and qualifications of
the employees in terms of job requirements, for administr ative purposes such as
placement, selection and promotion, to provide financial rewards and other actions which
require differential treatment among the members of a group as distinguished from actions
affecting all members equally´.

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1. A few decades ago, the employee used to be appraised by his department head. The
department head used to communicate his feedback and comments only to the immediate
superior of the employee. Thus the feedback was kept confidential in nature. As time
passed by, the immediate superior started appraising his subordinate¶s performance and
sending his confidential report to the department head. These were the periods when the
employee was not included in his appraisal process. The decisions used to be taken by his
superiors relating to his pay hike, promotion etc. Thus the system was non -transparent.

2. The current process of performance appraisal is much more open and gives some scope
for self-appraisal by the employee. The self -appraisal is followed by a joint discussion wit h
superior and then a decision is taken by the department head on his promotion, pay hike
etc. The feedback relating to his performance is directly given to the employee. Thus
performance appraisal process has gone through the phase of non -transparency to
transparency 




 

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º This provides an opportunity for discussion of career objectives, and creation

of a strategy designed to maximize career potential.
º To provide an opportunity for career counselling
º To help in succession planning.
º To assess training needs
º To plan for career development
º To assess and develop individual abilities
º To provide an objective basis on which to base decisions about training and
promotions.
9  3

º As well, feedback is encouraged in both directions: as such, employees are

encouraged to prepare ratings of their supervisors.
º To provide constructive feedback to the individual regarding how their
performance is seen.
º This provides a structured format for the discussion of performance issues on
a regular basis.
º Feedback either reinforces performance strengths, or provides the
opportunity to discuss resolution of performance deficiencies.

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º Salary
º Promotion
º Retention/termination
º Recognition of performance
º Layoffs
º Identification of poor performers


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º This provides a performance history which is not dependent upon human

memory, and which may be useful in the full range of personnel decisions,
including compensation decision-making.
º To review past and present performance, identifying strengths and
weaknesses.

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º To clarify, for the individual, organizational expectations

º This provides an opportunity to view one¶s performance in the context of
broader organizational goals.
º To assess future promotion prospects and potential
º To set objectives for the next period


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º This provides an opportunity for clearer articulation and definition of

performance expectations.

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º Documentation for HR decisions

º Helping to meet legal requirements

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Data relating to performance assessment of employees are recorded, stored, and

used for several purposes .The main purposes of employee assessment are:

1. To effect promotions based on competence and performance.

2. To confirm the services of probationary employees upon their completing the

probationary period satisfactorily.

3. To assess the training and development needs of employees.

4. To decide upon a pay raise where (as in the unorganized sector) regular pay
scales have not been fixed.

5. To let the employees know where they stand insofar as their performance is
concerned and to assist them with constructive criticism and guidance for the
purpose of their development.

6. To improve communication, Performance appraisal provides a format for

dialogue between the superior and the subordinate, and improves
understanding of personal goals and concerns. This can also have the effect of
increasing the trust between the rater and the ratee.

7. Finally, performance appraisal can be used to determine whether HR

programmes such as selection, training, and the transfers have been effective
or not.


Broadly, performance appraisal serves four objectives ±

i. Developmental uses.
ii. Administrative decisions.
iii. Organizational objectives.
iv. Documentation purposes.

Table outlines these and specific uses more clear:

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1 Developmental Issues Identification of individual needs, feedback,
transfers and job assignments. Identification of
individual strengths and developmental needs. 
2 Administrative Decisions Salary, Promotions, Retentions or Terminations,
Lay-offs etcj|
3 Organizational HR Planning, Evaluation of Organizational Goal
Objectives achievement, Information for Goal identification
etc.
4 Documentation Criteria for validation research documentation for
Purposes HR decisions helping to meet legal requirements. 



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The objectives of performance appraisal, listed above, point out the purposes which
such an exercise seeks to meet. What needs emphasis is that performance
evaluation contributes to firm¶s competitive strength. Besides encouraging high
levels of performance, the evaluation systems helps identify employees with
potential, reward performance equitably and determine employee¶s need for training.

Specifically, performance appraisal helps an organization gain competitive edge in

the following way:

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1. 
1 
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 4 An effective appraisal system can contribute to
competitive advantage by improving employee job performance in two ways -
by directing employee behaviour towards organizational goals, as was done
by the second beekeeper and by monitoring that behaviour to ensure that the
goals are met.
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  3     ##4 As stated above, appraisal is a critical input in
making decisions on such issues as pay raise, promotion, transfer, discharges
and completion of probationary periods. Right decision on each of these can
contribute to competitive strength of a firm. If promotion, for example, is made
on performance, the promotee feels motivate to enhance his or her
performance.|

3. 
# :###$   14 Employees tend to become

emotional and frustrated if they perceive that the ratings they get are unfair
and inaccurate. Such employees find that the efforts they had put in became
futile and obviously get demotivated.

Dissatisfaction in the job sets in and one of the outcomes of job dissatisfaction
is increased turnover. Fair and accurate results appraisal results in high
motivation and increased job satisfaction. An organization having satisfied
and motivated employees will have an edge over its competitors.

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  #+4  Although
Performance appraisal activities which are clearly instrumental in achieving
corporate plans and long -term growth, typical appraisal systems in most
organizations have been focused on short -term goals.

From the strategic management point of view, organizations can be grouped
into three categories- defenders, prospectors, and analysers. Performance
appraisal has definite roles in all the three strategies.

Typically, defenders have a narrow and relatively stable product -market

domain. Because of this narrow focus, these organizations seldom need to
make major adjustments in their technology, structure or methods of
operations. They devote primary attention t o improving the efficiency of their
existing operations. Because of the emph asis on building skills within the
organization, successful defenders use performance appraisal for identifying
training needs. Performance appraisal is usually more behaviour orie nted.

Organizations with a prospector strategy continuously search for different

product and market opportunities. In addition, these organizations regularly
experiment with potential reasons to new and emerging environmental trends.
Prospectors are often the harbingers of change. Because of the emphasis on
skills identification and acquisition of human resources from external sources,
as opposed to skills building with the organization, prospectors often use the
performance appraisal as a means of identif ying staffing needs. The
emphasis is on results. Finally, the focus is on division and corporate
 performance evaluation as they compare with other companies during the
same evaluation period.

Organizations with an analyser strategy operate in two types of product-

market domains. One domain is stable while the other is changing. In their
more innovative areas, managers watch their competitors closely and rapidly
adopt the idea that appears promising. In general, analysers use cost-
effective technologies for stable products and project or matrix technologies
training programmes. Thus, these organizations attempt to identify both
training as well as staffing needs. The appraisal systems are considered at
the individual, group and divisional levels. Finally, su ccessful analysers have
a tendency to examine current performance with past performance within the
organization. Cross-sectional comparisons (comparisons among companies)
may also occur.

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"@'4An organization needs a strategy consistent with the behaviour
of its employees if it were to realize its goals. A truism of organizational life is
that people engage themselves in behaviour that they perceive will be
rewarded. As employees want to be rewarded, they tend to occupy
themselves more with those activities on which the organization emphasizes.
For example, if the focus is on service, employees will behave in ways that
will help them in gaining rewards associated with service delivery. If the foc us
is on rewarding productivity, employees will strive for productivity. The
performance appraisal becomes not only a means of knowing if the
employee¶s behaviour is consistent with the overall strategic focus, but also a
way of bringing to the fore any ne gative consequences of the strategy-
behaviour fit. Thus, the performance appraisal system is an important
organizational mechanism to elicit feedback on the consistency of the
strategy-behaviour link.

Whatever the category, a performance appraisal system has strategic
importance to a firm in three ways:

º Feedback mechanism,
º Consistency between organizational strategy and job behaviour, and
º Consistency between organizational values and job behaviour.

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A five-step approach to conducting Performance Appraisal is recommended:

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Development of key performance criteria should be based on a comprehensive job

description and undertaken in consultation with workers. Four dimensions of
performance can be considered:

º Competencies: Knowledge, skills, and abilities relevant to performance.

º Behaviours: Specific actions conducted and / or tasks performed.
º Results / outcomes: Outputs, quantifiable results, measurable outcomes and
achievements, objectives attained.
º Organisational citizenship behaviours: Actions that are over and above usual
job responsibilities.

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In order to obtain accurate and valid performance appraisals, appraisal measures

should be tailored to the specific job or rjob family´ (i.e., groups of similar jobs). An
evaluation of factors in the work environment which help or hinder performance is
also recommended. This ensures that realistic expectations are set for workers¶
performance, and is also likely to increase the perceived fairness and acceptability of
performance appraisals.

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Traditionally, it has been the sole responsibility of managers / supervisors to assess

performance. However, other organizational members (e.g., clients, coworkers,
subordinates) can be a valuable source of information as they are likely to have
exposure to different aspects of a worker¶s performance. Collecting information from
multiple sources can increase the accuracy of performance evaluation (i.e., reduce
bias), and increase workers¶ perceptions of fairness.

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The two central purposes of the appraisal interview are to:

º Reflect on past performances to identify major achievements, areas for further

improvement, and barriers / facilitators to effective performance.
º Identify goals and strategies for future work practice. The appraisal interview
should be a constructive, two -way exchange between the supervisor and
worker, with preparation for the interview done by both parties beforehand.
  1+ ,#+4

The performance appraisal process should undergo regular review and
improvement. For example, focus groups or surveys could be conducted to
gauge workers¶ perceptions of the appraisal process. A successful
performance appraisal process should demonstrate a change in both the
ratings of workers¶ performance and aspects of the work environment that
impact upon work performance.

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In essence, best practice in performance appraisals involves:

º Integrating performance appraisal into a formal goal setting system.

º Basing appraisals on accurate and current job descriptions.

º Offering adequate support and assistance to workers to improve their

performance (e.g., professional development opportunities).

º Ensuring that appraisers have adequate knowledge and direct experience of

the workers¶ performance.

º Conducting appraisals on a regular basis.

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º ##-#+, 4This traditional form of appraisal, also known as
"Free Form method" involves a description of the performance of an
employee by his superior. The description is an evaluation of the performance
of any individual based on the facts and often includes examples and
evidences to support the information. A major drawback of the method is the
inseparability of the bias of the evaluator.

º c ,3  , 4 This is one of the oldest and simplest techniques
of performance appraisal. In this method, the appraiser ranks the employees
from the best to the poorest on the basis of their overall performance. It is
quite useful for a comparative evaluation.

º
  
#4 A better technique of comparison than the straight
ranking method, this method compares each employee with all others in the
group, one at a time. After all the comparisons on the basis of the overall
comparisons, the employees are given the final ranki ngs.

º  +   # , #4 In this method of Performance appraisal, the
evaluator rates the employee on the basis of critical events and how the
employee behaved during those incidents. It includes both negative and
positive points. The drawback of this method is that the supervisor has to note
down the critical incidents and the employee behaviour as and when they
occur.

º +  124 In this method, a senior member of the HR department or a

training officer discusses and interviews the supervisors to evaluate and rate
their respective subordinates. A major drawback of this method is that it is a
very time consuming method. But this method helps to reduce the superiors¶
personal bias.
º , 3+# , 4 The rater is given a checklist of the descriptions of the
behaviour of the employees on job. The checklist contains a list of statements
on the basis of which the rater describes the on the job performance of the
employees.

º (,  c +4 In this method, an employee¶s quality and quantity of

work is assessed in a graphic scale indicating different degrees of a particular
trait. The factors taken into consideration include both the personal
 characteristics and characteristics related to the on the job performance of the
employees. For example a trait like Job Knowledge may be judged on the
range of average, above average, outstanding or unsatisfactory.

º    # 4 To eliminate the element of bias from the ratter¶s

ratings, the evaluator is asked to distribute the employees in some fixed
categories of ratings like on a normal distribution curve. The rater chooses the
appropriate fit for the categories on his own discretion.

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º ####
 #4 An assessment centre typically involves the use of

methods like social/informal events, tests and exercises, assignments being
given to a group of employees to assess their competencies to take higher
responsibilities in the future. Generally, employees are given an assignment
similar to the job they would be expected to perform if promoted. The trained
evaluators observe and evaluate employees as they perform the assigned
jobs and are evaluated on job related characteristics. 

The major competencies that are judged in assessment centers are
interpersonal skills, intell ectual capability, planning and organizing
capabilities, motivation, career orientation etc. Assessment centres are also
an effective way to determine the training and development needs of the
targeted employees. 

º ,1 ++-  ,    c +#4 Behaviourally Anchored Rating

Scales (BARS) is a relatively new technique which combines the graphic
rating scale and critical incidents method. It consists of predetermined critical
areas of job performance or sets of behavioural statements describing
important job performance qualities as good or bad (for e.g. the qualities like
inter personal relationships, adaptability and reliability, job knowledge etc).
These statements are developed from critical incidents.

In this method, an employee¶s actual job behaviour is judged against the
desired behaviour by recording and comparing the behaviour with BARS.
Developing and practicing BARS requires expert knowledge.
 º "
 #       , 4 Human resources are valuable
assets for every organization. Human resource accounting method tries to
find the relative worth of these assets in the terms of money. In this method
the Performance appraisal of the employees is judged in terms of cost and
contribution of the employees. The cost of employees include a ll the
expenses incurred on them like their compensation, recruitment and selection
costs, induction and training costs etc whereas their contribution includes the
total value added (in monetary terms). The difference between the cost and
the contribution will be the performance of the employees. Ideally, the
contribution of the employees should be greater than the cost incurred on
them.



º GË;  #+ , : 360 degree feedback, also known as 'multi -
rater feedback', is the most comprehensive appra isal where the feedback
about the employees¶ performance comes from all the sources that come in
contact with the employee on his job.

360 degree respondents for an employee can be his/her peers, managers (i.e.
superior), subordinates, team members, customers, suppliers/ vendors -
anyone who comes into contact with the employee and can provide valuable
insights and information or feedback regarding the "on -the-job" performance
of the employee.


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1. Self appraisal
2. Superior¶s appraisal
3. Subordinate¶s appraisal
4. Peer appraisal.

360 degree performance appraisal is also a powerful developmental tool because

when conducted at regular intervals (say yearly) it helps to keep a track of the
changes others¶ perceptions about the employees. A 360 degree appraisal is
generally found more suitable for the managers as it helps to assess their leadership
and managing styles. This technique is being effectively used across the globe for
performance appraisals. Some of the organizations following it are Wipro, Infosys,
and Reliance Industries etc.

º  
 -  1# %E#&4 The concept of µManagement by

Objectives¶ (MBO) was first given by Peter Ducker in 1954. It can be defined
as a process whereby the employees and the superiors come together to
identify common goals, the employees set their goals to be achieved, the
standards to be taken as the criteria for measurement of their performance
and contribution and deciding the course of action to be follo wed.
 
The essence of MBO is participative goal setting, choosing course of actions
and decision making. An important part of the MBO is the measurement and
the comparison of the employee¶s actual performance with the standards set.
Ideally, when employees themselves have been involved with the goal setting
and the choosing the course of action to be followed by them, they are more
likely to fulfil their responsibilities. 


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º  c    4 Traditional performance appraisals involve a supervisor
and supervisee, both of which have limited perspectives. As with any
situation, limited perspectives lead to a limited amount of information by which
to judge performance. 

If a manager is busy supervising several people, as well as tasks and other
projects, then there will be limited time to take in the full scope and practice of
the performance of the supervisee. As an alternative, many industries today
are utilizing 360-degree feedback, which takes into account the relatio nships
that an employee has with peers, customers, clients, supervisors and those
whom the supervisee is responsible for overseeing. 

º 
# +- (1 F 1  F +1 4 Many times, feedback

forms that are utilized in performance appraisals o nly use quantitative or
qualitative measures, but not both. Quantitative appraisals mainly measure
numbers, such as how many projects, how many were on time. While this is
important, there are other things to take into consideration. 
Qualitative benchmarks involve the completion of personal or professional
goals and the stories of how the supervisee utilized opportunities to lead by
example and proactively implement the values and mission of the
organization. Listening to the stories of what has happened ov er the past year
and looking at numbers and outcomes will result in a clearer picture of what
the value of the employee is to the organization. 

º 
 #
 4 It is recommended that a manager spend about an hour

per employee writing performance appraisals and depending on the number
of people being evaluated it can take hours to write the a department¶s PA but
also hours meeting with staff to review the P.A. I¶ve know managers who had
100 plus people to write PAs on. 
 º  55 ##4 Performance appraisals are usually done once a year
and are connected to an increase in salary. This is a disadvantage in that
supervisees generally live in fear and experience anxiety when their review
time comes up. Having more consistent interaction when it com es to feedback
between management and supervisees can help reduce the fear, anxiety and
wondering about a raise. 

Furthermore, the employee naturally will want to bargain for more money
focusing on their strengths and the management will want to emphasize the
constructive areas of performance evaluation in order to keep from giving
raises, since money is a limited resource in any organization. This adds to the
stress of the review. 

º  ## ## 4  If a manager does not keep notes and accurate

records of employee behaviour they may not be successful sending a
consistent message to the employee. We all struggle with memory with as
busy as we all are so it is critical to document issues (both positive and
negative) when it is fresh in our minds. 



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º Select a good time

º Minimise interruption

º Welcome, at ease

º Start with something positive

º Ask open-ended question to encourage discussion

º Listen

º Manage eye contact and body language

º Be specific

º Rate behaviour not personality

º Layout development plan

 º Encourage subordinate participation

º Complete form

º Set mutual agreeable goals for improvements

º End in a positive, encouraging note

º Set time for any follow-up meetings

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Performance Appraisal for managers is known as performance management system.
Managers have to set certain .!- # + # %!E#&/, which serves as the
base of performance measurement.

KRA¶s mentions the critical tasks/performance areas that the appraisee needs to
focus on in the coming year. The appraiser and appraisee need to participate in
setting the KRA¶s. There can be maximum of 5 and minimum of 3 KRA¶s. The
importance of each KRA is designated in terms of percentage (%) and is writ ten in
the percentage weightage column. The total in the percentage weightage column of
all KRA¶s should be equal to 100. The KRA¶s are set at the beginning of the year.
Then they are evaluated in the midterm (in June) .

The KRA form is used to share the appraiser¶s expectations with the appraisee.
Appraiser have to clarify major areas of planned effort that are to be initiated during
the performance period and also how the appraiser expect the planned results to be
achieved.

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IA¶s defines attributes desirable of a member of Ranbaxy. These are the factors
upon which tasks are performed. These are further divided into two parts:

&  -@Ec%@E#&4This part shares IA¶s with the appraisee -


º Performance Focus
º Trustworthiness
º People Development
º Customer Responsiveness
º Quality Orientation
º Entrepreneurial Drive
 & +@E# %@E#&4 Here the appraiser decides with the appraisee not
less than 2 and not more than 5 IA¶s which are considered more important
for his/her specific role. Behavioural descriptions should also be used which
help to reach an agreement on the relevance of the IA¶s to the appraisee¶s
role. 
These can be:
º Strategic Thinking
º Problem Solving and Decision Making
º Relationship Management
º Communication
º Business Acumen
º Learning Creativity and Innovation
º Concern for Safety Environment

They also work on training plans. Where the appraiser and appraisee will mutually
decide on immediate training needs. Like new updations in SAP.

Then KRA score can be calculated as:

KRA Score = (Weight of each factor)

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KRA Scores:

º Score5 ± Exceptional
º Score 4 ± Exceeds Expectations
º Score3 ± Meets Expectations
º Score2 ± Needs Improvement
º Score1 ± Below Expectation

IA Score = total score of all IA¶s

5+X

Where x is for additional KRA¶s

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