RELATIONSHIP BETWEEN

PERFORMANCE MANAGEMENT SYSTEM

AND CORPORATE PERFORMANCE

PRESENTED BY:
Jarrar Mehdi,
Farhan Fayyaz,
Adnan Ali Fateh,
Shankar Lal,
 Shahneel Ahmed
Companies
 Industry overview (Pharma)

 Pakistan has about 400 pharmaceutical manufacturing units

including those operated by 25 multinationals present in the
country.

 meets around 70% of the country's demand of Finished Medicine.

 The industry has invested substantially to upgrade itself in the last

few years

 Private spending accounts for 65% of total healthcare expenditure

 Future potential exists.

 METHODOLOGY

we had to select 01 multinational and 02 local companies

working in Pakistan.

The tool for research was a questionnaire. This questionnaire

was comprehensively designed to cover all aspects related to the
research objectives.

The companies selected were:

Glaxo Smith Kline

Searle Pakistan
Pharmatec Pakistan (pvt) ltd
GlaxoSmithKline Pakistan Limited was created on January 1st 2002
through the merger of SmithKline and French of Pakistan Limited,
Beecham Pakistan (Private) Limited and Welcome (Pakistan)
Limited- standing today as the largest pharmaceutical company in
Pakistan.

GSK leads the industry in value, volume and prescription market

shares. GSK are proud of our consistency and stability in sales,
profits and growth.
 Some of their key brands include;
Augmentin, Panadol, Seretide, Betnovate, Zantac and Calpol in
medicine and renowned consumer healthcare brands include
Horlicks, Aquafresh, Macleans and ENO.
 Searle Pakistan Limited (SPL) was incorporated in Pakistan
as a Private Limited Company on October 5, 1965 as a
subsidiary of G.D. Searle & Co., U.S.A. In 1966

 manufacturing facility in S.I.T.E. and production of

Aldactone, Lomotil, Diodoquin, Ovulen, Neomycin
Sulphate, Probanthine and Hydryllin,
 Pharmatec is proud to be recognized as one of the rapidly
growing, most modern pharmaceutical manufacturing and
marketing companies in Pakistan

 The plant consisting of latest expanded manufacturing and

laboratory facilities, warehouses and offices covers a floor
area of about 7,000 square meters in S.I.T.E., the
developed industrial area of Karachi.
QUESTIONNAIRE
ANALYSIS
1. Does your company have a Performance
Management System for its employee?

COMPANY NAME YES NO

1. Glaxo Smith Kline  Yes

1. Searle Pakistan  Yes

1. Pharmatec Pakistan  yes

 1. Does your company have a Performance Management System for its
employee?

 Glaxo Smith Kline: yes .it is conducted by HR

department in collaboration with line managers of the
concerned department

 Performance Development Plan (PDP), MBO

method (yearly)
 Talent preview session
 Learning needs analysis:
1. Does your company have a Performance Management System
for its employee?

Searle Pakistan
Yes. performance management is part of HR
department’s function. The HR conducts it and results
are shared with the line managers of concerned
departments.
Pharmatec Pakistan:
 In Pharmatec performance management system does exist
but little importance is given to this system. It is a function
of HR department.
2. Is the performance management system
for all employees of your company?
Glaxo Smith Kline Searle Pharmatec

a) For all employees  For all  For all

a) For selected employees  selected

 2. Is the performance management system for all
employees of your company?

Glaxo Smith Kline:

for all employees throughout the organization
It is conducted for throughout all departments which
include sales, operations, finance, and HR. Inter
department comparison is also done by comparing
appraisals of two different departments.
The HR department of GSK is open to accept any
recommendation and suggestion from their
employees.
2. Is the performance management system for
all employees of your company?

Searle Pakistan:
to make a succession plan for all the employees and
therefore Performance Management System deals with
all the employees.
performance at all grounds
Pharmatec Pakistan:
only for selected employees and it serves as one of its
major lacking in the market.
Upper management is more relax as their
shortcomings are avoided to some extent.
3.Is performance appraisal done annually
or more frequently?
Glaxo Smith Kline Searle Pharmatec

a) Anually  annualy  annualy

a) Semianually  Semi

a) Quaterly
 3.Is performance appraisal done annually or more
frequently?

Glaxo Smith Kline: Annually appraisal is done in

GSK at the beginning of the year. In which targets
given to each employee is matched with its
performance.
Searle Pakistan: It is done twice per annum. This is
so that the management does not have to wait for the
whole year to take corrective action. The performance
appraisal twice a year is most suitable for the company
Pharmatec Pakistan: performance management
system at Pharmatec is done annually to review the set
benchmarks regarding sales and production capacity.
 4.What is the purpose of performance
management system?

Glaxo Smith Kline:

 To Access the Performance:
 Basis for Reward (Increment Bonus):
 Basis for Promotion, Placement:
 Ascertain Training And Development Needs:
 What is the purpose of performance management
system?

Searle Pakistan: Usefulness of the employee. For the

company, its most important assets are its employees. So
the usefulness of the employees is tracked down through
the performance appraisal and this serves as a basis for
rewards, promotion, placement, succession planning etc of
all the employees.
Pharmatec Pakistan: PMS is used for promotions of
employees only.
5. Do you think that HR Performance Management
System help your company

Glaxo Smith Kline:

It increases Employee motivation and that leads to
increase in profit, sales, and reduce turn over.
Employees are involved in decision making and they
are empowered to take decision.
If an employee is underperforming he is given a time
limit of 6-9 months to improve his performance.
 5. Do you think that HR Performance
Management System help your company
Searle Pakistan:
Reducing HR turnover. Through the performance
management system, the management tracks down the
areas where the employees are lacking behind and gives
them the training accordingly. Through proper training
the management helps the employees to perform well
and thus the employee turnover is reduced.
Pharmatec Pakistan: This company although
performing well financially but does not know the
importance of PMS, therefore they are unable to
identify core benefits of PMS for their organization.
6. How many numbers of employees give suggestions?

>10% GSK

5-10% Searle

1-4% Pharmatec

None
6. How many numbers of employees give
suggestions?
Glaxo Smith Kline:
GSK involves employees from grassroots level also in
evaluating and formulating strategies. Because it believes
the fact that they are in direct contact with the customers.
Searle Pakistan:
The top management from all of the departments is
involved in this process
The decision to promote or fire any employee is then done
by the head of the concerned department.
Pharmatec Pakistan: They are not open to suggestion
and only executives and top management can take
important decisions related to HR.
 7. HR satisfaction level?

Glaxo Smith Kline Searle Pharmatec

a) Excellent  Gsk

a) Good  Searle

a) Poor  Pharmatec
8. Summary of corporate performance for companies in the past year (last three years)?

Searle
2009 2008 2007

a) Net profit 400m 300m 60m

a) Sales 2.83b 3.5b 2.8b

a) HR turnover p.a 12% 14% 16%

a) Absenteeism % 8-10% 8-10% 8-10%

a) Suggestion received p.a Twice Twice Twice

a) No. of employees 1000 800 600

 Summary for the corporate performance
Glaxo Smith Kline
2009 2008 2007

a) Net profit 933.90m 1955.187m 1670.5m

a) Sales 14719.1m 13403.224m 10610.882m

a) HR turnover p.a 8% 8% 10%

a) Absenteeism % 5% 6% 6.5%

a) Suggestion received p.a - - -

a) No. of employees - - -
 Summary for the corporate performance

Pharmatec
2009 2008 2007

a) Net profit 96m 95m 45m

a) Sales - - -

a) HR turnover p.a 24% 21% 18%

a) Absenteeism % 10-12% 10-12% 12%

a) Suggestion received p.a - - -

a) No. of employees - - -
 Sales (in Millions Rs) GSK
14719.1

13403.22

10610.88

2007 2008 2009

 Net Profit (in Millions Rs) GSK

1670.5 1955.19

933.9

2007

2008

2009
 HR turnover ratio at GSK

10%

8%

8%

2007

2008

2009
 Absenteeism at GSK

7%
6%

5%

2007 2008 2009

 Sales (in Billion) SEARLE

3.5

2.8 2.83

2007 2008 2009

 Net Profit(in Millions) SEARLE

400

300

60

2007 2008 2009

 No. Of Empoyeess (SEARLE)
No. Of Empoyeess (SEARLE)

1000
800
600

2007

2008

2009
 HR Turn over p.a (SEARLE)

16

14

12

2007

2008

2009
 Net Profit (in MIllions Rs)

96

95

45

2009

2008

2007
 HR Turn over Pharmatec

24

21

18

2007 2008 2009

 RECOMMENDATION

For Pharmatec: implement Performance Management

system on whole organization.

For Searle: their number of employees is increasing. So

they have to properly manage the PMS. They can shift to
quarterly performance management review so that
information is available quickly and timely.
For Glaxo:
firstly it is recommended to continue the good
work they are doing. They are a role model for
other pharmaceutical companies. But having said
that it is necessary for them to identify
performance review on semiannual and quarterly
basis also. More delegation should be given to
employees.