y RELATIONSHIP BETWEEN

PERFORMANCE MANAGEMENT SYSTEM AND CORPORATE PERFORMANCE

y PRESENTED BY: y Jarrar Mehdi, y Farhan Fayyaz, y Adnan Ali Fateh, y Shankar Lal, y Shahneel Ahmed

Companies

Industry overview (Pharma)
y Pakistan has about 400 pharmaceutical manufacturing units

including those operated by 25 multinationals present in the country.

y meets around 70% of the country's demand of Finished

Medicine.

y The industry has invested substantially to upgrade itself in the

last few years expenditure

y Private spending accounts for 65% of total healthcare

y Future potential exists.

y The tool for research was a questionnaire. This questionnaire was comprehensively designed to cover all aspects related to the research objectives. y The companies selected were: y Glaxo Smith Kline y Searle Pakistan y Pharmatec Pakistan (pvt) ltd .METHODOLOGY y we had to select 01 multinational and 02 local companies working in Pakistan.

Aquafresh. y Some of their key brands include. Panadol. y GSK leads the industry in value. Zantac and Calpol in medicine and renowned consumer healthcare brands include Horlicks. . y Augmentin. profits and growth. Macleans and ENO. Beecham Pakistan (Private) Limited and Welcome (Pakistan) Limited. volume and prescription market shares. Seretide. GSK are proud of our consistency and stability in sales. Betnovate.standing today as the largest pharmaceutical company in Pakistan.y GlaxoSmithKline Pakistan Limited was created on January 1st 2002 through the merger of SmithKline and French of Pakistan Limited.

U. Diodoquin.T. Probanthine and Hydryllin.S.D.. Neomycin Sulphate. Ovulen. .y Searle Pakistan Limited (SPL) was incorporated in Pakistan as a Private Limited Company on October 5.A.I. In 1966 y manufacturing facility in S. and production of Aldactone. Lomotil. 1965 as a subsidiary of G. Searle & Co.E.

the developed industrial area of Karachi.E..y Pharmatec is proud to be recognized as one of the rapidly growing.I.000 square meters in S.T. warehouses and offices covers a floor area of about 7. most modern pharmaceutical manufacturing and marketing companies in Pakistan y The plant consisting of latest expanded manufacturing and laboratory facilities. .

yQUESTIONNAIRE ANALYSIS .

Pharmatec Pakistan  yes .1. Does your company have a Performance Management System for its employee? COMPANY NAME YES NO 1. Searle Pakistan  Yes 1. Glaxo Smith Kline  Yes 1.

it is conducted by HR department in collaboration with line managers of the concerned department y Performance Development Plan (PDP).1. MBO method (yearly) y Talent preview session y Learning needs analysis: . Does your company have a Performance Management System for its employee? y Glaxo Smith Kline: yes .

1. performance management is part of HR department¶s function. y Pharmatec Pakistan: y In Pharmatec performance management system does exist but little importance is given to this system. It is a function of HR department. Does your company have a Performance Management System for its employee? y Searle Pakistan y Yes. . The HR conducts it and results are shared with the line managers of concerned departments.

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? y Glaxo Smith Kline: y for all employees throughout the organization y It is conducted for throughout all departments which include sales. y The HR department of GSK is open to accept any recommendation and suggestion from their employees. . operations. and HR. finance. Inter department comparison is also done by comparing appraisals of two different departments.

2. Is the performance management system for all employees of your company? y Searle Pakistan: y to make a succession plan for all the employees and y y y y therefore Performance Management System deals with all the employees. . Upper management is more relax as their shortcomings are avoided to some extent. performance at all grounds Pharmatec Pakistan: only for selected employees and it serves as one of its major lacking in the market.

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? Annually appraisal is done in GSK at the beginning of the year.3. In which targets given to each employee is matched with its performance. . 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 y Pharmatec Pakistan: performance management y Glaxo Smith Kline: system at Pharmatec is done annually to review the set benchmarks regarding sales and production capacity. y Searle Pakistan: It is done twice per annum.

What is the purpose of performance management system? y Glaxo Smith Kline: y To Access the Performance: y Basis for Reward (Increment Bonus): y Basis for Promotion. Placement: y Ascertain Training And Development Needs: .4.

y Pharmatec Pakistan: PMS is used for promotions of employees only. succession planning etc of all the employees.What is the purpose of performance management system? y Searle Pakistan: Usefulness of the employee. For the company. . promotion. placement. 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.

Employees are involved in decision making and they are empowered to take decision. sales.5. y If an employee is underperforming he is given a time limit of 6-9 months to improve his performance. and reduce turn over. . Do you think that HR Performance Management System help your company y Glaxo Smith Kline: y It increases Employee motivation and that leads to increase in profit.

Do you think that HR Performance Management System help your company y Searle Pakistan: y Reducing HR turnover. Through the performance management system.5. Through proper training the management helps the employees to perform well and thus the employee turnover is reduced. y Pharmatec Pakistan: This company although performing well financially but does not know the importance of PMS. . the management tracks down the areas where the employees are lacking behind and gives them the training accordingly. 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 .

. 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.6. How many numbers of employees give suggestions? y Glaxo Smith Kline: y GSK involves employees from grassroots level also in y y y y evaluating and formulating strategies. 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 .

83b 12% 8-10% 2008 300m 3.8b 16% 8-10% Twice 600 a) Suggestion received p. of employees 1000 .a Twice a) No. Summary of corporate performance for companies in the past year (last three years)? Searle 2009 a) Net profit a) Sales a) HR turnover p.5b 14% 8-10% Twice 800 2007 60m 2.8.a a) Absenteeism % 400m 2.

224m 8% 6% 2007 1670.a a) Absenteeism % a) Suggestion received p.882m 10% 6.1m 8% 5% 2008 1955.Summary for the corporate performance Glaxo Smith Kline 2009 a) Net profit a) Sales a) HR turnover p.5m 10610.5% - . of employees 933.90m 14719.187m 13403.a a) No.

of employees - - - - - .Summary for the corporate performance Pharmatec 2009 2008 2007 a) Net profit a) Sales a) HR turnover p.a a) Absenteeism % 96m 95m 45m - - - 24% 21% 18% 10-12% 10-12% 12% a) Suggestion received p.a a) No.

Sales (in Millions Rs) GSK 14719.1 13403.224 10610.882 2007 2008 2009 .

Net Profit (in Millions Rs) GSK 1955.187 1670.9 2007 2008 2009 .5 933.

HR turnover ratio at GSK 10% 8% 8% 2007 2008 2009 .

Absenteeism at GSK 6.50% 6% 5% 2007 2008 2009 .

83 2007 2008 2009 .Sales (in Billion) SEARLE 3.8 2.5 2.

Net Profit(in Millions) SEARLE 400 300 60 2007 2008 2009 .

Of Empoyeess (SEARLE) 1000 800 600 2007 2008 2009 .No. Of Empoyeess (SEARLE) No.

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 .

So they have to properly manage the PMS. y For Searle: their number of employees is increasing. They can shift to quarterly performance management review so that information is available quickly and timely.RECOMMENDATION y For Pharmatec: implement Performance Management system on whole organization. .

y For Glaxo: y firstly it is recommended to continue the good work they are doing. More delegation should be given to employees. . But having said that it is necessary for them to identify performance review on semiannual and quarterly basis also. They are a role model for other pharmaceutical companies.