A PROJECT REPORT
ON
“ROLE OF HRD PRACTICES IN EMPLOYEE RETENTION IN ARBRO PHARMACEUTICAL INDUSTRY”
SUBMITTED IN THE PARTIAL FULFILMENT OF THE REQUIREMENT FOR THE AWARD OF THE DEGREE OF
MASTER OF BUSINESS ADMINISTRATION (MBA)
TO
MAHARSHI DAYANAND UNIVERSITY, ROHTAK
SUBMITTED BY YOGENDER YADAV
ROLL No. 2960 MBA 4TH SEM
AMITY BUSINESS SCHOOL, MANESAR SESSION: - AUGUST 2010
DECLARATION
I, Yogender Yadav Roll no. 2960 ,Class M.B.A (4th Semester) of the Amity Business School, Manesar, hereby declare that project titled “ROLE OF HDR PRACTICES IN EMPLOYEE RETENTION IN PHARMACEUTICAL SECTOR” is an original piece of research work carried out by me. The information has been collected from genuine & authentic sources.A seminar presentation of the
Training Report was made on ____________________ and the suggestions by the faculty were duly incorporated.
Presentation in Charge
Signature of
Candidate
Countersigned by
Director of the Institute
ACKNOWLEDGEMENT
This report has been made possible due to invaluable support of a number of people to whom I owe my heartfelt gratitude and without whose help, I may not have been able to complete this report. I would like to thank, Dr. R.C. Sharma, Professor and Advisor, Amity Business School, Manesar, for extending full help in my project. His consistent support and cooperation showed the way towards the successful completion of the project. I would like to acknowledge the support of my faculty guide, Mr. Yogesh, Amity Business School, Manesar, for his constant guidance in this project and for providing me the necessary information whenever required. Heartfelt thanks to other faculty members of Amity Business School, Manesar for their support and co-operation.
Yogender Yadav
TABLE OF CONTENTS Contents Declaration Certificate Acknowledgement
CHAPTER-I (i)
Introduction
(ii)
Significance of study
(iii)
Objectives of study
(iv)
Focus of study
(v)
Conceptualization
(vi)
Research methodology
(vii)
Plan of study
CHAPTER-II
Page No.
(i)
Review of existing literature
CHAPTER-III (i)
Industry Profile
(ii)
Company Profile
CHAPTER-IV (i)
Analysis and Interpretation
(ii)
Findings
A.CHAPTER-V (i)
Recommendations
(ii)
Conclusion
(iii)
Limitations of study Bibliography Annexure
INTRODUCTION
In an ideal world, employees work hard, love their job, worship their workplace, feel like a family and would never leave. But let’s look at the real world, where employee quite at the drop of a hat. How can attrition be controlled? As the Indian pharmaceutical industry grows exponentially, companies are taking the big leap from survival strategy to competitive strategy. Hence, there is a constant thirst for the best and the brightest of employees and the result-heavy attrition. The main cause for the movement is lack of motivation, increased expectation, and increased opportunity. Attrition also happens when people hate their working conditions, do not like their team-mates or perhaps do not like what they are doing. Organizational culture has a great impact on who stays and who goes. Also important of providing opportunities for development of their employees or their career growth is an important factor in employee attrition. Job misfit is also in the list of the factors. Experts say that organization behavior is instrumental in extending the tenure of employees in the organization as it increases their self-esteem, confidence, morale and motivation. A substantial growth of employee’s self-esteem is as important as the concept of learning in the industry. Otherwise, expert fear that pharmaceutical organizations will met a sorry fate as far as retention policies are concerned. As the attrition rate is high in the industry so in this study I tried to find out various factors and reasons effecting the employees retention in Arbro Pharmaceutical industry.
SIGNIFICANCE OF THE STUDY
This study explores all aspects of the workplace stability issue with a focus on retaining employees. Employee retention is most critical issue faced by corporate leaders as a result of the shortage of skilled labor, economic growth and employee turnover. As the Indian pharmaceutical industry grows exponentially, companies are taking the big leap from survival strategy to competitive strategy. Hence, there is a constant thirst for the best and the brightest of employee and the result –heavy attrition. After IT and BPO, it is now the Pharma sector that is facing the issue of high attrition rates. For most HR managers, employee retention is the biggest challenge. “Attrition is quit in the industry these days. This year, we have witnessed almost 32 percent plus attrition. This study is significant in explaining all the reasons and the possible solution for the retention.
OBJECTIVES OF THE STUDY
➢ To study attrition as the major problem in the present scenario
➢ To study various HR practices and present condition in Arbro Pharmaceutical
Industry ➢ To study factors responsible for employee attrition in Arbro Pharmaceutical
Industry ➢ To study the effectiveness of the retention practices adopted by Arbro
Pharmaceutical Industry
FOCUS OF THE STUDY
There are several problems faced by the employees that become a challenge for HR as how to manage problems and to motivate employees for not leaving the organization. The study says that the attrition in Arbro Pharmaceutical Industry has become the major issue.
The focus of the problem is that how HR can retain employees in this industry. The study will identify the cause and need to fulfill the requirements of the employee.
CONCEPTUALISATION Talent or human resource is a major asset for any company. Company Invest high amount of money for their recruitment, selection & training and what happens to company if these Talents or Employees leave the organization in short while seeking new opportunities. Indian Pharmaceutical Industry is one of the fastest growing knowledge based sector with annual attrition rate of near about 30-35% compared to the global Pharmaceutical attrition
rate of 10-12% per annum. Current statistics show that higher attrition rate problem mainly exists in Marketing and R&D departments."" Attrition rate in R&D is very high even higher then marketing, the reason may be shortage of skilled and experienced R&D professionals or increasing opportunities due to globalization and R&D outsourcing in India which have created a sudden demand for skilled research peoples. Major reasons for high attrition rate stated by employees are poor management, uninteresting job, lack of motivation, job lacking opportunity for future advancement, and inadequate salary or compensation plan. The immediate gain in salary package was found to be responsible for job change in 61 per cent of the cases. Leaving company by the employee not only leads to loss of money for the company in his training and development of knowledge but it also increase the threat of information security if employee moves to rival company and loss of the business ( from the customers the employee directly deals with) Talent or human resource is a major asset for any company. Company Invest high amount of money for their recruitment, selection & training and what happens to company if these Talents or Employees leave the organization in short while seeking new opportunities. Indian Pharmaceutical Industry is one of the fastest growing knowledge based sector with annual attrition rate of near about 30-35% compared to the global Pharmaceutical attrition rate of 10-12% per annum. Current statistics show that higher attrition rate problem mainly exists in Marketing and R&D departments."" Attrition rate in R&D is very high even higher then marketing, the reason may be shortage of skilled and experienced R&D professionals or increasing opportunities due to globalization and R&D outsourcing in India which have created a sudden demand for skilled research peoples.
Major reasons for high attrition rate stated by employees are poor management, uninteresting job, lack of motivation, job lacking opportunity for future advancement, and inadequate salary or compensation plan. The immediate gain in salary package was found to be responsible for job change in 61 per cent of the cases. Leaving company by the employee not only leads to loss of money for the company in his training and development of knowledge but it also increase the threat of information security if employee moves to rival company and loss of the business ( from the customers the employee directly deals with)
Employee Retention involves taking measures to encourage employees to remain in the organization for the maximum period of time. Corporate is facing a lot of problems in employee retention these days. Hiring knowledgeable people for the job is essential for an employer. But retention is even more important than hiring. There is no dearth of opportunities for a talented person. There are many organizations which are looking for such employees. If a person is not satisfied by the job he’s doing, he may switch over to some other more suitable job. In today’s environment it becomes very important for organizations to retain their employees. The top organizations are on the top because they value their employees and they know how to keep them glued to the organization. Employees stay and leave organizations for some reasons.
Employee retention Employee retention is a process in which the employees are encouraged to remain with the organization for the maximum period of time or until the completion of the project. Employee retention is beneficial for the organization as well as the employee. Employees today are different. They are not the ones who don’t have good opportunities in hand. As soon as they feel dissatisfied with the current employer or the job, they switch over to the next job. It is the responsibility of the employer to retain their best employees. If they don’t, they would be left with no good employees. A good employer should know how to attract and retain its employees.
Retention involves five major things: ➢ Compensation ➢ Environment ➢ Growth ➢ Relationship ➢ Support Employee retention would require a lot of efforts, energy, and resources but the results are worth it.
Importance of employee retention
Now that so much is being done by organizations to retain its employees, why is retention so important? Is it just to reduce the turnover costs? Well, the answer is a definite no. It’s not only the cost incurred by a company that emphasizes the need of retaining employees but also the need to retain talented employees from getting poached. The process of employee retention will benefit an organization in the following ways: 1. The Cost of Turnover: The cost of employee turnover adds hundreds of thousands of money to a company's expenses. While it is difficult to fully calculate the cost of turnover (including hiring costs, training costs and productivity loss), industry experts often quote 25% of the average employee salary as a conservative estimate. 2. Loss of Company Knowledge: When an employee leaves, he takes with him valuable knowledge about the company, customers, current projects and past history (sometimes to competitors). Often much time and money has been spent on the employee in expectation of a future return. When the employee leaves, the investment is not realized. 3. Interruption of Customer Service: Customers and clients do business with a company in part because of the people. Relationships are developed that encourage continued sponsorship of the business. When an employee leaves, the relationships that employee built for the company are severed, which could lead to potential customer loss.
4. Turnover leads to more turnovers: When an employee terminates, the effect is felt throughout the organization. Co-workers are often required to pick up the slack. The unspoken negativity often intensifies for the remaining staff. 5. Goodwill of the company: The goodwill of a company is maintained when the attrition rates are low. Higher retention rates motivate potential employees to join the organization. 6. Regaining efficiency: If an employee resigns, then good amount of time is lost in hiring a new employee and then training him/her and this goes to the loss of the company directly which many a times goes
unnoticed. And even after this you cannot assure us of the same efficiency from the new employee.
What Makes Employee Leave Employees do not leave an organization without any significant reason. There are certain circumstances that lead to their leaving the organization. The most common reasons can be: ➢ Job is not what the employee expected to be: Sometimes the job responsibilities
don’t come out to be same as expected by the candidates. Unexpected job responsibilities lead to job dissatisfaction. ➢ Job and person mismatch: A candidate may be fit to do a certain type of job which
matches his personality. If he is given a job which mismatches his personality, then he won’t be able to perform it well and will try to find out reasons to leave the job. ➢ No growth opportunities: No or less learning and growth opportunities in the current
job will make candidate’s job and career stagnant. ➢ Lack of appreciation: If the work is not appreciated by the supervisor, the employee
feels de-motivated and loses interest in job. ➢ Lack of trust and support in coworkers, seniors and management: Trust is the
most important factor that is required for an individual to stay in the job. Nonsupportive coworkers, seniors and management can make office environment unfriendly and difficult to work in. ➢ Stress from overwork and work life imbalance: Job stress can lead to work life
imbalance which ultimately many times lead to employee leaving the organization. ➢ Compensation: Better compensation packages being offered by other companies may
attract employees towards themselves. ➢ New job offer: An attractive job offer which an employee thinks is good for him with
respect to job responsibility, compensation, growth and learning etc. can lead an employee to leave the organization. Employee Retention Tools In the present scenario, world is turning into a global village and the whole globe is reachable from any destination. In this small world even companies are reachable to the people and vice versa. And so their jobs are also easily accessible for everyone. In this situation, the biggest challenge for a company is to retain its workforce intact especially the Knowledge Banks.
All the companies are planning to increase their turnover every moment of time. While in all this workout of increasing the turnover they forget about their loss incurred by the resignation of employees and the expenses of hiring new employees (Hiring Cost, Training Cost, Productivity Loss etc.). This hiring of a new employee normally costs around 35% or more of the average employee salary. For example- let us consider average salary of an employee per year as Rs.20, 000, and then the cost of hiring a new employee and other expenses come around Rs.7, 000. If you have 2 employees resigning per month the cost comes to Rs.14, 000 and taking the same for 12 months comes to around Rs.168, 000, which is a direct loss from the turnover of the company. And after all this there is always a risk of getting a right employee for the right position with a right attitude. If an employee resigns, then good amount of time is lost in hiring a new employee and then training him/her and this goes to the loss of the company directly which many a times goes unnoticed. And even after this you cannot assure us of the same efficiency from the new employee (He might be better and might not be). You require time to judge his capabilities and work nature. The loss is even graver if he/she is Your Knowledge Bank, this can bring your process to a standstill even. And above all these things, one resignation many a times triggers a chain reaction among other employees, leading to a negative effect. For all these and many other reasons you need to retain your employees. For retaining your employees, you need to understand the requirements of the employees and at the same time should make them clear about the expectations of the company from them. It’s a general human tendency that each human being thinks himself as important and expects the same from the other side, so the company management should make their employees accountable for their respective jobs and make them feel that they are very important for the smooth processing of that process(At the same time create a backup for him). Care and importance are two things of which every human being is mad of. Below are few of the tools for Employee Retention:1. Employee Reward Program- You can make a provision of Monthly or Quarterly Award (depending upon the budget) for the best employee, Awarding 2 or 3 best workers each month. The award can be in terms of gifts or money. If it is money then it should be divided into two parts, first part to be given with the next month salary and the remaining after 6 months. In this way he/she can be retained for 6 more months. These rewards shall be considered at the time of appraisal.
2. Career Development Program- Every individual is worried about his/her career. You can provide them conditional assistance for certain courses which are beneficial from your business point of view. Conditional assistance means the company will bear the expenses only if he/she gets an aggregate of certain percentage of marks. And entrance to that course should be on the basis of a Test and the number of seats to be limited. For getting admitted to such program, You can propose them to sign a bond with the company, like they cannot leave the company for 2 years or something after the successful completion of the course. 3. Performance based Bonus- The employee always comes to know about the profit of the company which is of course based on the strategic planning of the top management and the productivity of the employee. To get more work out of the employee, You can make a provision of Bonus. By this employee will be able to relate himself with the company’s profit and hence will work hard. This bonus should be productivity based. 4. Employee Referral Plan- You can introduce Employee Referral Plan. This will reduce your cost (charges of external consultants and searching agencies) of hiring a new employee and up to an extent you can rely on this new resource. On every successful referral, employee can be given a referral bonus after 6 or 9 months of continuous working of the new employee as well as the existing employee. By this you can get a new employee at a reduced cost as well as are retaining the existing one for a longer period of time. 5. Loyalty Bonus- You can introduce a Loyalty Bonus Program in which you can reward your employee after a successful completion of a specified period of time. This can be in the form of Money or Position. This will encourage the fellow employees as well whether they are interested in money or position, they will feel fascinated. 6. Giving a voice to the Knowledge Banks- First of all you should try to retain your workforce intact, as they are the intellectual asset of the company. And above that you can’t afford losing your knowledge banks. These are the people who stabilize the process. You can involve them in some of the decisions. 7. Employee Recreation- You should also let your employees enjoy in a light mood. You can take your employees to a trip or for an outing every year or bi-yearly. You can make use of this trip as well. You can start this trip with an opening note about the management views and plans, strategies etc. At the same time you can involve your top management into some of the fun activities as this will make feel the employees that they are very close to the management and everybody is same.
8. Gifts at some Occasions- You can give some gifts at the time of one or two festivals to the employees making them feel good and understand that the management is concerned about them. 9. Accountability- You should make each employee accountable so that he can also feel that he is as important as his manager. If he/she will be filled with this sense, he/she will seldom think of leaving the company. 10. Making the managers effective and easily accessible- You should make the management easily accessible so that the employee expectations can be clearly communicated to the top management, as it is impossible for the top management to reach each employee frequently. 11. Surveys- You should conduct regular surveys for feedbacks from employee about their superiors as well as other issues like food, development plans and other suggestions. This will make them feel of their importance and the caring nature of the company. Some of the suggestions might be of real good use for the company. For a company, the workforce is like an intellectual property, both in terms of skills and money. A trained and content workforce can lead a company to new heights while a opposite one can hamper it badly. So, every resignation saved is every dollar earned.
RESEARCH METHODOLOGY 1) Descriptive & Exploratory Research Methodology’ is adapted for this project
work. The present study is descriptive in nature, as it seeks to discover ideas and insight to bring out new relationship. Research design is flexible enough to provide opportunity for considering different aspects of problem under study. It helps in bringing into focus some inherent weakness in enterprise regarding which in depth study can be conducted by management. Exploratory research is investigation of relationships among variables without knowing why they are studied. It borders on an idle curiosity approach, differing from it only in that the investigator thinks there may be a payoff in the application somewhere in the forest of questions. 1) Source of data collection The data was collected from both primary and secondary sources. Primary sources:-
➢
Questionnaire
Secondary sources:➢ ➢ ➢
Websites Magazine Company record
1) Universe The universe of the study is Arbro Pharmaceutical Industry. 2) Sample size 50 employees of Arbro Pharmaceutical Industry.
PLAN OF THE STUDY The structure of present study is as follows:➢ Chapter 1 covers the introduction of the study, significance of the study, objectives of
the study, focus of the problem, conceptualization and plan of the study. The chapter also includes research methodology containing the nature of research, sample size and analysis pattern used to conduct the research. ➢ Chapter 2 explores the significant literature published on the present study reflecting
understanding of the relevant theoretical and empirical background of the problem. ➢ Chapter 3 explains the industry profile and company profile. ➢ Chapter 4 consists of data analysis and findings. ➢ Chapter 5 of this study contains recommendations and conclusions providing the end
result of the study. The last part gives the limitation of the study thus providing significant scope for further research.
REVIEW OF LITERATURE The literature clearly indicated that there are six keys to retaining personnel. They are recruiting, communications, training, job satisfaction, pay, and benefits. Recruiting The effort to retain the best personnel begins with recruiting. Attracting and retaining the best people are not two different things, but are the same thing. Both require creating and maintaining a positive reputation, internally as well as externally. Employers must be honest with the recruit about the beliefs, expectations, organizational culture, demands, and opportunities within the organization. By representing the organization realistically, a department will attract those who will be content working within the culture (Marx, 1995). Denton (1992, p.47) follows this up by stating that, “ the better the match between recruits and the organization the more likely you are to retain them.” Lynn (1997) believes that you must take time during the hiring process to make wise decisions. The employer must be candid about the working conditions, responsibilities, opportunities and other details to reduce the chances of making hiring mistakes. Taylor and Cosenza (1997) strengthen this thought by noting that it is imperative that companies give prospective employees a true picture of the organization, if they hopeto match the personality type with the climate and culture of the organization.
The literature was clear in pointing out that if departments want to increase retention they muststart with a solid recruiting process. Communications Carney (1998) believes that the key to employee retention is quite simple: communicate, communicate, communicate. Communication with the employees must begin early on in the relationship. He believes that the imprinting period of a new employee is probably less than two weeks. Employers must engage the employee early on by sharing how important the job they do is. Lynn (1997) follows this up by stating that early on an atmosphere of fairness and openness must be created by clearly laying out company policies. Taylor and Consenza (1997) indicate that it is important to communicate the values of the organization to its employees in order to increase their level of consent, participation, and motivation. Lynn (1997) echoes this thought by pointing out that the vision of the organization must be shared with the employee as well as the importance the employees play in helping fulfill it. Lack of communication may result in gaps between management’s perceptions of quality employment and the employees desired and perceived quality of employment (Taylor & Consenza, 1997). There must be a common purpose and trust among employees. People want to feel as if they are a vital piece of something larger (Carney, 1998). As Denton (1992) points out, managers must make sure employees know what they should do and why it is important. Lynn (1997) notes that communications must be a two way street to be effective. Employers must listen to what employees have to say. An atmosphere must be created in which employees feel comfortable making suggestions and trying our new ideas. The literature revealed that communication must begin early in the employer/employee relationship. Organizational values and culture must be made clear to all employees and their importance within the organization must be continually emphasized. Training As was noted earlier it is important that the employee feel like a valued member of the organization. Training helps underscore this message. Training personnel is a way to show you respect them and want them to grow. The department is making an investment in the employee by offering training (Marx, 1995). Good training can de-emphasize salaries and
benefits, in part by building a positive work environment and by giving employees advancement opportunities (Lynn, 1997). Lynn goes on to say that training helps strengthen employee loyalty. Training can help revitalize personnel. For an increasing number of people, the chance to learn new skills is a significant personal goal for both the career opportunities education can provide and for the chance to do something a little different (Mendonsa, 1998). Training emphasizes to the employee that they are valued and respected. This in turn to increased loyalty and retention.
Job Satisfaction While an organization must be competitive in terms of compensation and benefits, it is the relationship with the supervisor that is often a crucial factor in determining whether a person stays or goes (Mendonsa, 1998). Employees want more interaction with management, more self-satisfaction onthe job, more responsibility and more control over decisions affecting them. They want their work to make a difference and want to be part of something that matters (Taylor, 1997). Departments should encourage innovation by soliciting the advice and input of their staff members, followed by responses to ideas, complaints or questions (Taylor, 1997). It is difficult to keep people on the job if they have no say in how to do it (Spragins, 1992). People need to be recognized for their accomplishments in the workplace. In most organizations the feeling of under-recognition is the most pervasive feeling in the workplace (Mendonsa, 1998). Provide a great deal of personal and team recognition (Carney, 1998). Recognize achievements with memos, mentions in staff meetings or articles in the newspapers (Lynn, 1997). To retain employees, departments must offer career advancement opportunities. Departments failing to offer employees career opportunities, room for advancement and enhancement of skills and knowledge may find it difficult to retain qualified employees (Taylor, 1997). Marx (1995) concludes this by pointing out that promoting from within is
one of the proven methods of employee retention. Promoting from within shows that there is truly room for advancement and growth within the department. Employee involvement, recognition, importance of work, and career advancement opportunities are all important, when dealing with employee retention. Pay and Benefits In general people think that money and benefits or lack thereof, are the main reasons people leave their jobs, but this is not the case. While compensation and benefits may be a key factor in the final decision-making process, a money shortage is usually not what causes people to look in the first place (Mendonsa, 1998). Money may be the reason they give when they resign, but it’s like “white noise”. They are conscious of it for a while but if they are bored on the job, money alone is not going to keep them there (Branch, 1998). Although traditional benefits such as vacation and health are still important, today’s workers are also looking for more non-traditional benefits. Benefits such as flexible work ours, availability of childcare tuition assistance programs and discounts on services now top the list of desired benefits (Denton, 1992). The literature clearly indicates while still factors, money and benefits are not as important as job satisfaction in terms of employee retention. Employers have a need to keep employees from leaving and going to work for other companies. This is true because of the great costs associated with hiring and retraining new employees. The best way to retain employees is by providing them with job satisfaction and opportunities for advancement in their careers. The saying, good help is hard to find, is even truer these days than ever before because the job market is becoming increasingly tight (Eskildesen 2000, Hammer 2000). Eskildsen and Nussler (2000) suggest that employers are fighting to get talented employees in order to maintain a prosperous business. Ray Hammer (2000) as well as many other researchers/authors agree. Mark Parrott (2000) believes that, there is a straight line between employee satisfaction and customer satisfaction. He believes that today’s employees pose a complete new set of challenges, especially when businesses are forced to confront one of the tightest labor markets in decades. Therefore, it is getting more difficult to retain employees,
as the pool of talent is becoming more-andmore tapped-out. The research below, which focuses primarily on employee retention through job satisfaction, supports this contention. Employees that are satisfied and happy in with their jobs are more dedicated to doing a good job and taking care of customers that sustain the operation (Hammer 2000; Marini 2000; Denton 2000). Job satisfaction is something that working people seek and a key element of employee retention. Every person will have his or her own definition of what it means to be satisfied with a job. Studies show that employees who are satisfied with their jobs are more productive, creative and be more likely to be retained by the company (Eskildsen & Dahlgaard 2000; Kim 2000; Kirby 2000; Lee 2000; Money 2000; Wagner 2000). Today, changes in technology, global economics, trade agreements, and the like are directly affecting employee/employer relationships. “Until recently, loyalty was the cornerstone of that relationship. Employers promised job security and a steady progression up the hierarchy in return for the employee’s fitting in, performing in prescribed ways and sticking around. None of these assumptions apply today. Restructuring and layoffs occurring today are expected to continue far into the future. Employees are now finding that previous job skills are no longer valuable. They must now create new job growth possibilities, rather than waiting on promotions to be handed out. Fostering employee commitment can have a great impact on decreasing turnover rates. “Research shows commitment has a positive effect on productivity, turnover and employees willingness to help co-workers” (Bishop, 1997, p. 4). In fact, increased employee commitment has been shown to improve team performance and productivity and decrease absenteeism, turnover, and intention to quit. However, companies can take action to ensure that these increasing trends are minimized within their own individual cultures. Therefore, strong retention strategy must be implemented. First, a corporate values system must be defined based upon the organization’s values and vision. These values must guide the company and identify those employees desiring to move in the same direction. Next, trust must be established within all parts of the business. “Security comes from trust and trust comes from honesty and communication. The bottom line is that employees want to know their employer will be straightforward with them. Establish a process for sharing important information related to your business with your
employees” (Byrnes, 2002, P. 4). Third, assess employee priorities through surveying. The answers will allow an organization to structure effective reward programs, thus increasing employee satisfaction. Fourth, Byrnes recommends doing industry homework. Companies need to understand competitors’’ compensation and benefit programs. A clearer understanding of what is expected by employees within the industry provides the company the opportunity to increase satisfaction. Finally, the creation of a compensation and benefit package, supportive of company values and employee needs, is essential.
INDUSTRY PROFILE Indian Pharmaceutical Industry 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 force 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 annual growth rate of 9.9 per cent until 2010 and subsequently at 9.5 per cent till the year 2015.
Industry Trends ➢ The pharma industry generally grows at about 1.5-1.6 times the Gross Domestic
Product growth ➢ Globally, India ranks third in terms of manufacturing pharma products by volume
➢ The Indian pharmaceutical industry is expected to grow at a rate of 9.9 % till 2010 and after that 9.5 % till 2015 ➢ 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 ➢ The Indian vaccine market which was worth US$665 million in 2007-08 is growing at a rate of more than 20%
➢ The retail pharmaceutical market in India is expected to cross US$ 12-13 billion by 2012
Challenges 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: ➢ Regulatory obstacles ➢ Lack of proper infrastructure ➢ Lack of qualified professionals ➢ Expensive research equipments ➢ Lack of academic collaboration ➢ Underdeveloped molecular discovery program ➢ Divide between the industry and study curriculum Government Initiatives 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: ➢ Pharmaceutical units are eligible for weighted tax reduction at 150% for the research and development expenditure obtained. ➢ Two new schemes namely, New Millennium Indian Technology Leadership Initiative and the Drugs and Pharmaceuticals Research Program have been launched by the Government. ➢ The Government is contemplating the creation of SRV or special purpose vehicles with an insurance cover to be used for funding new drug research ➢ The Department of Pharmaceuticals is mulling the creation of drug research facilities which can be used by private companies for research work on rent Pharma Export 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 Pharmaceutical 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. Key players in Indian Pharmaceutical Industry 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: ➢ Ranbaxy Laboratories Limited 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 serves to customers from over 125 countries. Ranbaxy Laboratories 2009-2010 Q3 Net Profit Results showed a profit of Rs 116.6 crore as compared to Rs 394.5 crore deficits, recorded during the corresponding period last fiscal. ➢ Dr.
Reddy's Laboratories 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 generic products, applied for 22 new generic product registrations and filed 4 DMFs. ➢ Cipla 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-bacterial, cardiovascular drugs, antibiotics, nutritional supplements, antiulcerants, anti-asthmatics and corticosteroids. Cipla also offers other services like quality
control,
engineering,
project
appraisal,
plant
supply,
consulting,
commissioning and know-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.
➢ Nicholas Piramal 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 several international corporations like Cheissi, Italy; IVAX Corp; UK, F. Hoffmann-La Roche Ltd., Allergen Inc., USA etc.
➢ Glaxo Smithkline (GSK) 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, antiinvectives 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. ➢ Zydus Cadila 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. The net profit was Rs124.8cr which was increase of 39%; the increase was on account of higher sales and improvement in the OPM.
India's Domestic Pharmaceutical Market (12 Months Ended January 2009) Company Total Pharma Market Cipla Ranbaxy Glaxo Smithkline Piramal Healthcare Zydus Cadila
Size ($ Billion) 6.9 .36 .34 .29 .27 .24
Market Share (%) 100.0 5.3 5.0 4.3 3.9 3.6
Growth Rate (%) 9.9 13.4 11.5 -1.2 11.7 6.8
Future Scenario 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: ➢ According to a study by FICCI-Ernst & Young India will open a probable US$ 8 billion market for MNCs selling expensive drugs by 2015 ➢ The study also says that the domestic pharma market is likely to reach US$ 20 billion
by 2015 ➢ The Minister of Commerce estimates that US$ 6.31 billion will be invested in the domestic pharmaceutical sector ➢ Public spending on healthcare is likely to raise from 7 per cent of GDP in 2007 to 13 per cent of GDP by 2015 ➢ Dr Reddy's Laboratories has tied up with GlaxoSmithKline to develop and market generics and formulations in upcoming markets overseas ➢ Lupin, a Mumbai based pharmaceutical company is looking to tap opportunities of
about US$ 200 million in the US oral contraceptives market ➢ 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
COMPANY PROFILE Arbro Pharma is a WHO certified pharmaceutical company established in 1985. The company is engaged in the manufacture and sale of generic and proprietary pharmaceutical products. Arbro Pharma is one of the leading generic pharmaceutical companies in India having unique, modern, multiple plants located on the periphery of New Delhi, manufacturer of human Pharmaceuticals and animal health products. The company offers, Wide range of more than two hundred plus prescriptions and OTC formulations in pharmaceutical dosage forms, like Capsules, Tablets, Ointments, Liquid Orals, Powders and Small volume Parenteral preparations. The manufacturing is done under strict WHO cGMP guidelines to ensure high manufacturing standards to produce quality products. Backed by ultramodern formulations manufacturing facilities with fully automatic online operations with a built in area around 45000 sq. feet, Arbro Pharma is marketing both proprietary and generics under the categories of Antibiotics and Anti-infective, AntiPyretic, Analgesics, Anti-inflammatory, Anti-allergies, Steroids, Sex Hormones, AntiMalarial, Diuretics, Tranquillizers and various Vitamins preparations. Manufacturing facilities for Dry Sterile Powder Injectables formulations for the two anti-bacterial groups i.e. Beta-Lactam and Non Beta-Lactam. Looking forward Arbro Pharma is committed to improve its position in Small Volume Parenteral Preparations. Arbro Pharma has ever since strived to improve its existing facility by carrying out regular inspection and updating of technology for its products and processes and thus adhere to cGMP. To ensure that the cGMP standards are met and products comply with international quality standards, quality control measures having been imbibed at various stages of productions-from approval of raw materials to goods in-process as well as monitoring of the manufacturing process and extends upto checking of finished goods. Today, Arbro Pharma in a span of 24 years has registered more than 600 products more than any pharmaceutical company in India in all categories and dosage forms making Arbro Pharma one of the leading generic pharmaceutical companies in India. The quest for the quality products never ceased for Arbro Pharma and hence got the GMP approval by the FDA, India and World Health Organization.
The most precious asset of Arbro Pharma is its two hundred strong dedicated team consisting of people from different disciplines, placed at various locations but having one
common belief in the Company’s corporate Philosophy. A philosophy that propagates freedom of thought and growth for each individual. Where each one is encouraged to work with an independent mind and as a team striving to make a positive contribution towards alleviating human sufferings with advanced medical science. Arbro Pharma has been ensuring that its products should remain within the reach of masses, therefore, its pricing policies has been to provide high quality drugs at an affordable price. The quest for excellence would never cease and Arbro Pharma looks forward to strongly support the global challenge of achieving. Right from its inception Arbro Pharma’s objective remained to provide drugs of the highest quality and purity for the common man that is zealously persuade till date. ‘Excellence in quality’ is a commitment and the entire staff is dedicated towards this common goal. The quality did not start but was there from the beginning of the unit when the FDA, India, granted the GMP certificate. The regulatory body in India has the most stringent laws comparable to any international body and is fairly similar to the US FDA. As a result from the continued efforts to upgrade the existing facility and technology with much hard work, the company’s major achievement was when it was granted the WHO GMP certificate for 64 products. We proud our self to be among the best generic companies in India as far the quality is concern. At Arbro Pharma where our slogan long stands as "Care for Quality, Cure for All", is believed and followed by every person working for the company. Arbro Pharma is situated in an approved industrial area known as Kirti Nagar Industrial Area located in the heart of Delhi. The location is ideal and hygienic approached to the pollution free environment. The factory premises is away from open sewage, drains, public lavatory, and from other factories which produces disagreeable odour, fumes, large quantity of soot, dust and smoke.
In keeping with the needs of the time, the venture is totally eco and environment friendly. The manufacturing process is being disposed off as per the industrial norms and guidelines. Strict compliance to the rules and regulations set forth by the pollution control board are being adhered to. Arbro Pharma looks for the stronger support of its people to
adhere to cGMP requirements. Arbro Pharma is continuously upgrading its facility not only in quality but also its management & administration control and have recently filed for ISO 9002 certification. Arbro Pharma is located in the govt. approved industrial area of Kirti Nagar in the heart of New Delhi. The distance from New Delhi Railway Station is less than a km and IGI Airport is 10 Km. The company at present is spread over 45,000 Sq. ft. with a built in area of 33,000 Sq.ft. The building of the company is constructed strictly as per the conditions of Schedule M of the Drugs & Cosmetic Act, 1940 and their Rules 1945. The firm is also equipped with latest modern machinery in all the sections. The whole manufacturing area is centrally air-conditioned and is suitable to manufacture and store various pharmaceutical formulations at required temperature. The whole plant is capable to produce various pharmaceutical formulations by practicing good manufacturing practice (the latest implementation of the Drugs & Cosmetic Act). The company has independent huge stores to store various raw materials, packing materials and consumables. Total area of the stores is around 12000 Sq. ft. and the stores are adjoining to the main building of the company. The stores are in the shape of big halls, which are further divided into small and large partitions as per the requirement of the storage varying from product to product. The stores have sufficient capacity to store the various products to ensure the production schedule.
ELECTRICITY: The company has its own arrangement of electricity in case of failure of Government electricity system by way of two generating sets which is sufficient to run the whole unit day and night. A separate place away from manufacturing area has been provided for the generation of electricity, adjoining to the electricity room. Steam boiler is also fitted to feed the machines which require excess electricity and for production of water for injection.
LABORATORY: Apart from the manufacturing activities the company has its own independent laboratory equipped with all required testing equipment’s and is capable to test all types of Raw
Materials, Packing Materials, Semi-Finished products and Finished Products. The quality control laboratory is divided into the following sections: 1. Chemicals, Biochemical and Physicochemical Division 2. Fuming - Cupboard 3. Instrumentation Division 4. Sterility Testing 5. Microbiology Division 6. Pharmacology Division The company also have animal house and has the facilities to test the pharmaceutical products for toxicity before the release of any product for sale in the market. The testing methods developed by the company are authenticated and reliable. The whole area of the laboratory is centrally air-conditioned and all the testing is carried out under the supervision of expert technical staff approved by the State Government.
ANALYSIS AND INTERPRETATION
Q1. Do you have a program to assist employee when their personal problem may affect their on job productivity (e.g. alcohol or drug related, financial, etc.)?
1. Yes 2. No
Interpretation: In the above given data around 60% of the surveyed employees agree that the management take care of the problems if it will affect the performance of the employees but 40% employees are not satisfied with the way management handle their problems.
Q2. Are you presently doing performance evaluation for all field employees on a regular basis?
1. Yes 2. No
Interpretation: Since the field employees are mainly concerned with the customer and they are directly connected with customer, performance evaluation must be done and it is implied in the company also feel the
65% employees, while rest of the employees feel that it is mainly concerned with the profit only and not the actual evaluation of the employees.
Q3. Do you communicate regularly with field employees regarding the success of the company, future job prospects and other issues affecting the company?
1. Yes 2. No
Interpretation: Only 40% of the employees feel that the field employees are concerned regarding the changing scenario and the upcoming problems or the issues affecting the company, 60% feel that the field workers are only limited to the field and profits and they are not involved actually in the discussion, this work has been mainly done by the research and development department (R&D).
Q4. When lying off workers, do you try to find work for them also when in the industry?
1. Yes 2. No
Interpretation: Only few middle management people feel that it has been done but rest of the 80% feel that there is no such clause, but record says that no such situation has been observed yet.
Q5. Do you have a well understood pay for performance compensation program?
1. Yes 2. No
Interpretation: Most of the employees say yes to the question that they have system for compensation according to performance but 25% of the employees feel that they are not compensated according to their work and performance.
Q6. Do you have a formal orientation program for new employees?
1. Yes 2. No
Interpretation: Almost all of the employees feel comfortable with the program only few feel that such program do not include the whole knowledge of the company.
Q7. Do you provide incentives or rewards to employees for bringing forward suggestion on improving productivity?
1. Yes 2. No
Interpretation:
New ideas are always welcomed in the organisation feel 60% of the employees but 40% feel that they have not given ample amount of chance to present new ideas.
Q8. Do you formally recognize field employee with 20 or 25 years service with your organization?
1. Yes 2. No
Interpretation: Only 40% employees are aware of the record of field employee from 25-30 years but there is no such special recognition for these people, only the people related to the same particular field aware of them feel 60% employees.
Q9. Do you conduct occasional surveys of your employees, receiving formal feedback on company policies, compensation, benefits, employee attitudes, etc.?
1. Yes 2. No
Interpretation: Only 35%employees feel this data true as the compensation is not based on surveys and feedback, but it is based on management and the special criteria based on which it has been calculated feel the 65% of the employees.
Q10. Do you conduct regular survey of your competition to ensure your compensation policies are competitive?
1. Yes 2. No
Interpretation: Although the employees are not much satisfied with the compensation policy but regarding compensation policies to the competitors 70% feel that they provide the best in the industry, while 30% feel that they don’t keep regular check on the changing scenario.
Q11. Does your company offer a pension or retirement savings plan or profit sharing plan for field employees?
1. Yes 2. No
Interpretation: Almost all of the employees are satisfied with the Pension Plans Company is providing; only a few percent feel that it is comparable to the govt. plans.
Q12. Are you providing field employees with a comprehensive group benefits program (life insurance, extended medical and dental benefits, etc)?
1. Yes 2. No
Interpretation: Field employees are always benefited when we talk about the compensation plans as they directly deal with the customers and changing scenario and research and development.
Q13. Do you think that in the competitive age you have given the right environment to performer?
1. Yes 2. No
Interpretation: Regarding the working environment employees are a bit confused because they are not sure that they have given the right environment to perform comparative to others.
Q14. Do you have a formalized complaint resolution process within your company?
1. Yes 2. No
Interpretation: Only 10% of the employees feel that their problem has solved, rest feel that they don’t have such program and moreover they don’t have time to solve small issues on complains.
Q15. Do you organize any program like meditation classes or another stress buster for the employees?
1. Yes 2. No
Interpretation: 60% of the employees feel that they have given such meditation program no. of times depending on their work, while 40% have not attended such program yet; the 40% are the younger employees.
FINDINGS ➢ Management take care of their problems only 6o% of employee said that but the rest are not satisfied with management ➢ 35% employees feel that the evaluation is only for profit not for actual evaluation of employee on the other hand 65% feels opposite. ➢ Organization don’t involved field employees in discussion regarding changing scenario and upcoming problems. ➢ Management helps only few middle management employees in finding job at lay off. ➢ Company has a system of pay for performance 75% employees feel that but rest are opposite to it. ➢ Provides reward for forwarding any new suggestion and idea regarding any problem only feel by 60% of the employees. ➢ Not so much recognition for the field employees for their records in 25-30 years of job only a few employees are aware. ➢ Only 35% employees feels that feedback is provided by them regarding compensation, benefits and employees attitude but rest feel it is based on management and the special criteria based on which it has been calculated. ➢ Almost all of the employees are satisfied with the Pension Plans Company is providing only 2-3 employees are opposite to it. ➢ Regarding the environment for work half of the employees feel good but the other half are confused.
➢ No proper complaint solution program is there in the organization only 10% employees feel that organization provide solution for their problems. ➢ 60% of employees feel that organization arrange meditation program no. of times.
RECOMMENDATIONS ➢ In the above study I felt that there are lots of policies in the written form but the application part is missing, so I would suggest applying what has been written. ➢ In my study the % of field employee’s involvement is 40%only. But the field
employees are the back bone of the organisation so I feel that, the field employees can also be included during various discussions along with R&D department. ➢ The laying off worker does not have much security regarding the job prospective
in the industry feel 80% employees. Although this type of situation has not been arrived yet but I suggest that company must have such type of policies in their system for future security. ➢ In the organisation 40% employees feel that there is no recognition to the old field
employees. I suggest to the organisation that they can have regular half yearly programs in which all the employees can be introduced to the new staff and informal meetings can be there. ➢ 90% employees feel that they don’t have complain resolution programs so I suggest that complain handling department can be created for such types of resolution. ➢ 35% feel that there is no formal feed back involved during time of compensation
planning; I suggest that company can prepare a form in which they can have regular feed back from the employees.
CONCLUSION With the above analysis it has been concluded that the organisation is at the middle level. It performs the employee retention policies to a greater extent. The organisation has the potential to benefit from human resources programs. The introduction of a few programs could put it in to the ballpark of being a solid company to work for from an employee viewpoint. It covers the programs such as (compensation, benefits, retirement, supervisor training and safety) But some of the practices are in the written from only and yet to be applied in practical life and with the application of such programmes the organisation will reach to the extent. Out of the 15 question asked almost 55% response was in yes it means that the employees are satisfied with their policies but there is still hope for further improvements. Compensation policies: - compensation policies are the best mean to stop attrition rate and almost 65% employees are satisfied with the compensation plans and the performance evaluation programmes in the organisation. Working conditions: - working condition in the organisation are still to be improved feel 50% of the employees as the employees feel that there is less participation of the employees during discussion time and hence some part remain hidden Complain handling: - the organisation has poor complain handling process feel 90% of the employees which is a big drawback to the organisation. Training and development: - 70% employee’s feel that the training and development programmes is satisfactory, employees feel that company provides additional meditation programmes which help them to recover from their problems.
LIMITATIONS OF STUDY ➢ Time is very short for research, so this is very difficult to get the knowledge about everything. ➢ Since the filling of questionnaire and interviews need special attention so may be the employees are less interested in entertaining. ➢ The information was collected through the questionnaire is subject to willingness
of the respondent to respond.
BIBLIOGRAPHY
➢ Boudreau Milkovich, Human Resource Management, New Delhi, business ➢ ➢ ➢ ➢ ➢ ➢ ➢ ➢
publications,inc:1994 Sahu, R.K.,Training for Development, New Delhi, Excel Books,2008 Branch, Shelly (1998, November). The new economy: You hire ‘em. But can you keep ‘em? Fortune, 247. Carney, Karen (1998, November). How businesses can reduce high employee turnover.Inc, 47. Denton, D. Keith (1992). Recruitment, retention, and employee relations. West Westport, CT: Quorum Lynn, Jacquelyn (1997). Hard to hold: Conquer the tight labor market by retaining valuable workers. Entrepreneur, 34. Spragins, Ellen E. (1992, November). How to retain key employees. Inc., 36 Taylor, Susan L. & Cosenza, Robert M. (1997, December). Internal marketing can reduce employee turnover. Supervision, 3-5 The Human Factor, Feb 2011,volume 2, issue 3
Website:
➢ www.citehr.com ➢ www.google.com ➢ www.humanlinks.com ➢ http://retention.naukrihub.com ➢ http://www.expresspharmaonline.com/20060615/pharmalife01.shtmlg
Date:-
QUESTIONNAIRE
Name: Email Address: Contact Tel (inc. STD):Q1. Do you have a program to assist employee when their personal problem may affect their on job productivity (e.g. alcohol or drug related, financial, etc.)? 1. Yes 2. No Q2. Are you presently doing performance evaluation for all field employees on a regular basis? 1. Yes 2. No Q3. Do you communicate regularly with field employees regarding the success of the company, future job prospects and other issues affecting the company? 1. Yes 2. No Q4. When lying off workers, do you try to find work for them also when in the industry? 1. Yes 2. No Q5. Do you have a well understood pay for performance compensation program? 1. Yes 2. No Q6. Do you have a formal orientation program for new employees? 1. Yes 2. No Q7. Do you provide incentives or rewards to employees for bringing forward suggestion on improving productivity? 1. Yes 2. No Q8. Do you formally recognize field employee with 20 or 25years service with your organization?
1. Yes 2. No
Q9. Do you conduct occasional surveys of your employees, receiving formal feedback on company policies, compensation, benefits, employee attitude s, etc.? 1. Yes 2. No Q10. Do you conduct regular survey of your competition to ensure your compensation policies are competitive? 1. Yes 2. No Q11. Does your company offer a pension or retirement savings plan or profit sharing plan for field employees? 1. Yes 2. No Q12. Are you providing field employees with a comprehensive group benefits program (life insurance, extended medical and dental benefits, etc? 1. Yes 2. No Q13. Do you think that in the competative edge you have given the right environment to the performer? 1. Yes 2. No Q14. Do you have a formalized complaint resolution process within your company? 1. Yes 2. No Q15. Do you organize any program like meditation classes or another stress buster for the employees? 1. Yes 2. No Q16. Please use the space below for any further comments to your responses, or any suggestions on how I could improve
