Employee Engagement at Dr Reddy's Final

7/25/2019 Employee Engagement at Dr Reddy's Final

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CHAPTER I

INTRODUCTION

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1. INTRODUCTION

Employee engagementis a property of the relationship between an organization

and its employees. An "engaged employee" is one who is fully absorbed by and

enthusiastic about their workand so takes positive action to further the organization's

reputation and interests.

An organization with 'high' employee engagement might therefore be expected to

outperform those with 'low' employee engagement, all else being equal mployee

engagement is a workplace approach designed to ensure that employees are committed to

their organization!s goals and values, motivated to contribute to organizational success,and are able at the same time to enhance their own sense of wellbeing.

#here are differences between attitude, behaviour and outcomes in terms of

engagement. An employee might feel pride and loyalty $attitude%& be a great advocate of

their company to clients, or go the extra mile to finish a piece of work $behaviour%.

utcomes may include lower accident rates, higher productivity, fewer conflicts, more

innovation, lower numbers leaving and reduced sickness rates. (ut we believe all three )

attitudes, behaviours and outcomes ) are part of the engagement story. #here is a virtuous

circle when the preconditions of engagement are met when these three aspects of

engagement trigger and reinforce one another engaged organizations have strong and

authentic values, with clear evidence of trust and fairness based on mutual respect, where

two way promises and commitments ) between employers and staff ) are understood, and

are fulfilled.

Although improved performance and productivity is at the heart of engagement, itcannot be achieved by a mechanistic approach which tries to extract discretionary effort

by manipulating employees! commitment and emotions. mployees see through such

attempts very quickly& they lead instead to cynicism and disillusionment. (y contrast,

engaged employees freely and willingly give discretionary effort, not as an *add on!, but

as an integral part of their daily activity at work.

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(ut is employee engagement something new, or simply old wine $longstanding

management approaches% in new $fashionable managementspeak% bottles+ s it -ust the

latest management fad+ e believe that while it does have clear overlaps with analytical

antecedents such as commitment, *organizational citizenship behaviour!, -ob involvement

and -ob satisfaction, there are also crucial differences.

An engaged employee experiences a blend of -ob satisfaction, organisational

commitment, -ob involvement and feelings of empowerment. t is a concept that is greater

than the sum of its parts.

/espite there being some debate about the precise meaning of employee

engagement there are three things we know about it0 it is measurable& it can be correlated

with performance& and it varies from poor to great. 1ost importantly employers can do a

great deal to impact on people!s level of engagement. #hat is what makes it so important,

as a tool for business success.

2uman resource executives in ndia continue to struggle with talent management

issues, particularly retention. #he quest to find the best way to retain employees has taken

23 pundits through concepts such as employee review, employee satisfaction and

employee delights. #he latest idea is 4mployee ngagement5, a concept that holds, that,

it is the degree to which an employee is emotionally bonded to his organization and

passionate about his work that really matters. ngagement is about motivating employees

to do their best. An engaged employee gives his company his hundred percent. #he

quality of output and competitive advantage of a company depends upon the quality of its

people. t has been proved that there is an intrinsic link between employee engagement,

customer loyalty and profitability. hen employees are effectively and positively

engaged with their organization they form an emotional connection with the company.

#his impacts their attitude towards the company!s clients, and thereby improves customer

satisfaction and service levels. 1ost organizations realize today that a satisfied employee

is not necessarily the best employee in terms of loyalty and productivity.

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NEED AND IMPORTANCE OF THE STUDY

mployees also should be shown that they are valued from their first day on the

-ob, 167( said, and agencies should have mentoring programs to help them define their

roles. n addition, supervisors should use the various phases in the performance

management process to provide guidance and feedback and to tell employees how their

work contributes to the agency!s overall mission. ngagement is important for managers

to cultivate given that disengagement or alienation is central to the problem of workers

lack of commitrnent and motivation. An organization!s capacity to manage employee

engagement is closely related to its ability to achieve high performance levels and

superior business results. 6ome of the advantages of engaged employee are.

ngaged employees will stay with the company be an advocate of the company

and its products and services and contribute to bottom line business success. #hey will

normally perform better and more motivated. #here is a significant link between

employee engagement and profitability. its builds passion, commitment and alignment

with the organization!s strategies and goals increases employees trust in the organization.

7rovides high energy working environment.

nspire by promoting alignment and motivation not through orders, but via

messages and narratives that demonstrate the purpose of the organization. 3eport clearly,

frequently and with reach, keeping the company routine stable through the provision of

relevant information& mpower through educational experiences, the fundamentals of

brand culture. 7lan, execute and evaluate a good strategy that considers brand value and

inspires creative activities 8 9eadership0 9eaders need to be visible and in touch withtheir front line staff ) a desk is a dangerous place to run an organization. mployee :oice

An empowered employee will have a voice. here employee views are sought out they

should be listened to and visibly acted upon. ntegrity (ehaviour throughout the

organisation is consistent with the stated values, leading to employee trust and a sense of

integrity.

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OBECTI!ES OF THE STUDY

#o examine the strategies adopted and practices followed in /r. 3eddy!s

9aboratory regarding employee engagement system #o examine the importance given by employees to their work ; the level of their

satisfaction.

#o find out whether the changes in technology in /r. 3eddy!s 9aboratory have

been properly matched by training ; development of its manpower.

#o study the effectiveness of free flow of information between the management

and the employees.

#o examine the effects of work culture8environment and ethos in /r. 3eddy!s

9aboratory on employees. #o find out whether the employees are being adequately compensated for their

service and labour.

#o examine the quality of worklife of the employees in /r. 3eddy!s 9aboratory .

#o examine whether the welfare measures provided truly reflect the management!s

philosophy and policy. #o check whether the employee engagement survey

outcome is being implemented or not.

#o suggest measures for improvement.

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SCOPE OF THE STUDY

#he study provides an insight into the most crucial problem of human resource

management that is retaining the employee. #he study includes various strategies adopted

and proposed which provides a clear understanding to the various factors related to the

engagement and their interrelationship. A good understanding of the study and the usage

of its suggestions can help a great deal to the employers to reduce attrition. #he engaged

employees and the organizations go that extra mile for each other realizing the benefits

that flow through an investment in such a relationship.

#hus, mployee engagement is a barometer that determines the association of a

person with the organization.


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RESEARCH METHODO"O#Y

3esearch methodology is a way to systematically solve the research problem. t may be

understood as a science of studying how research is done scientifically. n this we study

the various steps that are generally adopted by the researcher studying his research

problem along with the logic behind them.

#he general methods adopted are as follows.

1. Re$ea%&' (e$)gn *3esearch /esign is conceptual structure within which research is

conducted. t is needed because it facilitates the smooth sailing of various research

operations, thereby making research as effective as possible yielding maximal

information with minimal expenditure of effort time and money.

+. Sampl)ng te&'n),-e0 A random sampling techniques was used to select the sample for

conducting the survey.

. Sample S)/e*A sample size of >?? employees has been considered.

0. Data Colle&t)on*#he task of data collection begins after the research problem has been

defined and research design is chalked out. @or the purpose of study two kinds of data

have been used. #hey are0

)2 P%)ma%y Data* #he data is gathered for the first time by the researcher questionnaire.

))2 Se&on(a%y Data* #his data is taken by the researcher from secondary sources,

internal or external books, internet, -ournals and organization catalogues.

3. Data Analy$e$ an( Inte%p%etat)on*/ata from questionnaires has been tabulated by

using simple statistical techniques. herever possible, percentages and graphical

presentations has been worked out and displayed. #hus the suitable interpretations have

been drawn there.

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"IMITATIONS OF THE STUDY

#he research conduct was limited to 2yderabad region only. /ue to time constraints, more time could not be devoted to individual respondent.

A busy schedule of dealers 8 retailers also makes the collection of information a

very difficult one.

@ull district was not covered as this is very tedious -ob to be done in B days.

2owever almost all main areas of the district were covered.

#he pro-ections are purely based on verbal meetings and may be influenced by

unprecedented factors.

hile studying the above fact should taken into consideration.

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CHAPTER II

RE!IE4 OF "ITERATURE

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+. RE!IE4 OF "ITERATURE

EMP"OYEE EN#A#EMENT

mployees who are fully engaged tend to work in offices that achieve better program

results, call in sick less often and stay with their agencies longer, according to a new

report by the 1erit 6ystems 7rotection (oard. #he report, which is based on results from

C??D survey of nearly E,??? employees at CF federal agencies, found that despite

dwindling resources and increased pressure to improve programs, agencies can thrive if

managers connect with their employees.

CHA""EN#ES*

ngagement as a beneficial twoway relationship where employees and employers *go the

extra mile! for one another. =ompanies that get it right reap the rewards and so do their

employees, that the benefits of having happy staff are welldocumented. (ut the challenge

for many organizations is showing that engagement brings a tangible return on investment

) a process many companies find elusive.

FINDIN#S*

A survey of F?? 23 professionals conducted via the 7ersonnel #oday website, are

surprising. ne in four organizations admitted that staff was not engaged. A similar

number said the situation had worsened in the past year. And FF per cent said that tackling

engagement was an over whelming challenge.

SO"UTIONS*

#he solution is that engagement cannot be addressed by a mechanistic approach. 4ach

situation is different and it comes back to the fact that employers and employees must

support each other.5

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EMP"OYEE EN#A#EMENT

mployee engagement has become a growing management concern ngaged workersmake more money for the company. #hey! contribute towards a healthy working

environment. #hey stay with the organization longer and are more committed to quality

and growth than are the other two groups of notengaged and actively disengaged

workers.

CHA""EN#E*

A 1anager should spend ample amount of time with his subordinates. 2e should get the

individual to view his or her role from a broader perspective instead of from a narrow

taskoriented point of view. #hey can help employees clarify how they can achieve their

outcomes. 1easurement of outcomes also becomes crucial.


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EMP"OYEE EN#A#EMENT

An organization!s productivity is measured not in terms of employee satisfaction

but in terms of employee engagement. mployees are said to be engaged when they showa positive attitude towards the organization and express a commitment to remain with the

organization. t is the level of commitment and involvement an employee has towards the

organization and its values. An engaged employee is aware of the business context and

works with colleagues to improve performance within the -ob for the benefit of the

organization. ngagement at work was conceptualized by Gahn $>HH?% as the harnessing

of organizational members! selves to their work roles. n engagement people employ and

express themselves physically, cognitively and emotionally during role performances.

mployee engagement is thus the level of commitment and involvement an

employee has towards their organization and its value. #he organization must work to

develop and nature engagement which requires a two way relationship between employer

and employee. #hus employee engagement a barometer that determines the association of

a person with the organization. ngagement is most closely associated with the existing

construction of *Job nvolvement!.

#hus -ob involvement results from a cognitive -udgment about the need satisfying

abilities of the -ob. Jobs in this view are tied to one!s self image. @urthermore engagement

entails the active use of emotions. @inally engagement may be thought of as an antecedent

to -ob involvement in that individuals who experience deep engagement in their roles

should come to identify with their -obs. mployee engagement he gave importance to all

three aspects, physical, cognitive and emotional. hereas in -ob satisfaction importance

has been more given to cognitive side.

According to the study of atson yatt, the profit chain establishes relationship

between profitability, customer loyalty and employee!s satisfaction, loyalty and

productivity. 6atisfaction is largely influenced by the services provided to customers.

6atisfied, loyal and productive employee creates value. mployee satisfaction in turn

results primarily from high quality support services and policies that enable employees to

deliver results to customers.

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FOCUS ON EMP"OYEE EN#A#EMENT

ngagement by industry ith the exception of government sector which has

relatively low engagement levels some high tech industries $pharma, biotech% score lowwhereas some service focused industries $retail, consumer products% score high.

ngagement by level6tudies show that people higher up in the organization experience

higher engagement. 2owever there is a drop in engagement past the vicepresident level.

ngagement by gender the survey reveals a larger disparity between men and women.

1en count KImore fully engaged and LIless disengaged than women. #aking global

figures into account, it can be said that ndian workers are among the most focused and

satisfied in the world.

BASIC ASPECTS OF EMP"OYEE EN#A#EMENT

#here are three basic aspects of employee engagement0 #he employees and their

own unique psychological makeup and experience.

#he employers and their ability to create the conditions that promote employee

engagement. nteractions between employees at all levels. #hus employee engagement is

a partnership between a company and its employee where everyone works together to

achieve the business ob-ectives of the company and fulfill their personal aspirations. t is

therefore largely the organization!s responsibility to create an environment and culture

conducive to this partnership and a winwin equation.

CATE#ORIES OF EMP"OYEES

#here are three different types of employees. #hey are engaged, not engaged, actively

disengaged.

>. EN#A#ED 5

ngaged employees are builders. #hey want to know the desired expectations for

their role so that they can meet and exceed them. #hey are naturally curious about their

company and their place in it. #hey perform at consistently high levels. #hey want to use

their talents and strengths at work every day. #hey work with passion and they drive

innovation and move their organization forward.

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+. NOT EN#A#ED 5

Mot engaged employees tend to concentrate in tasks rather than the goals and

outcomes they are expected to accomplish. #hey want to be told what to do -ust so thatthey can do it and say they have finished. #hey focus on accomplishing tasks outcome.

mployees who are not engaged tend to feel their contributions are being overlooked and

their potential is not being tapped. #hey often feel this way because they don!t have

productive relationships with their managers or with their coworkers.

. ACTI!E"Y DISEN#A#ED

#he actively disengaged employees are the cave dwellers. #hey are consistently

against *virtually everything!. #hey are not -ust unhappy at work they are busy acting out

their unhappiness. #hey sow seeds of negativity at every opportunity. veryday actively

disengaged workers undermine what their engaged coworkers accomplish. #he problems

and tensions that are fostered by actively disengaged workers can cause great damage to

an organization!s functioning.

THE RO"E THEORY

mployee engagement can be defined in terms of what people do at work,

something called the role theory. 3ole theory reviews different roles that people engage in

at work, and it explains reasons why people engage in certain roles and not in others.

#he five work related roles that exist in any company are0

o6 'ol(e% %ole 5 mployees come to work and do the -ob that is listed in their

-ob description

Team mem6e% %ole 5 mployees go 4above and beyond5 to help members of their

team work towards common goals. Ent%ep%ene-% %ole 5 mployees come up with new ideas and processes and try to

get those ideas implemented. Ca%ee% %ole 5 mployees do things to enhance their career in the organization&

they learn, they adapt new skills, and more.

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O%gan)/at)on Mem6e% Role0

mployees do things that promote and help the company even if it!s not part of

their -obs or their team!s duties n general we find that most employees have a sense of

fairness and even if their employer treats them poorly most will show up to work and do

the -ob role. (ut having employee show up at work simply doing their -obs gets an

employer nowhere in terms of long term competitiveness. f all your employees show up

and only do their -obs, then you are not building organizational strength and long term

competitiveness through people because anyone can hire those same employees and

duplicate what you are doing. t is the synergy that comes from people working together

and gathering creative ideas that leads to long term organizational wealth creation. #hat

synergy and above and beyond behavior is evidence of employee engagement

75A5B MODE"

According to GA( 1/9 for the success of employee engagement, the company

must follow three steps i.e. Gnowledge, Attitude and (ehavior

7NO4"ED#E*5

6takeholder must be aware of what is happening, what the change or engagement

effort is, and what they will see happening across the organization, to and by whom ,over

what time period .this is the 4launch5 part of engagement programmes, and is also where

much of the effort is focusedoften to the detriment of the subsequent stages.

ATTITUDE*5

nce the stakeholders have internalized the knowledge, they need to form an

attitude about what they know .generally this means that they must see tangible, positive

evidence that the organization is serious about and committed to the programme.

vidence of behavior change emerges in key leaders, managers and employees as, for

example, process begin to evolve and changes are made.

BEHA!IOUR

nce stakeholders have internalized the information and formed an attitude about

the change and what it means to them, it is essential that they are given the tools,

guidance and support needed to change their behaviours and must be visibly intolerant of

behaviors that do not align with achieving the ob-ectives behind the overall engagement

efforts

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THE TEN C8S OF EMP"OYEE EN#A#EMENT

2ow can leaders engage employees! heads, hearts, and hands+ #he literature offers

several avenues for action& we summarize these as the #en =!s of employee engagement.

1. Conne&t0

9eaders must show that they value employees. mployeefocused initiatives such

as profit sharing and implementing work)life balance initiatives are important. 2owever,

if employees! relationship with their managers is fractured, then no amount of perks will

persuade employees to perform at top levels. mployee engagement is a direct reflection

of how employees feel about their relationship with the boss. mployees look at whether

organizations and their leader walk the talk when they proclaim that, 4ur employees are

our most valuable asset.5

+. Ca%ee%0

9eaders should provide challenging and meaningful work with opportunities for

career advancement. 1ost people want to do new things in their -ob. @or example, do

organizations provide -ob rotation for their top talent. Are people assigned stretch goals.

/o leaders hold people accountable for progress+ Are -obs enriched in duties and

responsibilities+


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3. Cong%at-late0

(usiness leaders can learn a great deal from oo den!s approach. 6urveys show

that, over and over, employees feel that they receive immediate feedback when their

performance is poor, or below expectations. #hese same employees also report that praise

and recognition for strong performance is much less common. xceptional leaders give

recognition, and they do so a lot& they coach and convey.

:. Cont%)6-te0

7eople want to know that their input matters and that they are contributing to the

organization!s success in a meaningful way. @irst, an employee understands of the

connection between her work ) as operational by specific -obrelevant behaviors ) and

the strategic ob-ectives of the company had a positive impact on -ob performance.

6econd, an employee!s attitude towards the -ob and the company had the greatest impact

on loyalty and customer service than all the other employee factors combined. #hird,

improvements in employee attitude led to improvements in -obrelevant behavior& this, in

turn, increased customer satisfaction and an improvement in revenue growth. n sum,

good leaders help people see and feel how they are contributing to the organization!s

success and future.

;. Cont%ol*

mployee!s value control over the flow and pace of their -obs and leaders can

create opportunities for employees to exercise this control. A feeling of 4being in on

things,5 and of being givenopportunities to participate in decision making oftenreduces

stress& it also creates trust and a culture where people want to take ownership of problems

and their 6olutions.


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=. C%e()6)l)ty0

9eaders should strive to maintain a company!s reputation and demonstrate high

ethical standards. 7eople want to be proud of their -obs, their performance, and their

1>. Con?)(en&e*


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. Empo@e%ment

mployees want to be involved in decisions that affect their work. #he leaders of

high engagement work places create a trustful and challenging environment in which

employees are encouraged to dissent from the prevailing orthodoxy and to input and

innovate to move the organization forward.

0. Image

2ow much the employees are prepared to endorse the products and services which

their company provides its customers depends largely on their perception of the quality of

those goods and services. 2igh levels of employee engagement with high levels of

customer engagement.

3. E,-al oppo%t-n)ty an( ?a)% t%eatment

#he employee engagement levels would be high if their superiors provide equal

opportunities for growth and advancement to all the employees.

:. Re5 In?o%&ement o? people ?o&-$e( pol)&)e$

=ontinuous reinforcement exists when senior management provides staff with

budgets and resources to accomplish their work and empowers them.

;. Comm-n)&at)on

#he company should follow the open door policy. #here should be both upward

and downward communication with the use of appropriate communication channels in the

organization. f the employee is given a say in the decision making and has the right to be

heard by his boss then the engagement levels are likely to be high


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1>. Pe%?o%man&e app%a)$al

@air evaluation of an employee!s performance is an important criterion for

determining the level of employee engagement. #he company which follows an

appropriate performance appraisal technique $which is transparent and not biased% will

have high levels of employee engagement.

11. Pay an( 6ene?)t$

#he company should have a proper pay system so that the employees are

motivated to work in the organization. n order to boost his engagement levels the

employee should also be provided with certain benefits and compensation.

1+. Healt' an( $a?ety

3esearch indicates that the engagement level sare low if the employees do not feel

secure while working. #herefore every organization should adopt appropriate methods

and systems for the health and safety of their employees.

1. o6 $at)$?a&t)on

nly a satisfied employee can become an engaged employee. #herefore it is very

essential for an organization to see to it that the -ob given to the employee matches his

career goals which will make him en-oy his work and he would ultimately be satisfied

with his -ob.

10. Fam)ly ?%)en(l)ne$$

A person!s family life influences his work life. hen an employee realizes that the

organization is considering his family!s benefits also, he will have an emotional

attachment with the organization which leads to engagement.

13. Co5ope%at)on

f the entire organization works together by helping each other i.e., all the

employees as well as superiors coordinate well then the employees will be engaged.

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BENEFITS TO THE OR#ANISATION

mployee engagement builds passion, commitment and alignment with the

organization!s strategies and goals. Attracts more people like existing employee

ncreases employees! trust in organization.

=reates a sense of loyalty in a competitive environment.

9owers attrition rate.

ncreases productivity and improves morale.

7rovides a high energy working environment.

mproves overall organizational effectiveness.

(oosts business growth.

1akes the employee effective brand ambassadors for the company.

EMP"OYEE EN#A#EMENT IN !IRTUA"EN!IRONMENT

Geeping remote employees engaged is a critical challenge for managers.

mployees need to be engaged through various forums and interactions to build

excitement and passion through various communication channels and events. @or

example, at 6un 1icrosystems, employees are treated with utmost importance. #he senior

management team interacts with the employees through the intranet where the employees

are engaged in active dialogue on corporate goals and directions and also solicits their

feedback. 1anagement members engages with the employees on technological directions

through personal blog.$holding six town halls with employees every year%. #he company

also reaches out the employees! family by inviting and involving them in some events.

#he internal website of the company is updated daily, thus keeping employees abreast of

the happenings and developments in their organization.

=onducting a survey without planning how to handle the results can lead

employees to disengage. t is therefore to feel the pulse, the action plan is -ust as essential.

mployee engagement should be measured at regular intervals in order to track its

contribution to the success of the organization.

THE "OYA"TY FACTOR

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#he key to employee engagement is creating greater motivation for their work

and commitment to their organization. t is not possible to retain professionals only by

paying high salaries and offering attractive benefits. e need to create enthusiasm for

their roles, their work and the organization and ensure they are well integrated. mployee

engagement relates to the employee!s commitment to the organization!s success. ngaged

employees who are inspired and guided by the leadership equipped with the right tools

and managed by the right systems and process deliver superior performance. mployee

engagement today encompasses training, development, work environment, leadership,

performance management, work life balance, communication, compensation, benefits,

commitment, fun and social activities. #he quality of output and competitive advantage of

a company depends on the quality of people. mployees want to work for an organization

that issuccessful, legal, provides opportunities to grow, has managers who help

employees and is socially responsible.

MEASURIN# EMP"OYEE EN#A#EMENT

mployee engagement can be measured from two dimensions&

2ow employees feel $their emotions towards the company, the leadership, the

work environment etc%.

2ow they intend to act in the future $will they stay, give extra effort

etc%.mployee engagement can be revealed in several ways, including *pulse! to annual

surveys, tracking changes in the attrition rate, increase in the number of employee

referrals and growth in productivity and business. n many organizations the age old

employee satisfaction surveys were considered the most popular method for measuring

how happy an employee was in the organization. #his is slowly being replaced by surveys

that can effectively measure employee engagement. @or example, employee opinion

survey. #he analyzed results help us gauge the level of employee engagement within the

company. t also helps to identify the weak areas. After each survey Action 7lanning


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Step 15 ")$ten

#he employer must listen to his employees! and remember that this is a continuous

process. #he information employee!s supply will provide direction. #his is the only way

to identify their specific concerns. hen leaders listen, employees respond by becoming

more engaged. #his results in increased productivity and employee retention. ngaged

employees are much more likely to be satisfied in their positions, remain with the

company, be promoted and strive for higher levels of performance.

Step+5 Mea$-%e &-%%ent le9el o? employee engagement.

mployee engagement survey let us know what level of engagement the

employees are operating. =ustomizable employee survey will provide with a starting

point towards the efforts to optimize employee engagement. #his kind of survey is a

diagnostic tool of choice in the battle for the hearts of employees.

Step5 I(ent)?y t'e p%o6lem a%ea$

dentifying the problem areas helps to see which are the exact areas, which lead to

disengaged employees.

Step05 Ta)ng a&t)on to )mp%o9e employee engagement

t acting upon the problem areas nothing is more discouraging to employees than

to be asked for their feed back and see no movement toward resolution of their issues.

ven the smallest actions taken to address concerns will let the staff know how their input

is valued. @eeling valued will boost morale, motivate and encourage future input. #aking

action starts with listening to employees! feedback and a definitive action plan will need

to be put in place finally.

hile it is possible to measure engagement itself through employee surveys, this

does not assist in identifying areas for improvement within organizations. #o manage

employee engagement upwards, it is necessary to identify what drives engagement.

6ome points from research into drivers of engagement are presented below0

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Employee pe%&ept)on$ o? o6 )mpo%tan&e "...an employee's attitude toward the -ob's

importance and the company had the greatest impact on loyalty and customer servicethan

all other employee factors combined."N>O

Employee &la%)ty o? o6 eGpe&tat)on$ "f expectations are not clear and basic

materials and equipment are not provided, negative emotions such as boredom or

resentment may result, and the employee may then become focused on surviving more

than thinking about how he can help the organization succeed."

Ca%ee% a(9an&ement)mp%o9ement oppo%t-n)t)e$ "7lant supervisors and managers

indicated that many plant improvements were being made outside the suggestion system,

where employees initiated changes in order to reap the bonuses generated by the

subsequent cost savings."N>DO

Reg-la% ?ee(6a& an( ()alog-e @)t' $-pe%)o%$ "@eedback is the key to giving

employees a sense of where they!re going, but many organizations are remarkably bad at

giving it."N>FO"'hat really wanted to hear was '#hanks. Pou did a good -ob.' (ut all my

boss did was hand me a check.'"N>CO

-al)ty o? @o%)ng %elat)on$')p$ @)t' pee%$ $-pe%)o%$ an( $-6o%()nate$ "...if

employees' relationship with their managers is fractured, then no amount of perks will

persuade the employees to perform at top levels. mployee engagement is a direct

reflection of how employees feel about their relationship with the boss." N>LO

Pe%&ept)on$ o? t'e et'o$ an( 9al-e$ o? t'e o%gan)/at)on "'nspiration and values' is

the most important of the six drivers in our ngaged 7erformance model. nspirational

leadership is the ultimate perk. n its absence, NitO is unlikely to engage employees."

E??e&t)9e Inte%nal Employee Comm-n)&at)on$ which convey a clear description of

"what's going on". "'

Re@a%( to engage 9ook at employee benefits and acknowledge the role of incentives.

"An incentive to reward good work is a tried and test way of boosting staff morale and

enhancing engagement."

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=ommitment theories are rather based on creating conditions, under which the employee

will feel compelled to work for an organization, whereas engagement theories aim to

bring about a situation in which the employee by free choice has an intrinsic desire to

work in the best interests of the organization..

3ecent research has focused on developing a better understanding of how variables such

as quality of work relationships and values of the organization interact, and their link to

important work outcomes.N>KO@rom the perspective of the employee, "outcomes" range

from strong commitment to the isolation of oneself from the organization

IMPORTANCE OF EN#A#EMENT

ngagement is important for managers to cultivate, given that disengagement or

alienation is central to the problem of worker!s lack of commitment and motivation.

1eaningless work is often associated with apathy and detachment from ones works

$#homas; :elt house %.n such conditions, individuals are thought to be estranged from

their selves. An organization!s capacity to manage employee engagement is closely

related to its ability to achieve high performance levels and superior business results. n

the workplace research on employee engagement $2arter,6chmidt;2ayes,C??C% have

repeatedly asked employee whether they have the opportunity to do what they do best

every day. hile one in five employees strongly agree with this statement. #hese work

units scoring higher on this perception have substantially higher performance. #hus,

employee engagement is critical to any organization that seeks to retain valued

employees.

As organizations globalize and become more dependent on technology in a virtual

working environment, there is a greater need to connect and engage with employees to

provide them with an organizational identity. ngaged employees are more likely to stay

and be an advocate of the company!s product and services. #hey contribute to the overall

success of the organization. A greater number of loyal employees ensure low recruitment

and training costs, in effect enhancing the productivity of the organization. #hey are also

more willing to put in extra effort when the organization needs it. #heir impact on the

working environment is also significant as they are more focused on organizational

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benefit than personal goals. #his consequently reduces feelings of acrimony and internal

rivalries. #hey also pro-ect a positive image to new recruits and this motivates the latter to

perform better and assimilate themselves in the office culture.

mployee engagement is an umbrella term that captures any number of factors including

-ob satisfaction but it's important to recognize that different factors lead to different

outcomes.

All areas of the economy are experiencing financial strain, including the public sector

where the workforce is having to negotiate a considerable amount of change. #his is

evident in places such as the M26, where staff will be tasked with implementing the

recent 2ealth and 6ocial =are Act.


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OR#ANISATIONA" INITIATI!ES

1ost organizations have a range of programmes to improve the engagement level

of their employee. t should start right at the selection stage. =hoosing the right fit andgiving a realistic -ob preview. 6trong induction and orientation programme. 3igorous

training and development from technical to soft skills to leadership development

programme. #o keep up the morale of people and drive them towards excellent

performance, incentives can be given such as recognition letters, profit sharing schemes,

long performance awards, 67s, building assets like own home. 3egular feedback to all

people. =ommunication forums like the inhouse magazine and regular surveys and

conferences. #o maintain the quality of worklife and a balance between

personal8professional lives, there are recreational activities like festivities, gettogethers,

sports etc.An open and transparent culture to empower its people and development

repreneurs.

INCREASIN# EMP"OYEE EN#A#EMENT

7rovide :ariety #edious, repetitive tasks can cause burn out and boredom over

time. f the -ob requires repetitive tasks, look for the ways to introduce variety by rotating

duties, areas of responsibility, delivery of service etc. =onduct periodic meetings with

employees to communicate good news, challenges and easytounderstand company!s

financial information. 1anagers and supervisors should be comfortable communicating

their staff and able to give and receive constructive feedback. ndulge in employee

deployment if he feels he is not on the right -ob. 7rovides an open environment.

=ommunicate openly and clearly about what!s expected of employee at every levelyour

vision, priorities, success measures etc.


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REA" EMP"OYEE EN#A#EMENT RU"ES

e often think that super important corporate initiatives will transform our

organization into places where everyone will come to work and want to be more engaged.

=orporate initiatives can!t make the magic. mployee engagement happens only when

you remove barriers to work and these barriers are unique to every work group. #he

people who deliver the corporate initiatives have to make engagement happen, i.e., the

managers.

HO4 TO MO!E O4NERSHIP TO MANA#ERSAND EMP"OYEES

n order to move the employee engagement process from ownership by corporate

23 to ownership by and employees, several things must happen

>. 1easurement of employee engagement must be done more than once in a year.

e need multiple ways to assess engagement& the engagement metrics must

include performance measures.

C. Pou can!t have engaged employees without super engaged managers. ngagement

improving efforts must start at top and work their way down. #he most senior

executive must be assured that they are engaging their senior team and that teamhas to work on creating a high engagement environment for its direct reports ; so

on. ngagement must be done by leadership through example.

E. #his process of top down engagement is owned by each level of management.

ach manager himself benefits from the process, and then they share the benefits

with their own employees. n this learning process managers 4own5 employee

engagement.

F. ngagement is about getting rid of things that block productivity. e bring people

to work, then put lots of obstacles in the way of their being able to succeed.

=reating an engaged work force means getting barriers out of the way for your

employees to be effective. e cannot create a magic set of C?, F?, K? survey

questions that will assess the things that are getting in the way of productivity and

performance. #hese things can be lumped into categories but they differ from

company to company, department to department and employee to employee.

#hese productivity blockers and de motivators are not taught in a basic

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introduction to management book. #hey are not going to disappear with the

purchase of some new technology or from hiring the latest management guru.

ngagement will happen when each individual manager learns what!s getting in

the way of his8her employees! performance and each manager chooses to take

action.D. #he process of engagement is a process , you can!t get it right at the year end. Pou

have to create a continuous learning, continuous improvement, continuous

measurement and continuous action process to maximize productivity.

SAFETY AND SECURITY

/3. 3//P!6 9A(3A#3P 's work climate is governed by 23 7olicy, 16

$ntegrated 1anagement 6ystem% consisting of 6 H??>0C???,

6>F??>0C??F,26A6>K??>0C??, /r. 3eddy!s 9ab code of =onduct, 6exual

2arassment $7revention 7olicy%and histle (lower 7olicy and is improved by reviewing

the current practices and implementation of improvement initiatives. =entral 6afety

=ommittee is the apex committee which decides the strategy for safety and its successful

implementations. 6afety initiatives in the company include hazard identification ; risk

analysis $23A%, preparation of -ob safety analysis, housekeeping and safety surveys,mock drills, reporting and analysis of near miss incidents8accidents etc. mployee's

involvement in improving the safety standard is ensured through their participation in the

departmental safety committees, plant safety committee and other forums.

4OR7 EN!IRONMENT

/3. 3//P!6 9A(3A#3P is the first 3efractories company in ndia to

establish a fullfledged environment protection department. #he system for air and water

pollution monitoring, measurement, corrective, preventive action ; periodic review are in

place.

An emerging and global trend in health is a focus on partnerships alongside

publicprivate partnerships there are also a number global health initiatives. 6uch

initiatives are thought to be one of the benefits of globalization.


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HEA"TH INITIATI!ES

=onsidering the nature of operations, system has been established to prevent

occurrence of silicosis, a ma-or health hazard by ensuring effective dust control systems,

use of dust masks, -ob rotation and conducting health awareness classes regularly. 71=

are conducted for all employees ;contract labour as ;. 3eplacing old producers by

modern ones and replacing coal with petcoke has minimized toxic gas pollution in


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EMPO4ERMENT

An environment of empowerment is built through0

nabling workforce through training and development to take decisions closest to

the front line.

/elegations of authority with trust ; support, to take actions and make decisions,

to satisfy the customers at first contact.


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INFORMATION F"O4 AND T4O 4AY COMMUNICATION

=ommunication across the work units, -obs and locations is achieved through

a% /ocumentation of all work procedures and instructions $in 16% and their

communication to all employees through training.b% Availability of these on in the intranet and as hard copies, which can be accessed

by all,c% #hrough positional training where a highly skilled worker8officer trains a group

assigned to him onthe-ob as per the needs of his colleaguesd% Gnowledge 1anagement system $G1 site% where the knowledge champions and

experts gather and place knowledge pieces including all successful =7s on the

G.1. site,e% /epartmental meetings for knowledge sharing.f% 9ogbooks maintained by departments,g% Job rotation.

INDI!IDUA" #OA" SHARIN# INNO!ATION

#he =(6= is cascaded to /ivisional8/epartmental


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CHAPTER III

INDUSTRY

AND

COMPANY PROFI"E

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INDUSTRY

INTRODUCTION TO BU"7 DRU# INDUSTRY*

6ince the achievement of independence, ndia pharmaceutical industry registered a

substantial progress and has become one of the country!s leading industries. ndia is now

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

especially during K?!s ndia acquired a status of one of the ma-or exports of drugs and

pharmaceutical in the international market.

7rior to the launching of second fiveyear plan, the manufacture of pharmaceuticals was

limited largely to processing of bulkimported drugs in to tablets, capsules and other

formalities. 9ater the ndian manufacturers were encouraged to make up the manufacture

of basic drugs wherever it was economically possible and technically feasible, resulting in

the growth of bulk drug industry and leading to selfsufficiency in the production of these

raw materials called as bulk drugs. #he number of bulk drugs and pharmaceutical

chemicals manufactured in the country by the ndian change in the pattern of production,

the industry has now emerged as an exporter of basic chemicals, intermediaries and

finished production. #hus bulk drugs are poised to become the new start in the export

firmament.

7harmaceuticals are medicinally effective chemicals, which are converted to dosage

forms suitable for patients to imbibe. n it basic chemical form, 7harmaceuticals are

called bulk drugs and the final dosage forms are known as formulations. Qsage of

7harmaceuticals is governed by the underlying medical science. #he four primary

medical sciences are as under0

Allopath or modern medicine has gained global popularity.

Ayurveda, an ancient ndian science, mainly uses herbal remedies.

Qnani having =hinese rigin is prevalent in 6outh ast Asia.

2omeopathy, founded by a H th

century.

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INDUSTRY SCENARIO*

orldover, the 7harmaceuticals industry is focused on Allopath, the most modern

medical science. ther modes of medical treatment such 2omeopathy, Ayurveda andQnani are more prevalent in third world countries.

#he exports from the ndian pharmaceutical industry to the well regulated market in

Qnited 6tates of America is increasing rapidly, by recording the highest growth in the

current financial year when compared to the recent past.

#he ndian pharmacy exports to Q6 have already recorded a favorable momentum right

from the year C??C, increasing from Q6/ million FKH.?K in April ?C1arch ?E to Q6/

million LK?.D? in April C??L 1arch C?>?.

@rom being an import dependent industry in the past >HD?!s ndian pharmaceutical

industry has achieved selfsufficiency and gained global recognition as a producer of low

cost high quality bulk drug and formulations. 9eading ndian companies have developed

infrastructure in over L? countries including developed markets like Q6A and Q37.

n the last few years several pharmaceutical companies have demonstrated that they

posses the ability to engage in commercially viable research and development activities

and become significant players in the international market.

#he pharmaceutical industry comprises of C?,?DE manufacturing unit and provides

employment to approximately EE lakhs people. #he total production in the country in

>HHHC??? was >H,E crores. #he total capital investments in pharmaceutical industry

were 3s. C,D?? crores with 3;/ expenditure being 3s. EC? =rores. #he country!s exports

stood at 3s. L,LE> crores in >HHHC???, imports were 3s. E,FF> a net surplus of 3s E,>H?

crores.

#he leading CD? pharmaceutical companies control ? percent of the market. ver L?

percent of ndia!s bulk drugs production is exported to and the balance is sold locally to

other formulators. ith more than KD percent of formulation production in the country is

sold in the domestic market, ndia is largely selfsufficient in the case of formulations,

even though some life savings, new generations, under patent formulations continues to

be imported especially by 1M=!s

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#RO4THOF THE INDIAN PHARMACEUTICA" INDUSTRY

PA36 +>>;5>< +>1>5>= +>1151> +>1+511 +>151+

=apital nvestment >F? D?? >KF? C>D? CD??

7roduction@ormulation >D? >C?? >C?LK >EKK >DHL?

(ulk /rugs >K CF? CLCE E>FK E

mport K.C >>C.DF CKLK E>CK EFF>

xport E.?D FL.EK DEDE DHDH LLE>3; xpenditure E >F.D CC? CL? EC?

ndia is one among the top five manufacturers of the bulk drug in the world and is among

the top C? pharmaceutical exporter in the world. #he industry manufacturers almost the

entire range of therapeutic products and is capable of producing raw materials for

manufacturing a wide range of bulk drugs from the basic stage.

#he government has taken measures to give impetus to domestic production drugs and

formulations, creating an environment conductive for channeling new investments into

pharmaceutical sector. 2owever the industry and experts feel that time has come for the

government to announce new policy initiatives, particularly relating to the research and

development and pricing regime, in order to propel the industry into a new growth orbit,

as well as, to face the challenges of the #led trading system and a #376driven

product patent environment.

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BU"7 DRU#S*

(ulk drugs are medicinally effective chemicals. #hey are derived from F type

intermediate $raw materials% namely0

7lant derivatives $2erbal 7roducts%

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

6ynthetic chemicals

(iogenetic $human% derivatives e.g. 2uman insulin

(ulk drug discovery requires intensive and expensive research, so new drugs are patented

by the innovator to ensure commercial gains on his 3;/ investment. hen a drug goes

off patent it becomes generic. (ulk drugs can be broadly categorized as

Qnder patent


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ver C?,??? registered pharmaceutical manufactures exist in the country. #he market

share of 1M=!s has fallen from DI in >H> to around EDI in the ndian pharmaceutical

market, while the share of ndian companies has increased from C?I in >H> to nearly

LDI. 7usses have almost lost completely.

#he sector has undergone several policy as well as attitudinal changes over the past two

yeas. t was one of the ma-or beneficiaries from the budget proposals. 6ome of the

positive steps taken were

7harmaceutical industry as knowledge based industry. #he government has plans

to increase the investment in research and development.

3ationalization of excise duty and reduction in interest rates in export financing.

Additional deductions under income tax laws for 3;/ expense.

@oreign direct investments permit unto FI through automatic route.

6etting up C high level committees to review the drug policy for strengthening

3;/ capabilities, reducing the price control regime.

(esides the ndian parliament has enacted the required changes in the

ndian patent act >H? $73% regarding mailbox arrangement and xclusive 1arketing

3ight $13%. @or while the main pharmacy companies have recorded a measure of >.FI

increase in sales and .FI fall in profits, the ndian pharmacy companies have recorded a

C>I growth in sales companies has decreased from >.KI if sales to >.LI in case of 1M=

pharmacy companies has increased E.KI to F.FI.

6o while the 1M= companies did not make many new launches $make a hue

; cry about increasing competition from the generics, delay in patent regime, unfavorable

price cuts%. (ut the ndian companies took everything in their stride and went out all

cylinders firinglaunching new products, entering the generics market, reorganizing the

marketing structure, focusing on new growth segments like =ardiac, /iabetic, and

7sychiatry among a host of other initiatives.

ndian pharmaceutical exports, among the top three contributors to the world pharmacy

trade, are poised to grow CDI this year to touch R>.D billion, according to = estimates.

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#he country is potential to rank among top three tin the world as suppliers

of the generic drugs by C?>C, of the government paves way for creating a conductive

business environment by framing new policies for the sector, said 3anbaxy chief

executive officer / 6 (arr

S4OT ANA"YSIS FOR THE INDIAN PHARMA INDUSTRY

STREN#THS*

=ost competitiveness.

elldeveloped ndustry with strong manufacturing base.

ell stablished Metwork of 9aboratories and 3;/ nfrastructure.

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

6trong marketing and distribution network.

3ich (io/iversity.

=ompetencies in chemistry and process developments

4EA7NESS*

9ow investments in innovative 3;/.

9ack of resources to compete with other 1M=s for Mew /rug /iscovery

3esearch and to commercialize molecules on the worldwide basis

9ack of strong linkages between industry and academia.

9ack of culture of innovation in the ndustry.

9ow medical expenditure and healthcare spend in the country.

nadequate regulatory standards.

7roduction of spurious and low quality /rugs tarnishes the image of the ndustry

at home

And abroad.

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OPPURTUNITIES*

6ignificant export potential.

9icensing deals with 1M=s for M=s and M//s.

1arketing alliances to sell 1M= products in domestic market.

=ontract manufacturing arrangements with 1M=s.

7otential for developing ndia as a centre for international clinical trails.

Miche player in global pharmaceutical 3;/.

THREATS*

7roduct patent regime poses a serious challenge to domestic industry unless it

invests in 3esearch and /evelopment.

3;/ efforts of ndian 7harmaceutical companies hampered by lack of enabling

3egulatory requirement.

/rug price control order puts unrealistic ceilings on product prices and

profitability and prevents 7harmaceutical companies from generating 4inevitable5

surplus.

xport effort hampered by procedural hurdles in ndia as well as nontariff

barriers imposed abroad.

9owering of tariff protection.

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COMPANY PROFI"E

ABOUT DR. REDDY8S "ABORATORIES "TD.

/r. 3eddy!s 9aboratories was founded by /r An-i 3eddy, an entrepreneur

scientist, in >HKF. #he /MA of the company is drawn from its founder and his vision to

establish ndia!s first discovery led global pharmaceutical company. n fact, it is this spirit

of entrepreneurship that has shaped the company to become what it is today.

/r An-i 3eddy, having moved out of 6tandard rganics 9imited, a company he

had successfully cofounded, started /r. 3eddy!s 9aboratories with R F?,??? in cash and

R>C?,??? in bank loanS #oday, the company with revenues of 3s.>, HF crore $Q6 RFFL

million%, as of fiscal year C?>C, is ndia!s second largest pharmaceutical company and the

youngest among its peer group.

#he company has several distinctions to its credit. (eing the first pharmaceutical

company from Asia 7acific $outside Japan% to be listed on the Mew Pork 6tock xchange

$on April >>, C??>% is only one among them. And as always, /r. 3eddy!s chose to do it inthe most difficult of circumstances against widespread skepticism. /r. 3eddy!s came up

trumps not only having its stock oversubscribed but also becoming the best performing

7 that year.

/r. An-i 3eddy is well known for his passion for research and drug discovery. /r.

3eddy!s started its drug discovery programme in >HHE and within three years it achieved

its first breakthrough b out licensing an antidiabetes molecule to Movo Mordisk in 1arch

>HH. ith this very small but significant step, the ndian industry went through a

paradigm shift in its image from being known as -ust *copycats! to *innovators!S #hrough

its success, /r. 3eddy!s pioneered drug discovery in ndia. #here are several such

inflection points in the company!s evolution from a bulk drug $A7% manufacturer into a

vertically integrated global pharmaceutical company today.

#oday, the company manufactures and markets A7 $(ulk Actives%, @inished

/osages and (iologics in over >?? countries worldwide, in addition to having a very

promising /rug /iscovery 7ipeline. hen /r. 3eddy!s started its first big move in >HKL

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from manufacturing and marketing bulk actives to the domestic $ndian% market to

manufacturing and exporting difficulttomanufacture bulk actives such as 1ethyldopa to

highly regulated overseas markets, it had to not only overcome regulatory and legal

hurdles but also battle deeply entrenched mindset issues of ndian 7harma being seen as

producers of 'cheap' and therefore *low quality! pharmaceuticals. #oday, the ndian

7harma industry, in stark contrast, is known globally for its proven high qualitylow cost

advantage in delivering safe and effective pharmaceuticals. #his transition, a tough and

oftenperilous one, was made possible thanks to the pioneering efforts of companies such

as /r. 3eddy!s 9aboratories.

#oday, /r. 3eddy!s continues its -ourney. 9everaging on its *9ow =ost, 2igh ntellect!

advantage. @oraying into new markets and new businesses. #aking on new challenges and

growing stronger and more capable. ach failure and each success renewing the sense of

purpose and helping the company evolve.

ith over HD? scientists working across the globe, around the clock, the company

continues its relentless march forward to discover and deliver a breakthrough medicine to

address an unmet medical need and make a difference to people!s lives worldwide. And

when it does that, it would only be the beginning and yet it would be the most important

step. As 9ao #zu wrote a long time ago, *E9en a 1>>> m)le o-%ney $ta%t$ @)t' a $)ngle

$tep.8

A""IANCIN#

/r. 3eddy's is a global pharmaceutical company operating in over >?? countries

worldwide. #he company's operations span across the entire pharmaceutical value chain

from A7 to @ormulations to /iscovery 3esearch as well as service areas such as =ustom

7harmaceutical 6ervices $=76%.

/r 3eddy's (usiness


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BUSINESS

/r. 3eddy's is a vertically integrated, global pharmaceutical company with proven

research capabilities and presence across the pharmaceutical value chain. e manufacture

Active 7harmaceutical ngredients and @inished /osage forms and market them globally,

with a focus on Qnited 6tates, urope, ndia and 3ussia. n addition, the drug discovery

arm of the company conducts basic research in the areas of diabetes, cardiovascular,

inflammation and bacterial infection.

OUR CORE AREAS

ur core businesses of Active 7harmaceutical ngredients $A7% and (randed

@ormulations are well established with an impressive track record of growth and

profitability. ur and focuses primarily on

the Morth America and Q markets. e have built a robust pipeline of generic products,

which will help us drive growth in the medium and long term. n addition, the company is

investing in creating businesses of the future the innovation led businesses of 6pecialty

and /rug /iscovery.

ur revenues for fiscal C?>> were Q.6. RFFL million.

OPPORTUNITIES 4ITH US

#ene%)&$ RDwe are working on the largest pipeline that is directed towards the

Q6, urope, Australia, Mew Tealand, 6outh America ; 3ussian markets. e are looking

for talented people at middle senior level who can play a path breaking role in the 3;/

efforts and augment the


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BOARD OF DIRECTORS

/r. 3eddy's has a board comprising of eminent individuals from diverse fields.

#he board acts with autonomy and independence in exercising strategic supervision,

discharging its fiduciary responsibilities, and in ensuring that the management observes

the highest standards of ethics, transparency and disclosure.

ur /irectors are experts in the diversified fields of medicine, chemistry and medical

research, human resource development, business strategy, finance and economics. #hey

review all information relating to significant business decisions, including strategic and

regulatory matters. very member of the board, including the nonexecutive directors, has

full access to any information related to the company.

=ommittees appointed by the board focus on specific areas, and take decisions within the

authority delegated to them by the board. #he committees also make specific

recommendations to the board on various matters from timetotime.

CODE OF ETHICS AND OMBUDSMAN PROCEDURE

e at /r. 3eddy!s have a longstanding commitment to the lofty principles of

corporate governance and ethical business practices. #his is a value, which is shared by

our (oard of /irectors, senior management and employees at all levels across the world.

#o reflect our continued commitment to the highest standards of truth, integrity and

transparency, the (oard of /irectors of our =ompany has adopted a =ode of (usiness

=onduct and thics $=ode%. #his =ode applies to each one of us in /r. 3eddy!s.

#he =ode at /r. 3eddy!s has been designed to comply with the provisions of the

6arbanesxley Act of C??C and its implementing regulations. t is a general statement of

goals and expectations for individual and business conduct. #he =ode and an

mbudsman 7rocedure have been chalked out to provide information, education and

resources to help out employees make good, informed business decisions and to act on

them with integrity.

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CORPORATE #O!ERNANCE

/r. 3eddy's longstanding commitment to high standards of corporate governance

and ethical business practices is a fundamental shared value of its (oard of /irectors,

management and employees. #he =ompany's philosophy of corporate governance stems

from its belief that timely disclosures, transparent accounting policies, and a strong and

independent (oard go a long way in preserving shareholders trust while maximizing

longterm shareholder value.


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/r. 3eddy's longstanding commitment to high standards of corporate governance and

ethical business practices is a fundamental shared value of its (oard of /irectors,

management and employees. #he =ompany's philosophy of corporate governance stems

from its belief that timely disclosures, transparent accounting policies, and a strong and

independent (oard go a long way in preserving shareholder trust while maximizing long

term shareholder value.

#he company has identified and articulated its core purpose, mission and values in

keeping with its desire for achieving corporate excellence. /r. 3eddy's believes in

creating an environment where the parameters of conduct and behavior of the company

and its management is constantly aligned with the business environment.

#he mainstays of /r. 3eddy's =orporate


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#he nvestment =ommittee

#he 1anagement =ommittee

#he members of the =ommittees of (oard are as under0

Audit =ommittee 1anagement =ommittee

/r. mkar


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A4ARDS AND ACCO"ADE

#he Appreciation =ertificate of the /istrict =ollector for being the Be$t Clean

P%o(-&t)on In(-$t%yfor the year C?>> was awarded to A7 Qnit :.

#he = So-t'e%n Reg)on "ea(e%$')p EG&ellen&e A@a%(was awarded to

/r. 3eddy's for the year C?>?.

#he = Nat)onal A@a%( ?o% EG&ellen&e )n 4ate% Management for the year

C??D was awarded to both A7 Qnits and :.

#he @# Qnit of /r. 3eddy's achieved the ISO 10>>1*+>>0 standard on

June H, C??D.

#he #enente&' En9)%onmental EG&ellen&e S)l9e% A@a%(for the year

C??F?D was awarded to the A7 . 1r./r.G.AMJ 3//P ) =2A31AM

C. 1r.


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OTHER OBECTS*

>. #o carry on the business of /istributors, /ealers, holesalers, 3etailers,

=ommission Agents,

C. 1anufacturers, 3epresentatives for all types of products.

E. #o carry on the business of professionals for all types of services.

F. #o carry on the business of design, engineering and execution and implementation

of various. #ypes of pro-ects on contract or turnkey basis and to acquire the

designing or technical know how.

D. #o cultivate, grow, produce or deal in any vegetable products and to carry on the

business of @armers, dairy man, milk contractors, dairy farmers, millers, surveyors

and vendors of milk cream, =heese, butter and poultry and provision of all kinds,

growers of and dealers in corn, lay and 6traw, seeds men and nursery men and to

buy, sell and trade in any goods usually traded and of #he above business or other

business associated with the farming interest which may be

Advantageously carried on by the company.

L. #o carry on the business of manufacturers, fabricators, erectors, dealers of in all

types of =hemical equipment, pumps, valves, storage tanks etc. required by the

chemical and 7harmaceutical industry.

. #o purchase plant, machinery, tools and implements from time to time and he

selling or disposing of the same.

K. #o transact or carry on all kinds of agency business and in particular, in relation to

the investment of money, the sale of property and collection and receipt of money,

or otherwise of any assets, funds and business under any agreement.

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H. #o carry on and undertake the business of investing its funds in equity and

preference shares, stocks, bonds, debentures $convertible and nonconvertible% of

new pro-ects and securities of all kinds and every description of well established

and sound companies, to subscribe to capital issues of -oint stock companies,

ventures, industries, units, trading concerns whether old or new as the company

my think fit and to assist them by granting financial accommodation by way of

loans8advances to industrial concerns and to assist industrial enterprises in

creation , expansion and modernization upon terms whatsoever and to act as

finance brokers, merchants and commission agents and to deal in HDL, with or without security and on such #erms as may be determined from

time to time. 2owever, the company shall not carry on the business of (anking as

defined under the (anking 3egulation Act. >HFH& and to carry on and undertake

the business of finance, investment and trading, hire purchase, leasing and to

finance lease operations of all kinds, purchasing, selling, hiring or letting on hire

of all kinds of plant and machinery and equipment that the =ompany may think

fit and to assist in financing operations of all and every kind of description of hire

purchase or deferred payment or similar transactions and to subsidies finance or

assist in subsidizing or financing the sale and maintenance of any goods, articles

or commodities of all and every kind of description upon any terms whatsoever

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and to purchase or otherwise deal in all forms of immovable and movable

property, including lands and buildings, plant and machinery, equipment, ships,

aircraft, automobiles computers and all consumer, commercial and industrial items

and to lease or otherwise deal with them in any manner whatsoever including

release there of regardless of whether the property purchased and leased be now

and 8or used.

>>. #o provide a package of investment8merchant banking services by acting as

manages to public issue securities, by underwriting securities, act as ssue 2ouse

and to carry on the business of registrars to investment schemes, 1oney managers

to secure and extend market support by conducting surveys, collecting data,

information and reports and to act as general traders and Agents, to carry on the

agency business and warehousing indenting and dealership of business.

:. #he liability of the members of the company is limited.

:. a. #he authorized share capital of the company is 3s.D?,??,??,???8 $3s. @ifty =rores

nly%divided into >?,??,??,??? equity shares of 3s.D8 $3s. @ive only% each.

b. #he company has power from time to issue shares, 2ybrids, /erivatives, ptions,

Uuasiequity nstruments, with differential rights, or to increase, consolidate, subdivide,

exchange,reduce and also to purchase any of its shares whether or not redeemable and to

make payments out of its capital in respect of such purchase or otherwise alter its share

capital as equity or non voting equity shares or preference shares and to attach to any

classes of such shares preferences, rights, privileges or priorities in payment of dividends

or distribution of assets or otherwise, over any other shares and to sub-ect the same to any

restriction, limitation or condition and to vary the regulation of the company,

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DISCO!ER STRATE#IES

ur /iscovery 3esearch programs span a combination of '@ocus #herapeutic

Areas' with known unmet medical needs and significant commercial potential. e have

developed approaches that leverage the knowledge currently available on validated drug

targets for efficient disease modulation by developing bestinclass molecules.

#he usage of focused synthesis approaches helps us in enhancing the probability of

success with significant reduction in financial risk.

Additional approaches include developing 'firstinclass' molecules for drug

candidates that hold potential for therapy against diseases such as Atherosclerosis and

bacterial infections.

EMP"OYEE DE!E"OPMENT

At /r 3eddy's we foster a culture which has the following tenets ....

C-$tome% Fo&-$e( an( H)g' Pe%?o%man&e D%)9en (oth external and internal

customers are accorded highest priority with sensitivity and commitment to target, time ;

cost and focus on delivering innovative affordable medicines globally.

Ent%ep%ene-%)al an( Inno9at)9e


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7EY MI"ESTONES

C?>E

Acquires access to /rug /elivery #echnology 7latforms in the /ermatology

segment through the acquisition of #rigenesis.

C?>C

Announces a >Dyear exclusive product development and marketing agreement for

#= drugs with 9einer 2ealth 7roducts in the Q6.

9aunches buprofen, first generic product to be marketed under the 4/r. 3eddy!s5

label in the Q6.

C?>>

=onducts its first overseas acquisition ) (16 9aboratories 9imited and 1eridian

2ealthcare in QG.

C?>?

(ecomes the first Asia 7acific pharmaceutical company, outside Japan, to list on

the Mew Pork 6tock xchange. 9isted with the symbol *3/P! on April >>, C??>.

utlicenses /3@ F>DK to Movartis for up to Q6 RDD million upfront payment.

9aunches its first generic product, 3anitidine, in the Q6 market.

(ecomes the first ndian pharmaceutical company to obtain an >K?day exclusive

marketing rights for a generic drug in the Q6 market with the launch of @luoxetine

F? mg capsules on August E, C??>.

C??H

/r. 3eddy!s 9aboratories becomes ndia's third largest pharmaceutical company

with the merger of =heminor /rugs 9imited, a group company.

3eddy Q6 #herapeutics, a whollyowned subsidiary, is established at Atlanta, Q6

to conduct target based drug discovery.

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C??K

Acquisition of American 3emedies 9imited, a pharmaceutical company based in

ndia.

C??

9icenses antidiabetic molecule, /3@ CCD $3agaglitazar%, to Movo Mordisk.

C??L

9icenses antidiabetic molecule, /3@ CDHE $(alaglitazone%, to Movo Mordisk.

(ecomes the first ndian pharmaceutical company to outlicense an original

molecule.

@irst AM/A filed with the Qnited 6tates @ood and /rug Administration for

3anitidine.

C??D

6ets up of a Joint :enture in 3ussia.

C??F

1akes a


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!A"UES

4e $t%)9e ?o% eG&ellen&e )n e9e%yt')ng @e t')n $ay an( (o .

-al)ty0 e are dedicated to achieving the highest levels of quality in everything we do

to delight customers, internal ; external, every time.

Re$pe&t ?o% t'e In()9)(-al0 e uphold the self esteem and dignity of each other by

creating an open culture conducive for expression of views and ideas irrespective of

hierarchy

Inno9at)on Cont)n-o-$ "ea%n)ng0 e create an environment of innovation and

learning that fosters, in each one of us, a desire to excel and willingness to experiment

Colla6o%at)on Team@o%0 e seek opportunities to build relationships and leverage

knowledge, expertise and resources to create greater value across functions, businesses

and locations

Ha%mony So&)al In)t)at)9e$0 e take utmost care to protect our natural environment

and serve the communities in which we live and work.

O-% 6-$)ne$$ p%a&t)&e$ a%e g-)(e( 6y t'e ')g'e$t et')&al $tan(a%($ o? t%-t' )nteg%)ty

and transparency.

TA"ENT AUSITION

/r. 3eddy!s recruits talent from across the world through lateral hiring as well as by

visiting premier campuses.

=ampus hiring is done through either0

(usiness 6chools

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#echnical Qniversities ) we hire graduates and postgraduates n the areas of

=hemistry, (iologics, 7harmaceutics, 7harmacology and 1icrobiology among others.

A4ARD AND RECO#NITION

/r. 3eddy's has been awarded the Mational Award for xcellence in =orporate


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CHAPTER I!DATA ANA"YSIS

AND

INTERPRETATION

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DATA ANA"YSIS AND INTERPRETATION

1. I no@ @'at )$ EGpe&te( o? me at @o%

Ta6le 1* 4o% eGpe&te( ?%om employee$.

ptions Mumber of respondents 7ercentage of respondents

6trongly agree F? F?

Agree EE EE

Mot decided >E >E

/isagree

6trongly disagree

#otal >?? >??

C'a%t 1* @o% eGpe&te( ?%om employee$

40

33

13

7 7

Percentage of respondents

Strongly agree

Agree

Not decided

Disagree

Strongly disagree

Analy$)$*

F?I respondents strongly disagree, EEI respondents agree that they know what is

expected of them , >EI respondents are not yet decided , whereas I of the respondents

disagree and strongly disagree that they don!t know what is expected of them

Inte%p%etat)on*

1ost of the respondents are aware of the work being expected of them in the

organization.

C. believe what do as a worker is important.

Ta6le +* Impo%tan&e o? @o%e%.

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6trongly agree C C

Agree F? F?Mot decided > >

/isagree >? >?

6trongly disagree

total >?? >??C'a%t +* Impo%tan&e o? @o%e%.

8

12

5

3 2


Strongly agree

Agree

Not decided

Disagree

Strongly disagree

Analy$)$*

CIrespondents strongly agree, F?I respondents agree that they believe what

they do is important as worker, >?I respondents disagree , whereas LI of the

respondents strongly disagree that the work they do is not of much importance

Inte%p%etat)on*

1ore than half of the respondents believe that what they do as a worker is

important in the organization.. I ?eel %e$pe&te( at @o%.

Ta6le * Feel)ng %e$pe&te( at @o%


6trongly agree EE EE

Agree E? E?

Mot decided

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/isagree > >

6trongly disagree >E >E

total >?? >??

C'a%t * Feel)ng %e$pe&te( at @o%

10

9

2

5

4


Strongly agree

Agree

Not decided

Disagree

Strongly disagree

Analy$)$*EEIrespondents strongly agree, E?I respondents agree that they are being

respected at work, whereas >LI respondents disagree, and >EI of the

respondents strongly disagree that they are being respected at work.Inte%p%etat)on*

1ore than half of the respondents believe that what they do as a worker is

important in the organization.0. I 'a9e mate%)al$ an( e,-)pment$ I nee( to (o my o6 e??)&)ently.

Ta6le 0* Do)ng o6 e??)&)ently @)t' mate%)al$ an( e,-)pment$.


6trongly agree >E >E

Agree >? >?

Mot decided

/isagree F F

6trongly disagree CE CF

total >?? >??

C'a%t 0* Do)ng o6 e??)&)ently @)t' mate%)al$ an( e,-)pment$.

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4

3

2

14

7


Strongly agree

Agree

Not decided

Disagree

Strongly disagree

Analy$)$*

>EIrespondents strongly agree, >?I respondents agree that they have materials

and equipments to do their -ob efficiently, whereas FI respondents disagree,

and CEI of the respondents strongly disagree that they are being provided with

required materials and equipments.

Inte%p%etat)on*

1ost of the respondents feel that they don!t have necessary materials and

equipments to do their -ob effectively.3. I %e&e)9e t'e )n?o%mat)on an( &omm-n)&at)on I nee( to (o my o6.

Ta6le 3* Employee %e&e)9e$ t'e )n?o%mat)on an( &omm-n)&at)on to (o t'e)%

o6.

Opt)on$ N-m6e% o? %e$pon(ent$ Pe%&entage o? %e$pon(ent$

6trongly agree EE EEAgree C? C?

Mot decided >F >F

/isagree CE CE

6trongly disagree >? >?

total 1>> 1>>

C'a%t3* Employee %e&e)9e$ t'e )n?o%mat)on an( &omm-n)&at)on to (o t'e)%

o6.

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9

65

7

3


Strongly agree

Agree

Not decided

Disagree

Strongly disagree

Analy$)$*

E?Irespondents strongly agree, C?I respondents agree that their supervisor or

someone cares about them as a person at work, whereas CEI respondents

disagree, and >?I of the respondents strongly disagree that they are cared by their

supervisor.

Inte%p%etat)on*

1ost of the employees feel that their supervisor or someone cares about them as a

person at work.

;. 4'en I ?eel p%o6lem at @o% I am a6le to $ol9

Documents

Employee Engagement at Dr Reddy's Final