Final comp. pharma sector(rolno. 25,28,30)

8/7/2019 Final comp. pharma sector(rolno. 25,28,30)

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Project Report on

Comparison of Compensation andBenefits Structure in Cipla,Ranbaxy

and Dr.Reddys Laboratory Ltd.

Submi tted By:

Rasika Dalvi (25)

Rutika Bade (28)

Sneha Carvalho (30)

UNDER THE GUIDANCE OF

MRS. SULBHA RAORANE

ST.FRANCIS INSTITUTE OF MANAGEMENT AND

RESEARCH

MT. POISAR, S.V.P. ROAD,

BORIVLI (WEST), MUMBAI- 400 103.


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MEANING OF COMPENSATION

C om pensat ion is a syste m at ic approach to prov iding m onetary val u e to e m ployees in

exchange for work perfor m ed. C om pensat ion m ay ach ieve several p u rposes ass ist ing in

recr ui tm ent, jo b perfor m ance, and jo b sat isfact ion.

C om pensat ion is the re mu nerat ion rece ived b y an e m ployee in ret u rn for h is/her

contr ibu tion to the organ iz at ion. It is an organ iz ed pract ice that involves balanc ing

the work-e m ployee relat ion b y prov iding m onetary and non- m onetary benef its to

em ployees.

It is the m ethods and pract ices of m ainta ining balance between interests of operat ing the

com pany w ith in the f iscal bu dget and attract ing, develop ing, reta ining, and reward ing h igh

qu ality staff thro u gh wages and salar ies wh ich are co m pet itive w ith the preva i ling rates for

simi lar e m ploy m ent in the la bou r m arkets

C om pensat ion is an integral part of h um an reso u rce m anage m ent wh ich helps in

m ot ivat ing the e m ployees and im prov ing organ iz ational effect iveness.

IMPORTANCE OF COMPENSATION -

A good co m pensat ion package is im portant to m ot ivate the e m ployees to increase

the organ iz ational prod u ct ivity.

U nless co m pensat ion is prov ided no one w ill co m e and work for the organ iz at ion.

Thu s, co m pensat ion helps in r u nning an organ iz at ion effect ively and

acco m pl ish ing its goals. S alary is ju st a part of the co m pensat ion syste m , the e m ployees have other

psycholog ical and self-act u aliz at ion needs to f u lf il. Thu s, co m pensat ion serves

the p u rpose.


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The m ost co m pet it ive co m pensat ion w ill help the organ iz at ion to attract and s u sta in

the best talent. The co m pensat ion package sho u ld be as per indu stry standards

ava ila b le reso u rces.

C om pensat ion m ay be u sed to:

y recr ui t and reta in qu al if ied e m ployees.

y increase or m ainta in m orale/sat isfact ion.

y reward and enco u rage peak perfor m ance.

y ach ieve internal and external eq ui ty.

y redu ce t u rnover and enco u rage co m pany loyalty.

y m od ify (thro u gh negot iations) pract ices of u nions.

Recr ui tm ent and retent ion of q u alif ied e m ployees is a co mm on goal shared b y m anyem ployers. To so m e extent, the ava i la bi lity and cost of q u alif ied appl icants for open

pos it ions is deter mi ned b y m arket factors beyond the control of the e m ployer. Wh i le an

em ployer m ay set co m pensat ion levels for new h ires and advert iz e those salary ranges, it

does so in the context of other e m ployers seek ing to h ire fro m the sa m e appl icant pool.

Morale and jo b sat isfact ion are affected b y co m pensat ion. Often there is a balance (eq ui ty)

that mu st be reached between the m onetary val u e the e m ployer is w illing to pay and the

sent im ents of worth felt be the e m ployee. In an atte m pt to save m oney, e m ployers m ay opt

to free z e salar ies or salary levels at the expense of sat isfact ion and m orale. C onversely, an

em ployer w ish ing to red u ce em ployee t u rnover m ay seek to increase salar ies and salary

levels.

C om pensat ion m ay also be u sed as a reward for except ional jo b perfor m ance. Exa m ples of

su ch plans inclu de: bonu ses, co mmi ss ions, stock, prof it shar ing, ga in shar ing.


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COMPONENTS OF A COMPENSATION SYSTEM-

C om pensat ion w ill be perce ived b y em ployees as fa ir if based on syste m at ic co m ponents.

Var io

us co

m pensat

ion syste

ms have developed to deter

mine the val

ue of pos

itions. These

syste m s u tiliz e m any s imi lar co m ponents inclu ding jo b descr i pt ions, salary

ranges/str u ctu res, and wr itten proced u res.

The co m ponents of a co m pensat ion syste m inclu de:

y J ob Descriptions A cr itical co m ponent of both co m pensat ion and select ion

syste m s, jo b descr i pt ions def ine in wr iting the respons ibi lit ies, req ui rem ents,

f u

nctions, d

uties, locat

ion, env

iron

ment, cond

itions, and other aspects of jo

bs.

Descr i pt ions m ay be developed for jo b s ind ividu ally or for ent ire jo b fami lies.

y J ob Analysis The process of analy zi ng jo bs fro m wh ich jo b descr i pt ions are

developed. Jo b analys is techn iqu es inclu de the u se of interv iews, q u est ionna ires,

and o bservat ion.

y J ob Evaluation A syste m for co m par ing jo b s for the p u rpose of deter mi ning

appropr iate co m pensat ion levels for ind ividu al jo b s or jo b elem ents. There are fo u r

m ain techn iqu es: Rank ing, C lass if icat ion, Factor C om par ison, and Po int Method.

y Pay Structures U sef u l for standard izi ng co m pensat ion pract ices. Most pay

str u ctu res inclu de several grades w ith each grade conta ining a mi nimum

salary/wage and e ither step incre m ents or grade range. S tep incre m ents are co mm on

with u nion pos itions where the pay for each jo b is pre-deter mi ned thro u gh collect ive

barga ining.

y Salary Surveys C ollect ions of salary and m arket data. May inclu de average

salar ies, inflat ion ind icators, cost of l iving ind icators, salary bu dget averages.

C om pan ies m ay pu rchase res u lts of s u rveys cond u cted b y su rvey vendors or m aycond u ct the ir own salary s u rveys. When p u rchas ing the res u lts of salary s u rveys

cond u cted b y other vendors, note that s u rveys m ay be cond u cted w ith in a spec if ic

indu stry or across indu str ies as well as w ith in one geograph ical reg ion or across

different geograph ical reg ions. Know wh ich indu stry or geograph ic locat ion the

salary res u lts perta in to before co m par ing the res u lts to yo u r co m pany.


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OUTLINE OF COMPENSATION PLAN-

Develop a program outline.

y S et an o b ject ive for the progra m .

y Esta b lish target dates for im ple m entat ion and co m plet ion.

y Deter mi ne a bu dget.

Designate an individual to oversee designing the compensation program.

y Deter mi ne whether th is pos ition w ill be per m anent or te m porary.

y Deter

mine who w

ill oversee the progra

monce

it

is esta

blished.

y Deter mi ne the cost of go ing o u ts ide vers u s look ing inside.

y Deter mi ne the cost of a cons u ltant's rev iew.

Develop a compensation philosophy.

y For m a co m pensat ion co mmi ttee (pres um a b ly cons ist ing of off icers or at least

inclu ding one off icer of the co m pany).

y Dec

ide what,

if any, d

ifferences sho

uld ex

ist

in pay str

uct

ures for exec

utives,

profess ional e m ployees, sales e m ployees, and so on (e.g., ho u rly vers u s salar ied

rates, incent ive- based vers u s non cont ingent pay).

y Deter mi ne whether the co m pany sho u ld set salar ies at, a bove, or below m arket.

y Dec ide the extent to wh ich e m ployee benef its sho u ld replace or s u pple m ent cash

com pensat ion.

Conduct a job analysis of all positions.

y C ondu ct a general task analys is b y m ajor depart m ents. What tasks mu st be

acco m pl ished b y who m?

y G et inpu t fro m sen ior v ice pres idents of m arket ing, f inance, sales, ad mi nistrat ion,

produ ction, and other appropr iate depart m ents to deter mi ne the organ iz at ional

str u ctu re and pr im ary f u nct ions of each.


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y Interv iew depart m ent m anagers and key e m ployees, as necessary, to deter mi ne the ir

spec if ic jo b f u nct ions.

y Dec ide wh ich jo b class if icat ions sho u ld be exe m pt and wh ich sho u ld be non-

exem pt.

y Develop m odel jo b descr i pt ions for exe m pt and non-exe m pt pos itions and d istr ibu te

the m odels to incumb ents for rev iew and co mm ent; adj u st jo b descr i pt ions if

necessary.

y Develop a f inal draft of jo b descr i pt ions.

y Meet w ith depart m ent m anagers, as necessary, to rev iew jo b descr i pt ions.

y Final iz e and doc um ent all jo b descr i pt ions.

Evaluate jobs.

y Rank the jo b s w ith in each sen ior v ice pres idents and m anager's depart m ent, and

then rank jo bs between and a m ong depart m ents.

y Ver ify rank ing b y co m par ing it to indu stry m arket data concern ing the rank ing, and

adju st if necessary.

y Prepare a m atr ix organ iz at ional rev iew.

y On the bas is of req ui red tasks and forecasted bu siness plans, develop a m atr ix of

jo bs cross ing l ines and depart m ents.

y C om pare the m atr ix w ith data fro m both the co m pany str u ctu re and the indu strywide m arket.

y Prepare flow charts of all ranks for each depart m ent for ease of interpretat ion and

assess m ent.

y Present data and charts to the co m pensat ion co mmi ttee for rev iew and adj u stm ent.

Determine grades.

y Esta b lish the n umb er of levels - sen ior, ju nior, inter m ed iate, and beg inner - for each jo b fami ly and ass ign a grade to each level.

y Deter mi ne the n umb er of pay grades, or m onetary range of a pos ition at a part icu lar

level, w ith in each depart m ent.


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Establish grade pricing and salary range.

y Esta b lish benchm ark (key) jo b s.

y Rev iew the m arket pr ice of benchm ark jo b s w ith in the indu stry.

y Esta b lish a trend l ine in accordance w ith co m pany ph i losophy ( i.e., where the

com pany wants to be in relat ion to salary ranges in the indu stry).

Determine an appropriate salary structure.

y Deter mi ne the d ifference between each salary step.

y Deter mi ne a mi nimum and a m ax imum percent spread.

y S lot the re m aining jo bs.

y Rev iew jo b descr i pt ions.

y Ver ify the p u rpose, necess ity, or other reasons for m ainta ining a pos ition.

y Meet w ith the co m pensat ion co mmi ttee for rev iew, adj u stm ents, and approval.

Develop a salary administration policy.

y Develop and doc um ent the general co m pany pol icy.

y Develop and doc um ent spec if ic pol icies for selected gro u ps.

y Develop and doc um ent a strategy for m er it ra ises and other pay increases, s u ch as

cost-of-l iving adj u stm ents, bonu ses, ann u al rev iews, and pro m ot ions.

y Develop and doc um ent proced u res to j u stify the pol icy (e.g., perfor m ance appra isal

for m s, a m er it ra ise sched u le).

y Meet w ith the co m pensat ion co mmi ttee for rev iew, adj u stm ents, and approval.

Obtain top executives' approval of the basic salary program.

y Develop and present cost im pact st u dies that project the expense of br inging the

present staff u p to the proposed levels.

y Present data to the co m pensat ion co mmi ttee for rev iew, adj u stm ent, and approval.

y Present data to the exec u tive operat ing co mmi ttee (sen ior m anagers and off icers) for

rev iew and approval.


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Communicate the final program to employees and managers.

y Present the plan to the co m pensat ion co mmi ttee for feed back, adj u stm ents, rev iew,and approval.

y Make a presentat ion to exec u t ive staff m anagers for approval or change, and

incorporate necessary changes.

y Develop a plan for co mmu nicat ing the new progra m to e m ployees, u sing sl ide

shows or m ov ies, l iterat u re, hando u ts, etc.

y Make presentat ions to m anagers and e m ployees. I m ple m ent the progra m .

y Des ign and develop deta iled syste m s, proced u res, and for m s.

y Work w ith HR infor m at ion syste m s staff to esta b lish effect ive im ple m entat ion

proced u res, to develop appropr iate data inpu t for m s, and to create effect ive

m on itor ing reports for sen ior m anagers.

y Have the necessary for m s pr inted.

y Develop and deter mi ne for m at spec if icat ions for all reports.

y Execu te test r u ns on the h um an reso u rces infor m ation syste m .

y Execu te the progra m .

Monitor the program.

y Mon itor feed b ack fro m m anagers.

y Make changes where necessary.


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TYPES OF COMPENSATION

C om pensat ion prov ided to e m ployees can d irect in the for m of m onetary b enef its

and/or ind irect in the for m of non- m onetary b enef its known as perks, t im e off, etc.

C om pensat ion does not inclu de only salary bu t it is the s um total of all rewards

and allowances prov ided to the e m ployees in ret u rn for the ir serv ices. If the

com pensat ion offered is effect ively m anaged, it contr ibu tes to h igh organ iz at ional

prod u ct ivity. They are as follows:

1. Direct C om pensat ion

2. Ind irect C om pensat ion

1. DIRECT COMPENSATION

D irect co m pensat ion refers to m onetary benef its offered and prov ided to

em ployees in ret u rn of the serv ices they prov ide to the organ iz at ion. The m onetary

benef its inclu de b asic salary, ho u se rent allowance, conveyance, leave travel

allowance, m ed ical re imbu rsem ents, spec ial allowances, bonu s, Pf/ G ratui ty, etc.

They are g iven at a reg u lar interval at a def inite t im e.

Basic Salary

S alary is the a m ou nt rece ived b y the e m ployee in l ieu of the work done b y him /her

for a certa in per iod say a day, a week, a m onth, etc. It is the m oney an e m ployee

rece ives fro m his/her e m ployer b y render ing h is/her serv ices.

House Rent Allowance

Organ iz at ions e ither prov ide acco mm odat ions to its e m ployees who are fro m

different state or co u ntry or they prov ide ho u se rent allowances to its e m ployees.

Th is is done to prov ide the m soc ial sec u r ity and m ot ivate the m to work.


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Conveyance

Organ iz at ions prov ide for ca b fac i lities to the ir em ployees. Few organ iz at ions also prov ide

veh icles and petrol allowances to the ir em ployees to m ot ivate the m .

Leave Travel Allowance

These allowances are prov ided to reta in the b est talent in the organ iz ation. The e m ployees

are g iven allowances to v isit any place they w ish w ith the ir fa mi lies. The allowances are

scaled as per the pos ition of e m ployee in the organ iz at ion.

Medical Reimbursement

Organ iz at ions also look after the health cond itions of the ir em ployees. The

em ployees are prov ided w ith m ed i-cla im s for the m and the ir fa mi ly m emb ers.These m ed i-cla im s inclu de health- insu rances and treat m ent bi lls re imbu rsem ents.

Bonus

Bonu s is pa id to the e m ployees d u r ing fest ive seasons to m ot ivate the m and prov ide the m

the soc ial sec u r ity. The bonu s am ou nt u su ally a m ou nts to one m onths salary of the

em ployee.

Special Allowance

S pec ial allowance s u ch as overt im e, m o bi le allowances, m eals, co mmi ss ions,

travel expenses, red u ced interest loans; insu rance, cl ub m emb ersh i ps, etc are

prov ided to e m ployees to prov ide the m soc ial sec u r ity and m ot ivate the m wh ich

im prove the organ iz at ional prod u ctivity.


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2. INDIRECT COMPENSATION

Ind irect co m pensat ion refers to non- m onetary benef its offered and prov ided to e m ployees

in l ieu of the serv ices prov ided b y the m to the organ iz at ion. They inclu de Leave Pol icy,

Overt im e Pol icy, C ar pol icy, Hosp ital iz at ion, Ins u rance, Leave travel A ssistance L imi ts,

Ret irem ent Benef its, Hol iday Ho m es.

Leave Policy

It is the r ight of e m ployee to get adeq u ate numb er of leave wh i le work ing w ith the

organ iz at ion. The organ iz at ions prov ide for pa id leaves s u ch as, cas u al leaves, m ed ical

leaves (s ick leave), and m atern ity leaves, stat u tory pay, etc.

Overtime Policy

Em ployees sho u ld b e prov ided w ith the adeq u ate allowances and fac i lities du r ing the ir

overt im e, if they happened to do so, s u ch as transport fac i lities, overt im e pay, etc.

Hospitalization

The e m ployees sho u ld b e prov ided allowances to get the ir reg u lar check- u ps, say at an

interval of one year. Even the ir dependents sho u ld be el igib le for the m ed i-cla im s that

provide the

me

mot

ional and soc

ial sec

ur

ity.

Insurance

Organ iz at ions also prov ide for acc idental insu rance and l ife insu rance for e m ployees. Th is

gives the m the e m ot ional sec u r ity and they feel the m selves val u ed in the organ iz at ion.

Leave Travel

The e m ployees are prov ided w ith leaves and travel allowances to go for hol iday w ith the ir

fami lies. S om e organ iz at ions arrange for a to u r for the e m ployees of the organ iz at ion. Th is

is u su ally done to m ake the e m ployees stress free.


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Retirement Benefits

Organ iz at ions prov ide for pens ion plans and other benef its for the ir em ployees wh ich

benef

its the

mafter they ret

ire fro

mthe organ

izat

ion at the prescr

ibed age.

Holiday Homes

Organ iz at ions prov ide for hol iday ho m es and g u est ho u se for the ir em ployees at d ifferent

locat ions. These hol iday ho m es are u su ally located in h i ll stat ion and other m ost wanted

hol iday spots. The organ iz ations m ake s u re that the e m ployees do not face any k ind of

diff icu lties d u r ing the ir stay in the g u est ho u se.

Flexible Timings

Organ iz at ions prov ide for flex ib le t imi ngs to the e m ployees who cannot co m e to work

du r ing nor m al sh ifts d u e to the ir personal pro b lem s and val id reasons.


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INTROD UC TION TO PH A RM A S EC TOR IN INDI A -

The Indian pharmaceutical industry is the world's second-largest b y volum e and is likelyto lead the m anu factu r ing sector of Ind ia. Ind ia's bi o-tech indu stry clocked a 17 percentgrowth w ith reven u es of Rs.137 bi llion ($3 bi llion) in the 2009-10 f inanc ial year over the

prev iou s f iscal. B io-phar m a was the bi ggest contr ibu tor generat ing 60 percent of theindu stry's growth at Rs.8,829 crore, followed b y bi o-serv ices at Rs.2,639 crore and bi o-agr i at Rs.1,936 crore.

The f irst phar m aceu tical co m pany are Bengal C hemi cals and Phar m aceu tical Works,wh ichstill ex ists today as one of 5 govern m ent-owned dr u g m anu fact u rers, appeared in C alcu ttain 1930. For the next 60 years, m ost of the dr u gs in Ind ia were im ported b y mu ltinat ionalseither in f u lly-for mu lated or bu lk for m . The govern m ent started to enco u rage the growth of dr u g m anu fact u r ing b y Ind ian co m pan ies in the early 1960s, and w ith the Patents A ct in1970ena b led the indu stry to beco m e what it is today. Th is patent act re m oved co m pos ition

patents fro m food and dr u gs, and tho u gh it kept process patents, these were shortened to a per iod of f ive to seven years. The lack of patent protect ion m ade the Ind ian m arketu ndes ira b le to the mu ltinat ional co m pan ies that had do mi nated the m arket, and wh i le theystrea m ed o u t, Ind ian co m pan ies started to take the ir places. They carved a n iche in both theInd ian and world m arkets w ith the ir expert ise in reverse-eng ineer ing new processes for m anu fact u r ing dr u gs at low costs. A ltho u gh so m e of the larger co m pan ies have taken ba b ysteps towards dr u g innovat ion, the indu stry as a whole has been follow ing th is bu sinessm odel u nt il the present.


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INTROD UC TION TO C IPLA -

Cipla was fo u nded b y Khwaja A bdu l Ha mi ed in 1935 and was known as The C hemi cal,Indu str ial and Phar m aceu t ical La borator ies, tho u gh it is better known b y the acrony m C i platoday. C i pla was reg istered in A u gu st, 1935 as a p ub lic l imi ted enterpr ise and it began w ithan au thor iz ed cap ital of Rs. 6 lakh. Today, the co m pany is one of the lead ing Ind ian

phar m aceu tical co m pan ies.

Tho u gh set u p in 1935, it was only in 1937 that C i pla began m anu factu r ing and m arket ingits phar m aceu tical prod u cts. Today, the co m pany has its fac i lities spread across severallocat ions across Ind ia su ch as M umb ai, G oa, Patalganga, K u rk umb h, Bangalore, andV ikhrol i. C i pla co mm ands an im portant pos ition in the Ind ian phar m aceu tical indu stry b ydint of its p ioneer ing efforts in m anu fact u r ing cost-effect ive dr u gs for pat ients infected w ithHIV- A IDS .

Ciplas product portfolio:The follow ing is a br ief o u tline of the several categor ies u nder wh ich C i pla m anu fact u resits prod u cts:

Prescription DrugsA s a part of prescr i pt ion dr u gs, C i pla m anu fact u res scores of prod u cts s u ch as ant i-v iraldr u gs, appet ite st imu lants, ant i-spas m od ics, laxat ives, vert igo m ed icines, sedat ives,

pregnancy test ing k its, hypnot ics, resp iratory dev ices, ant i-inflamm atory dr u gs, ant i-allerg icdr u gs, ant i-TB dr u gs, ant i-acne dr u gs, analges ics, anesthet ic agents, ant i-o bes ity dr u gs,diu ret ics, nasal preparat ions, skeletal mu scle relaxant, immu no-su ppressants, go u t

preparat ions, top ical preparat ions, iron chelators, mu ltihalers, ben ign prostat ic hyperplas iadr u gs, hor m one replace m ent therapy dr u gs, card iovasc u lar agents and cere bralvasod ialators.

Bulk DrugsC i pla m anu fact u res 2 types of bu lk dr u gs: act ive phar m aceu t ical agents and dr u ginter m ed iates. The var iou s types of act ive phar m aceu tical agents prod u ced b y C i pla inclu dearthr itic and rhe um at ic agents, C NS dr u gs, gastro intest inal dr u gs, ant i-m alar ial dr u gs,u rology dr u gs, ophthal mi c dr u gs, card iovasc u lar dr u gs, osteoporos is dr u gs, and ant i-histami nes. C i pla is renowned for m anu fact u r ing h u ndreds of dr u g inter m ed iates. S om e of the well-known ones are A lpra z olam , A nastra z ole, C arved i lol, Dana z ol, D u taster ide,Etopos ide, Entacapone, Felod i p ine, Fl u tami de, Nev irap ine, O m epra z ol, Top iram ate,Zidovu dine, and Zolp idem .

Over-the-counter (OTC) DrugsC i pla m anu fact u res scores of OT C m ed icines that cater to categor ies su ch as ch ild care,health dr inks, eye care, co u gh and cold, ha ir care, foot care, oral hyg iene, sk in care, pa incare, indigest ion, and l ifestyle m anage m ent. C i pla also m anu fact u res several m ed icines thatare v itami n and mi neral s u pple m ents.


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Technology ServicesC i pla has an enor m ou s rep u tat ion in the phar m ace u tical m arket for the range of technologyserv ices that it offers. C i pla offers serv ices l ike cons u lting, co mmi ss ion ing, eng ineer ing,

project appra isal, q u al ity control, know-how transfer, s u pport, and plant s u pply.

A part fro m its strong presence in the Ind ian m arket, C i pla also has an extens ive exportm arket and reg u larly exports to m ore than 150 co u ntr ies in reg ions s u ch as North A m er ica,S ou th A m er ican, A sia, E u rope, M iddle East, A u stral ia, and A fr ica. For the year ended 31stMarch, 2007 C i plas exports were worth approx im ately Rs. 17,500 mi llion. C i pla is alsocons idera b ly well-known for its technolog ical innovat ion and processes for wh ich thecom pany rece ived know-how loyalt ies to the t u ne of Rs. 750 mi llion d u r ing 2006-07. For its im press ive track record and state-of-the-art eq ui pm ents at its var iou s m anu fact u r ingfac i lities, C i pla has been approved b y reg u latory b od ies su ch as:

y World Health Organ iz at iony Food and Dr u g A dmi nistrat ion (FD A ), U S A y Therape u tic G oods A dmi nistrat ion (T GA ), A u stral iay Phar m aceu t ical Inspect ion C onvent ion (PI C ), G er m anyy Nat ional Inst itu te of Phar m acy (NIP), H u ngary

C i pla has recently la u nched i-P ill wh ich is a s ingle dose e m ergency contracept ive and hasacqui red a great deal of pop u lar ity in a short span of t im e. Other latest la u nches of C i plainclu de prod u cts s u ch as Nova, Mox ici p, Flo m ex, Fu llfor m , Monta ir LC , and I mi cr it. These

prod u cts are expected to do well in the Ind ian m arkets in the near f u tu re.

Introduction to Dr.Reddys Laboratories Ltd.

Dr. Reddy's Laboratories Ltd., trad ing as Dr. Reddy's , fou nded in 1984 b y Dr. K. A nji Reddy has beco m e Ind iasecond bi ggest phar m aceu tical co m pany.Dr. A nji Reddy hadworked in the p ub licly-owned Ind ian Dr u gs and Phar m aceu ticals Ltd. Reddy'sm anu fact u res and m arkets a w ide range of phar m aceu ticals in Ind ia and overseas. Thecom pany has over 190 m ed icat ions, 60 act ive phar m aceu tical ingred ients,for dr u gm anu fact u re, d iagnost ic k its, cr itical care and bi otechnology prod u cts.

Dr. Reddy's began as a s u ppl ier to Ind ian dr u g m anu fact u rers, bu t it soon started export ingto other less-reg u lated m arkets that had the advantage of not hav ing to spend t im e andm oney on a m anu fact u r ing plant,that that wo u ld ga in approval fro m a dr u g licens ing body

su ch as the U .S . Food and Dr u g A dmi nistrat ion.(FD A ). By the early 1990s.the expandedscale and prof ita bi lity fro m these u nreg u lated m arkets ena b led the co m pany to beg infocu sing on gett ing approval fro m dr u g reg u lators for the ir for mu lat ions and bu lk dr u gm anu fact u r ing plants in m ore-developed econo mi es. Th is allowed the ir m ove m ent intoregu lated m arkets s u ch as the U S and E u rope.

By 2007, Dr. Reddy's had s ix FD A -plants prod u cing act ive phar m aceu tical ingred ients inInd ia and seven FD A -inspected and I S O 9001(q u ality) and I S O 14001(env iron m ental


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m anage m ent) cert if ied plants m ak ing pat ient-ready m ed icat ions f ive of the m in Ind ia andtwo in the U K .

Introduction To Ranbaxy

Company Profile

Ran baxy La borator ies L imi ted (Ran baxy), Ind ia's largest phar m aceu t ical co m pany, is anintegrated, research based, internat ional phar m aceu tical co m pany, prod u cing a w ide rangeof qu ality, afforda b le gener ic m ed icines, tr u sted b y healthcare profess ionals and pat ientsacross geograph ieRan baxys. Ran baxy today has a presence in 23 of the top 25

phar m aceu tical m arkets of the world. The C om pany has a glo bal footpr int in 46 co u ntr ies,world-class m anu factu r ing fac ilit ies in 7 co u ntr ies and serves c u sto m ers in over 125cou ntr ies.

In Ju ne 2008, Ran baxy entered into an all iance w ith one of the largest Japanese innovator

com pan ies, Da ii ch i S ankyo C om pany Ltd., to create an innovator and gener ic phar m aceu tical powerho u se. The co mbi ned ent ity now ranks a m ong the top 20 phar m aceu tical co m pan ies, glo b ally. The transfor m at ional deal w i ll place Ran baxy in ahigher growth trajectory and it w ill em erge stronger in ter m s of its glo bal reach and in itscapa bi lities in dr u g develop m ent and m anu fact u r ing.

Mission & Vision

Ran baxy's mi ss ion is To beco m e a Research- based Internat ional Phar m aceu ticalC om pany. The C om pany is dr iven b y its v ision to A ch ieve s ign if icant bu siness in

propr ietary prescr i pt ion prod u cts b y 2012 w ith a strong presence in developed m arkets.

Financials

Ran baxy was incorporated in 1961 and went p ub lic in 1973. For the year 2009, theC om pany recorded G lo bal S ales of U S $ 1519 Mn. The C om pany has a b alanced mi x of reven u es fro m em erg ing and developed m arkets that contr ibu te 54% and 39% respect ively.In 2009, North A m er ica, the C om pany's largest m arket contr ibu ted sales of U S $ 397 Mn,followed b y Eu rope garner ing U S $ 269 Mn and A sia clock ing sales of aro u nd U S $ 441Mn.

Strategy

Ran baxy is foc u sed on increas ing the m om entum in the gener ics bu siness in its key m arketsthro u gh organ ic and inorgan ic growth ro u tes. G rowth is well spread across geograph iesw ith foc u s on developed and e m erg ing m arkets. It is the C om panys constant endeavo u r to

prov ide a w ide basket of gener ic and innovator prod u cts, leverag ing the u niqu e Hy b r idBu siness Model w ith Da ii ch i S ankyo. The C om pany w ill also increas ingly foc u s in h ighgrowth potent ial seg m ents l ike Vacc ines and B iogener ics. These new areas w ill addsign if icant depth to the ex ist ing prod u ct p i pel ine.


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R&D

Ran baxy v iews its R&D capa bi lities as a v ital co m ponent of its bu siness strategy that w ill prov ide a s u sta ina b le, long-ter m com pet itive advantage. The C om pany has a pool of over 1,200 R&D personnel engaged in path- b reak ing research.

Ran baxy is am ong the few Ind ian phar m aceu tical co m pan ies in Ind ia to have started itsresearch progra m in the late 70's, in su pport of its glo bal a mbi tions. A f irst-of- its-k indworld class R&D centre was co mmi ss ioned in 1994. Today, the C om pany has mu lti-disc i pl inary R&D centers at G u rgaon, in Ind ia, w ith ded icated fac ilit ies for gener icsresearch and innovat ive research. The R&D env iron m ent reflects its co mmi tm ent to be aleader in the gener ics space offer ing val u e added for mu lat ions and develop m ent of

ND A /A ND A s, based on its Novel Dr u g Del ivery S yste m (NDD S ) research capa bi lity.Ran baxys f irst s ign if icant internat ional s u ccess u sing the NDD S technology platfor m cam ein S epte mb er 1999, when the C om pany o u t-licensed its f irst once-a-day for mu lat ion to amu ltinat ional co m pany.

In Ju ly 2010, Ran b axys New Dr u g D iscovery Research (NDDR) was transferred toDa ii ch i S ankyo Ind ia Phar m a Pr ivate L imi ted as part of the strategy to strengthen the glo balResearch and Develop m ent str u ctu re of the Da ii ch i S ankyo G rou p. Wh ile NDDR w ill now beco m e an integral part of Da ii ch i S ankyo L ife S cience Research C enter in Ind ia, based inG u rgaon, Ran b axy w ill cont inu e to independently develop and later co mm erc ial ise the ant i-m alar ial new dr u g, A rterolane + PQP, wh ich is cu rrently in Phase III tr ials. Ran baxy w illalso explore the f u rther develop m ent of late stage progra m s developed b y NDDR in the lastfew years, inclu ding the develop m ent progra m s in the G S K colla borat ion. W ith in Ran baxy,R&D of G ener ics w ill now get a sharper foc u s, as the C om pany is increas ingly work ing onm ore co m plex and spec ialist areas.

People

The C om panys bu siness ph ilosophy based on del iver ing val u e to its stakeholdersconstantly insp ires its people to innovate, ach ieve excellence and set new glo bal benchm arks. Dr iven b y the pass ion of its arou nd 14,000 strong mu lticu ltu ral workforcecom pr ising of over 50 nat ional ities, Ran baxy cont inu es to aggress ively p u rsu e its mi ss ionTo becom e a Research- based Internat ional Phar m aceu tical C om pany.


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Compensation and Benefits structure of three companies.

Components of Salary

Dr.ReddysLaboratoryLtd.

Ranbaxy Cipla

Component ABas ic S alary 2300 3250 4500Sub Total A 2300 3250 4500Annual BasicSalary

27600 39000 43200

Component BAllowance/ReimbursementHou se Rentallowance

1500 1625 0

Med icalA llowance

350 325 0

C onveyanceA llowance

1200 650 0

Edu

cationalA llowance 250 325 0

C ommu nicat ionA llowance

400 0 0

TelephoneA llowance

0 0 0

A pparelA llowance

0 0 0

Refresh m entA llowance

0 0 0

K it A llowance 0 0 0S tat ionary

A llowance

0 0 0

Other A llowances

500 325 900

Sub Total B 4200 3250 900Annual FixedAllowance

50400 39000 10800

Component CVariable PayLeave Travel 0 1625 0


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Comparison of Annual Components Structures of 3 companies

A llowanceBonu s/Ex- G rat ia 0 7800 12000Annual VariablePay

0 9425 12000

Component Dfringe BenefitsProv ident

Fu

nd(@12% of Bas ic)

276 390 432

G ratui ty(@4.86%of Bas ic)

111.78 157.95 174.96

Sub Total D 387.78 547.95 606.96Annual FringeBenefits

4653 6575 7284

Annual TotalCost ToCompany

82653 94000 73284

C om ponents Dr.Reddys Ran baxy C i pla(in Rs.) ( in Rs.) ( in Rs.)

A nnu al Bas ic S alary 27600 39000 43200Percentage of T C TC 33.39% 41.49% 58.95%A nnu al F ixed A llowances 50400 39000 10800Percentage of T C TC 60.98% 41.49% 14.74%A nnu al Var ia b le Pay 0 9425 12000Percentage of T C TC 0% 10.03% 16.37%A nnu al Fr inge Benef its 4653 6575 7284Percentage of T C TC 5.63% 6.99% 9.94%A nnu al Total C ost To C om pany 82653 94000 73284


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Recommendations-

It is reco mm ended that Phar m a Ind u stry sho u ld have a well cons idered pay str u ctu re pol icywh ich w ill address cr itical,long ter m issu es concern ing how the f ield staff sho u ld be

awarded.The c u rrent m arket scenar io is h ighly co m pet itive,need for ready m ade talent is on r iseacross the indu stry.

The attr ition rate in th is f ield is very extre m ely h igh.

People w ill re m ain the m ost im portant reso u rces for any organ iz at ion.

Thu s the co m pensat ion is go ing to play im portant role in recr ui tm ent and retent ion of talent.

C ons ider ing the a bove s itu at ion, the co m pensat ion str u ctu res of Phar m a Ind u stry sho u ldaim at:

1) Enr ich ing the organ iz at ional val u es, espec ially those concerned w ithexcellence,perfor m ance,tea m work,q u ality and int iative.

2) C reat ing co m pensat ion and b enef it str u ctu re su ch that the co m pany is a b le toacqui re and reta in the h igh perfor m ance f ield staff.Th is w ill benef it not only thestaff bu t also the organ iz at ion.

3) The co m pan ies sho u ld also ens u re that they are g iving the r ight mi x and the levelsof reward in l ine w ith co m panys c u ltu re,need of bu siness,the needs of e m ployeesand the co m pet itive env iron m ent in wh ich the co m pany operates.

In order to real iz e the a bove m ent ioned o b ject ives and cons ider ing the fact that rev ising the pay str u ctu re is co m pl icated for the co m pany, the follow ing is reco mm ended:

1) The co m pany sho u ld f irst cons ider w ith in wh ich q u art ile its cu rrent co m pensat ionstr u ctu re falls i.e. betweenMinimum -First Q u art ile (S LA B1) or

First Q u art ile- Med ian ( S LA B2) or Med ian-Th ird Q u art ile (S LA B3) or Th ird Q u art ile- Max imum (S LA B4).

2) Then it sho u ld analy z e the attr ition in its co m pany and the level of co m pet it ion it isfac ing.


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3) A fter cons ider ing the po ints m ent ioned a bove, if the s itu at ion is not very ser iou sthen it sho u ld rev ise its co m pensat ion str u ctu re so that its ju st enters in theimm ed iate next sla b .

4) However if the s itu at ion is very ser iou s in the co m pany and analys is reveal that isdirectly l inked to the co m pensat ion, the co m pany can j um p imm ed iate h igher sla b and go for m ore h igh sla b .

5) However as a co m ponent of the indu stry,the co m pan ies sho u ld rev ise its str u ctu ressu ch that it falls w ith in the inter-q u art ile range.


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Questionnaire

Des ignat ion:

Ten u re: Fro m :

1) What is the Bas ic S alary offered to yo u? A m ou nt ( in Rs.):__________________ Or Range ( in Rs):___________________

2) What Ho u se Rent A llowance (HR A ) g iven to yo u (if g iven) ? A m ou nt ( in Rs.):__________________ Or Range ( in Rs):___________________

3) What is the conveyance allowance g iven to yo u A m ou nt ( in Rs.):__________________ Or Range ( in Rs):___________________

4) What is the m ed ical allowance g iven to yo u (if g iven) ? A m ou nt ( in Rs.):__________________ Or Range ( in Rs):___________________

5) What is the ed u cat ional allowance g iven to yo u (if g iven) ? A m ou nt ( in Rs.):__________________ Or


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Range ( in Rs):___________________

6) A re there any other allowances g iven to yo u? a) Yes. S pec ify:____________________________________ b) No

7) A re yo u given leave travel allowances b y you r co m pany? a) Yes. S pec ify:___________________________________ b) No

8) A re yo u given f ixed ann u al a m ou nt b y you r co m pany? a)Yes. S pec ify:___________________________________ b) No


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References

www.cipla.com www.ranbaxy.com

www.wikipedia.com http://www.drreddys.com/index.html

Documents

Final comp. pharma sector(rolno. 25,28,30)