Report on Compensation and Benefits

8/2/2019 Report on Compensation and Benefits

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CHAPTER 1

INTRODUCTION

Objectives of the study

Scope of the study

Need of the study

Limitations of the study

Research methodology

Compensation & Benefits Page 1


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INTRODUCTION

The increasing competitiveness of the labor market and turnover of employees had

resulted in nightmare in compensation planning. Apart from this, the growing demands of the

employees and competitive salaries offered by multinational companies had almost resulted in

a compensation war in companies.

Therefore, the human resources managers and tax experts have to evolve proper

compensation planning for High end and qualified employees. The components of

compensation have to be devised in such a way that, it focuses on the growing demands of

employees while retaining the competitiveness and profitability of the company

Management approach of an organization has to be san effective imperative to set

paradigms for managing an enterprise and its people so that the human resources functions

forms an integral part of corporate policy.

Acquire or sharpen capabilities required to perform various functions associated

with their present of expected future roles.

Develop the general capabilities as individuals exploit their potentials for their own

and organizational development purposes.

Develop an organizational culture.



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CONCEPT OF COMPENSATION AND BENEFITS

Compensation represents both the intrinsic and extrinsic rewards employees receive for

performing their job. Intrinsic compensation reflects the employees psychological mind set

result from performing their job. Extrinsic compensation includes both monetary and non

monetary rewards.

Intrinsic Compensation represents employees critical psychological state that results

from performing their job. Job characteristic theory describes these critical psychological

states. According to this job theory, employees experience enhanced psychological states (that

is intrinsic compensation) when their jobs rate high on five core job dimensions: skill variety,

task identity, task significance, autonomy and feedback.

Extrinsic Compensation includes both monetary and non monetary rewards.

Compensation Professionals establish monetary compensation programs to reward employees

according to their job performance levels. Monetary compensation represents Core

Compensation. Non-monetary rewards includes protection programs (for example, medical

insurance), paid time-off (for example vacations), and services (for example, day care

assistance).Nonmonetary rewards are referred as Fringe Compensation.

Non-monetary rewards includes protection programs (for example, medical insurance),

paid time-off (for example vacations), and services (for example, day care assistance).Non

monetary rewards are referred as Employee benefits. Employee Benefits programs include a

variety of programs that provide paid time-off, employee services, and protection programs.

Benefits are benefits which employees or directors receive from their employment but

which are not included in their salary cheque or wages. On the tax return form they are called



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'benefits in kind'. They include such things as company cars, private medical insurance paid for

by the employer and cheap or free loans.

Definition

According to Handerson a step by step approach for designing a remuneration system

that recognizes job requirements, employee related knowledge and skills and performance

related incentives that link individual, work unit and organizational performance

Total remuneration also includes a host of benefits that protect and expand the life style

and health of workers and their families.

Compensation is the remuneration received by an employee in return for his/her

contribution to the organization. It is an organized practice that involves balancing the work-

employee relation by providing monetary and non-monetary benefits to employees.

Compensation is an integral part of human resource management which helps in motivating the

employees and improving organizational effectiveness.

Components of Compensation System

Compensation systems are designed keeping in minds the strategic goals and business

objectives. Compensation system is designed on the basis of certain factors after analyzing the

job work and responsibilities. Components of compensation system are as follows:



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Fig 1. Components of compensation system

Types of Compensation

Compensation provided to employees can direct in the form of monetary benefits

and/or indirect in the form of non-monetary benefits known as perks, time off, etc.

Compensation does not include only salary but it is the sum total of all rewards and allowances

provided to the employees in return for their services. If the compensation offered is effectively

managed, it contributes to high organizational productivity.

Direct Compensation

Direct compensation refers to monetary benefits offered and provided to employees in

return of the services they provide to the organization. The monetary benefits include basic

salary, house rent allowance, conveyance, leave travel allowance, medical reimbursements,

special allowances, bonus, Pf/Gratuity, etc. They are given at a regular interval at a definite

time.



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Fig 2. Direct compensation

Indirect Compensation

Indirect compensation refers to non-monetary benefits offered and provided to

employees in lieu of the services provided by them to the organization. They include Leave

Policy, Overtime Policy, Car policy, Hospitalization, Insurance, Leave travel Assistance

Limits, Retirement Benefits, Holiday homes.



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Fig 3. Indirect Compensation



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OBJECTIVES OF STUDY

Job candidate choose to work for particular companies for a number of reasons

including career advancement opportunities, training, the companys reputation for being a

good place to work, location, and compensation. Companies try to spark job candidates

interest by communicating the positive features of core and fringe compensation programs.

Companies use compensation to compete for the very best candidates. Goals of compensation

professional/HR manager are

Identifying jobs and designing their compensation and reward limits.

Redesign compensation and reward system when ever required.

Ailing the compensation strategy with business and HR strategy.

Identifying unneeded jobs and unneeded employees and making a downsizing decisions

and thus cost cutting.

Identifying jobs that can be outsourced to reduce expenses of the organization or cost

cutting.

Identifying the quantity and quality of people required in the organization.

Determining work to be performed by different units and individual and amount of

knowledge and skills required for the jobs.



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SCOPE OF THE STUDY:

The study was intended to obtain information about:

The compensation structure of an employee.

The quality of work in the organization since the quality of work depends on the perfor-

mance of the employee.

The strengths and weaknesses of employees

Compensation is the valuation of worth, quality or merit. Compensation structure, also

known as remuneration, is a method by which the job performance of an employee is valuated

or quantified. It is the most important management tool helpful in attracting and retaining the

best employees.

People differ in their abilities and their aptitudes. There is always some difference be-

tween the quality and quantity of the same work on the same job being done by two different

people. Therefore, Compensation professional should understand each employees abilities,

competencies and relative merit and worth for the organization.



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NEED FOR THE STUDY

A good compensation package is important to motivate the employees to increase the

organizational productivity.

Unless compensation is provided no one will come and work for the organization. Thus,

compensation helps in running an organization effectively and accomplishing its goals.

Salary is just a part of the compensation system, the employees have other psychological

and self-actualization needs to fulfill. Thus, compensation serves the purpose.

The most competitive compensation will help the organization to attract and sustain the

best talent. The compensation package should be as per industry standards.

RESEARCH METHODOLOGY



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The data was collected from various sources given below.

1. Primary Source:

Personal interaction with the employees of VIVIMED.

Questionnaire.

Conducting interviews.

2. Secondary Source:

Company journals and magazines.

Various books, magazines, Internet browsing etc.

Sample design

Sampling Unit: The study is directed towards Executives only.

Sampling Size: Sampling size of 40 is taken in this study.

Sampling Method: Convenience sampling

Period of Study: Fieldwork done for a period of six weeks.

Analysis: Analysis is done by calculating the percentages and depicting them pictorially.



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LIMITATIONS OF THE STUDY

The study is however subject to certain limitations:

The sample size is 40 only, which may not be sufficient to give the correct results due

to the limitation of time.

The sample does not cover the entire Employees in the organization due to logistical

constrains.

It is left to the respondent to take his own time to answer the questions; therefore it

cannot be certain that whether the replies given by respondents are manipulated or

presented his original thoughts.

Heavy reliance is placed on the respondents view, which cannot be verified.



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CHAPTER II

REVIEW OF LITERATURE



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COMPENSATION AND BENEFITS

Introduction

Compensation and benefits is an emotive area, not only for the organizations but also

for the employees. Establishing and managing a reward structure is one of the critical corner-

stones of the human resources department. It is extremely important to design the right reward

package that supports the business goals. The HR professionals understand the importance of

compensation and benefits in such a way that they are able to understand the intricacies, basic

reward system, the global trends in compensation & benefits and are able to link pay with per-

formance for better planning.

The increasing competitiveness of the labor market and turnover of employees had re-

sulted in nightmare in compensation planning. Apart from this, the growing demands of the


a compensation war in certain industries.

Therefore, the human resources managers and tax experts have to evolve proper com-

pensation planning for High end and qualified employees. The components of compensation

have to be devised in such a way that, it focuses on the growing demands of employees while

retaining the competitiveness and profitability of the company.

The increasing competitiveness of the labor market and turnover of employees had re-

sulted in nightmare in compensation planning. Apart from this, the growing demands of the


a compensation war in certain industries.



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Evolution of Compensation

Todays compensation systems have come from a long way. With the changing

organizational structures workers need and compensation systems have also been changing.

From the bureaucratic organizations to the participative organizations, employees have started

asking for their rights and appropriate compensations. The higher education standards and

higher skills required for the jobs have made the organizations provide competitive

compensation to their employees.

Compensation strategy is derived from the business strategy. The business goals and

objectives are aligned with the HR strategies. Then the compensation committee or the

concerned authority formulates the compensation strategy. It depends on both internal and

external factors as well as the life cycle of the Organization.

Fig 4. Evolution of Compensation

Evolution of Compensation Strategic Compensation:

Traditional Compensation Systems

In the traditional organizational structures, employees were expected to work hard and

obey the bosses orders. In return they were provided with job security, salary increments and

promotions annually. The salary was determined on the basis of the job work and the years of



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experience the employee is holding. Some of the organizations provided for retirement benefits

such as, pension plans, for the employees. It was assumed that humans work for money, there

was no space for other psychological and social needs of workers.

Change in Compensation Systems

With the behavioral science theories and evolution of labor and trade unions, employees

started asking for their rights. Maslow brought in the need hierarchy for the rights of the

employees. He stated that employees do not work only for money but there are other needs too

which they want to satisfy from their job, i.e. social needs, psychological needs, safety needs,

self-actualization, etc, Now the employees were being treated as human resources.

Their performance was being measured and appraised based on the organizational and

individual performance. Competition among employees existed. Employees were expected to

work hard to have the job security. The compensation system was designed on the basis of job

work and related proficiency of the employees.

Todays Modern Compensation Systems

Today the compensation systems are designed aligned to the business goals and

strategies. The employees are expected to work and take their own decisions. Authority is

being delegated. Employees feel secured and valued in the organization. Organizations offer

monetary and non-monetary benefits to attract and retain the best talents in the competitive

environment. Some of the benefits are special allowances like mobile, companys vehicle;

House rent allowances; statutory leaves, etc.

Payroll Management Process



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Calculation of gross salaries and deductible amounts is a tedious task which involves

risk. Some of the organizations use the traditional manual method of payroll processing and

some go for the advanced payroll processing software. An organization opts for any of the

following payroll processing methods available

Fig 5. Modern Compensation system.

Manual System

Manual payroll system is the traditional payroll system which involves pen and ink,

adding machine, spreadsheet, etc instead of computers, software and other computerized aids.

The process was very popular when there were no computerized means for payroll processing.

Now-a-days it is only few small scale organizations in the remote areas that use the

manual payroll. Sometimes the construction industry and manufacturing industry also use the

manual payroll systems for the contractual labor, as theses contracts are on daily/weekly basis.



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There is full control in the hands of owner. But the process is tedious, time consuming

and risky as it is more prone to errors.

Accountant

Accountant is a professional having a degree/diploma course in finance/accountancy.

He/she is responsible for all the activities related to payroll accounting. He/she has the sound

knowledge of accounting principles and globally accepted standards.

The process adds costs to the organization. It involves paying someone who is

responsible for calculating the salaries of others. The financial control regarding salary goes in

the hand of accountant.

Payroll Software

In todays computerized environment, payroll system has also developed itself into

automated software that performs every action needed by the payroll process. It helps in

calculating the payable amounts and deductions very easily. It also helps in generating the pay

slips in lesser time. Automated calculations result in no errors. Data is validated automatically

by the software. It needs professionals to make use of the software for its efficient working.

Payroll Outsourcing

Payroll outsourcing involves a third party (an outsourcing company) in the calculations

of salaries and deductions. The outsourcing organization is responsible for all the activities of

the payroll accounting. It saves time and cost for the organization. If there is more number of



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employees (say more than 900-1000) in the organization, payroll outsourcing would be very

much beneficial.

The data is provided to the consultants/outsourcing firms. The various payroll functions

undertaken by the outsourcing organizations are as follows:

Analysis of payroll records;

Payroll taxes, medical claim processing

Employee Insurance & Provident fund.

Components of compensation:-

Basic wages/Salaries:-

These refer to the cash component of the wage structure based on which other elements

of compensation may be structured. It is normally a fixed amount which is subject to changes

based on annual increments or subject to periodical pay hikes. It is structured based on the

position of an individual in the organization and differs from grades to grades.

Dearness allowance:-

The payment of dearness allowance facilitates employees and workers to face the price

increase or inflation of prices of goods and services consumed by him. The onslaught of price

increase has a major bearing on the living conditions of the labor. The increasing prices reduce

the compensation to nothing and the money's worth is coming down based on the level of

inflation.



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The payment of dearness allowance, which may be a fixed percentage on the basic

wage, enables the employees to face the increasing prices.

Bonus:-

The bonus can be paid in different ways. It can be fixed percentage on the basic wage

paid annually or in proportion to the profitability. The Government also prescribes a minimum

statutory bonus for all employees and workers.

There is also a bonus plan which compensates the Managers and employees based on

the sales revenue or Profit margin achieved. Bonus plans can also be based on piece wages but

depends upon the productivity of labor.

Commissions:-

Commission to Managers and employees may be based on the sales revenue or profits

of the company. It is always a fixed percentage on the target achieved. For taxation purposes,

commission is again a taxable component of compensation.

The payment of commission as a component of commission is practiced heavily on

target based sales. Depending upon the targets achieved, companies may pay a commission on

a monthly or periodical basis.

Mixed plans:-



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Companies may also pay employees and others a combination of pay as well as

commissions. This plan is called combination or mixed plan. Apart from the salaries paid, the

employees may be eligible for a fixed percentage of commission upon achievement of fixed

target of sales or profits or Performance objectives.

Nowadays, most of the corporate sector is following this practice. This is also termed as

variable component of compensation.

Piece rate wages:-

Piece rate wages are prevalent in the manufacturing wages. The laborers are paid wages

for each of the Quantity produced by them. The gross earnings of the labor would be equivalent

to number of goods produced by them.

Piece rate wages improves productivity and is an absolute measurement of productivity

to wage structure. The fairness of compensation is totally based on the productivity and not by

other qualitative factors.

The GANTT productivity planning and Taylor's plan of wages are examples of piece

rate wages and the related consequences.

Sign on Bonuses:-

The latest trend in the compensation planning is the lump sum bonus for the incoming

employee. A person, who accepts the offer, is paid a lump sum as a bonus.

Even though this practice is not prevalent in most of the industries, Equity research and

investment banking companies are paying this to attract the scarce talent.

Profit sharing payments:-



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Profit sharing is again a novel concept nowadays. This can be paid through payment of

cash or through ESOPS. The structuring of wages may be done in such a way that, it attracts

competitiveness and improved productivity.

Profit sharing can also be in the form of deferred compensation at the time of

retirement. At the time of retirement the employees may be paid a lump sum or retrial benefits.

Fringe benefits:-

The provision of fringe benefits does not attract any explanation. These include.

Company cars

Paid vacations

Membership of social/cultural clubs

Entertainment tickets/allowances.

Discounted travel tickets.

Family vacation packages.

Reimbursements:-

Employees, depending upon their gradations in the organization may get

reimbursements based on the Expenses incurred and substantiated. Certain expenses are also

paid based on expenses incurred during the course of business.

In many cases, employers provide advances to the employees for incurring certain

expenses that are incurred during the course of the business.



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Some examples are.

Travel expenses.

Entertainment expenses

Out of pocket expenses

Refreshments expenses during office routine outside office premises.

Sickness benefits/pregnancy:-

The increasing social consciousness of corporate had resulted in the payment of

sickness benefit to the Employees of companies. This also includes payments during pregnancy

of women employees.

The expenses incurred due to injury or illness are compensated or reimbursed to the

employees. In certain companies, the death of an employee is compensated financially.

Companies are also providing supporting financial benefits to the family of the

bereaved employees. However, companies covering these cost through appropriate insurance

policies like, Medical and life insurance.

The whole idea of compensation management can be better understood through the

following Pyramid structure.



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Fig 6. Compensation pyramid

Industry driven factors:-

There are also certain driven factors that are influencing the compensation planning.

The compensation Packages of knowledge workers are different from that of manufacturing

sector. The employees working in call centers are compensated differently (vs) employees of

technology driven companies.

Some notable examples are

a) Compensation paid in IT/ITES,

b) Investment banking/Equity research,

c) Software companies,

d) High-end industries having high technology content like Bio/Nano

technology.

e) Private research and related fields.



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CHAPTER III

INDUSTRY & COMPANY PROFILE



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INDUSTRY PROFILE

INDIAN PHARMACEUTICAL INDUSTRY:

The Indian Pharmaceutical Industry today is in the front rank of Indias science-

based industries with wide ranging capabilities in the complex field of drug manufacture and

technology. A highly organized sector, the Indian Pharma Industry is estimated to be worth $

4.5 billion, growing at about 8 to 9 percent annually. It ranks very high in the third world, in

terms of technology, quality and range of medicines manufactured. From simple headache pills

to sophisticated antibiotics and complex cardiac compounds, almost every type of medicine is

now made indigenously.

Playing a key role in promoting and sustaining development in the vital field of

medicines, Indian Pharma Industry boasts of quality producers and many units approved by

regulatory authorities in USA and UK. International companies associated with this sector have

stimulated, assisted and spearheaded this dynamic development in the past 53 years and helped

to put India on the pharmaceutical map of the world.

The Indian Pharmaceutical sector is highly fragmented with more than 20,000

registered units. It has expanded drastically in the last two decades. The leading 250

pharmaceutical companies control 70% of the market with market leader holding nearly 7% of

the market share. It is an extremely fragmented market with severe price competition and

government price control.

The pharmaceutical industry in India meets around 70% of the country's demand for

bulk drugs, drug intermediates, pharmaceutical formulations, chemicals, tablets, capsules, orals

and injectibles. There are about 250 large units and about 8000 Small Scale Units, which form



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the core of the pharmaceutical industry in India (including 5 Central Public Sector Units).

These units produce the complete range of pharmaceutical formulations, i.e., medicines ready

for consumption by patients and about 350 bulk drugs, i.e., chemicals having therapeutic value

and used for production of pharmaceutical formulations.

Following the de-licensing of the pharmaceutical industry, industrial licensing for most

of the drugs and pharmaceutical products has been done away with. Manufacturers are free to

produce any drug duly approved by the Drug Control Authority. Technologically strong and

totally self-reliant, the pharmaceutical industry in India has low costs of production, low R&D

costs, innovative scientific manpower, strength of national laboratories and an increasing

balance of trade. The Pharmaceutical Industry, with its rich scientific talents and research

capabilities, supported by Intellectual Property Protection regime is well set to take on the

international market.

Advantage India

Competent workforce: India has a pool of personnel with high managerial and technical

competence as also skilled workforce. It has an educated work force and English is commonly

used. Professional services are easily available.

Cost-effective chemical synthesis: Its track record of development, particularly in the area of

improved cost-beneficial chemical synthesis for various drug molecules is excellent. It provides

a wide variety of bulk drugs and exports sophisticated bulk drugs.

Legal & Financial Framework: India has a 53 year old democracy and hence has a solid legal

framework and strong financial markets. There is already an established international industry

and business community.



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Information & Technology: It has a good network of world-class educational institutions and

established strengths in Information Technology.

Globalization: The country is committed to a free market economy and globalization. Above

all, it has a 70 million middle class market, which is continuously growing.

Consolidation: For the first time in many years, the international pharmaceutical industry is

finding great opportunities in India. The process of consolidation, which has become a

generalized phenomenon in the world pharmaceutical industry, has started taking place in

India.

THE GROWTH SCENARIO

India's US$ 3.1 billion pharmaceutical industry is growing at the rate of 14 percent per

year. It is one of the largest and most advanced among the developing countries.

Over 20,000 registered pharmaceutical manufacturers exist in the country. The domestic

pharmaceuticals industry output is expected to exceed Rs260 billion in the financial year 2002,

which accounts for merely 1.3% of the global pharmaceutical sector. Of this, bulk drugs will

account for Rs 54 bn (21%) and formulations, the remaining Rs 210 bn (79%). In financial year

2001, imports were Rs 20 bn while exports were Rs87 bn.

Steps to strengthen the industry

Indian companies need to attain the right product-mix for sustained future growth. Core

competencies will play an important role in determining the future of many Indian

pharmaceutical companies in the post product-patent regime after 2005. Indian companies, in

an effort to consolidate their position, will have to increasingly look at merger

acquisition options of either companies or products. This would help them to offset loss of new

product options, improve their R&D efforts and improve distribution to penetrate markets.



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Research and development has always taken the back seat amongst Indian

pharmaceutical companies. In order to stay competitive in the future, Indian companies will

have to refocus and invest heavily in R&D.

The Indian pharmaceutical industry also needs to take advantage of the recent advances

in biotechnology and information technology. The future of the industry will be determined by

how well it markets its products to several regions and distributes risks, its forward and

backward integration capabilities, its R&D, its consolidation through mergers and acquisitions,

co-marketing and licensing agreements.

COMPANY PROFILE:



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The company was originally promoted by Mr.A.M.Rao and incorporated as Emgi

Pharmaceutical & Chemical Private limited on September 22, 1988 with registrar of

Companies of Karnataka, Bangalore.

On Mr.Raos accidental death the company was put for sale, in 1989 Mr.Santosh

Varalwar and Mr.Sandeep Varalwar acquired Emgi Pharmaceutical & Chemical Pvt. Ltd. And

commenced manufacturing of bulk drugs in 1991.

VIVIMED LABS LIMITED

When chemistry and cost matter.

Here chemistry and innovation are blended into a formula of value creation and growth.

Established in the year 1988, with a motto to be the best in the active pharmaceutical

ingredients besides in the year 1995, it migrated to specialty chemicals market.

Vivimed today embodies the vision of the top notch player in developing and

commercializing product catering to a variety to therapeutic categories into a leading finished

dosage manufactures, bulk drugs and specialty chemicals. If chemistry is their cornerstone,

innate business sense is their beacon

The addition of James Robinson, UK into the vivimed family is a testimony to this

attribute. More than just an acquisition, James Robinson is their step towards expanding into

large canvas of specialty chemicals, photo-chromatic, photo-graphic and fluorescent chemicals.

Vivimed gradually introduced other products and broadened the range of oral care, hair

care, and skin care and preservatives products. Vivimeds capacity in synthesis organic

chemistry and R & D enables it to become a knowledge partner, to certain large multinational,

such as Unilever and LOreal.



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Vivimed is primarily organized into divisions and companies. Divisions are operations,

which have grown from the parent company to emerge into their own as independent entities.

They have their own teams, markets and plans.

The H&PC Actives Division has been a key mover and the driver that has enabled

Vivimed Labs builds its international reputation. Known to global manufacturers across the

world for its strength in synthetic organic chemistry the H&PC division has under its umbrella

five areas

Oral care

Sun care

Skin care

Hair care

Preservatives

The Specialty Pharma Division of Vivimed Labs is a merged entity of VVS Pharma

and Creative Healthcare. The Specialty Division has its inherent strengths in drug delivery ad

drug discovery. They are focused on providing cures in the Oncology space, Arthritis,

Syndrome X, Macular degeneration, Psoriasis and Stress.

UK Company, James Robinson Ltd, has now been incorporated into the new

organization as Vivimed Labs Europe Ltd. It is a leading global supplier of dyes used in a host

of personal care and consumer products ranging from hair dye intermediates and photographic

developer chemicals to ophthalmic lenses and fluorescent dyes for textiles, inks and coatings.



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US Company, Harmet International, has joined the group as Vivimed Labs USA Inc., as

a US hub to increase our global footprint and cut down the time to market for global customers

Harmet International becomes a strategic and relevant entity. Positioned to ensure a smooth,

seamless distribution and delivery channel Harmet is being evolved to create a perfect

alignment between markets and manufacturing.

VIVIMED STRATEGY:

Vivimed has focused on the specialty chemicals and pharmaceuticals for global

markets, with full fledged marketing capabilities the company has been able to market its

products in all over 100 countries in Asia, Europe, North-America and Far-East etc.,

Vivimed has set up an independent REACH compliance Unit in the UK. We have

successfully completed the pre-registration of its phase-in substances. This allows

uninterrupted business at least until the end of November 2010. By "phase-in" we refer to the

formal REACH definition, which includes any substance in the Vivimed portfolio that is either

manufactured by Vivimed in the EEA, or directly imported by Vivimed for sales or use in the

EEA.

REACH is the new European Community regulation governing the Registration,

Evaluation, Authorization and Restriction of Chemicals.

VISION, MISSION AND VALUES:

When chemistry costs and matter..



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..Be friending the future

VISION

To continually raise the standards of excellence in Specialty Chemical and Pharmaceu-

tical field, achieve and maintain the highest level of customer satisfaction based on proven sci-

entific principles, administered with empathy and insight.

MISSION

Vivimed mission is to be globally acclaimed pharmaceutical company, meeting the re-

quirements of health care imbibing the philosophy of both commercial and social concerns,

driven by research and manufacturing capacities.

VALUES

Vivimed has always strived to be a value driven organization. The core values influenc-

ing Vivimed operations are:

Personal Care: We care, respect and show compassion and humanity to all who call on us and

are associated with us. We try our best to surpass their expectations.

Integrity: We conduct our business fairly with honesty and transparency.

Fairness: We are fair, sincere and ethical in all our deals to create an environment of trust and

respect.

Excellence: We constantly strive to be the quality products provider leveraging technology and

delivering the best to the society at large.



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Responsibility: We are sensitive to those who call on us in pain and distress and try our very

best to ease them of their stress and tension.

Vivimed business practices are guided by the highest ethical standards of truth, integri-

ty and transparency.

Human Resources

Our Company operates in a highly competitive environment vis--vis attracting the best

talent for its operations. Therefore, human resources management has assumed vital impor-

tance. The key to the success of our Company lies in its people whose skills, expertise, and tal-

ent help the Company to achieve and sustain its market position. It is the peoples commitment,

technical know-how, innovative ability and performance driven mindset that enable. Vivimed

to react swiftly and creatively to the evolving customer and market needs. Our Company pro-

vides requisite training at regular intervals to all its employees. Specialized training and busi-

ness exposure with a focus on building leadership in all areas of the Companys operations was

a major initiative taken up during the year. The process of improving organizational and human

capability is continued through competencies mapping of managerial positions, development of

leadership and building of talent for the future. Cordial relations with the employees prevailed

at all Company locations during the year.

The total number of employees of Vivimed and its subsidiaries as at March 31, 2009

was around 1060 including those on contract.



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COMPENSATION & BENEFITS IN VIVIMED

The HRM concept has educated and made the organizations to understand and realize,

without doubt, that their organizations strength lies in their people. They are one among the

other resources like material resource, money resource, machine resources and are equally and

sometimes more important than the other resources. Human beings also have a need to grow

and develop themselves professionally. Compensation is a method of valuating of employees in

the organization including all aspects of job performance and to attract and retain the best em-

ployees.

The Compensation system of VIVIMED consists of Base pay; House rent allowance

(HRA), Dearness allowance, Conveyance, and Others. These are the basic components of

salary of Vivimed employees which contributes to their gross salary paid by the organization; it

also includes deductions which consist of ESI, Provident fund, Professional Tax, Income tax,

etc.

Deductions are deducted from the gross and arrived at the Net payable amount to the employee

in other word what we call Take home.

Net salary= (Base pay + HRA+Conveyance+Others) Deductions.

Base pay is 40-50% of gross.

40% for employees of salary greater than Rs. 30,000/-.

50% for employees of salary less than or equal to Rs.30, 000/-.

HRA is 20% of gross.



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Conveyance is 25% of gross.

Others are 5-15% of gross.

5% for employees of salary is greater than Rs.30, 000/-.

15% for employees of salary less than or equal to Rs.30, 000/-

Deductions include ESI, PF, PT, IT etc.



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CHAPTER IV

DATA ANALYSIS AND

INTREPRETATION



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1. Are you aware of the Compensation Package in your Organization?

a) YES

b) NO

S.No. RESPONSE RESPONDENTS PERCENTAGE (%)

1 YES 29 72

2 NO 11 28

TOTAL 40 100

Observation: From the above figure it can be observed that 72% of the total numbers of

employees know their compensation Package.

2. Do you agree that compensation commensurate with the work done by you?



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a) Strongly agree

b) Agree

c) Disagree

d) Strongly Agree

S.No RESPONSE RESPONDENTS PERCENTAGE (%)

a. Strongly agree 14 35

b. Agree 23 57

c. Disagree 3 8

d. Strongly disagree 0 0

Total 40 100

Observation: From above figure it can be observed that 35% of employee's think

that their compensation commensurate with the work done by them completely,

while 57% of them think that it commensurate to some extent and 8% think that it

commensurate to very little extent.

3. Are you aware of your Roles and Responsibilities of your job in the organization?

a) Yes

b) No



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S.No. RESPONSE RESPONDENTS PERCENTAGE (%)

a. YES 40 100

b. No 0 0

Total 40 100

Observation: From the above figure it can be observed that all the employees are aware of the

roles and responsibilities of their job in the organization.

4. Are you compensated as per your job responsibilities?

a. YES

b. No


S.NO. RESPONSE RESPONDENTS PERCENTAGE (%)

a. YES 34 85

B. NO 6 15TOTAL 40 100


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Observation: From the above figure it can be observed that 85% of the employee's think that

they are compensated as per their job responsibilities while 15% think that they are not.

5. Do you have autonomy in determining how to perform your job?

a) Yes

b) No

S.No RESPONSE RESPONDENTS PERCENTAGE (%)

a. YES 29 72.5

B. NO 11 27.5

TOTAL 40 100



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Observations: From the figure it can be observed that 72% of employees have the autonomy in

determining how to perform their job while 28% think that they dont have the autonomy.

6. Does your employer provide you with the feed back regarding your performance?

a) Yes

b) No


S.NO. RESPONSE REPONDENTS PERCENTAGE (%)

a. YES 34 85

b. NO 6 15

TOTAL 40 100


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Observation: From the above figure it can be stated that 85% of employees receive feedback

from their employer or immediate supervisor while 15% do not receive any kind of feedback.

7. Do you agree this feedback has helped you to improve your key performance?

a) Strongly agree b) Agree

c) Disagree d) Strongly disagree

S.NO. RESPONSE REPONDENTS PERCENTAGE (%)

a. Strongly agree 14 35

b. Agree 23 57

c. Disagree 3 8

d. Strongly disagree 0 0

TOTAL 40 100



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Observation: From the above figure it can be stated that 57% of employees believe that the

feedback given to them was very helpful in improving their key performance to some extent

and 35% thing it was very much helpful to them while 8& think it was only a little help.

8. How many pay revisions had been taken place after your joining? ( )

a. Less than two

b. Between 2 & 5

c. More than 5

d. None

S.NO RESPONSE RESPONDENTS PERCENTAGE (%)

a. Less than two 5 12

b. Between 2 & 5 25 62

c. More than 5 5 13

d. None 5 13

TOTAL 40 100



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Observation: From the figure it is observed that 62% of employees had pay revisions between

2 & 5, 13% of employees had more than 5 times, 13% of employees had less than 2 times & 12

% had no pay revisions.

9. What is the criterion for salary increase?

a. Performance

b. Seniority

c. Performance + Seniority

d. Others

S.NO RESPONSE RESPONDENTS PERCENTAGE (%)a. PERFORMANCE 17 42

b. SENIORITY 0 0

c. PERFORMANCE+SENIORITY 17 43

d. OTHERS 6 15

TOTAL 40 100



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Observation: From the above figure it can be seen that 43% of employees feel that

Performance + seniority is the criteria for salary revision, 42% think that its only performance

and 15% think its due to other reasons. No employee feels that seniority is a basis for their pay

revision.

10. How far your organization is providing other benefits when compared to similar

organizations?

a. Excellent

b. Very Good

c. Good

d. Poor


a. EXCELLECT 0 0

b. VERY GOOD 29 72.5

c. GOOD 11 27.5

d. POOR 0 0

TOTAL 40 100



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Observation: From the above figure it is clear that 72% of the employees are of the opinion

that the benefits provided to them are very good while 28% say they are good.

11. Are you satisfied with benefits provided by your organization?

a. Yes

b. No

S.No RESPONSE RESPONDENTS PERCENTAAGE (%)

a. YES 40 100

B. NO 0 0

TOTAL 40 100



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Observation: From the above figure it is clear that the employees are very much satisfied with

the benefits provided by the organization.

13. What is your opinion regarding allowances in your organization provided that

they are?

a. Excellent

b. Very good

c. Good

d. Poor


a. EXCELLECT 0 0

b. VERY GOOD 17 42.5

c. GOOD 23 57.5

d. POOR 0 0

TOTAL 40 100



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Observation: From the figure it can be stated that 58% of employees feel that the allowances

provided to then are good enough while 42% think they are very good.

14. How far the HR Department/Organization had reached regarding your

compensation?

a. Excellent

b. Very good

c. Good

d. Poor


a. EXCELLECT 6 15

b. VERY GOOD 14 35

c. GOOD 20 50

d. POOR 0 0

TOTAL 40 100



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Observation: From the figure it can be seen that 50% of employees are of opinion that the

HRD is good enough regarding their compensation and 35% feel that its very good while only

15% thing its excellent.

15. What is your opinion regarding compensation package in your organization?

a. Excellent

b. Very good

c. Good

d. Poor


a. EXCELLECT 6 15

b. VERY GOOD 14 35

c. GOOD 20 50

d. POOR 0 0

TOTAL 40 100



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Observation: From figure it can be observed that 50% of employees are of the opinion that the

organization if offering them a good compensation package while 35% think that its very good

and 15% think that its excellent.



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CHAPTER V

FINDINGS, SUGGESTIONS &

CONCLUSIONS

FINDINGS:

In this study, I have attempted to reveal various attributes, which help assessing the

actual realities of the organization.

During the interaction with the employees of the organization through the questionnaire

session, the findings that have been made are given below:

It has been observed that majority of employees know about their compensation

package and feel that they are commensurate with the work done by them.



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It had been observed that majority of the employees know their job responsibilities and

roles and most of them think that they are compensated as per their job roles &

responsibilities.

It has been observed that majority of employees have autonomy in determining how to

perform their job. Majority of employees get feedback from their superiors and only

few of them are of opinion that this feedback has helped them to improve their

performance and hence management should pay attend to this issue.

Majority of employees feel that the pay revisions are based on Performance + seniority.

However, many respondents also feel satisfied with the fulfillment of esteem needs

such as appreciation letters and certificates, or giving higher responsibilities to handle

etc.,

Many of them are of opinion that the benefits provided to them are good enough and

are satisfied with them.

Many of them feel that the allowances provided to them are fair enough and are

satisfied with them.

Majority of them feel that the HRD & Organization is very good regarding their

compensation & Benefits.

It has been observed that majority of the respondents feel that individual pay for

performance plans reduces cooperation and team work.

The respondents feel that good work or any contribution by employees in this

organization does not go unnoticed. However, many agree to the statement that good

work is not being noticed. Hence, management should attend to this issue.



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SUGGESTIONS:

In VIVIMED, the management could provide transport facility to the employees who

travel from distant places by collecting nominal charges for maintenance.

The rewards system in the organization is good but it can be improved further to make

it effective.

The management should take an opportunity to publicly acknowledge and appreciate in

front of his peers which builds up the self morale of the employee.

The employees feel that the performance system that earns incentives is hard to reach

and the management should attend to this issue

The employees feel that better cooperation among employees, employees-management

will result in greater effectiveness. Thus management can arrange for some team

building programs.

Setting goals for employees to develop their capabilities necessary for effective perfor-

mance, individual growth and achieving organizational goals.

Promotions or increments should not be based totally on the ratings of the performance

Appraisal forms.

Performance Appraisal Reports should be revealed to the employees so that they can

put their best efforts in their work.



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There should be a continuous need to educate and train the executives in the organiza-

tion, as the system is a development tool and aims to strengthen communication be-

tween employees and management.

A climate of mutuality, openness and trust should prevail in the organization as it con-

tributes to the substantial growth of the employees



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CONCLUSION:

Role clarity is present in right terms in this organization

The Flow of communication is effective.

The Extents of performance based pay is good and can be improved.

Relationship between the management and employees is quite good.

Team work is in right manner and the spirit of the team leader and sales executives is in

the right form.

Slight job satisfaction is prevalent in the mind set of the employee and it may prove

harmful to the organization.

The output of the compensation and benefits system is taken as the basis for evaluating

the job performance of the employees

Feedback is given to the employees regarding their performance, without which the rea-

son behind conducting performance appraisal is not met.



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BIBLIOGRAPHY



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REFERENCES

1. Joseph J.Martocchio, 2006, Strategic compensation, Third edition Pearson

Education Richard 1.

2. Milkovich & NewMan, 2005, Compensation, Tata McGraw Hill, New Delhi.

3. Bruce R. Ellig, 2004, The Complete guide to Executive Compensation, TMH.

WEBSITES

1. www.vivimedlabs.com

2. http://www.outsource2india.com/kpo/samples/pharmaceutical-industry-

report.asp

3. http://www.pharmaceutical-drug-manufacturers.com/pharmaceutical-industry/

4. www.citehr.com

http://www.vivimedlabs.com/http://www.outsource2india.com/kpo/samples/pharmaceutical-industry-report.asphttp://www.outsource2india.com/kpo/samples/pharmaceutical-industry-report.asphttp://www.pharmaceutical-drug-manufacturers.com/pharmaceutical-industry/http://www.citehr.com/http://www.vivimedlabs.com/http://www.outsource2india.com/kpo/samples/pharmaceutical-industry-report.asphttp://www.outsource2india.com/kpo/samples/pharmaceutical-industry-report.asphttp://www.pharmaceutical-drug-manufacturers.com/pharmaceutical-industry/http://www.citehr.com/


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ANNEXURE



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Questionnaire

Vivimed Labs Ltd.

Veernag Towers, Hubisguda, Hyderabad- 500 007

___________________________________________________________________________

Questionnaire on Compensation and Benefits:

Name of the employee: Department:

Designation:

Date of Joining

Experience:

1. Are you aware of the Compensation Package in your Organization? (Yes/No)

2. Do you agree that your compensation commensurate with the work done by you?

a. Strongly agree

b. Agree

c. Disagree



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d. Strongly disagree

3. Are you aware of your Roles and Responsibilities of your job in the organization?

(Yes/No)

4. Are you compensated as per your Roles & responsibilities? (Yes/No)

5. Do you have Autonomy in determining how to perform the job? (Yes/No)

6. Does your employer provide you with the Feedback regarding your Performance?

(Yes/No)

7. Do you agree this feedback has helped you to improve your Key performance?

a. Strongly agree

b. Agree

c. Disagree

d. Strongly disagree

8. How many pay revisions had been taken place after your joining in the organization? ( )

a. Less than two

b. Between 2 & 5

c. More than 5



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d. None

9. What is the Criteria for Salary increase?

a. Performance

b. Seniority

c. Performance +Seniority

d. Others

10. How far your Organization is providing other benefits when compared to similar organiza-

tion?

a. Excellent

b. Very good

c. Good

d. Poor

11. Are you satisfied with the benefits provided to you by your organization? (Yes/No)

12. If No what are the reasons?

13. What is your opinion regarding allowances in your organization provided that they are?

a. Excellent



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b. Very good

c. Good

d. Poor

14. How far the HR Department has reached regarding your compensation

a. Excellent

b. Very good

c. Good

d. Poor

15. What is your opinion regarding compensation Packages in your organization?

a. Excellent

b. Very good

c. Good

d. Poor

___________________________________________________________________

Date: Signature of the employee:

Documents

Report on Compensation and Benefits