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A STUDY ON PERFORMANCE APPRAISAL MANAGEMENT IN Dr. REDDY’S LABORATORIES

LTD

PROJECT REPORTSUBMITTED IN PARTIAL FULFILLMENT OF THE

REQUIREMENTS FOR THE DEGREE

MASTER OF BUSINESS ADMINISTRATION

BYS.POOJITHAA30601908080

AMITY GLOBAL BUSINESS SCHOOL

2009

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ACKNOWLEDGEMENTI avail this opportunity to express my deep sense of gratitude to all the people

who have helped me to carry out and complete this project in partial fulfillment of my

MBA degree curriculum

I am deeply indebted to Dr. G. Prasad Rao, Director, AMITY GLOBAL

BUSINESS SCHOOL for the valuable support and gave me an opportunity to do my

project work.

I wish to express my hearty thanks to my faculty guide Prof. Latha

Chakravarthy of AMITY GLOBAL BUSINESS SCHOOL, for the help she provided to

carry out this project.

It has been of inestimatable pleasure and privilege to express my heartful

gratitude, admiration and sincere thanks to Dr. V. Narayana Reddy, HR, Dr. Reddy’s

Laboratories Limited, CTO-UNIT III

I also wish to thank all the employees of Dr. Reddy’s Laboratories Limited, who

helped me by sharing their knowledge and I offer a word of thanks to the almighty who

gave me strength, courage and blessing to carry out a successful study

S.POOJITHA

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INTRODUCTION

In this 21st century scenario, one can easily identify the rapid changes in the world

in various things. The human person started thinking differently from past. Each one

strives to do better than the past.

Person’s mind started working in thinking about his status where he works and

where he wants to be i.e., his future goal. Every one wants to be specially identified from

the other. For this he strives to do better than others. He wants to be recognized as better

than others.

In this context we have a word of performance appraisal of the individuals and

groups in the organization. It is the individuals or employees who are considered to be the

backbone of any organization.

In this work one can notice the importance of performance appraisal and how it

helps in molding the employees in achieving organizational goals. For our convenience

the work has been divided into various chapters each one dealing with different aspect of

the work.

Performance appraisal is the method of appraising employee’s activities in order

to make him to work towards achieving organizational goals. Appraising an employee is

one of the fundamental jobs of human resource management. It is done by knowing the

strengths and weaknesses of employees thus correcting them wherever necessary and

molding them by training if necessary.

This also helps in giving rewards to those who contribute in the development of

the organization. Before understanding the meaning of performance appraisal, let us

consider where and how it started.

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1.1 History of Performance Appraisal:

Once the employee has been selected and placed, he is then appraised for his

performance. Performance appraisal is the step where the management finds out how

effective is has been in selecting employees. Performance appraisal is a process of

evaluating an employee’s performance on the job in terms of its requirements. It is the

process of evaluating the performance of the employee in terms of the requirements of

the job for which he is employed, for placement, selection promotion, financial reward

and other actions which require differential treatment among the members of a group as

distinguished from actions affecting all members equally.

Performance appraisal technique is said to be used, for the first time during the

First World War, by the US army. It has adopted “man-to-man” rating system for

evaluation military personnel during those periods.

Performance of individuals of an organization would chance over a period of

time. It could happen in order to adapt to the changing requirements and the changing

working conditions. By performance appraisal one can bring together or abolish the gap

between the expected performances an actual performance.

So, the main objective of performance appraisal is to understand the needs of

employees, to correct those who deviate from the organizational goals, through training,

counseling. This also help to prevent grievances, and in disciplinary activities of

employees. Thus, making each and every employee happy on his job and help them to

develop their skills and talents.

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Figure 1: Employee Happiness

1.2 What is Performance?Performance is synonymous with behavior; it is what people actually do.

Performance includes those actions that are relevant to the organizational growth and can

be measured in terms of each individual’s proficiency (level of contribution).

1.3 How is Performance managed?

Good performance by the employees creates a culture of excellence, which

benefits the organization in the long run. The activity includes evaluation of jobs and

people both, managing gender bias, career planning, and devising methods of employee

satisfaction etc. The efforts are to make to generate the individual’s aspirations with the

objectives of the organization. Organization has to clear the way of career advancements

for talented and hardworking people. Fear of any kind from the minds of the employees

should be removed so that they give best to their organization. Allow free flow of

information. Communication network should be designed in such a way no one should be

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allowed to become a hurdle. This enables the managers to take correct decisions and that

too quickly.

1.4 Why Performance Appraisal?Today’s working climate demands a great deal of commitment and effort from

employees, who in turn naturally expect a great deal more from their employers.

Performance appraisal is designed to maximize effectiveness by bringing participation to

more individual level in that it provides a forum for consultation about standards of work,

potential, aspirations and concerns. It is an opportunity for employees to have

significantly greater influence upon the quality of their working lives. In these times of

emphasis on “quality”, there is a natural equation: better quality goods and services from

employees who enjoy better quality “goods and services” from their employers.

Performance appraisal must be seen as an intrinsic part of a manager’s

responsibility and not an unwelcome and time-consuming addition to them. It is about

improving performance and ultimate effectiveness.

Performance appraisal is a systematic means of ensuring that managers and their

staff meet regularly to discuss post and present performance issues and to agree what

future is appropriate on both sides.

This meeting should be based on clear and mutual understandings of the job in

question the standards and outcomes, which are a part of it. In normal circumstances,

employees should be appraised by their immediate managers on one to one basis. Often

the distinction between performance and appraising is not made. Assessment concerns

itself only with the past and the present. The staff is being appraised when they are

encouraged to look ahead to improve effectiveness, utilize strengths, redress weaknesses

and examine how potentials and aspirations should match up.

It should also be understood that pushing a previously prepared report across and

desk cursorily inviting comments, and expecting it to be neatly signed by the employee is

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not appraisal - this is merely a form filling exercise which achieves little in terms of

giving staff any positive guidance and motivation.

1.5 The appraisal of performance should be geared to:

Improving the ability of the jobholder;

Identifying obstacles which are restricting performance

Agreeing a plan of action, that will lead to improved performance.

It is widely accepted that the most important factor in organization effectiveness is

the effectiveness of the individuals who make up the organization. If every individual in

the organization becomes more effective, then the organization itself will become more

effective. The task of reviewing situations and improving individual performance must

therefore be a key task for all managers.

For appraisal to be effective, which means producing results for the company, each

manager has to develop and apply the skills of appraisal.

These are: -

SETTING STANDARDS

MONITORING PERFORMANCE

ANALYZING ANY DIFFERENCES

INTERVIEWING

Setting standards on the performance required, which will contribute to the

achievement of specific objectives.

Monitoring performance in a cost–effective manner, to ensure that previously

agreed performance standards are actually being achieved on an ongoing basis.

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Analyzing any differences between the actual performance and the required

performance to establish the real cause of a shortfall rather than assume the fault

to be in the job holder.

Interviewing having a discussion with the jobholder to verify the true cause of a

shortfall, a developing a plan of action, which will provide the performance,

required.

Appraisal can then become a way of life, not concerned simply with the regulation of

rewards and the identification of potential, but concerned with improving the

performance of the company. The benefits of appraisal in these terms are immediate and

accrue to the appraising manager, the subordinate manager/employee, and to the

company as a whole.

Performance appraisals actively involve employees in understanding what is expected

of them. By setting agreed objectives — and later reviewing the results — each employee

is responsible for his or her own performance.

Performance appraisals are applicable for all categories of employees in the

enterprise. Sometimes self appraisal schemes are implemented for top management cadre.

In most cases employees are appraised by their superiors. The modern way of appraising

is by superiors, subordinates, peers and others which is 360 degree appraisal.

It is good to discuss the outcome of appraisal with the employee. The objective of

appraisal is not to blame the employee but to bring an improvement in the employee.

Appraisal needs to be objective and not subjective. The actual performance of the

employee is to be appraised and not the employee as a person. It gives a qualitative

judgment as to indicate how well or how bad the employee is doing the job, whether the

employee is able to complete the job assigned to him and to what extent the achievement

is possible, whether the performance is affected by the reasons beyond the control of the

employee and whether the employee has utilized his strengths in performing the job.

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At Dr. Reddy’s, sustainability is a multi-dimensional aspiration, which has its roots in

the every purpose of our existence – providing affordable medicines to people around the

world and meeting medical needs through innovation. Our business, by its very nature,

serves a social good, so we have a far deeper reason than profits alone to drive our

performance.

For Dr. Reddy’s, building a sustainable organization is not a trend that blindly follow;

it is intrinsic to how they have operated for decades. To Dr. Reddy’s, a commitment to

sustainability means a commitment to fulfilling the obligations to all the stakeholders –

the customers & partners, employees, shareholders and society. Thus, while optimizing

profitability may be one measurement of the performance, they also judge the success by

the performance with regard to the communities in which they live and work, the

environment and the employees. They understand that it is only by increasing value to all

of these stakeholders that can build an ever flourishing and lasting organization.

While sustainability thinking was always woven into the fabric of the

organization, they formally declared their intent to institutionalize it in 2004, when they

first began to publicly report their sustainability practices.  They annually publish their

Sustainability Report with direction from the guidelines recommended by Global Report

Initiative G3, covering social, ethical, and economic, safety and environmental aspects of

our business.

1.6 Purpose of Performance Appraisal:

Organizations use the performance appraisal for three purposes:

a) Administrative: It commonly serves as an administrative tool by providing

employers with a rationale for making many personnel decisions, such as

decisions relating to pay increases, promotions, demotions, terminations and

transfers.

b) Employee development: It provides feedback on an employee’s performance.

Appraisal data can also be used for employee development purposes in helping to

identify specific training needs of individual.

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c) Programme Assessment: Programme assessment requires the collection and

storage of performance appraisal data for number of uses. The records can show

how effective recruitment, selection and placement have been in supplying a

qualified workforce.

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

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

different people. Performance appraisals of Employees are necessary to understand each

employee’s abilities, competencies and relative merit and worth for the organization.

Performance appraisal rates the employees in terms of their performance.

Performance appraisals are widely used in the society. Performance appraisal is

considered as most significant and indispensable tool for organization because it provides

highly useful information in making decisions regarding employee placements and

promotions. Accurate information plays a vital role in organization as a whole. It helps

pinpoint weak areas in employees and provides need bases training programmes.

Performance appraisal is very important but equally delicate and sensitive area in

Human Resource Management. Periodical performance appraisal is a common practice in

mist of the enterprises. It is a tool for the up-gradation of performance of the employees.

1.7 Benefits of performance appraisal:

It serves as a means of telling a subordinate how he is doing and suggesting

necessary changes in his behavior and attitudes.

It thus provides information which helps to counsel the subordinate. It also

serves to stimulate and guide employee’s development.

It is useful in analyzing training and development needs. These needs can be

assessed because performance appraisal reveals people who require further

training to remove their weaknesses.

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Performance appraisal serves as a means for evaluating the effectiveness of

devices used for the selection and classification of employees.

It is therefore helps to judge the effectiveness of recruitment, selection,

placement and orientation systems of the organization.

Performance appraisal facilitates human resource planning and career

planning. Permanent performance appraisal records of employees help

management to do human resource planning without relying upon personal

knowledge of supervisors.

Performance appraisal promotes a positive work environment, which

contributes to productivity. When achievements are recognized and rewards

on the basis of objective performance measures, there is improvement in the

work environment.

1.8 Need and Importance of the Study:This work on performance appraisal helps, one to understand the methods adopted

at Dr. Reddy’s Laboratories Ltd in appraising the employees, which makes or

motivates them to work towards achieving organizational goals.

1.9 Objectives of the Study:1. To study on Performance Appraisal System.

2. To study the design of Performance Appraisal System existing in Dr. Reddy’s

Laboratories Limited.

3. To know the satisfaction level of existing Performance Appraisal System of the

organization.

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1.10 Scope of the Study:This study is confined to the performance appraisal system of Dr. Reddy’s

Laboratories Ltd. It analysis the different appraisal methods adopted by the organization

and tries to bring out the importance and use of appraisal method to employees and also

its drawbacks if any.

1.11 Methodology of the Study:The study of performance appraisal in Dr. Reddy’s Laboratories Limited is made

with the help of Primary and Secondary Data.

1.12 Sources of Data:The study is based on both Primary and Secondary data.

Primary Data:

Primary data is collected through a well structured questionnaire circulated to 50

employees working in the organization.

Personal discussions were held with the officials to elicit relevant information

for the purpose of the study.

Secondary Data:Secondary data was some times collected from more than one source. The

secondary data is collected from the official records of the company.

1.13 Limitations: 1. Since the number of employees selected is limited therefore the findings may not

represent the entire organization.

2. The duration of the study is limited.

3. Gathering required information through oral communication also.

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“The latest mantra being followed by organizations across the world being – "get paid

according to what you contribute" – the focus of the organizations is turning to

performance management and specifically to individual performance. Performance

appraisal helps to rate the performance of the employees and evaluate their contribution

towards the organizational goals. If the process of performance appraisals is formal and

properly structured, it helps the employees to clearly understand their roles and

responsibilities and give direction to the individual’s performance. It helps to align the

individual performances with the organizational goals and also review their

performance.”

Figure 2: Appraisal of the employee by the supervisor

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REVIEW OF LITERATURE

In any organization performance appraisal plays a vital role in developing the

skills of the employees. It is a systematic evaluation of subordinates by their superiors of

their performance. Generally, the superiors wish to know the performance of their

subordinates. On the other hand, the employees like to know their positions in the

organization.

Performance appraisal of the groups, individuals and organizations has become a

common practice in all societies. It can be a structured form or unstructured form. This

appraising of performance helps one to know where and how an individual or groups are

performing the work.

2.1 Meaning:

Performance appraisal is a method of evaluating the behavior of employees in the

work spot. In general, one can understand that performance refers to the degree of

accomplishment of the tasks that make up an individual’s job. It means that whether the

person has fulfilled the demands of the job, which are expected of him or of the job.

2.2 Definitions:"Performance appraisal is a systematic and objective way of evaluating an

employee's performance in terms of his job requirements".

"Performance Appraisal is the process of evaluating the performance and

qualifications of the employees, in terms of the requirements of the job for purposes

of administration including placement, selection for promotions, providing financial

rewards and other actions which require: differential treatment among the members

of a group as distinguished from actions affecting all members equally".

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2.3 Features:1. Performance appraisal is the systematic description of an employee’s job relevant

strengths and weaknesses.

2. The basic purpose is to find out how well the employee is performing the job and

establish a plan of improvement.

3. Appraisals are arranged periodically according to a definite plan.

4. Performance appraisal is not job evaluation. It refers to how well some one is

doing the assigned job.

5. Performance appraisal is continuous process in every large-scale organization.

2.4 Need for Performance Appraisal:

The following explains the need for performance appraisal in any organization.

1. Performance appraisal Provides information about the performance ranks basing

on which decision regarding salary fixation, conformation, promotion, transfer,

and demotions are taken.

2. It Provides feedback information about the behavior of sub-ordinate.

3. It helps in counseling employees who are deviated from the objectives.

4. It is a tool to detect the skill, knowledge of employees.

5. It also needed to prevent grievance and in disciplinary activities.

2.5 Purpose of Performance Appraisal:Basically the performance appraisal aims at attaining the different purposes.

They are: -

To create and maintain a satisfactory level of performance.

To contribute to the employee growth and development through training, self and

management development program.

To help the supervisors to have a proper understanding about their subordinates

To guide the job changes with the help to continuous ranking.

To facilitate fair and equitable composition based on performance.

To facilitate for testing and validating selecting tests interview technique through

comparing their scores with Performance Appraisal System Ranks.

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To provide information for making decision regarding lay of retrenchment etc…

To ensure organizational effectiveness through correcting employee for standard and

improved performance, and suggesting to change employee behavior.

2.6 Who Appraises:It is important to know the persons who are responsible for appraising. The

appraiser can be any person who has thorough knowledge about the job content, contents

to be appraised, standards of contents, and who observes the employee while performing

the job.

The Typical Appraisers are as under:

The supervisor

peers

subordinates

Employees themselves

consultants

Users of service.

Contents to be appraised:Generally, the following qualities of the person are appraised. They are:

Technical skills.

Integrity.

Honesty.

Sincerity.

Judgment skills.

Creativity

Ability to accustom to new things area of interest.

Quantity of work.

Knowledge of the job.

Punctuality.

Good housekeeping.

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Intelligence.

Attendance.

Cooperation.

Initiative.

Accuracy.

Performance appraisal plays a useful role in understanding and identifying the

potential of the employees. It focuses on the aspects like whether the strengths and

capabilities of the employee can be developed to match the specific requirements of the

jobs at higher levels. It also helps to understand which other jobs can be assigned to him.

Thus, the appraisal is the analysis of the employee. It suggests as how to strengthen the

strengths and overcome the weaknesses so that he can become a better asset for the

organization.

Performance appraisal is an important tool applied at the time of giving salary

increase to the employees. Often, the performance of an employee is so extraordinary that

the organization plans to reward the employee with a special increase in salary over and

above the routine increase. These employees contribute valuably to the organization and

giving extra benefits make them not to leave the organization. Thus performance

appraisal is an integral part of the human resource development effort.

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2.7 Process of Performance Appraisal System:

The major steps in the process of performance appraisal are diagrammatically

represented below.

Figure 3: Steps Involved in The process of performance appraisal

Establish performance standards

Communicate performance expectations to employees

Measure actual Performance

Compare actual performance with standards

Discuss the appraisal with employees

If necessary, initiate corrective action

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2.8 The Evaluation Process:

This process of performance appraisal follows a set pattern viz., a means performance is

periodically appraised by his superiors. Questions are raised. Is his potential the greatest

as a manager or as a staff specialist? What are his strengths and weakness?

The process of evaluation begins with the establishment of performance

standards. At the time of design a job and formulate a job description, performance

standards are usually develop for the position. Theses standards should be clear and

vague and objective enough to be understood and measured.

These standards should be discussed with supervisors to find out which different

factors are to be incorporated, weights and points to be indicated on the appraisal form

and later on used for appraising the performance of the employee.

The next step is to communicate theses standards to the employees, for the

employees left to them, would find it difficult to guess what is expected of them. To

make communication effective feedback is necessary from the subordinate to the

manager.

The third step is the measurement of performance. To determine what actual

performance is necessary to acquire information about it. We should be concerned with

how we measure and what we measure.

The fourth step is the comparison of actual performance with standards. The

employee is appraised and judged of his potential for growth and advancement. Attempts

are made to note deviations between standard performance and actual performance.

The next stage is the results of appraisal are discussed periodically with the

employee where good points weak points and difficulties are indicated and discussed so

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that performance is improved. Conveying good news is considerably less difficult for

both the manager and subordinate than when performance has been below expectations.

The final step is the indication of corrective action when necessary immediate

corrective action can be two types. One is immediate and deals predominately with

symptoms, the other basic and devices into causes. Attempts may also be made to

recommend for salary increases promotions.

Figure 4: Evaluation process

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APPRAISAL METHODS

TRADITIONAL METHODS MODERN METHODS

Straight Ranking Method. Assessment Center Method

Man-To-Man Comparison Method Management by Objectives Method

Grading Method Human Asset Accounting Method

Graphic Rating Scales Method Behaviorally Anchored Rating Scales

Forced Choice Description Method.

Check Lists Method

. Free From Essay Method.

Critical Incident Method

. Group Appraisal Method

. Field Review Method.

. Figure 5: Performance appraisal methods

2.9 Methods for Appraising Performance:

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As there is lot of changes tasking place as the time passes number of methods of

performance appraisal have been developed. Each of them has been used for measuring

the performance of employees. Strauss and Sayles categorize these methods. They

divided them into:

1. Traditional Methods

2. Modern Methods

The traditional methods emphasize about the individual employees’ personality trails,

here as modern methods are based on job related and results oriented characteristics oft

he employees. This classification is as follows

2.10 TRADITIONAL METHODS:

Straight Ranking Method.

Man-To-Man Comparison Method.

Grading Method.

Graphic Rating Scales Method.

Forced Choice Description Method.

Check Lists Method.

Free From Essay Method.

Critical Incident Method.

Group Appraisal Method.

Field Review Method.

2.11 MODERN METHODS:

Assessment Center Method

Management By Objectives Method

Human Asset Accounting Method

Behaviorally Anchored Rating Scales

TRADITIONAL METHODS

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Following are some of the traditional methods of performance appraisal:

Graphic Rating Scales:

Graphic rating scales compare individual performance to an absolute standard. In

this method, judgments about performance are recorded on a scale. This is the oldest and

widely used technique. This method is also known as ‘linear rating scale’ or ‘simple

rating scale’. The appraisers are supplied with printed forms one for each employee.

These forms contain a number of objectives, behavior and trait-based dependability,

initiative, leadership qualities, emotional stability in case of managerial personnel.

These forms contain rating of scales. Rating scales are to two types:

1. Continuous Rating Scale

2. Discontinuous Rating Scale

Continuous Rating Scale:

In continuous order like 0, 1,2,3,4, and 5.

Discontinuous Rating Scale:

In discontinuous scale the appraiser assigns the points to each degree.

Performance regarding each character is known by the points given by the rater.

The points given by the rater to each character are added up to find out the overall

performance. Employees are ranked on the basis of total points assigned to each one of

them.

One reason for the popularity of the rating scales is its simplicity, which permits

many employees to quickly evaluate. Such scales have relatively low design cost and

high in case of administration. They can easily pinpoint significant dimensions of the job.

The major drawback to these scales is their subjectivity and low reliability.

Another limitation is that the descriptive words often used in such scales may have

different meanings to different raters.

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Straight Ranking Method:

In this method, the ranking of a man in a work group is done against that of

another. The relative position of each man is tested in terms of his numerical rank as the

whole man is compared to whole man. It may also be done by ranking a person on his job

performance against that of another member.

Paired Comparison Method:

This method is also a ranking technique in which every employee is appraised by

comparing his every trait with all the other persons’ traits. The results of these

comparisons are tabulated and a rank is assigned to each employee.

Man-to-man Comparison Method:

In this method, certain factors are identified for the purpose of analysis based on

which a scale of a man is created for each factor by the appraiser. Then each employee is

compared with the man in scale and certain score for each factor are awarded for him.

This method is also known as forced comparison method.

Grading Method:

The later considers certain features and marks them accordingly to a scale. Certain

categories of worth are first established and carefully defined as grades like A-

outstanding, B very good, C-good or average, D-fair and E-poor etc. The actual

performance of an employee is then compared with these grade definitions and is allotted

a grade that best describes the employee’s performance.

Forced Choice Description Method:

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The rating elements are several sets of pair phrases or adjectives relating to job

proficiency or personal qualifications. The appraisal is asked to indicate which of the

given phrases are most and least descriptive of the appraised. Based on the favorable and

unfavorable terms the employee is appraised.

Forced Distribution Method:

The appraiser is forced to rate the performance of the employees through their

factors categorized into different types of either a five point scale or a three-point scale.

For example, the appraisal may distribute his employee's performance as outstanding,

above average, average, below average.

Checklist Method:

The rater does not evaluate employee performance. The appraiser supplies reports

about the performance of appraisers and the personnel department does the final rating. A

series of questions are presented concerning an employee to his behavior. The rater, then,

checks to indicate if the answer to a question about an employee is positive or negative.

The value of each question may be weighed equally or certain questions may be weighed

more heavily than others.

Free Essay Method:

The supervisor makes a free form, open-ended appraisal of an employee in his

own words and puts down his impressions about the employee. The description is always

as factual and concrete as possible. No attempt is made to evaluate in a quantitative

manner.

Group Appraisal Method:

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Appraisees are rated by an appraisal group consisting of their supervisor and three

or four other supervisors who have some knowledge of their performance.

Field Review Method:

A trainer employee from the personnel department interviews line supervisors to

evaluate their respective subordinates. The appraiser takes detailed notes of the collected

information and proceeds to evaluation process.

The above listed traditional methods are easy and simple to adopt but their

effectiveness is limited because a majority of the methods are based on rating the

personality traits of the appraisees rather than the task related traits.

MODERN METHODS OF PERFORMANCE APPRAISAL

Appraisal by Results or Management by Objectives:

Management by objectives (MBO) can be described as a “process whereby the

managers and employees of an organization jointly identify its common goals, define

each individuals major areas of responsibility in terms of results expected of him and use

these measures as guides for operating the units and assessing the contributions of each of

its members”.

The use of management objectives was first widely advocated in the 1950s by the

noted management theorist Peter Drucker. MBO (management by objectives) methods

of performance appraisal are results-oriented. That is, they seek to measure employee

performance by examining the extent to which predetermined work objectives have been

met.

Objective of MBO:

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MBO has an objective in itself. The objective is to change behavior and attitudes

towards getting the job done. It is a management system and philosophy that stress goals

rather than methods.

Basic Principles of MBO:

Setting of organizational goals and objectives.

Specific objective for each individual.

Participative decision making.

Explicit time period and performance evaluation.

Assessment Center Method:

It is a stimulation method developed initially for military situations. The important

feature of this method is ‘job-related stimulation’ which involves characteristics of those

managers that managers feel are important to the job success. The evaluators observe and

evaluate participants as they perform activities commonly found in these higher-level

jobs.

Human Asset Accounting Method:

It refers to activity devoted to attaching money estimates to the value of a firm's

internal" human organization and its external customer goodwill. The human asset is

considered to be enhanced if; a worthy employee joins the organization. If distrust and

conflict prevails in organization then human assets are considered to be devalued. The

current value of an organization's human assets can be appraised by developed

procedures, by undertaking periodic measures of key casual and intervening enterprise

variables.

Behaviorally Anchored Rating Scales (BARS) Method:

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This method of performance appraisal is a recently developed method. The

procedure for bars is usually five stepped. The first step is generation of critical incidents

by the appraisers. The next step is to develop performance dimensions, which are clusters

of the critical incidents. The third step is to reallocate incidents. Scaling of the incidents

usually in a 7- point or in a 9- point scale to represent effective and ineffective

performance is the Fourth step. The last step in this procedure is to develop a final

instrument in which a subset of incidents is used as "behavior anchors" for the

performance dimensions. This system is time consuming and expensive.

360 Degrees Performance Appraisal System:

This is defined as the systematic collection and feedback of performance data on

an individual or group, derived from a number of stakeholders in their performance. It is

done in a systematic way via questionnaire or interviews. This formalizes people

judgement coming from natural interactions. They have with each other. There is both a

collection and a feedback process. Data is gathered and feedback is provided to the

individuals.

This feedback system assesses managers in terms of the competence. So

far 360 degrees feedback has concentrated on people who are at more senior level in

organization.

FEEDBACK

BOSS

TEAM MEMBERS

PEERS CUSTOMERS SELF STAFF

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Figure 6: 3600 performance appraisal

2.12 Psychological Appraisal:

Large organizations employ full time industrial psychologists. When

psychologists are used for evaluations, they assess an individual's future and not past

performance. The appraisal normally consists of in-depth interviews, psychological tests

and discussion with the superior.

PerfECT PROCESS IN Dr. REDDY’S LABS

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We believe a great supervisor is actually an excellent coach, not just a boss. Our

performance management process, ‘PerfECT’, gets our managers to do just that –

COACH. It is all about inspiring breakthrough thinking. It is about challenging your

limits. It is about an empowering environment to get you to be at your best – ALWAYS.

What’s more, you love being respected for what you are and beating your own

expectations. We help you inspire yourself!

2.13 Perfect process:

The performance appraisal at Dr. Reddy’s is called PerfECT. A perfect stand for

performance enhancement and coaching Tool, this tool is applicable to the entire

organization.

Objective:

Perfect at Dr. Reddy’s is essentially focused towards employee development. This

means that the superior has to necessarily take a predominantly developer or coach role

vis-à-vis the employee. This also implies that the focus is on performance improvement

growth & employee alignment with the organization strategy & values and not merely on

rewards and discrimination. A performance rating is a clement but not the primary aim of

the perfect process.

Philosophy:

To align people with organizational strategy and values.

To be perceived as transparent & fair in the process.

To be oriented to people development and, yet put the onus of development on the

individual.

To encourage team work and collaboration,

To create a system teamwork and collaboration.

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To create a system of assessment by team rather then individuals.

To differentiate among team members based on performance and potential.

To raise the performance bar.

To show intolerance to mediocrity.

The perfect form is a flexible tool to help superiors and employees with each phase of

performance management performance planning (Goal setting) performance coaching,

2.14 KEY PROCESS OF PERFECT:

Performance Planning / Goal setting:

The superior and the employee meet to clarify expectations from their key

customers stakeholders and each other. Those inputs should be converted into

performance goals to be met during the review period. The goals can be added / deleted

modified with mutual consent in response to changing business priorities.

Performance coaching:

At various times throughout the year, the superior and the employee should meet

informally to review job performance and progress against set goals. A formal half-yearly

review discussion with mutual sign off between the superior and employee would take

stock of the progress made and make course corrections as and when necessary.

Performance review:The employee is required to give his/her short term and medium term career

aspiration at Dr. Reddy’s based on his/her current skill and competency sets and the

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skill/competency required to fit into the horizontal carrier movement within and across

function, which may help in long term strategic development of the employee.

The superior while reviewing the performance of the employee shall try to take

feedback from as many sources of data as possible in order to arrive at a reasonably

objective conclusion. The superior shall analyze goal achievement data; self development

efforts and then try to take feed back from customer/supplier/project managers, as the

case may be both performance and behaviors.

The superior shall note his comments about the performance of the employee and

propose a rating from the following

Exceptional contributor

Significant contributor

Contributor

Partial Contributor

Low contributor

Feedback and Consequence Management:

It is likely that some employees would be disappointed when they receive the

final rating. It is the jobs of the superior manage the aspirations of different levels of

performers and keep them motivated. It is necessary that the superior discuss in details

with the employee and explain the rationale behind the rating. The development plan

needs to be chalked out for the person to take him/her up the performance curve.

DR. REDDY’S LABORATORIES LTD.

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TYPE - Public

FOUNDED - 1984

HEADQUARTERS - Hyderabad, Andhra Pradesh, India

KEY PEOPLE - Anji Reddy, Chairman GV Prasad, CEO

INDUSTRY - Pharmaceuticals

REVENUE - $1.5 Billion (MAY2007)

NET INCOME - $216 Million (MAY2007)

EMPLOYEES - 8,225

WEBSITE - www.drreddys.com

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“We are committed toProviding affordable andInnovative medicinesFor healthier lives”.e

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Dr. REDDY’S OVERVIEW

COMPANY OVERVIEW

Dr. Reddy’s Laboratories Ltd. trading as Dr. Reddy's, founded in 1984 by Dr. K.

Anji Reddy, has become India’s second biggest pharmaceutical company. Dr. Anji Reddy

had worked in the publicly-owned Indian Drugs and Pharmaceuticals Ltd. Reddy's

manufactures and markets a wide range of pharmaceuticals in India and overseas. The

company has more than 190 medications ready for patients to take, 60 active

pharmaceutical ingredients for drug manufacture, diagnostic kits, critical care and

biotechnology products. Dr. Reddy’s began as a supplier to Indian drug manufacturers,

but it soon started exporting to other less-regulated markets that had the advantage of not

having to spend time and money on a manufacturing plant that that would gain approval

from a drug licensing body such as the US’s Food and Drug Administration

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The Company was incorporated under the laws of Indian Companies Act, 1956 as

a Public Limited Liability Company.

At a time when India was largely dependent on imports, Dr.Reddys began perations

with a single drug facility near Hyderabad, India. In 1986, the first consignment of

Methyldopa was shipped to West Germany, launching the Company’s foray into global

markets. Subsequently, Dr. Reddy’s moved up the value chain, by entering the Finished

Dosage business and launching its drug discovery program.

Over the years, related diversification and acquisitions transformed Dr. Reddy’s

into a leading pharmaceutical company from India. Dr.Reddy’s stated purpose is to provide

affordable and innovative medicines for healthier lives.

Dr. Reddy’s today is divided into three core businesses of Pharmaceutical Services

& Active Ingredients (PSAI), Generics and Innovative Products. Dr.Reddy's have a dual

impact. Through PSAI and Generics business, It strive to make medicines more affordable

globally and through their focus on Innovative products they address unmet or poorly met

medical needs.

The PSAI business serves Innovators and the Generics manufacturing companies

through drug substance and drug product development along with manufacturing services.

Dr. Reddy’s core strength in APIs (Active Pharmaceutical Ingredients) continued to

increase significantly over the years with offerings of over 100 molecules to customers

across the world. Today, Dr.Reddy’s ranks amongst the top three API players globally. Its

CPS (Custom Pharmaceutical Services) business, which is only seven years old, serves a

few big sized pharmaceutical companies and many emerging pharma companies today.

The CPS business received a boost in 2005 with the acquisition of Roche’s API

manufacturing unit in Mexico.

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This facility possesses the niche capability of steroid API manufacture. In 2008,

acquisition of the Small Molecule business of DowPharma at its Mirfield and Cambridge

sites, UK, made the business stronger in its portfolio and service offerings. Today,

Dr.Reddy's is the largest CPS player from India. Their CPS business has emerged as a

partner of choice to innovators by providing technical expertise, world-class infrastructure

and flexibility to bring their medicines to the market quickly and economically.

Dr.Reddy's Generics business works towards providing patients in key geographies

with high quality generic medicines at affordable prices. The top four key markets for their

generics business include India, Russia, US and Germany. Apart from these four markets,

Dr. Reddy’s has its business presence in many other countries through Joint Ventures,

representative offices and third party arrangements.

Increased awareness, acceptance of generics and favorable legislation, have

together with the large volume of branded products losing patent protection over the

coming years, led to continued expansion of the generic pharmaceuticals market. Dr.

Reddy’s capitalized on this opportunity by leveraging its product development capabilities,

state-of-the-art manufacturing capacities and access to its own APIs, which offer significant

supply chain efficiencies.

3.1 PURPOSE

The purpose is to help people lead healthier lives. This has been the driving force

behind all their action and investments since 1984. There is a constant search for

solutions to significantly improve the quality of life. Their relentless focus on innovation,

entrepreneurship and globalization transformed them into an illustrious discovery-based

entity powered by innovative research, which are guided by their core values.

Playing a meaningful role in the society is a priority in their commitment to

spreading health and happiness. They intend to see that their work with the

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underprivileged in the areas of education, health and poverty alleviation scales up into a

major movement and achieves self-sustainability.

3.2 VISION

Dr. Reddy’s is a global pharmaceutical powerhouse

committed to protecting and improving health and well being.

Their vision is to become a discover –lead, global pharmaceutical company.

They will archive the vision by building:

Workplaces that will attract, energize and help retain the first talent

available.

An organizational culture that is relentlessly focused on the speedy

translation of scientific discoveries into innovative products that make a

significant difference in the people’s live .

A global marketing organization that understands and responds needs of

the customer.

3.3 MISSION

Create a customized curriculum design to develop the professionals who will

work with the medical fraternity and the people to make their life healthier.

Canalize the efforts of specialists from the various disciples to develop

knowledge, skills, and faculty among the students with appropriate value and

attitudinal orientation among them so that they can establish themselves as

professionals

Carve a space for patient education in health care service sector in order to enable

them to complement medical fraternity and add value to the health.

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Equip patient educators to play a vital role in enabling medical parishioners

devote quality time in diagnosis and treatment of patients.

3.4 OBJECTIVES OF DR. REDDY’S LABS

Complying with the statutory norms and regulations.

Conducting active R&D and technology planning in new process development

to minimize the advance impact on safety, health and environment.

Using and maintaining equipment systems and facilities to provide a safe

work atmosphere to all employees, visitors, contractors and neighboring

community and aim towards incident and injury free facilities.

Conserving resources and preventing pollution.

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Dr. REDDY’S VALUES

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Quality:

We are dedicated to achieving the highest levels of quality in everything we do to

delight customers internal and external every time.

Respect for the Individual:

We uphold the self-esteem and dignity of each other by creating an open culture

conductive for expression of views and ideas irrespective of hierarchy.

Innovation and Continuous learning:

We create an environment of innovation and learning that fosters, in each of us a

desire to excel and willingness to experiment.

Collaboration & teamwork:

We seek opportunities to build relationships and leverage knowledge, expertise

and resources to create greater values across businesses functions and locations.

Harmony and Social Responsibility:

We take utmost care to protect our natural environment and serve the

communities in which we work and live.

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3.5 COMPANY POLICIES

Dr. Reddy’s is a global pharmaceutical power house committed to protecting and

improving health and well being.

Their strategic business units are:

Branded finishes Dosage

Generic Finished Dosage

Bulk Active

Custom chemical

Biotechnology

Critical care

Discovery Research

Critical care

Launched in 1998, Dr Reddy’s Critical Division (CCD) caters to Specialty

segments like Oncology. It strives to create a strong base for a sustainable long-term

competitive advantage.

In a short span of four years, the division has achieved a leading position in the

oncology segment. The accelerated growth comes from its ability to face challenges and

achieve a paradigm shift. CCD has set new standards through innovative product

presentations focused customer approach and customized patient service.

Safety, Health and Environment

Safety, Health and Environment are the three magic words that ensure hope,

health and happiness. They believe that maintaining the ecological balance is as

important as their business. Their motto is creating more with less and, in keeping with it,

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they have taken major steps to develop sustainable use of resources and conserve the

environment.

Child and police (CAP) Project:

In associations with the Andhra Pradesh state police as an innovative public

private partnership to demonstrate a model to address the learning of children at risk.

A program from the CAP project platform, attempts to connect learning and

livelihoods in a model that addresses critical issues affecting the quality of life and future

of adolescent who opt of school as well as potential dropouts among school going

adolescents in the 13-17 yrs age group.

The sustainability of this micro level project has been demonstrated by the

initiatives that have affected policy across stakeholders. The program has gone beyond

the ream of merely addressing access in educations and now includes school community

competency development for quality education for children as part of the CAP-SCORE

(school community partnerships in educations) project. The project has succeeded in

directly mobilizing and mainstreaming 5970 children at risk – putting them through

bridge school and successfully mainstreaming them into formal government school. In

addition, it is now affecting over 20,000 children in 100 government schools and 150

slum communities of Hyderabad and urban Ranga Reddy districts through its school

improvement initiatives.

The foundation considers it imperative that in having catalyzed a community-

based model, the CAP-SCOPE program is mainstreamed with the bureaucracy for the

program to be sustainable and replicable in the long run. As per this design, the project is

now in its sixth years, an independent organization with its own board and governing

council members with Dr. Reddy’s Foundation continuing to play a mentoring and

supportive role.

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Employee Events

Dr. Reddy’s organizes events to encourage holistic employee development. These

events range from our three-month long annul sports and cultural fest. Celebrations” to

occasion-led mini celebrations. They also have clubs to encourage employee interest in

music, sports and adventure sports, among others.

House Magazine-Elixir

Elixir, their house magazine, was conceived to connect employees across

locations and knit them into the Dr. Reddy’s family. It is also a forum for employees to

hare news, views and analysis.

Employee Development

A motivated employee is a creative one. With this in mind, Dr .Reddy’s invests

significant resources in employee development and in providing a constructive work

environment, which is a key for enhancing employee contribution.

LDP-The Leadership Development Programme

The leadership development programme (LOP) is a part of Dr. Reddy’s talent

management programme. The company’s top 50 executives are part of this process,

which involves workshops on company strategy and values, 360-degree feedback and

development of skills. Every individual in the leadership group prepares his/her

individual Development plan (IDP), which is discussed with the CEO and the COO.

Based on the IDP, structured development programme also includes formal methods of

assessing leadership competencies and providing career growth for senior executives.

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MDP – Management Development Programme

The management Development programme (MD/p0) is also part of the talent

management initiative. An annual programme, it helps identify leaders.MDP creates a

pool of talented employees who are high performers in their present position and also

have the potential to handle challenges and greater responsibility. MOP creates a carrier

path for promising executives by offering options for growth and development, besides

opportunities for moving up the corporate ladder.

Ankur – The Learning Center

Dr. Reddy’s is a learning organization. Ankur, Hindi for sprout, is our center for

learning. Ankur symbolizes growth with transformation and is representative of the

human potential for development.

Ankur envisions enabling Dr. Reddy’s to initialize the learning culture. And

ensures that the learning process gathers speed throughout the company. Its activities are

overseen by a supervisory board consisting of SBU heads and are led by a director.

Ankur’s Mission:

To provide a space for employees to study and reflect.

To provide resources for intellectual stimulation.

To enable an individual to grow as a person.

To provide learning resources for self-development.

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3.6 FOCUS ON EMPLOYEES

Our approach to Human Resource management is centered on our core values of

individual respect, collaboration & teamwork, quality, innovation & continuous learning,

and harmony & social responsibility. Anchoring the value system is the ideal of

“excellence” at the pinnacle and “truth, integrity and transparency” at the base. With these

values informing our people practices and policies, we have created a challenging,

performance-oriented work environment where openness, fairness and collaboration bring

out the best in our people and encourage continuous learning and personal growth. The

key dimensions of our organizational culture are:

● Customer focused and performance-driven, where customers (external and internal) are

accorded the highest priority and where everyone is sensitive to commitments, time and

cost, and focus on delivering innovative affordable medicines globally.

● Entrepreneurial and innovative, where genuine mistakes are tolerated, intelligent risk-

taking is encouraged and employee-empowerment practices are implemented.

● Egalitarian and trusting mindset, where rank and status consciousness are disdained,

leadership walks the talk, where credibility and trustworthiness are championed and

leaders provide access to people, resources and information.

●Flexible and adaptive, where change is welcome and initiatives implemented with

sincerity and commitment, diversity understood and accepted, and mutual respect for

diversity and various cultures coexist.

Dr. Reddy's efforts to recruit, develop and retain the best global talent across our

organization have been greatly enhanced by their people-centric policies and practices,

with the result that they have grown their workforce from 5,700 to 9,500 in the last five

years. They have improved gender diversity from 2% in 2003 (our first year of

sustainability reporting) to more than 8% today.

A significant preoccupation for Dr. Reddy’s currently is leadership development,

which will drive growth and ensure a viable succession plan for the future. This means

improving leadership behavior across the organization and giving high performing

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individuals the skills and opportunities they need to lead. The new Leadership Academy at

Dr. Reddy’s will play an important role in these efforts.

Recruitment

Dr. Reddy’s estimates of its annual manpower requirement flow from its Business

Planning Process and its five-year strategic plan. The company uses a variety of means to

recruit employees, including referrals, internal job postings, external consultants, industry

and academic events, job fairs, newspaper advertisements, job portals, its web site, walk-ins,

and campus, internship, and alumni programs.

Its referral program accounts for 26 percent of recruits and offers employees bonuses

of at least $3000 for successful placement of recruits. As well as hosting thirty interns from

college campuses each year, Dr. Reddy’s has a project-internship program, through which it

gives business-relevant short-term projects to students. The majority of its recruits (83

percent) have industry experience. PhDs and technical candidates are required to make

presentations in specific areas to a panel of interviewers. Psychometric evaluations are often

used to assess candidates at the senior level.

Training & development

Since the bulk of the company’s new employees already have extensive industry

experience, induction is staggered over time as new recruits join. Induction facility visits,

relevant training, and a meeting with the CEO and other senior executives.

After the induction program, management graduates complete a cross-functional

project that they present to senior managers before taking on new assignments.

New employees are assigned a buddy for three months to help them integrate into the

company. As well as through feedback solicited from new recruits following the induction

program, employee first impressions and expectations are assessed through team poster

presentations. The satisfaction of new recruits is gauged through feedback from buddies

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after 30 days, employee feedback after 60 days, and a discussion with both buddies and

employees after 90 days.

Dr. Reddy’s has a dedicated learning center that runs various technical and soft-skill

training modules for employees as well as extracurricular courses for employees and family

members. It monitors training effectiveness through employee debriefs with managers,

manager feedback, and skill assessments after a specified period. In addition to formal

training, extensive coaching, and on-the-job training, the company uses informal experience

sharing, computer-based training, and self-learning.

Performance management

Employees are required to set functional, project, and development goals through

discussions with managers. 360-degree performance reviews are conducted bi-annually, are

based on a Balance Scorecard approach, and emphasize team as well as individual

performance. Year-end performance reviews include employee self-appraisals and

assessment of developmental needs as well as assessment by supervisors.

A committee reviews each employee’s performance ratings, and employees are

required to agree or file a grievance regarding their performance ratings. Performance

reviews are tied to training and development, succession planning, leadership development,

promotion, and compensation.

Compensation levels are determined through biannual benchmarking studies. In

addition to monetary rewards, Dr. Reddy’s recognizes individual and team performance as

well as team and organizational service through a variety of awards celebrated annually.

Managerial development

Dr. Reddy’s adheres to a promote-from-within policy, and employees are given

preference in filling any vacant positions. A talent-management board identifies potential

successors for critical positions in all business units. High-potential employees, identified

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through the company’s performance- management system, are gauged on nine leadership

skills.

Employees participate in a career-design workshop that includes a variety of self-

assessment tools such as psychometric tests and exercises. High-potential ones are groomed

for leadership positions through in-house training programs, approved external programs,

coaching, career counseling, meetings with those two organizational levels higher, job

rotations and enrichment, and training.

Employee engagement & retention

The human-resource function has two groups that work on organization-wide

initiatives and another that works directly with each of the business groups. Dr. Reddy’s

uses extensive structured coaching to encourage continual dialogue between managers and

employees to enhance employee engagement. As well, the company has a formal system in

which senior managers mentor employees and job mentors serve as mentors in plants.

Other communication channels include a corporate intranet, sessions with senior

management, meetings with HR representatives, and newsletters. It also conducts an annual

organizational-climate survey and solicits employee suggestions through opinion surveys,

focus groups, an intranet, suggestion boxes, manager open-house sessions and town-hall

meetings. The company offers tuition reimbursement, hosts a day-care center, offers a

variety of preventive-medicine programs, and holds employee and family events.

Management – employee communication

In Dr. Reddy’s employees can directly dialogue with senior management through:

An open forum where employees get an audience with the global chief of HR and

other senior HR members.

Employees can skip a level and report problems to those above the immediate

superior.

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Employees can post views or start discussions on the CEO’s blog on the intranet.

In addition to above, Dr. Reddy’s employees have access to a variety of online

and print communications.

3.7 HR PHILOSOPHY

Dr Reddy’s work place attracts, energizes and retains the finest talent they:

Continuously strive towards working with a multifaceted and talented workforce

that will bring different perspectives to the table.

Provide an even-handed opportunity for individual development and advancement

based on merit.

Attract, Develop and retain versatile achievers. Regardless of their nationality,

and provide them with the resources to bring out the best in them.

Involve employees and their families in developing a network of talented people

for creative work and a long-term relationship.

Build an organization that is continuously learning and changing to suit the

dynamic business environment.

Develop and nurture leaders who shall bring out the best in themselves and their

teams.

Promotes the spirit if team work in the work place innovation IS a process that

needs the contribution of many.

3.8 HR POLICY Always select employees who are the best of available candidates.

Observe legal/moral obligation.

Not opposed to union! Association of employees would welcome discussions with

then employees’ representations.

Active participation in professional association.

Pay competitive remuneration at all aspects, in all aspects.

Maintain high standard of discipline.

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Encourage employee welfare and support cultural activities.

Publish in house journal to publicize employee’s professional and personal

achievements.

Encourage free journal to publicize employee’s professional and personal

achievements.

Encourage free flow of idea and suggestions all round so that employees can give

his best in a free and democratic atmosphere.

Given opportunity for self-development by

A) Encouraging participative management

B) Providing

Internal training courses

External training courses

Participating in seminars

Figure 7: HR policy in Dr.Reddy’s

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Dr. ANJI REDDY (Chairman)

G.V.PRASAD (Executive vice chairman and chief executive officer)

SATISH REDDY(Managing Director &Chief Operating Officer)

DR.OMKARGOSWAMI

RAVI BHOOTHALINGAM

DR. BRUCE LA CARTER

ANUPAM PURI

Table 1: Whole time directors and non-whole time directors

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3.9 COMMITTEES OF THE BOARD

Committees appointed by the Board focus on specific areas and take informed

decisions within the framework of delegated authority, and make specific

recommendations to the Board on matters in their areas or purview. All decisions and

recommendations of the committees are placed before the Board for information or for

approval.

We have six Board-level Committees, namely

The Audit Committee

The Compensation Committee

The Governance Committee

The Shareholders' Grievance Committee

The Investment Committee

The Management Committee

The members of the Committees of Board are as under:

Audit Committee

Dr. Omkar Goswami (Chairman)

Kalpana Morparia

Ravi Bhoothalingam

Management Committee

Satish Reddy (Chairman)

G.V.Prasad

Ravi Bhoothalingam

Compensation Committee Ravi Bhoothalingam (Chairman)

Kalpana Morparia

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Dr. JP Moreau

Investment Committee G.V.Prasad (Chairman)

Ravi Bhoothalingam

Satish Reddy

Governance Committee

Anupam Puri (Chairman)

Dr. Omkar Goswami

Shareholders' Grievance Committee

Ravi Bhoothalingam (Chairman) G.V.Prasad

Satish Reddy

3.10 MANAGEMENT TEAM

The Management Council is the top tier of our company's management structure.

The management of Dr. Reddy's has developed and implemented policies, procedures

and practices that attempt to translate our company's vision, mission and purpose into

reality. The management also identifies, measures, monitors and controls the risks factors

in the business and ensures safe, sound and efficient operation. The Management Council

meets every quarter under the chairmanship of the CEO.

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Top Brands & Products

GERMANY INDIA RUSSIA NORTH AMERICA (Products)

SIMVAS NISE OMEZ Sumatriptan AG

ALENDR OMEZ CIPROLET Fexofenadine

OMEPRA STAMLO NISE Glimepiride

OXYCOD STAMLO BETA ENAM Oxaprozin

TRAMAD ATOCOR KETOROL Ondansetron

RAMHCT OMEZ-D EXIFINE Meprobamate

IBUPRO RAZO CETRINE Divalproex Spr. Capsules

GABAPE ENAM   Simvastatin

RAMIPR MINTOP   Finasteride

BISOPR CLAMP   Ciprofloxacin

      Tizanadine

Table 2: Dr. Reddy’s Top brands and products of different countries

3.11 DR.REDDY'S RANKED AMONG BEST EMPLOYEERS IN

INDIA

Dr. Reddy's has been ranked 13 among the 25 Best Employers in India and it is

the only Indian Pharma Company among the top 25. This was announced in the "Best

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Employers in India 2002" survey conducted by Hewitt Associates, a global management

consulting firm, in conjunction with Business Today, one of India's leading business

magazines.

The selection was based on in-depth questionnaires completed by CEOs, HR

departments and employees of participant organizations followed by an in-depth audit.

The Best Employers were distinguished on the following criteria, among others:

Degree of employee satisfaction, commitment, and morale

Depth, breadth, and prevalence of HR practices

Uniqueness of HR practices

Effectiveness of HR practices in meeting employee needs

Alignment of HR practices to business context

3.12 DR. REDDY’S CULTURE Customer focused and performance driven where both external and internal

customers are accorded the highest priority and where everyone is sensitive to

commitments, time & cost and focuses on delivering innovative, affordable

medicines globally.

Entrepreneurial and innovative where genuine mistake are tolerated, intelligent

risk raking is encouraged and people feel a sense of empowerment.

Egalitarian and trusting where rank and status consciousness is low: leadership

walks the walk where credibility & trustworthiness are championed and leaders

provide access to people, resources and information.

Flexible and Adaptive where change is welcome and initiatives are implemented

with sincerity and commitment diversity is understood and accepted and mutual

respect for diversity and various ethnic cultures coexist.

RESEARCH AND METHODOLOGY

This deals with analyzing the data collected in Dr. Reddy’s Laboratories Ltd through

questionnaire. This questionnaire is present to the employees working in Dr. Reddy’s

Laboratories Limited.

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The sample comprises of 50 members belonging to UNIT III of Dr. Reddy’s

Laboratories Limited. The percentage is presented in below (pie) charts.

SAMPLE QUESTIONNAIREEmployee Name:

Designation:

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Please tick the appropriate block for the following questions:

Questions

To a large extent

To a certain extent

To a little

extent

To a less

extentNot at all

According to department norms, I have sorted out my routine activities for my better performance.

Giving feedback is the best way to Improve performance.

Are you satisfied with the present appraisal system?

Do you have the liberty of self-appraisal?

Compensation decision provides inputs to system of rewards.

I regularly review my achievement in the current performance with a preset standard.

Questions

To a large extent

To a certain extent

To a little extent

To a less extent

Not at all

Proper maintenance and arrangement of the

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records improve the presentation of my performance.

Is a feedback channel practiced in your organization after the given task is completed?

Are different types of training programs conducted at your work place on the basis of performance?

Is career growth plan discussed in the performance appraisal process with every employee?

A regular review of my performance will allow me to take early corrective action.

A clear definition of my goals will enable me to improve my performance.

I constantly improve myself by attending various sessions related to my area of interest.

My performance related to the job has been changed largely over the last 3 years.

Promotion decisions can serve as a useful basis for job change or enhancement.

Thanks for your cooperation

ANALYSIS

1. According to department norms, I have sorted out my routine activities for my

better performance.

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Characteristics No. of respondents % of respondents

large extent 25 50

Certain extent 10 20

Little extent 10 20

Less extent 5 10

Not at all 0 0

Total 50 100

Interpretation: From the above table, it is observed that 50%of the employees have

sorted their routine activities for better performance to a large extent, 20% certain extent,

20% little extent and other 10% less extent.

2. Giving feedback is the best way to improve performance.

Characteristics No. of % of respondents

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respondents

large extent 50 100

Certain extent 0 0

Little extent 0 0

Less extent 0 0

Not at all 0 0

Total 50 100

Interpretation: From the above table, it is observed that 100%of the employees said that

giving feedback is the best way to improve the performance.

3. Are you satisfied with the present appraisal system?

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Characteristics No. of respondents % of respondents

large extent 3 6

Certain extent 15 30

Little extent 8 16

Less extent 16 32

Not at all 8 16

Total 50 100

Interpretation: From the

above table, it is observed that 6% of the employees are satisfied with the present appraisal system to a large extent,

30% of the employees are satisfied to a certain extent, 16% to a little extent, 32% less extent,16% are not all satisfied

with the present appraisal system.

4. Do you have the liberty of self-appraisal?

Characteristics No. of respondents % of respondents

large extent 2 4

Certain extent 10 20

Little extent 5 10

Less extent 0 0

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Not at all 33 66

Total 50 100

Interpretation: From the above table, it is observed that 4% of the respondents said that

they have a liberty of self-appraisal to a large extent,20% to a certain extent,10% to a

little extent, 66% majority of the respondents said that they do not have the liberty of

self-appraisal.

5. Compensation decision provides inputs to system of rewards.

Characteristics No. of respondents % of respondents

large extent 16 32

Certain extent 24 48

Little extent 5 10

Less extent 5 10

Not at all 0 0

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Total 50 100

Interpretation: from the above table, it is observed that 32% of the respondents said that

compensation decision will provide inputs to the system of rewards to a large extent, 48%

respondents to a certain extent,10% little extent,10% less extent.

6. I regularly review my achievement in the current performance with a preset standard.

Characteristics No. of respondents % of respondents

large extent 22 44

Certain extent 18 36

Little extent 10 20

Less extent 0 0

Not at all 0 0

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Total 50 100

Interpretation: From the above table, it is observed that 44% of the respondents said

that they review their achievement in present performance with preset standard, 36% to

certain extent and 20% little extent.

7. Proper maintenance and arrangement of the records improve the presentation of my performance.

Characteristics No. of respondents % of respondents

large extent 7 14

Certain extent 21 42

Little extent 20 40

Less extent 2 4

Not at all 0 0

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Total 50 100

Interpretation: From the above table, it is observed that 14% of the respondents said

that the performance can be improved by maintaining and arranging the records

properly,42% said to a certain extent performance can be improved,40% to a little extent

and 4% to a less extent.

8. Is a feedback channel practiced in your organization after the given task is completed?

Characteristics No. of respondents % of respondents

large extent 38 76

Certain extent 12 24

Little extent 0 0

Less extent 0 0

Not at all 0 0

Total 50 100

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Interpretation: From the above table, it is observed that 76% of the respondents said

that feed back channel is practiced in their organization after the given task is completed

to a large extent and 24% said that to a certain extent feedback channel is practiced.

9. Are different types of training programs conducted at your work place on the basis of performance?

Characteristics No. of respondents % of respondents

large extent 7 14

Certain extent 24 48

Little extent 13 26

Less extent 3 6

Not at all 3 6

Total 50 100

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Interpretation: From the above table, it is observed that 13% of the respondents said

that different types of training programs are conducted on the basis of performance to a

large extent, 47% of respondents said to a certain extent they are conducted, 28% to a

little extent, 6% less extent and 6%said that no training programs are being conducted on

the basis of performance.

10. Is career growth plan discussed in the performance appraisal process with every employee?

Characteristics No. of respondents % of respondents

large extent 7 14

Certain extent 12 24

Little extent 3 6

Less extent 23 46

Not at all 5 10

Total 50 100

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Interpretation: From the above table, it is observed that 14% of the respondents said

that career growth plan is discussed with them in the appraisal process to a large extent,

24% said to a certain extent,6% little extent, 46% to a little extent and 10% respondents

said that career growth plan is not at all discussed in appraisal process.

11. A regular review of my performance will allow me to take early corrective action.

Characteristics No. of respondents % of respondents

large extent 45 90

Certain extent 5 10

Little extent 0 0

Less extent 0 0

Not at all 0 0

Total 50 100

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Interpretation: From the above table, it is observed that 90% majority of the

respondents said that regular review of their performance will allow them to take early

corrective action to a large extent and 10% respondents said to a certain extent.

12. A clear definition of my goals will enable me to improve my performance.

Characteristics No. of respondents % of respondents

large extent 15 30

Certain extent 15 30

Little extent 15 30

Less extent 0 0

Not at all 5 10

Total 0 100

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Interpretation: From the above table, it is observed that 30% of the respondents said that

clear definition of the goals will allow them to improve the performance to a large extent,

30% to a certain extent, 30% to a little extent and 10% said that clear definition of goals

will not allow to improve the performance.

13. I constantly improve myself by attending various sessions related to my area of

interest.

Characteristics No. of respondents % of respondents

large extent 12 24

Certain extent 12 24

Little extent 8 16

Less extent 0 0

Not at all 18 36

Total 30 100

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Interpretation: From the above table, it is observed that 24% of the respondents said that

by attending various sessions related to their area of interest one can be improved to a

large extent, 24% said to certain extent they can be improved, 16% to a little extent and

36% said that one cannot be improved at all by attending various sessions related to their

of interest.

14. My performance related to the job has been changed largely over the last 3 years.

Characteristics No. of respondents % of respondents

large extent 40 80

Certain extent 10 20

Little extent 0 0

Less extent 0 0

Not at all 0 0

Total 30 100

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Interpretation: From the above table, it is observed that 80% of the respondents said

that their performance has been changed largely from the past 3 years to a large extent

and 20% of the respondents said that their performance has been improved to a certain

extent from the past 3 years.

15. Promotion decisions can serve as a useful basis for job change or enhancement.

Characteristics No. of respondents % of respondents

large extent 7 14

Certain extent 17 34

Little extent 0 0

Less extent 10 20

Not at all 16 32

Total 50 100

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Interpretation: From the above table, it is observed that 14% of the respondents said that

promotion decision can serve as a useful basis for improvement to a large extent33% to a

certain extent, 20% less extent and 33% of the respondents said that promotion decision

cannot serve as a basis for improvement at all.

CONCLUSIONSHaving done a work on performance appraisal at Dr. Reddy’s Laboratories Limited,

the following conclusions are drawn. These are done after observing the appraisal at the

organization.

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One could say that the organization has been motivating their employees

to work more by appraising their performance.

As the feedback from the employees reveal that performance appraisal

system is helpful in achieving the goals and objectives of the organization.

The organization follows seniority, merit cum seniority for promotions.

The study reveals that there is significant improvement in the performance

of the employees’ after appraisal.

The respondents are satisfied with the existing performance appraisal

system.

The respondents prefer to set their own targets in order to improve their

performance in line with those of company targets.

The performance appraisal system gives importance in the identification

and definition of training and development requirements.

The performance is appraised based on the out come of the employee.

The relation between superiors and subordinates is improved through

performance appraisal system.

Multi-dimensional skills are improved though performance appraisal.

Appraisal system helps to create competitive environment at the work

place.

SUGGESTIONS Though the performance appraisal system is helping the employees in Dr. Reddy’s

Laboratories Limited, it could be made better by following the suggestions given

below:

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1. In order to maintain healthy relationship between employees and management, the

later should held regular discussions with their subordinates.

2. The management should also take proper care in handling dissatisfied employees,

because they may create problems in the organization.

3. The management should help the employees to over come the stress and strain at

their work place.

4. A competitive environment at the work place should be maintained.

5. The management should also encourage the efforts and suggestions from

employees.

6. The employees should inculcate in themselves a feeling of family in the

organization.

7. The organization should implement modern methods of performance appraisal

such as performance management system (PMS).

CASE STUDY

A Sweet Employee Performance Appraisal System for

Jelly Belly

Candy making is a fun business, and so it's no surprise that it's fun to work at the

Jelly Belly Candy Company of Fairfield, California. But at this family-owned company,

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there's no fooling around when it comes to promoting employee performance and job

satisfaction. So when Jelly Belly decided to overhaul and automate its antiquated

employee performance and talent management process, it was looking for a serious

solution to help give its employees across the United States fair, accurate performance

appraisals.

The Jelly Belly Candy Company makes Jelly Belly brand jelly beans in over 50

flavors, as well as candy corn and other treats. Introduced in 1976 and named by former

U.S. president Ronald Reagan as his favorite candy, the company's jelly beans are

exported worldwide. Herman Goelitz Candy was founded in 1869 by Albert and Gustav

Goelitz, whose great-grandsons own and run Jelly Belly today.

Like almost every smart company, Jelly Belly recognizes that employees are more

likely to stay with their employer when they feel connected and recognized for their

efforts. Evaluation and performance management programs are critical to aligning

corporate and employee values and priorities.

8.1 Challenge

Jelly Belly's search for a new employee performance and talent management

system began several years ago, when two branches of the family business were reunited

into a single company. One branch was using an outdated EPM software program. The

other was doing its employee performance appraisals manually, using paper forms.

Having a variety of jelly bean flavors is great - a variety of employee appraisal

processes in a single company is not. The task of updating and consolidating the

performance management process fell to Margie Poulos, HR Manager of Jelly Belly's

Midwest operations. She and a small team of Jelly Belly HR staff were charged with

finding a single automated system that could be used for all of Jelly Belly's 600

employees in three locations.

The driving factor behind Jelly Belly's performance management automation was

the belief that thorough, accurate reviews help employees to better understand what's

expected of them, so that they can set clear, measurable objectives. That translates into

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higher employee satisfaction, said Jeff Brown, Jelly Belly's Director of Human

Resources. "When employees feel they have gotten a thorough and accurate review, it

boosts their morale," Brown said. It also leads to improved talent management and

employee retention, which management experts know is a key factor in corporate growth

and market leadership.

8.2 Solution

To meet their strategic goals, Poulos and her team drew up a list of the criteria

that a new system had to meet. Top on the list was ease of use. "We didn't want to end up

with a system that is so complicated that the managers wouldn't use it," Poulos said. A

new system also had to save time. Because employees were in multiple locations, it

needed to be web-based for accessibility. And it had to be flexible, easily incorporating

core competencies into different forms.

Jelly Belly's selection committee looked at products from different software

vendors. "We eliminated right away those that were geared to very large companies and

those that were not web-based," Poulos said. "We also eliminated those that offered too

many options for customization. It's one thing to offer options, but another thing when

the product requires so much customization that it becomes overwhelming."

The committee selected Halogen eeAppraisal™, a web-based employee

performance and talent management application from Halogen Software. "We liked the

way it looked, and we really liked the user-friendliness of it. It's easy for the managers to

use and it's customizable without overwhelming them," Poulos said. After two days of

training by Halogen staff, four members of Jelly Belly's HR team set out to train the

company's supervisors on the new system. About 50 managers received a crash course in

using Halogen eAppraisal, and then used it to complete annual employee evaluations in

May. Jelly Belly's HR team is now customizing the software to include more relevant

competencies and to respond to comments from managers and staff on the new system.

"The feedback has been really positive, from both managers and employees as well.

Some staff said this was the best appraisal they've had," Poulos said, "They felt the

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evaluations were fair and realistic, and supervisors had the scope to provide more

relevant and legitimate comments than they could before. Rather than just clicking on a

bunch of canned comments, they were accurately reviewing the employee."

8.3 Results

The new automated employee performance appraisal system has completely

formalized and organized Jelly Belly's employee evaluation process. "It allows us to

standardize competencies across job classifications, add signature and comment sections

to make our process more interactive, and increase accessibility for remote managers,"

Brown said.

Under Jelly Belly's old system, employees conducting reviews started from

scratch once a year with new performance journals. Halogen Appraisal will let them log

notes throughout the year and regularly update their on-line appraisals. Employees use

one consistent employee evaluation form to add comments and to sign their appraisals.

The web-based product helps remote and traveling managers maintain access to

the forms and the data they need to evaluate their staff. "In our old system, a few folks in

Chicago would have access to the system. But we have managers in California with

Chicago subordinates. It's important that they can share the same forms across the board.

And we have folks who are on the road a lot or are working out of home offices, so

having them be able to access this is a huge point for us," Brown explained.

Organizing and automating the appraisal process results in performance appraisals

that are more accurate and fair, Brown noted. "This is important `because, after all, an

employee appraisal is a legal document," he said.

The new system is also helping Jelly Belly track training requirements and

development in its staff, Poulos added. "We've always had a separate training manual.

Now we can go in to the evaluations and more easily monitor employees' skills

development, see what training is needed by individuals and check the due dates for

training and renewal. That makes it much easier for us to keep track," Poulos noted.

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The new employee performance and talent management system has proven to be a

big time-saver for Jelly Belly's HR team. "Since this year was the first time using the new

system, it took us a little longer than it will next year. But the process was a whole lot

faster," Poulos said. "It has already saved us a lot of time, and we got everybody's

appraisals done in one shot." The new system is also helping Jelly Belly to better align

employee goals with the company's business objectives. And for one of America's best-

known candy companies, it doesn't get any sweeter than that.

ARTICLE CREATE A GOOD IMPRESSION IN YOUR NEW JOB!

Congratulations! You've just been appointed to your new job. Now the real work

begins.

It is important from the beginning to convince your new employers that, in

selecting you, they have made the right choice.

Demonstrate that you are highly-motivated and eager to get started.

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Discuss your duties and responsibilities; and establish your priorities. Set

challenging, but achievable, short-term and long-term goals.

To enable you to fit in quickly, find out as much you can about your

company and its organizational structure.

Identify the most successful and highly valued people in the firm and

analyze the reasons for their success. Use them as your role models.

Associate with colleagues who are perceived as ideal employees.

Prepare carefully for meetings with your boss. Try to anticipate questions

and be ready with positive and considered responses. Make sure you are

always well-informed. Keep up to date on current issues.

Learn all you can about problem-solving techniques. When you are given a

problem to solve, tackle it enthusiastically and systematically.

Establish a reputation as a good team player by developing good working

relationships and cultivating friendships with as wide a range of people in

the company as possible.

Participate fully in your company's training programme and avail of all

opportunities to extend your knowledge and develop work-related skills.

Learn from your own mistakes and the mistakes of others.

Do more than is specified in your contract. Volunteer for assignments that

will help raise your profile within the company.

Complete all work on time. Don't make promises unless you are sure you

can deliver.

Develop a reputation for honesty, loyalty and integrity.

Since your job description will form the basis of your performance

appraisal, it is important to review it regularly.

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REFERENCES

Books

1. Agarwal R.D. Dynamics of Personnel Management in India, Tata McGraw Hill

Publishing Company, New Delhi (1977).

2. Aswathappa, Human Resource Management, Tata McGraw-Hill Publishers

Company, New Delhi, (2008).

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3. Aquinas P.G., Human Resource Management, Vikas Publishing House Pvt Ltd,

New Delhi (2005).

4. Biswajeet Pattanayak, Human Resource Management, Prentice Hall Of India,

New Delhi, (2006).

5. C.B. Memoria and S.V. Gankar, Personnel Management, Himalaya publishing

house, Hyderabad, (2007).

6. Edwin B. Flippo, Personnel Management, McGraw-Hill Book Company, New

York, (1976).

7. Michael V.P., Human Resource Management and Human Relations, Himalaya

Publishing House, Mumbai (1995).

8. Subba Rao, Industrial Relations and Personal Management, Himalaya publishing

house, Hyderabad, (2007).

9. Terry G.R Principles of Management Richard D Irwin Homewood (1970).

Websites:

www.drreddys.com