A PROJECT REPORT ON COMPENSATION MANAGEMENT SYSTEM AT BIOLOGICAL.

E LTD, AZAMABAD HYDERABAD

DANIEL CHOWDARY DUDDUKURI (HT. NO: 140810672060)

Project submitted in partial fulfillment for the award of Degree of MASTER OF BUSINESS ADMINISTRATION From: OSMANIA UNIVERSITY

Dr.B.R.AMBEDKAR INSTITUTE OF MANAGEMENT & TECHNOLOGY (APPROVED BY AICTE, & AFFILIATED TO OSMANIA UNIVERSITY) Baghlingampally, Hyderabad-500 004 2010 2012

DECLARATION

I hereby declare that this Project report titled COMPENSATION MANAGEMENT SYSTEM AT BIOLOGICAL.E LTD AZAMABAD, HYDERABAD submitted by me to the Department of Business Management, O.U., Hyderabad, is a bonafide work undertaken by me and it is not submitted to any other University or Institution for the award of any degree diploma/certificate or published any time before.

Name: DANIEL CHOWDARY DUDDUKURI

Signature of the Student

Date:

ABSTRACT
The term compensation administration or wage and salary administration denotes the process of managing a companys compensation program. The goals of compensation administration are to design a cost-effective pay structure that will attract, motivate and retain competent employees. Compensation represents both the intrinsic and extrinsic rewards employees receive for performing their jobs. Intrinsic compensation reflects employees psychological mindsets that result from performing their jobs. Extrinsic compensation includes both monetary and non-monetary rewards. This topic covers all the compensation types, benefits. The objectives of

compensation system are equity, Efficiency, Macro Economic Stability, Efficient Allocation of Labor, Control Costs, Determination of Wage Rates, Comply with Legal Regulations, Improving Industrial Relations. The study goes through all the objectives of the compensation.

ACKNOWLEDGEMENT
The perfect way to document this project would be to start with acknowledging all those people who directly or indirectly encouraged, supported me with their value added inputs without them this project would not have been this better. To start with I would like to thank Mr. A.V.MOHAN SIR of BIOLOGICAL.E LIMITED at Paradise for giving me an opportunity to do my project work. My sincere thanks to my faculty Ms.Deepthi madam, assistant professor, for her technical expertise, advice and excellent guidance. She not only gave my project scrupulous reading, but added many examples and ideas to improve it. My sincere thanks to our college H.O.D Prof.Dr.V.Pramadha madam. My sincere thanks to my project coordinator Dr.Sabitha Madam. My special thanks to my sister S. Sunitha and my family for being so supportive. Finally I would like to owe my sincere appreciation to all the Employees of the organization who provided a friendly environment and supported through out my project.

DANIEL CHOWDARY

TABLES OF CONTENTS CONTENTS CHAPTER 1 CHAPTER 2 CHAPTER 3 CHAPTER 4 CHAPTER 5 CHAPTER 6 CHAPTER 7 CHAPTER 8 CHAPTER9 CHAPTER10 INTRODUCTION RESEARCH METHODOLOGY REVIEW OF LITERATURE INDUSTRY PROFILE COMPANY PROFILE DATA ANALYSIS & INTERPRETATION FINDINGS & SUGGESTIONS CONCLUSION BIBLIOGRAPHY ANNEXURE ANNEXURE - A QUESTIONNAIRE PAGE NO. 02 08 11 21 31 40 56 61 64 66

CHAPTER -1 INTRODUCTION

INTRODUCTION
INTRODUCTION TO HUMAN RESOURCE MANAGEMENT
The term Human Resource can be thought of as, the total knowledge, skills, creative abilities, talents and aptitudes of an organizations workforce, as well as the value, attitudes and beliefs of the individuals involved. Management is the art of getting things done through people. It is further defined as, that field of human behaviour in which managers plan, organize, staff, direct and control human, physical and financial resources in an organized effort, in order to achieve desired individual and group objectives with optimum efficiency and effectiveness. Thus, human resource is a crucial sub-system in the process of management. Different terms are used to denote human resource management. They are: labour management, labour administration, labour-management relations, employee - employer relations, industrial relations, personnel administration, personnel management, human capital management, human asset management, human resources management and the like.

DEFINATION OF HUMAN RESOURCE MANAGEMENT :

Human Resource Management (HRM) is the function within an organization that focuses on recruitment of, management of, and providing direction for the people who work in the organization. It is a process of planning, organizing, and controlling for procurement of human resource into organization for the benefit of organization and society

The three inter-linked things: Productivity organization Social aspects of external environment Generating opportunities

INTRODUCTION TO COMPENSATION MANAGEMENT :

Compensation is a systematic approach to for providing monetary value to employees in exchange for work performed. Compensation may achieve several purposes assisting in recruitment, job performance, and job satisfaction. Compensation management, also known as wage and salary administration, remuneration management, or reward management, is concerned with designing and implementing total compensation package.

DEFINATION OF COMPENSATION :
Compensation includes direct cash payments, indirect payments in the form of employee benefits and incentives to motivate employee to strive for higher levels of productivity. Human resource is the most vital resource for any organization. It is responsible for each and every decision taken,each and every work done and each and every result. Employees should be managed properly and motivated by providing best remuneration and compensation as per the industry standards. The lucrative compensation will also serve the need for attracting and retaining the best employees. Compensation is the remuneration received by an employee in return for his/her contribution to the organization. It is an organized practise that involves balancing the work-employee relation by providing monetary and non-monetary benefits to employees. Compensation is an integral part of human resource management which helps in motivating the employees and improving organizational effectiveness. Compensation system are designed keeping in minds the strategic goals and business objectives. Compensation system is designed on the basis of certain factors after analysing the job work and responsibilities.

COMPONENTS OF COMPENSATION SYSTEM ARE AS FOLLOWS:

JOB ANALYSIS
Job analysis is a systematic approach to defining the job role, description, requriments, responsibilites, evaluatoin,etc. It helps in finding out requried level of education, skills, knowledge, training,etc for the job position. It also depicts the job worth i.e measurable effectiveness of the job and contribution of job the organization. Thus, it effectively contributes to setting up the compensation package for the job position.

PAY STRUCTURE
Once job analysis has been done organizations need to decide upon the pay structures. Pay structures refer to the process of setting up the pay for a job in an organization. The process deals with internal and external analysis to estimate the compensation package for a job profile. Internal equity, external equity and individual equity are the most popular pay structures. Job description provides the in depth knowledge about the job profile and its worth. Pay structures are the strong determinent of employees valve in the organization. It helps in analysing the employees role and status in the organization. It provides for fair treatment to all employees. Pay structures also include the estimation of incentives.

SALARY SURVEY
Organizations have to bridge the gap between the industry standards and their salary packages. They cannot provide compensation packages that are either less than the industry standards or are very higher than the market rates. For the purpose they undertake the salary survey. The salary survey is the research done to analyse the industry standards to set up the compensation strategy for the organization. Organizations can either conduct the survey themselves or they can purchase the survey reports from a reputed research organization. These reports constitute the last 2-5 years or more compensation figures for the various positions held by the organizations. The analysis is done on the basis of certain factors defined in the objectives of the research.

NEED FOR THE STUDY :

A good compensation package is important to motivate the employees to increase the organizational productivity.

Unless compensation is provided no one will come and work for the organization. Thus, compensation helps in running an organization effectively and accomplishing its goals.

Salary is just a part of the compensation system, the employees have other psychologica and self-actualization needs to fulfill. Thus, compensation serves the purpose.

The most competitive compensation will help the organization to attract and sustain the best talent. The compensation package should be as per industry standards.

OBJECTIVES OF THE STUDY

To reward employees past performance fairly, in line with efforts, skills and competencies.

To attract and retain competitive high performing employees. To motivate the high performing employees and reinforce desirable employee behaviour.

To remain competitive in the labor market. To align employees future performance with organizational goals. To communicate the employees their worth to the organization. To provide employee social status.

SCOPE OF THE STUDY: The complex process includes decisions regarding variable pay and benefits. It suggests an exchange relationship between the employee and the organization. It involves design, development, implementation, communication and the evaluation of reward strategy and process of the organization.

To work on the feedback and provide fruitful suggestions and recommendations to the organization. To ensure that this work is made as useful as possible to the organization.

CHAPTER- 2 RESEARCH METHODOLOGY

DATA COLLECTION METHOD:

SAMPLING METHOD: Simple random sampling is a technique of drawing the sample in such a way that each unit of the population having an equal and independent of chance.

Sample size: 60 respondents. Statistical Tool: Random sampling method Sample Unit: People belonging to all designations. SOURCES OF DATA :

The data collected is from the personal interaction with the authorized members, team leaders in Biological E Ltd.

QUESTIONNAIRE Under this method a well - structured questionnaire is prepared covering all aspects with respect to the related topics. This contains close-ended questions. In the close-ended questions the respondent has to answer the questions within the choice specified. By distributing the questionnaire to the respondent the date is collected. OBSERVATION METHOD By observing the activities being performed by the organization, the data is collected. Care should be taken that the activity should be observed for one complete work life style.

PRIMARY DATA: Primary data is the data collected directly from those at whom the study is aimed at. SECONDARY DATA:

The guidelines from the MBA department staff and project guide. The broachers and material provided by the Biological E Ltd. Books relating to compensation management by different authors.

METHOD OF ANALYSIS The data is analyzed mainly from the questionnaire. Data interpretation is done with the help of statistical tool like Bar chart. Which are all based on the data which is not only collected from questionnaire but also from companys profile.

The process of analyzing the data will begin with first collecting the data, which is obtained, from the questionnaire and then tabulating it. Then the tabulated data is depicted in diagrammatic form that is in the terms of a graph. Then from the graph an interpretation is made.

CHAPTER- 3 REVIEW OF LITERATURE

INTRODUCTION OF DEFINATION OF COMPENSATION :

Compensation represents both the intrinsic and extrinsic rewards employees receive for performing their jobs. Together, both intrinsic and extrinsic compensation describe a companys total compensation system. Intrinsic compensation reflects employees psychological mind-sets that result from performing their jobs. Extrinsic compensation includes both monetary and nonmonetary rewards. Organizational development professionals promote intrinsic compensation through effective job design.

COMPENSATION AND INTERNAL & EXTERNAL EQUITY

A growing realization among not-for-profit organizations and their funders is that human resources performance is a key determinant of organizational effectiveness. As this effectiveness, in turn, depends upon organizations ability to recruit and retain skilled employees, these organizations compensation packages must be externally competitive and internally equitable. And, as complex as compensation is, further complications are budgetary limitations constraining not-for-profits from offering a more generous compensation package. A compensation strategy that is aligned with an organization strategy helps ensure that managers can attract and retain high-quality employees. Designing such a strategy is itself a complex process with numerous decision points and multiple variables to consider. Whether they are developing a compensation package for new or existing positions, it is important for human resources managers to consider their organizations size and complexity, its fiscal capacity and the market rates for jobs. requiring similar skills.

What is Compensation?
Compensation is the area of human resources management which involves making decisions about pay that are fair, equitable and competitive with current market rates; providing employees with incentives to improve performance; ensuring that benefits packages are cost effective and serve to motivate employees, and making certain that all compensation-related policies and programs comply with government requirements. Compensation strategy is a set of tools used by management to further the objectives of the organization. It can assist in recruitment, improving job performance, achieving equity, promoting and enhancing job satisfaction, reducing turnover and improving relations with unions. And it can be adapted to changes in organizational needs, goals, and available resources.

TYPES OF COMPENSATION : Extrinsic Rewards are those rewards which are most visible, such as job security or opportunities for promotion. They may be further divided into direct rewards, including cash compensation such as base pay and performance pay and indirect rewards generally classed as non-cash, or benefit items, that protect an employees income or contribute to the employees standard of living. Intrinsic Rewards are derived from the workplace itself and are valued internally by the employee. These include opportunities for personal growth, quality of work life, job satisfaction, challenges, personal and professional development opportunities, a sense of belonging, freedom to act, visionary leadership. To sum up, total compensation is the sum of all the direct and indirect compensation elements used by an organization to compensate. Services, and benefits received by employees as part of their employment. It does not include other forms of rewards such as recognition and interpersonal relationships etc. Extrinsic Rewards are rewards that an employee receives because of the job itself, including cash compensation, benefits, promotions and job security. Intrinsic rewards come from the work environment and are valued internally by the employee. Job satisfaction, selfesteem, achievement, growth, and professional and personal development are some examples of ntrinsic rewards. Internal Equity is the fairness in the employment contract or compensation programs when compared with other employees within the organization.. External Equity is the fairness in relation to the total compensation in other competing organizations or in the relevant labour market.

Internal Equity and External Competitiveness Determining Pay & Benefits

A central feature of a compensation policy is the balance between internal equity and external competitiveness. Employees will perceive their pay to be equitable if it is fair in relation to their peers in the workplace and in other organizations. Internal equity is achieved when compensation programs are applied consistently, horizontally and vertically, across an organization. Maintaining external competitiveness relies on comparative data from competing employers in the same labour market. the role equity plays in compensation: Internal, external and individual/personal equity issues are key ethical concerns in compensation management. At the internal level, an organizations pay structure reflects the values of jobs to the organization. At the external level, levels of compensation are in accord with those of the relevant labour market. At the personal or individual level, compensation matches their job performance. Perception of inequity at any of these levels will lead to employee dissatisfaction, which in turn will lessen the motivation to perform well.

Importance of Achieving Internal and External Equity Equity, in particular internal and external equity, is a crucial factor in determining pay rates. The fairness of a compensation policy can be assessed by employees pay levels in relation to those of their colleagues and employees in comparable jobs in the larger market. When pay rates are too low, the organization will face difficulties with recruitment and retention. By contrast, if they are too high, the organization may face financial difficulties. The process of establishing pay rates, while ensuring internal and external equity, typically takes different measures: Achieving Internal Consistency (Internal Equity) Here the worth of each job within the organization is determined through the Job Evaluation process (job analysis, job descriptions, & job evaluations). This establishes the relative worth of a job in relation to the value of other jobs in the workplace.

Achieving External Competitiveness (External Equity)

Before comparing external market rates on a position, human resources managers need to set out the essential elements of existing compensation policies such as cash compensation and indirect pay. This mix is a central consideration when making comparisons to pay levels at other organizations. Another consideration in designing compensation strategies is whether to match, lag or lead the market. One common method for accessing information on pay rates for benchmark jobs in other organizations is through using or collecting salary survey information.

FORMS OF PAY
Because employee compensation comprises the largest grouping of expenditures for most agencies, managers with HR responsibilities need to understand the various types of compensation that are part of Total Compensation and how to manage these lines on the budget effectively. In keeping with the focus of this manual, this chapter will pay particular attention to the compensation issues most relevant to not-for-profits. In recent years, compensation has become a far more complicated issue than setting pay levels. Strategic compensation policies reward employees past performance, allows the employer to remain competitive in the job market, maintain compensation equity among employees, align employees performance with organizational goals, control the compensation budget, help attract new employees and reduce the costs of employee turnover. For not-for-profits, strategic compensation policies need to be grounded in organizations mission, vision and work, taking into account the size of the organization, its service area and financial capacities. They must ensure that their human resources is planned most effectively toward meeting organizational goals. Total Compensation refers to all forms of pay or rewards going to employees as a result of their employment and can be broken down into three categories

BASE PAY
Pay in return for time worked, and separate from output or results achieved, base pay is typically the largest amount on an employees pay cheque. Employees have their wages (for hourly pay periods) or salaries (for weekly or monthly pay periods) guaranteed by employers as part of the terms of their employment. When given a preference for how they would choose their form of income, most employees prefer having the security in that the largest proportion of their compensation is base pay. Trade unions have generally pushed for base pay as the primary pay component. PERFORMANCE PAY Sometimes known as performance-contingent pay, variable pay, or at risk pay, performance pay can be classified as to whether the performance is related to individual employees, a work team, or the entire organization. Plans which highlight individual performance are the most effective in almost any setting for promoting improved performance and include piece rates, commissions, merit pay and targeted incentives. Work team performance plans include productivity, gain-sharing and goal-sharing. Organization performance plans include profit sharing and stock plans.

MERIT PAY IS A MONETARY REWARD

Given in recognition of outstanding performance which increases base pay. It may be paid in a lump-sum or added incrementally to base pay. Indirect Pay is part of an employees total compensation package, non-cash items or services provided to employees in return for their contribution to the organization (i.e., health benefits, paid time off ). Sometimes the costs for the items are shared by the employees.

COMPENSATION MIX MAY

Include a part of base pay and/or performance pay and/or indirect pay or a relative proportion of each. Salary is direct compensation/pay calculated at an annual or monthly rate rather than by hour.

EVALUATING JOBS
In all organizations, managers have the expectation that they will be able to recruit and retain appropriately skilled employees who are able to perform the tasks and responsibilities outlined in their job descriptions. Employees want to be paid at levels that are fair and equitable in comparison to other jobs in the organization and in the marketplace. Job evaluation can increase the capacity of organizations to recruit and retain qualified employees at competitive rates of pay

affordable to the organization; that is, job evaluation can ensure that both management and employees will have the perception that compensation is fair and equitable.

What is Job Evaluation?

Job evaluation is the systematic scoring and comparison of jobs along organizationally determined dimensions of job worth such as in the effort, responsibility, complexity, importance, skills and the working conditions of a job. One possible end product of job evaluation is a job classification structure in which jobs of similar value to the organization, no matter how different in other respects, are located at the same level on the job pay hierarchy. This job pay hierarchy provides the foundation for the development of pay grades and pay ranges.

Methods of Job Evaluation

Job evaluation requires information to distinguish among jobs, usually on the basis of work activities and/or job required worker characteristics. The most utilized evaluation methodologies are: 1. Ranking involves creating a hierarchy of jobs by comparing jobs on global factors that presumably are common to all the jobs being evaluated. 2. The Classification method defines categories of jobs and slots jobs into these classes. 3. Factor Comparison involves job-to job comparisons on several specific factors. 4. The Point Method compares jobs on rating scales which are comprised of specified factors.

Job Evaluation is a systematic

Process that compares jobs and ranks them based on their relative worth to the organization. It is used to create a job structure for the organization and establish compensation standards. Job Analysis is the process of identifying and determining information about a job for the purpose of writing descriptions. Factors considered include duties, tasks, responsibilities, and skill requirements, among others. JOB DESCRIPTION IS A WRITTEN Summary of a job which identifies the position and describes its tasks, major duties and responsibilities and minimum qualifications and abilities required to perform the job. Job Family is made up of related jobs distinguished by levels of knowledge, skills, and abilities (competencies) as well as other factor required of the jobs.

Job Class (Job Grade) represents

A group of jobs that are substantially similar, justifying a common name, similar selection processes and similar compensation.

JOB ANALYSIS
Job Analysis is a process to identify and determine in detail the job duties and requirements and the relative importance of these duties for a given job. Job Analysis is a process where judgments are made about data collected on a job.

JOB DESCRIPTIONS
Making use of the information collected in job analysis, standardized job descriptions outline What physical, mental, and interactional activities a job entails, How a worker utilizes methods, procedures, tools, and information sources to carry out a given job, and Why the job was developed (the necessary role it plays in the organizations meeting its objectives). The well written, detailed job descriptions provide the foundation of any internally consistent compensation system.

What is a Compensable Factor?

As they are the most important job characteristics by which organizations establish relative pay rates, compensable factors should be both job-related and further agency strategy. In job evaluation they are measured by degree statements and assigned a value depending upon their value to the organization. Compensable factors describe job requirements, as opposed to personal experience, characteristics or performance of the incumbent, providing the legal means to justify pay differences. Typical compensable factors, derived from Ontarios Pay Equity Act, include skill, effort, responsibility, and working conditions, and are found in most jobs.

JOB EVALUATION THE PAY STRUCTURE

As outlined in the first six steps in job evaluation establish the relative worth of all the jobs in an organization or group from which a hierarchy of jobs is produced. In the seventh step which is discussed in some detail in this chapter, the established hierarchy lists out the most valuable jobs to the least valuable to the organization. The pay structure (salary structure) that follows sets out the pay grades (or levels) and the pay ranges, along with the criteria for salary movement within the pay structure. There are two basic approaches to constructing a pay structure. In the first, every job that has a different total of job evaluation points will be treated separately and will, in

effect, become a particular pay grade. The other approach is to group jobs that have similar value in the organization (certain range of point values) into pay grades.

PAY GRADES
A pay grade is a grouping of jobs of the same or comparable value to the organization. Each job within a pay grade will have the same pay range, that is, minimum, midpoint and maximum. The first step in building flexibility into the pay structure is to group different jobs that are considered substantially equal for pay purposes into a pay grade.

PAY RANGES
A pay range is the continuum of pay rates from minimum to maximum within a pay grade. A pay range maximum is the upper limit of what the employer pays for that type of work and the minimum is the lowest amount. The higher end of the range can be used to attract experienced, higher-paid employees when the starting salary within a particular range would be too low, given their level of experience. These ranges also make it possible for managers to recognize performance differences among employees within grades or for those with different levels of seniority.

DESIGNING YOUR BENEFITS PACKAGE

Benefits are a form of indirect pay within a compensation system. They are rewards (other than wages, salaries or performance-related payments) that employees receive in return for their continued service to the organization. They are designed to protect employees and their families from loss of income due to health problems or other work-related financial disruptions, and can improve the employees general quality of life through special programs and services in the workplace. They can include retirement plans, health insurance, life insurance, disability insurance and vacation. Some benefits, such as Employment Insurance, Workers Compensation and the Canada Pension Plan, are compulsory, government-mandated programs.

LINKING PAY TO PERFORMANCE

When deciding whether to implement a performance-based compensation system within an organization, managers need to consider whether it will or will not be effective in enhancing their employees performance and satisfaction. This chapter will address some of the typical drawbacks and benefits of linking merit pay to performance appraisal and will provide an overview of the performance appraisal and management process

DEFINING MERIT PAY

As noted in earlier chapters, many not-for-profit or public organizations consider merit pay to be a type of performance pay, which by definition is not the case. Performance pay does not increase the base pay whereas merit pay does. By evaluating employees performance on a scheduled basis and, if merit warrants, granting an increase to base pay, merit pay is often assumed to be a useful mechanism for recognizing and encouraging continuing good performance. The concept of merit pay has been around for as long as people have been working for pay and has long been used as a mechanism for calculating salary increases. Most employers would agree that higher levels of employee performance should result in higher pay levels. Employees, in turn, appreciate the recognition and increased pay provided to them by merit plans. However, formal performance-based pay plans cannot be assumed to be effective merely because they are implemented; and, tying performance appraisals to merit pay has the potential for creating inequities in pay. Without careful implementation and without ongoing evaluation as to their effectiveness, appraisal processes can fail to have positive effects on employee motivation, creating mistrust in the performance appraisal process itself and undermining the other functions associated with this process. For example, the focus on salaries may divert attention from feedback on employee performance, rendering the process ineffective particularly when the feedback is unfavorable and difficult for the employee to hear. Moreover, giving positive reviews and then paying everyone the same even for different degrees of performance can have an equally negative motivating effect.

USING SALARY SURVEYS

Salary surveys are a consultative tool that employers and associations use to obtain salary information that is useful in determining the competitive wage rates needed to attract and retain competent employees. Employers can use surveys in different ways; as well as establishing a competitive salary structure, they can use the surveys to support their job evaluation system. When job evaluation and survey data are used jointly, internal and external equity are mutually reinforced. The focus of surveys tends to be on collecting base salary information and they can also be an effective means of researching trends in the design of benefits packages and pay systems. Pay structures tend to be strongly influenced by practices.

COMMUNICATING COMPENSATION
Communication is central to achieving any organizations strategic objectives.1 As much as it is managements prerogative to set compensation levels, this role will have positive effects on employee morale if it is exercised in an open, consultative fashion. Communicating the rationale behind compensation systems helps ensure that employees have solid understanding of these systems. They should know their compensation packages and the decision-making process which determined it. And they should also have a good grasp of the array of benefits available to them.

CHAPTER 4 INDUSTRY PROFILE

INDUSTRY PROFILE
The foundation of the Indian Pharma Industry was laid exactly a century ago when in 1901, Bengal Chemicals and Pharma works was set up in Calcutta. The growth of industry was slow till 1970. The overall production of bulk drugs and formulations was of the order of Rs. 3 billion. The major players were multi-national companies like Glaxo, Sandoz, Roche, Pfizer, Hoechst etc. The Patent Act of 1970 and government investment in drug industry infused life in pharma sector resulting in its span from decade to decade as is evident from the following Table Decadal Progress of Pharma Industry Year 1950 1960 1970 1980 1990 Formulations Formulations Formulations + bulk Formulations + bulk Formulations + bulk Status MNC based Indigenous production based on imported drugs Production based on indigenously produced and drugs imported drugs. Production based on indigenous drugs mainly bulk drugs. Indigenous production serving domestic and bulk drugs export market.

The pharma industry includes manufacture of basic drugs, formulations, intravenous fluids and pharma aids like hospital disposables, kits, capsules etc. At the time of independence, the pharmaceutical industry in India was in a primitive shape basically involved in the manufacture of formulations. The pharmaceutical industry in India meets around 70% of the countrys demand for bulk drugs, drug intermediates, pharmaceutical formulations, chemicals, tablets, capsules, orals and injectibles. There are about 250 large units and about 8000 Small Scale Units, which from the core of the pharmaceutical industry in India (including 5 Central Public Sector Units). These units produce the complete range of pharmaceutical formulations, i.e., medicines ready for consumption by patients and about 350 bulk drugs, i.e., chemicals having therapeutic value and used for production of pharmaceutical formulations.

Following the de-licensing of the pharmaceutical industry, industrial licensing for most of the drugs and pharmaceutical products has been done away with. Manufacturers are free to

produce any drug duly approved by the Drug Control Authority. Technologically strong and totally self-reliant, the pharmaceutical industry in India has low costs of production, low R & D costs, innovative scientific manpower, strength of national laboratories and an increasing balance of trade. The Pharmaceutical Industry, with its rich scientific talents and research capabilities, supported by Intellectual Property Protection regime is well set to take on the international market.

ROLE OF PHARMACEUTICAL INDUSTRY IN INDIA - INDIA ADVANTAGE

India has the advantage of the cost, as the cost of labor, the cost of inventory is much lower than other place. The multinational companies, investing in research and development in India may save up to 30% to 50% of the expenses incurred. The cost of hiring a research chemist in the US is five times higher than its Indian counterpart. The manufacturing cost of pharmaceutical products in India is nearly half of the cost incurred in US. The cost of performing clinical trials in India is one tenth of the cost incurred in the United States. The cost of performing research in India is one eighth of the cost incurred in the United States.

KEY PLAYERS IN INDIAN PHARMACEUTICAL INDUSTRY

There are several national and international pharmaceutical companies that operate in India. Most of the countrys requirements for pharmaceutical products are met by these companies. Some of them are briefly described below :

Ranbaxy Laboratories Limited is the biggest pharmaceutical manufacturing company in India. The company is ranked at the 8th position among the global generic pharmaceutical companies and has presence in 48 countries including world class manufacturing facilities in 10 countries and serves to customers from over 125 countries. Ranbaxy Laboratories 2009-2010 Q3 Net Profit Results showed a profit of Rs 116.6 crore as compared to Rs 394.5 crore deficit, recorded during the corresponding period last fiscal. Dr.Reddy Laboratories manufactures and markets a wide range of pharmaceuticals both in india and abroad. The company has 60 active pharmaceutical ingredients to

manufacture drugs, critical care products, diagnostic kits and biotechnology products. The company has 6 FDA plants that produce active pharma ingredients and 7 FDA inspected and ISO 9001 and ISO 14001 certified platns. Dr. Reddys Q1 FY10 result shows the revenues of the company at Rs. 18,189 million which is up by 21%. During this quarter the company introduced 24 new generic products, applied for 22 new generic product registrations and filed 4 DMFs.

Cipla is an Indian pharmaceutical company renowned for the manufacture of low cost anti AIDS drugs. The companys product range comprises of anthelmintics, oncology, anti-bacterials, cardiovascular drugs, antibiotics, nutritional supplements, anti-ulcerants, anti-asthmatics and corticosteroids. Cipla also offers other services like quality control, engineering, project appraisal, plant supply, consulting, commissioning and know-how transfer, support. For the financial year 2008-09 the company registered an increase of 22% in sales and other income over the previous year. Nicholas Piramal is the second largest pharmaceutical healthcare company in India. The brands manufactured by the company include Gardenal, Ismo, Stemetil, Rejoint, Supradyn, Phensedyl and Haemaccel. Nicholas Piramal has entered into join ventures and alliances with several international corporations like Cheissi, Italy; IVAX Corp; UK, F. Hoffmann - La Roche Ltd., Allergan Inc., USA etc. Glaxo Smithkline (GSK) is a United Kingdom based pharma company; it is the worlds second largest pharmaceutical company. The companys portfolio of pharma products consist of central nervous system, respiratory, oncology, vaccines, antiinfectives and gastro-intestinal/metabolic products among others. On November 2009, the FDA had announced that the H1N1 vaccine manufactured by GSK would join the list of the four vaccines approved. Zydus Cadila also known as Cadila Healthcare is an Indian pharmaceutical company located in Gujarat. The Companys 1QFY2010 results show the net sales at Rs 880.3 cr which is higher than the estimated Rs 773 cr. The net profit was Rs 124.8 cr which was increase of 39%; the increase was on account of higher sales and improvement in the OPM.

ROLE OF PHARMACEUTICAL INDUSTRY IN INDIA GDP

The Role of Pharmaceutical Industry in India GDP is immense. For the past few years the Indian Pharmaceutical Industry is performing very well. Role of Pharmaceutical Industry in India GDP-Facts :

The Pharmaceutical Industry in India is one of the largest in the world. It ranks 4th in the world, pertaining to the volume of sales. The estimated worth of the Indian Pharmaceutical Industry is US$ 6 billion. The growth rate of the industry is 13% per year. Almost most 70% of the domestic demand for bulk drugs is catered by the Indian Pharma Industry. The Pharma Industry in India produces around 20% to 24% of the global generic drugs. The Indian Pharmaceutical Industry is one of the biggest producers of the active pharmaceutical ingredients (API) in the international arena. The Indian Pharma sector leads the science - based industries in the country. The pharmaceutical sector has the capacity and technology pertaining to complex drug manufacturing. Around 40% of the total pharmaceutical produce is exported. 55% of the total exports constitute of formulations and the other 45% comprises of bulk drugs. The Indian Pharma Industry includes small scaled, medium scaled, large scaled players, which totals nearly 300 different companies. There are several other small units operating in the domestic sector.

PHARMACEUTICAL INDUSTRY IN INDIA - GROWTH

As per the present growth rate, the Indian Pharma Industry is expected to be a US$ 20 billion industry by the year 2015. The Indian Pharmaceutical sector is also expected to be among the top ten Pharma based markets in the world in the next ten years. The national Pharma market would experience the rise in the sales of the patent drugs. The sales of the Indian Pharma Industry would worth US$ 43 billion within the next decade. With the increase in the medical infrastructure, the health services would be transformed and it would help the growth of the Pharma industry further. With the large concentration of multi national pharmaceutical companies in India, it becomes easier to attract foreign direct investments. The Pharma industry in India is one of the major foreign direct investments encouraging sectors. Due to the presence of low cost manufacturing facilities, educated and skilled manpower and cheap labor force among others, the industry is set to scale new heights in the fields of production, development, manufacturing and research. In 2008, the domestic pharma market in India was expected to be US$ 10.76 billion and this is likely to increase at a compound annual growth rate of 9.9 percent until 2010 and subsequently at 9.5 percent till the year 2015.

The varied functions such as contract research and manufacturing, clinical research; research and development pertaining to vaccines are the strengths of the Pharma Industry in India. Multinational pharmaceutical corporations outsource these activities and help the growth of the sector. The Indian Pharmaceutical Industry has a bright future.

CHALLENGES : Every industry has its own sets of advantages and disadvantages under which they have to work; the pharmaceutical industry is no exception to this. Some of the challenges the industry faces are:

Regulatory obstacles Lack of proper infrastructure Lack of qualified professionals Expensive research equipments Lack of academic collaboration Underdeveloped molecular discovery program

INITIATIVES The government of India has undertaken several including policy initiatives and tax breaks for the growth of the pharmaceutical business in India. Some of the measures adopted are :

Pharmaceutical units are eligible for weighted tax reduction at 150% for the research and development expenditure obtained. Two new schemes namely, New Millennium Indian Technology Leadership Initiative and the Drugs and Pharmaceuticals Research Program have been launched by the Government. The Government is contemplating the creation of SRV or special purpose vehicles with an insurance cover to be used for funding new drug research. The Department of Pharmaceuticals is mulling the creation of drug research facilities which can be used by private companies for research work on rent.

The following form the basis of the technological strengths of the Indian Pharmaceutical industry:

Self-reliance displayed by the production of 70% of bulk drugs and almost the entire requirement of formulations within the country. Low cost of production Low R & D costs Innovative Scientific manpower Strength of National Laboratories Increasing balance of trade in pharma sector.

INDIAS DOMESTIC PHARMACEUTICAL MARKET (12 MONTHS ENDED JANUARY 2009)

Company Total Pharma Market Cipla Ranbaxy Glaxo Smithkline Piramal Healthcare Zydus Cadila Source : ORG IMS Size ($ Billion) 6.9 .36 .34 .29 .27 .24 Market Share (%) 100.0 5.3 5.0 4.3 3.9 3.6 Growth Rate (%) 9.9 13.4 11.5 1.2 11.7 6.8

FUTURE OF PHARMACEUTICAL INDUSTRY With several companies slated to make investments in India, the future scenario of the pharmaceutical industry in looks pretty promising. The countrys pharmaceutical industry has tremendous potential of growth considering all the projects that are in the pipeline. Some of the future initiatives are:

According to a study by FICCI-Ernst & Young India will open a probable US$ 8 billion market for MNCs selling expensive drugs by 2015. The study also says that the domestic pharma market is likely to reach US$ 20 billion by 2015. The Minister of Commerce estimates that US$ 6.31 billion will be invested in the domestic pharmaceutical sector. Public spending on healthcare is likely to raise from 7 percent of GDP in 2007 to 13 percent of GDP by 2015. Lupin, a Mumbai based pharmaceutical company is looking to tap opportunities of about US$ 200 million in the US oral contraceptives market.

Due to the low cost of R $ D, the Indian pharmaceutical off-shoring industry is designated to turn out to be a US$ 2.5 billion opportunity by 2012.

CHAPTER 5 COMPANY PROFILE

ORIGIN OF THE COMPANY:

This company was launched by the U.S. trained founder president DR.D.V.K.RAJU, as first of amongst the endeavors to promote pharmacy industry and its inception in 1953. The company started with mere 30 people and today there are more than 1000, dedicated with all the skills and build B.E. as one of the successful company that it is today.

Biological E Limited has approximately 1100 employees which is inclusive of both permanent and build and casual workers. The various classes of employees, workmen, staff executies, managers and above .the number of women employees, is on par with that of men. The fact is that there are 80 women out of permanent workmen who have a significant role to play.

MISSION STATEMENT: Biological E Limited is a dedicated health care company , offering innovative solution for disease prevention and management,through superior, valve added product that satisfy current and future needs, not only for its customers but also for health and well-being of people worldwide

SWOT ANALYSIS : Strengths :

;

cost competitives well devoloped industry with strong manufacturing base well established network of laboratories and R$D infrastructure access to pool of highly trained scientists, both in india and abroad. . strong marketing and distributes network. rich biodiversity. competencies in the chemistry and process development.

Weaknesses :

low investments in innovative R$D

lack of resources to compete with MNCs for new drug discovery research and to commercialize molecule on a world wide basis. Lack of strong linkages between industry and academia. Lack of culture of innovation in the industry. Lack of culture of innovation in the industry. low medical expenditure and healthcare spend in the country. Inadequate regulatory standards. production of spurious and low quality drugs tarnishes the images of industry at home and abroad.

Opportunities :

significant export potential licensing deals with MNCs for NCEs and NDDs marketing alliances to sell MNC products in domestic market contract manufacturing arrangements with MNCs potential for developing india as a centre for international clinical trails niche player in global pharmaceutical R$D

Threats :

proudcts patent regime poses serious challenge to domestic industry unless it invests in research and development. R$D efforts of indian pharmaceutical companies hampered lacking of enabling regulatory requirements . for instance ,restriction on animal testing outdated patent office. drug price control order puts unrealistic ceiling on product prices and profitability and prevents pharmaceutial companies from generating investible surplus.

B.E. AND ITS INTELLECTUAL POWER:

People are most important in todays organizations than ever before. B.Es people are B.Es core resources. The success of BE is built on its management of its human resources. As a business entity, BE is conscious of the fact that the primary drier of performance is talent. It is the only talented people who can lend competitive advantage to the business, with its multiplier effect. Since inception, it is B.Es vision that it is the talent management which constitutes a great divide between big and small. Attracting talent, Retaining talent and building talent are B.Es elements of talent management. B.Es people are the key behind its success story. Whereas a technology can be purchased and copied, it levels the playing field. The people on other hand cannot be copied. Although human bodies may be coined in the future, their ideas, personalities, motivation, organizational cultural values cannot be copied. If there is one differentiating factor that will perish, it is talent and creativity of its people.

Management style predominantly influences that working environment. In BE, we provide greater autonomy, freedom to the people to develop and contribute the best to the organization. The entire management team behaves like a family, coherent and compact, looks to one another for support as well as lend support. B.E. strongly believes that in knowledge - based industries Pharma, Biotech etc success of the business increasingly depends on people - embodied knowledge. Dr. Vijay Kumar Datla. B.Es Chairman and managing director is the man behind managements thrust on individuals learning and development in B.E. he is the driving force behind the tremendous growth of B.E. Ltd.

B.E - A LEGEND IN PHARMA INDUSTRY : Biological E has come a long way, enhancing its strengths and expanding its horizons. Today, biological E has a formidable presence, sera and vaccines, bulk drugs and herbal products. Since B.E had an illustrious of foreign collaboration starting from Evans of U.S to Pasteur Maeriux Connaught of France & Solovay of Belgium, Biological E Ltd is the first company to bring the Korean red ginseng India, and elixir that promotes good health. It is also a pioneer in anti - b drugs and the first to introduce life saving anticoagulants in India.

A part from the domestic retail marketing. B.E supplies most of essential and life saving drugs to various central government hospitals, state govt hospitals, public sector undertaking and to the Indian armed forces. Its international division provides global access to high quality innovative products of B.E to the health and well - being of the people worldwide. B.E INTENATIONAL :

BEinternational division caters to the overseas market with products that meet world - class standards in all respects. This quality consciousness had made BE sought after resources for innovative.

APIs Formulations Vaccines Natural Products Veterinary products

A major thrust in initiated in the areas of exports, expanding the already existing global presence of products of BE.

B.Es MILESTONES: Salient features of its products : BE is the private sector Biological Product Company in India and it is the first Pharma company in South India. Its unique Biological Products namely Heparine, Sodium, Neo Hepatex are proved to be blockbuster molecules for the company.

Heparine : The wonder drug Heparine is a natural anti-coagulant with no substitutes of its kind even today. It is biological nature extract produced for the first time in India by BE. Heparine therapy is a must during surgical operations to prevent clotting of blood. It is also used for post operative health care purposes.

Neo-Hepatex :

Neo-Hepatax is another biological products with faster absorbing capacity. The product is so unique that the medical fraternity loved the curative aspects of the Neo-Hepatex. Vitamin B12, with natural erythropoietin ingredients facilitates faster absorption resulting in a speedy relief to the patients in cases of anemia. B.E is the pharma Company which manufactured Anti-TB Drug in India. B.E had another distinction of the first private sector vaccine manufacturer in India. B.E is the pioneer in preventive medicine. B.E is a forerunner in the production of pediatric vaccines and other biological therapeuties which are part of childs immunization schedule. BE products Tetanus Toxoid (BETT), Diphtheria, Tetanus & Pertussis Vaccine (TRIPVAC), Anti - Tetanus Serum, Anti Diphtheria Serum an Anti Snake Venom Serum, Diphtheria & Tetanus Vaccine (BIVAC). Government of India launched Universal Immunization Program in 1985 (UIP) in a Phased manner to cover all districts by 1990. The objective of the UIP was to reduce infant, child and maternal morbidity and mortality by protecting against six vaccine preventable major diseases. B.E had its credit, immense contribution to Central Governments Universal Immunization Program.

Major production of the above vaccines caters to the need of the UIP. Over the past one decade BE has supplied around 120 Croresdoses (1.2 billion) doses of vaccines towards the immunization needs of India. Today BE enjoys leadership position in Vaccinology. Literally every child in India at one time or the other is immunized by BE. The Company has seceral important molecules. BBC is an abbreviation coined for its three most popular and outstanding brands namely BETHADOXIN, BESTOZYME and COSCOPIN.

Bethodoxin a multi vitamin, growth - promoting product, Bestozyme digestive syrup helps in promoting appetite and coscopin and its range, which is anti-cough medicine, operate in the most competitive therapeutic segments in the pharma markets. Coscopin in occupying 171st rank in India in the first 300 popular brands.

Gastrogyl : Gastrogyl is another unique formulation of BE first of its kinds in India. Gastrogyl is a combination of Trinadazole and Ciprofloxacin and is powerful anti-infective against polymicrobial infection of gastro intestinal Tract and Pelvic inflammatory disease.

Resourceful Research and Development :

Research and Development constitutes tge life of BE. After all, that is where vision transforms into reality, and ideas turn into actions, which is why, BE leaves no efforts and resources spared to equip itself with the research and innovation elsewhere purposeful alliances with such world re-owned pharma organization such as Evans Medial of UK, Solvay Cie of Belgium, (Veterinary Products), Pasteur Merieux Connaught of France (Sera & Vaccine). BEs research and development center is approved by the department of Science and technology, Government of India and is credited with developing a number of FIRST TIME IN INDIA formulations. Is also focuses on conventional systems of medicine like ayruveda researches simple yet highly effective and affordable remedies for many of lifes common ailments. The company had a well equipped research and development Laboratory managed by highly qualified and competent scientists. The research laboratory is number of basic and bulk drugs are being developed in our R&D laboratory and in collaboration with National Chemical Laboratory, Pune and Central Food Technology Research Institute (CFTRI) Mysore. Biotechnology at BE : The era of the 21st century belongs to Biotechnology. The technological advance in various disciplines of Biology have created a greatest impact on medicine and drug delivery systems. The revolutionary in recombinant DNA (r-DNA) technology, the work on human genome and related areas have opened up immense possibilities in drug discovery, India had now tools to produce designer Biotherapeutics. The Government of Andhra Pradesh had earmarked 600 sq kms as Genorne Valley for establishing a Biotech Park. It is the first state - of - the - art Biotech Park in India to provide world - class infrastructure to biotech manafacturing units.

The joint venture with Government of Andhra Pradesh, Shapooraji Pallonji Biotech Park Private Limited had invited BE by allotting 50 acres of land of setting up its ultra modern biotech unit in Genome Valley. BEs most modern biotech project with an investment of rs. 100 Crores is underway expected to rollout its vaccines by 2004. The new products will be ready for commercialization by the November 2004. The focus of our green field project is to reach out global markets and enrich and expand the vaccine product range in the biotechnology segment strictly complying with WHO and US-FDA GMP. This new project is the key part of our drive for internationalization of our business. This is also expected to add regulatory strength in our operations.

DEPARTMENTS OF BIOLOGICAL E LIMITED :

There are 18 departments in B.E. Ltd where man power plays an important role. These include : 1. Marketing departments : This department comprised of two major sections : a. Marketing sections b. Sales administration a. Marketing Services : This section deals with consignment agents, finished goods, sending goods to consignment, pending goods, valuation of goods etc. b. Sales administration : This section deals with salaries, personal fields and fields staff sales, data collection daily reports etc. 1. 2. 3. 4. 5. 6. Strategic business development department. Regulatory affairs department. International operations departments. Commercial material and stores department. Product planning and material department. General administration department.

This deals with the allotment of telephone, vehicles, transportation, travel requisition etc. 7. 8. 9. 10. 11. 12. Distribution department. Pharmaceutical product / technical department. Research and development formulation department. Recombinant vaccines department. Engineering services department. Finance department

13. 14. 15. 16. 17.

Information system department. Human resources and legal department. Quality assurance/ quality control department. Security department. Sera vaccines department.

Product division : B.Es product range at present spans over 70% of the therapeutic segments including the critical areas of childcare and cancer. B.Es product divisions are :

Pharma. Oncology. Vaccines. Childcare. Herbal.

Pharma : BE pharma is the back-bone of biological E. group which offers a wide range of values added products to meet most of the health care needs of the common man with product range that covers most of common illness that physician encounter in his daily practice. Its product range caters to urban and rural India. In high quality value added products offerings are affordable and available with arms reach of common man, there by help in the alleviation suffering of the sick. BE is equipped with most modern a facility for both manufacturing and quality control, and it enjoys the confidence of all medical practitioners. Thus it is one of the respected among the top pharmaceutical companies of the growing at rapid rate.

Vital vaccines :

A pioneer in prevention of medicines in India, BE was one of the first to introduce anti -tetanus and polio vaccines in the country. Today BE market an impressive array of the world class vaccines providing effective protection against many disabling and crippling diseases, certain of them collaborated with Pasteur Meraux co naught of France world leaders in preventive and therapeutic vaccines. In the face of increasing incidence of new infectious diseases, BE focuses on developing Newer and more powerful vaccines in order to make diseases prevention more potent than before. Child cares : B.E expands the scope of preventive medicine further in child care division which focuses on adequately meeting the specialized health care of children in India. Is also helps in providing on exclusive range of formulations in curative as well as the prevention aspects of pediatric health care tomorrow. Let the computers handle : While the demand grew, the volume grew. The company let the computers tale over. To speed up the operations and increase efficiency, a super mini computer had been installed with over forty terminals connecting all the departments online. All the branches are equipped with computers, the stocks and sales accounts are computers. Branches at Andhra Pradesh :

Azamabad - small volume parental, liquids. Patancheru - injectables. Dehradun, Uttaranchal - Oral solids, liquids & dry powers. Gaganpahad - Sera & vaccines, bulk drugs. Shameerpet Genome valley - Biotech plant.

Future foravs : B.E envisages exploring to new frontiers of health care by adopting latest technologies and amalgamating with its own expertise and developing newer ranges of drugs and vaccines. The facility is coming up tin a 50 - acre land allotment to Shapoorji Pallonji Biotech Park at Shamirpet about 40 kms from Hyderabad at an estimated cost of Rs. 95 Crores

CHAPTER- 6

DATA ANALYSIS & INTERPRETATION

integrated compensation system. INTERPRETATION: From the above graph/table it is evident that 55% of the employees mentioned that there organization follow company board compensation system and 10% of the employees do not know that what compensation system they organization follow.

08) Are you satisfied with current compensation system? options provided number of people Answered 1 2 3 4 highly satisfied satisfied not satisfied need changes 6 36 6 12

s.no

analysis in percentage 10% 60% 10% 20%

ANALYSIS: It is clear that 60% of the employees satisfied, 20% of the employees told that there should be some changes and 10% of the employees are highly satisfied and 10% of the employees are not satisfied with the current compensation system.

INTERPRETATION: From the above graph/table it is evident that 60% of the employees are satisfied and 10% of the employees are not satisfied with the current compensation system.

48

09)

What are the problems you encounter with the current compensation system?

S.No. 1 2 3 4

Options Provided delay in payments non - justifiable delay in increments any other

Number of People Answered 6 48 6 0

Analysis in percentage 10% 80% 10% 0%

Analysis: It is clear that 80% of the employees encounter problems like non-justifiable, 10% and 10%
employees encounter problems like delay in payments and delay in increments respectively.

Interpretation: From the above graph/table it is evident that 80% of the employees encounter problems like non-justifiable, 10% of the employees encounter problems like delay in increments with the current compensation system.

49

10) Please identify which type of legally required benefits your organization provites?

S.No. 1 2 3 4

Options Provided Old age benefits Medical benefits workers compensation benefits if any

Number of People Answered 33 27 0 0

Analysis in percentage 55% 45% 0% 0%

Analysis: It is clear that 55% of the employees told that they receive old age benefits after retirement and 45%
of the employees receive medical benefits.

Interpretation: From the above graph/table it is evident that 50% of the employees mention that the benefits received from Biological E. organization are old age benefits and medical benefits.

50

11)

Which type of modern pay system does your organization follow?

S.No. 1 2 3 4

Options Provided incentive pay person focused pay team based pay don't know

Number of People Answered 15 12 21 12

Analysis in percentage 25% 20% 35% 20%

Analysis: It is clear that 25% of the employees specify that the organization follow incentive pay, 20% of the employee specify that the organization follow person-focused pay, 35% of the employee specify that the organization follow team based pay, 20% employees dont know which type of modern pay system does there organization follow.

Interpretation: From the above graph/table it is evident that 35% of the employees specify that there organization follow team based pay, 20% of the employees donot know what modern pay system that there organization follow.
51

12) What are the new trends in compensation management offered by the organization?

S.No. 1 2 3 4

Options Provided Soft loans Club memberships loans for two/four wheelers any other

Number of People answered 0 18 42 0

Analysis in percentage 0% 30% 70% 0%

Analysis: It is clear that 70% of the employees mentioned that the organization provides soft loans to buy two and four wheelers and 30% of the employees mentioned that the organization provides club memberships. Interpretation: From the above graph/table it is evident that 70% of the will get loans for two, four employees wheelers and 30% of the employees get club memberships that are offered by the organization.

52

13)

What is the frequency of revival of the compensation?

S.No. 1 2 3 4

Options Provided quaterly Half - yearly annually bi - annually

Number of People answered 0 0 36 24

Analysis in percentage 0% 0% 60% 40%

Analysis: It is clear that 60% of the employees agreed that the revival of compensation is done annually and 40% of the employees agrred that revival of compensation is done bi-annually. Interpretation: From the above graph/table it is evident that 70% of the employees agree that the organisation revive the compensation annually, and 30% of the employees agreed that the compensation will revive bi - annually in the Biological E.
53

14)

Which type of compensation payment system do you prefer?

S.No. 1 2 3 4

Options Provided fixed pay system variable pay system balanced - debt method all

Number of People answered 30 12 18 0

Analysis in percentage 50% 20% 30% 0%

Analysis: It is clear that 50% of the employees prefer fixed pay system, 20% of the employees prefer, 30% of the employee prefer balanced debt method in their organization.

Interpretation: Form the above graph/table it is evident that 50% of the employees prefer fixed pay system, 20% of the employees prefer variable pay system.

54

15) What is the average working duration of an employee in the organization?

S.No. 1 2 3 4

Options Provided 8 hours in a day 9 hours in a day 10 hours in a day above 10 hours in a day

Number of People answered 60 0 0 0

Analysis in percentage 100% 0% 0% 0%

Analysis: It is clear that 100% of the employees mentioned that the average working duration of an

employee in the organization is 8hrs in a day.

Interpretation: From the above graph/table it is evident that 100% of the employees agreed that average working duration in the Biological. E organization is 8 hours in a day.
55

CHAPTER- 7 FINDINGS & SUGGESTIONS

FINDINGS

Most of the employees are satisfied with the current compensation system. There is no delays in salary payment. The increments which are given to the employees are integrated with performance evaluation and wage agreement. The organization does not provide rewards to the employees, an production incentive scheme shall be implemented. The company follow its own internal compensation system. The employees dont know that salary rise improves effeciency and generates cooperation among the employees in the organization. The workmen dont know that their organization have a compensation linked with HR strategies to retain best talent. Medical benifits is being offered by the company to the employees. The reviwal of compensation for the non-unionized employees and executies is every year. The frequenccy of reviwal of compensation for the workmen covered under settlement is every 3.5 years. There are no new trends in the ccompensation management offered by the company. The organization provide loan facilities for the employees. The organization provide benifits or services besides to salary. The employees dont know the strategic goals of the organization.

The employees compare companys compensation program with external market rate. Good compensation gives good performance. mostly the company provide manetary compensation,welfare amminities and others. the employees recieve benifits for work place injury. the organization provide flexi-time for the corporate employees.

LIMITATIONS OF THE STUDY

The project chosen for analysis is COMPENSATION MANAGEMENT in Biological E Ltd for a period of 45 days.

The study only deals with the compensation management in Biological E Ltd

Only those respondents were interviewed who were present at the time of the Study.

The sample selected may not be including of the total population. Many employees have failed to give their frank opinion due to various reasons.

RECOMMENDATIONS
I would like to make some recommendations for the compensation system in the organization.

The organization can provide quarters to the work men to avoid high cost of rents by them. There should be a production incentive scheme system for the work men. this will encourage workmen to produce more and earn than their regular wages. The compensation should be increased for workmen employees as for equity norms or practice. should be a financial planner in the organization. that planner can give suggestions

Their

how the employees can plan their monthly budget from their salary.

CHAPTER- 8 CONCLUSION & BIBLIOGRAPHY

CONCLUSION
The work men is not satisfied with their compensation, they are the back bone of the organization. Their comepensation should be increased according to the standard of living of the common human being in the society. The frequency of revival of compensation to the work men should be bi-annually. New trends in the compensation should be implemented in the organization for the top level employees to better standard of living. The organization must provide education loans for the top level employees for improvement for the skills and knowledge.

BIBLIOGRAPHY

BOOKS REFERRED:
Human resource management and Industrial relations Strategic Compensation Compensation Compensation Management

AUTHORS:
P.Suhba Rao Joseph J Martocchio Milkovich & New Man Dr. Kanchan Bhatia

WEB SITES VISITED:

www.google.com www.humanresources.about.com www.citehr.com www.scribd.com www.biological.e.com

CHAPTER- 8

ADDENDUM

Addendum A Questionnaire
I, Daniel Chowdary Duddukuri, Management student from Dr. Br. Ambedkar Insitute of Management & Technology, am conducting a survey on Compensation Management System as a part of my project work. I request you to answer the following questions and choose a degree of acceptance from the options provided. Your response and personal details will be kept entirely confidential Department : Designation : Age : Questionnaire for Compensation Management:
1. How long have you being associated with bilogical E. Ltd? (a) 0 - 1 year (b) 2 - 3 years (c) 4 - 5 years (d) above 5 years

2. Are you aware of the compensation system in your organization? (a) Yes (b) No

3. Are you entitled to any employee benefits or services besides salary? (a) Yes (b) No

If Yes please mention ___________________________________ 4. Does your organisation offer any rewards to motivate personnel working for better performance in your organization? (a) always (d) Never 5. Does a salary rise in the organization improves the efficiency and generate cooperation among the employees? (a) Strongly agree (b) Agree (c) Strongly disagree (d) disagree (b) Sometimes (c) At the time of more production

6. Are the increments integrated with performance evaluation? (a) always (b) some times (c) special cases (d) Not at all

7. Which of the compensation system does your organization follow? (a) company board (b) wage board (c) integrated (d) Dont know

8. Are you satisfied with current compensation system? (a) highly satisfied (b) satisfied (c) not satisfied (d) need changes

9. What are the problems you encounter with the current compensation system? (a) delay in payments (b) non - justifiable (c) delay in increments

(d) Any other ___________________________________ 10. Please identify which type of legally required benefits your organization provides? (a) Old age benefits (c) Workers compensation benefits ___________ (b) Medical / Insurance benefits (d) if any other please mention

11. Which type of modern pay system does your organization follow? (a) Incentive pay (b) Person focused pay (c) Team based pay (d) Dont know

12. What are the new trends in compensation management offers by the organization? (a) Soft loans to buy furniture, home appliances (b) Club memberships (c) Loans to buy two/four wheelers (d) Any other please mention __________________________ 13. What is the frequency of revival of the compensation? (a) Quaterly (b) Half-yearly (c) Annually (d) bi-annually

14. Which type of compensation payment system do you prefer? (a) fixed pay system (b) variable pay system (c) balanced debt method (d) all

15. What is the average working duration of an employee in the organization? (a) 8 hours in a day (b) 9 hours in a day (c) 10 hours in a day

(d) more than 10 hours in a day