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Introduction
Over the last decade there has been a worldwide movement towards the implementation of performance management in both the public and private sectors. Performance management targets planned performance along with the improvement that needs to be achieved overtime. It is important for both organizations and individuals working in them and is best viewed as the development of these individuals who are working towards the achievement of shared meaningful objectives of the organization. Performance management system is a systematic way of measuring the performance of employees, through which the organization aligns their mission, goals and objectives. It also follows an integrated and goal oriented approach to assign, assess, train, and reward employees performance. However if its not conducted properly, they can give an inaccurate result about the performance of the employees which in turn affects the overall performance of the organization. Due to this reason the appraisers also need to be trained properly so that they can ensure the maximum effectiveness of this continuous process.
Employee performance management includes planning, monitoring, developing, rating and rewarding. In effective organizations, managers and employees practice good performance management regularly by executing each key component process well. Goals are set and work is planned routinely. The progress that is made toward those goals is measured followed by giving employees the feedback. High standards are set, but it is also kept in mind that they are made achievable and the proper skills are taught through training needed to achieve them. Lastly both formal and informal rewards are given to recognize the behaviour and results that help in the accomplishment of the organizational goal. Therefore all five component processes work together while also supporting each other to achieve an effective performance management system.
The pharmaceutical industry in Bangladesh is one of the most developed sectors within Bangladesh. The two companies that we will be analysing in this report are:
- Square Pharmaceutical Ltd.
- Novartis (Bangladesh) Ltd.
Square Pharmaceutical is the local company whereas Novartis Pharmaceutical is the MNC. Square pharma is the flagship company of Square Group which has been holding a strong leadership position in the pharmaceutical industry of Bangladesh since 1985. They have been the market leader for the last 32 years. On the other hand Novartis provides healthcare solutions. The Company is a multinational group of companies specializing in research, development, manufacturing and marketing of a variety of healthcare products. Their portfolio focuses on science-based healthcare sectors that are growing rapidly while rewarding innovation and enhancing the lives of patients. The performance and appraisal management system in Square Pharmaceuticals Company is a planned system. They use different management tools for establishing their performance and appraisals management. For Novartis, they measure employee performance following three methods of performance appraisal MBO, 360 degree feedback and SMART.
Problems with PMS Application in Bangladeshi Pharmaceutical Industry
In case of performance management application in Bangladesh, there is some evidence that shows performance management concepts are not being practiced properly in all organizations yet. Performance management system is not just about ticking the right boxes on a form. The concept of performance management is neither sufficiently well understood nor appreciated in most of the organizations in our country. In most cases current practice involves an old style of performance management system being followed which is highly bureaucratic and follows an hierarchical system with inadequate management expertise. The rigid hierarchical structures that exist in most organizations is also a reason for this situation. Performance management system is likely to be seen as a threat, facing resistance, at all levels of an organization and a reason for this is the absence of high level of technical capacity and transparency. In most of the organizations, it is a confrontational, one way communication done by the management or a formal interview carried out to take disciplinary action.
The broad objective of this study is to find out the overall situation regarding the practices of the performance management processes of the two selected companies in the pharmaceutical industry in Bangladesh.
The specific objectives of this report are:
- To identify the level of practicing the performance management system in the selected companies.
- To identify whether the practice of performance management system varies across these two companies.
- To provide some suggestions which could be used as contribution regarding managerial perspective for improving the management system of these two selected companies.
Company Overview
Square
Square company was founded in 1958 where it started its journey leading to todays present state as one of the top line conglomerates in Bangladesh. It was converted into a public limited company in 1991 and listed with the stock exchange in 1995. Square Pharmaceuticals Ltd., the flagship company, has held a strong leadership position in the pharmaceutical industry of Bangladesh since 1985 and is now on its way to becoming a high performance global player. The turnover of Square pharma was Taka 45.88 Billion (US$ 540 million) with about 16.95% market share and a growth rate of approximately 8.52% from July 2017 to June 2018. Square Pharmaceuticals Limited has extended its range of services towards the highway of global market. It pioneered exports of medicines from Bangladesh in 1987 and has been exporting antibiotics and other pharmaceutical products since then. Present export market covers 42 countries. This extension in business and services has proved the credibility of Square Pharmaceuticals Limited.
Novartis
Novartis was created in 1996 as a result of the merger between Ciba-Geigy and Sandoz Laboratories, both of which are well known Swiss companies with years of experience. Novartis International AG is a multinational pharmaceutical company based in Basel, Switzerland. Novartis (Bangladesh) Limited researches, develops, manufactures, and markets pharmaceutical products. It operates as a subsidiary of Novartis AG. It is one of the largest healthcare companies in the world. Novartis produces medications for many diseases with cancer and cardiovascular medications making up the bulk of sales. Novartis is different from other major pharmaceutical companies as it also has a strong presence in the generic market with Sandoz being one of the largest generic manufacturer under a major pharmaceutical company. This investment in the generic market helps Novartis to be partially insulated from patent expiration. The Pharmaceuticals Division of Novartis is recognized worldwide for the innovative medicines provided to patients, physicians and healthcare organizations. The products are concentrated in major therapeutic areas: Cardiovascular and Metabolism, Oncology and Hematology, Neuroscience and Ophthalmics (NSO), Respiratory, Immunology and Infectious Diseases (IID).
SWOT Analysis
SWOT analysis conducts the external and internal analysis of a business. The acronym SWOT stands for strengths, weaknesses, opportunities and threats. This analysis may help to develop strategies for Square and Novartis pharmaceutical companies.
Square Pharmaceuticals Limited
SWOT Analysis of Square Pharmaceuticals
Strengths Weaknesses
- Good reputation with strong brand image
- Large customer base
- Product development capabilities
- Visible presence in the market Some product prices are quite high
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