CASE: RPG Life Science: Catching the Pulse Phase-II

Team Mighty Minnows TISS Mumbai

RPG Life Sciences

RPG Life Sciences, formerly Searle India Ltd, started in 1968 Part of Rs. 17,000 crore RPG Enterprises An integrated pharmaceutical company with global footprints It is a research based, pharmaceutical company, producing a wide range of quality, affordable medicines

250
200 150 100 50 3.19 0 2008-09 2009-10 2010-11 2011-12 CAGR 144.44 187.53 163.09 12.91 193.51

223.42

20
16

14.99

15.46

12 8 4 0

2012-13

Total Income (in Cr.)

* Source: RPG Life Sciences Annual Report

Employees & Management

Researchers, Biotechnologists, Sales people, Management professionals

Channel Partners
Research equipment manufacturers, Technology service providers, Retailers, Academicians & Universities

Customers
Patients, Drug marketing companies, Drug manufacturing companies, Govt. agencies, Doctors, etc.

RPG Life Sciences - Stakeholders

Case Context
Key Pointers
Employee engagement score has improved
Performance Management system score - one of the dimension of Employee Engagement is below expectations PMS as standalone appreciated and acceptable
73 73

EES Score

Improving but still lower than other businesses (KEC 82 %)

Much lower than Our Approach PMS Score expected level of 65 %

78

52

48 47 Recommendations
Identifying Key 2013 focus areas

2011

2012

2011

2012

2013

Scores in %

Scores in %

Inculcating Performance Consistently low score Analysing Score the possible System with STAY Stark difference in PMS survey score Management 70 reasons for the lag in scores Employee Engagement 60 when conducted separately from EES 57 and proposing solutions 60 52 50 47 50 43 Employee Engagement surveyed 40 under 3 dimensions- Strive, Say &

Stay Consistent low score on Stay dimension over the period

30 Operationalizing Employee Engagement & Performance 20 Management System 10 0 2011 2012 Scores in % 2013

Employee Engagement
Definition: Aon Hewitt defines engagement as the state of emotional and intellectual involvement that motivates employees to do their best work.

Facts* Every 4 employees out of 10 are not engaged worldwide 80 % of the employees are engaged at a typical best employer Top 3 engagement drivers: Career opportunities, Recognition, and Organization reputation

About Engagement is the primary enabler of successful execution of any business strategy. Engagement is not a short-term initiative. Engagement must be driven from the top. No one impacts the state of engagement more than the employees immediate leader.

Measuring Employee Engagement Gallups G12 feedback system Gallup has identified the factors that determine whether people are actively engaged, disengaged, or actively disengaged.

High Engagement
Consistently High Levels of Performance Natural innovation and drive for efficiency

Low Engagement
Lost Productivity
Decreasing Employee Performance

Intention building of supportive efficiency

Emotional commitment High Energy Enthusiasm

Increased Employee Turnover

Lowers customer service Increased absenteeism

* CBSR and Hewitt Associates , Engaging employees through CSR webinar, Jan 2010

Employee Engagement
Engagement Drivers Outcomes
Work Engagement
Behaviours

Is RPG LS capturing all these drivers in its EES Work Tasks Work Processes Resources Sense of Accomplishment

Physical Environment Work Life Balance

Quality of Life
Work and Workplace Variables - Expectations from work and the workplace Cognitive Engagement - Has positive beliefs about work, workplace and company Affective Engagement - Sense of pride, attachment and passion about work, workplace Company and company

Engagement Drivers

Organizational Outcome

People
Response - High energy - Self starter - Intense work involvement Employee - Shows infectious Engagement enthusiasm - Goes the extra mile Better in-Role & Extra-Role Performance - Meets and exceeds Performance and Role Expectations - Inspire Others

- Sales Senior Leadership - Customer Manager satisfaction Co-workers - Productivity - Revenue Customers - Profitability

Higher/ Better

Is PMS at RPG LS in sync with its Employee Individual practices Variables Engagement
- Positive Self Esteem

Practices

Opportunities

Lower/ Fewer - Turnover - Absenteeism - Waste - Accidents

People/ HR practices Managing Performance Organizational reputation Communication

Career Opportunities Learning & Development

Engagement Behaviours

Total Rewards

Individual Outcome

Pay Benefits Recognition

* CBSR and Hewitt Associates , Engaging employees through CSR webinar, Jan 2010

Performance Management
Aligning Objectives

Organization Vision, Mission and Goals

Performance Culture
Performance Management Developing People
Rewards & Recognition

Every employee strives to give his best and wants to perform even better than he did in the previous years

Planning
Appraisal Purpose Performance Indicators Rating Process Rating Scales Feedback Mechanisms Communication Strategy Training Plan Implementation Strategy Evaluation Plan Assessment Tools & Delivery Plans

Performing

Key Determinant of Employee Engagement Designing the Performance Management process to foster Employee Engagement will lead to higher levels of performance Performance Management System: tool which helps employee to grow in their career accompanied with better benefits
*Only 3% of worldwide organizations say their overall Performance Management System is effective
*Mercer, Effective Performance Management, How do you measure up ? webcast, June 2013

Rewarding

Evaluating

Integrating Employee Engagement with Performance Management

Benefits of the engaged workforce can be reaped maximum by driving higher levels of Employee Engagement; taking meaningful and visible actions that matter most to the employees Performance Appraisal is an activity thatwhen done wellcan drive higher levels of Employee Engagement and align employees to the organizations goals Description of Activities PMS is one of the top opportunities to improve Employee Engagement Effective Performance Management leads to better engaged employees

Performance Management Activities

Setting performance and development goals

Expected Behaviour
- Jointly setting goals - Helping employees understand how their work supports the overall company strategy and direction

Managers and employees set goals collaboratively, employees become more engaged

Providing ongoing feedback and recognition

Providing ongoing feedback to improve performance is a key driver of Employee Engagement

- Providing satisfactory amount of recognition - Providing feedbacks that help improve performance

Performance Management

Managing employee development

Providing opportunities for training & support regarding career development: it fosters employee development and drive Employee Engagement

- Providing sufcient opportunities for training - Supporting career development efforts - Conducting career-planning discussions

Conducting mid year and year-end appraisals

Satisfying employees with the quality of appraisal discussions, particularly yearend appraisal discussions

- Conducting an effective Performance Appraisal discussion

Building a climate of trust and empowerment

Management style involving employees in decision making has positive effect on engagement

- Valuing ideas and opinions - Providing the resources and decision-making authority to perform effectively - Providing control over the quality of work

Analysing the Difference Proposing the solution

Evaluating PMS within EES Communication Strategy Integration of PMS with EES
Performance Agreement
Goal Setting- Stimulates feeling of engagement Psychological Contracts Integration of Performance Psychological Meaningfulness Management System with Psychological Safety Employee Engagement Psychological pillars availability

Measurement of Defining PMS Performance Management as part of Employee Engagement: Items for evaluating Performance Developing Management as a dimension Relevant and of Employee Engagement Valid Items are not properly defined or framed Performance Management Conducting while measured as Survey standalone, captured on different items than those used in Employee Engagement measurement
Analysis of PMS within EES

ImplementedPropagation Performance Management System not properly communicated to all the stakeholders Facilitating the Communicating

Training

use of the about the PMS Appraisers and Appraise system to its lacks clearand its understanding users as a about theimportance system pillar of Conducting Inadequate training Employee regular trainingresource available about Engagement about the the system upgradation of Two way and improper the system Ineffective feedback feedback system system enabling the required changes in the system

Engagement Facilitation Performance Management

System considered only as a driver of Employee Job designEmployees say in their job design Engagement rather than as employee development Coaching and Social Supportsystem development Leadership- task behaviour and support Performance Management behaviour leaders promote engagement not properly implemented Training- Engagement through as a pillar of Employee continuous development Engagement

Performance & Engagement Appraisal and Feedback

Trust and Justice during Performance Appraisals- employees trust that their efforts will be rewarded Engagement appraisals- Including engagement behaviour of employees Feedback- Positive feedback promotes socio-emotional climate in organizations

Making PMS more efficient

Ensure Metrics are clear, consistent, and appropriate Evaluation process is fair, timely, and objective Good performance is rewarded: Competitive pay and benefits Opportunities for development Recognition Job Security

The programme for introducing Performance Management should take into account the fact that one of the main reasons why it fails is that either line managers are not interested, or they dont have the skills, or both Develop a Performance Review booklet providing criteria for Appraises, Appraisers and Reviewers to evaluate and differentiate between performance level with more conviction, more objective and complete SMART criteria by which objectives can be measured

Ensure the process is seen as a business one and not as an HR process Dont expect it to work quickly. It takes a few years to embed Performance Management in the organisations ethos

Ensure that Behavioral aspects of the performance are not overlooked due to the target based evaluation approach of the PMS

Hire motivated and capable employees; Provide ongoing training and development Relational contract, Long term orientation, stretch jobs that allow for adaptation 2 way involvement of individual & managers: Synergistic Cooperation Keep the context in perspective while goal setting

Consult, Involve & Communicate Align and ensure relevance to organizational/stakeholder needs Plan and prepare carefully Keep it simple Define performance expectations Ensure clear purpose and processes Align to culture and with other HR processes Be realistic about the scale and pace of change

Donts

Dos

Just make it a form- filling, intensive exercise Link to pay Neglect communication, consultation and training Provide training Assume managers have the skills required Blindly follow others Assume that everyone wants it

Contributing Factors toward Attrition

Leadership Issues
Employees require optimal environment to stay in a job for any significant length of time, which includes an array of non-financial rewards like encouragement, recognition & healthy doses of respect

No connection As per Gallup The best workplaces give their to the big employees a sense of purpose, help them feel they picture belong and enable them to make difference No Empathy
Taking time to listen to employees

Low scores on stay dimension cannot be directly attributed to Performance Management system Impact of short comings in Performance Management system can be seen on Strive & Say also

Lack of Motivation
Absence of intrinsic motivation within employees

Key Factors identified for low score on Stay

Career Planning

Development Establishing clear career paths, setting attainable Roadblocks stretch objectives and encouraging employees to
learn as much as possible

Compensation & Benefits Organizational Distinctiveness

No Fun

Reinventing the work environments, blurring the line between work and play

* Forbes, Six Reasons Your Best Employees Quit 24th Jan 2013

Career Development
Designing Effective Career how Most Impact on Overall engagement: organization value their people, fit them into Development Plan future plans and provide growth opportunities
Setting Expectationsestablishing Stay dimension can be attributed to career Linking Compensation to Career clear progression requirements and Frameworkcan be part development for employees of, or guidelines to support job opportunities completely removed from, the movements, making sense for both organizations compensation Absence of clear career progression path strategy the employees capabilities as well as Matter of organizational philosophy the needs of theto organization leads exiting of employees

Components of Career Professional growth is critical to driving Development Plan engagement and retaining employees
Explicitly defined levels and step: job levels within and across functions should be developed in response to the organizations business needs are career paths that well

New learning & training opportunities : most desired form of recognition for engaged employees
Bring in stakeholder input- involve Showing the big picture- defines not key stakeholders, including affected just movement within or up a A mo u nt o f Devel o p ment employees, in the process function, but across the organization
Too little Just Right Too Much

Creating communicated and understood by employees is not something most companies do Function well. Even in the best-case - Specific competencies: critical scenario where managers are holding competencies should be highly specific to each function and predictive of high regular performanceperformance reviews with on the job their employee, employees often dont understand how to move either horizontally or vertically in an Assessment organization and calibration process: tools

4% 53%

5% 36%

5% 25%

5% 23%

43%

Build for the future- career framework should provide enough 72% 70% flexibility to adapt to changing 59% business needs

As humans, we are driven to grow, to learn, to become more than we are, and Progression guidelines: developing and that is especially true of top talent. communicating guidelines summarizing the

for assessing competency demonstration; implementation of review process fairly calibrating evaluations of competencies and performance so that expectations and standards are applied equitably

ENGAGED

CONTRIBUTING DISENGAGED

HOSTILE

Types of Employees
* Quantum Workplace, Employee Engagement: What Career Growth Opportunities Do Employees Want?, 10 th Oct, 2013

newly created career progressions within and across functions, addressing both performance and competency demonstration along with business needs

Career Development Model for Employees at RPGLS

Providing a rich platform for individuals to realise their full potential, augmenting skill, knowledge and attitude Preparing individuals to manage self, others and business

En-Talent

En-Leader

Ex-Pot

En-Young

Building a robust talent pipeline by evaluating readiness of employee for identified roles

EmployeeAhead
Leveraging fresh talent and start building and moulding from there on

EX - POTENTIAL
Managers to rate their direct reportees Questionnaire consisting of different parameters to measure potential To be carried out with PMS activity Mapping of scores on performance grid Managers to be trained for this task Communication to employees through workshops and presentations

Exceeds Expectations

Rating employees on performance potential grid

Meets Expectations
Assigning of roles as per the mapping on potential grid thus exploiting full potential of the employees with varied kind of talents

Career Opportunities as per ratings

Imparting training programs and conducting workshops for further improvement

Development Needed

To be integrated with PMS

Applicable from every new financial year

Assigning of roles from new financial year so as to get fresh start

Sample Performance Potential Grid

EN- TALENT

Advanced Management courses International exposure Leadership development programs Corporate University programs

Job Shadowing, Coaching, Mentoring Hands on Training Behavioural Training Job rotation, Cross Functional exposure

Development Needed

Exceeds Expectations

Meets Expectations

Rigorous training program on functional competencies Training calendars to be designed for quarterly, halfyearly and yearly period

EN- LEADER
Identifying candidate for leadership development through Ex- Pot Allocating Mentor

Operational Features
For star performers 3 years in a row Growing leaders within the organization Step 1-3: Induction Phase Step 4-6: Empowerment Phase Mentor to play crucial role in developing leadership potential Candidate to get in touch with mentor on fortnightly basis Mentor shall also review the performance after each phase

Empowering through sharing responsibilities such as Planning, Reviewing, Negotiation

Developing Priority Skills such as Self Esteem, Managing Self, Empathy, Values, Team building etc.

Full Responsibilities such as Decision making, Interpersonal skills

Leadership

Step 1: Through Ex-pot

Step 2: Assigning Mentor in next 2 Weeks

Step 3: Leadership skill training in next 6 weeks

Step 4: Shared responsibilities involving evaluation at regular intervals

Step 5: Full responsibilities, involving evaluation at regular intervals

Step 6: Leadership

EN- YOUNG Assigning Roles

Evaluation
Functional Stints
Assessment of each assignment Training programs or other interventions to bridge the skill gaps

Induction

Begins with on boarding process Opportunity to get familiarise with the group & business Functional Insights 2-3 weeks program

Functional hands on training Live projects 8 weeks in each function

Role Allocation as per assessment scores and preference of the candidate Training programs focussing on Managerial/ Functional/Busine ss trainings