Professional Documents
Culture Documents
GSK 2
GSK 2
GSK 2
GLAXOSMITHKLEIN
(GSK)
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ORGANIZATIONAL BEHAVIOR
TERM REPORT
SUBMITTED BY:
TO:
MS.SHAGUFTA RAFIF
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LETTER OF ACKNOWLEDGEMENT
Dear Reader:
It has been an honor for us to prepare a report on “GlaxoSmithKline” which was assigned to us
by Ms. Shagufta Rafif without her rich guidance such a report would not have been any easy task
to achieve.
We would like to thank Ms. Tasmia Mulji (H.R TRAINEE) of GSK for providing us valuable
information that helped us to complete this report.
We would again like to take this opportunity and express our acknowledgement distinctly to Ms.
Shagufta Rafif for directing us about the technical aspects of the report and we express sincere
gratitude to our parents for their continuous support throughout the preparation of this report.
Regards,
SHAIQ QURESHI
SAMEEA KHAN
SAAD BADAR
SAAD SHAHEEN
USAMA ABBASI
LETTER OF TRANSMITTAL
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Although the current motivational practices conducted by GSK are going well, the information
gathered from different sources shows that with some more motivational practices the company
can get the desired results more effectively and efficiently. Recommendations regarding the
implementation of some more practices which includes; piece-rate pay, skill-based pay,
employee stock option program and some other have been made.
We are grateful to the H.R EXECUTIVES of GSK for their generous cooperation with us in
answering our questions and provide us other documents because of which we were able to
complete our report.
It has been a privilege to work on this report for which we are grateful to you. Should you have
any query concerning this report, we will be happy to discuss them with you.
Yours Sincerely,
AGHA ALI KHAN
SHAIQ QURESHI
SAMEEA KHAN
SAAD BADAR
SAAD SHAHEEN
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USAMA ABBASI
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TABLE OF CONTENTS
Table of contents
1. Executive summary…………………………………………………………………………………(8-9)
2. Overview of the organization…………………………………………………………………..(10-12)
3. Motivational practices used in GSK…………………………………………………………...(12-13)
4. Topic wise analysis of motivational practices used In GSK………………………..(13-14)
5. Impact of motivation on :………………………………………………………………………...(14-17)
a. Productivity
b. Absenteeism
c. Turnover
d. Job satisfaction
6. Employee recognition programs used by GSK…………………………………………(17-23)
a. Purpose
b. Recognition approach
c. Benefits and pay
d. Shares and saving
e. Health and life, Development
f. Rewards and recognition
g. GSK spirit
h. Awards
i. Pay for performance
j. Employee stock options
7. Employee involvement programs used by GSK………………………………………..(23-28)
a) Empowering people
b) Employee participation
c) Creativity, energy and ideas
d) Commercial and GMS employees
e) Ideas engine website operated by GSK
f) Representative participation
g) Work councils
h) Board representatives
i) Quality circles
j) Employee stock ownership programs
8. Flexible benefit programs adopted by GSK………………………………………………(28-35)
a) Allowing employees it build their future
b) Designing flexible benefits
c) Employee health and well being
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d) Total reward
9. Skill based pay programs…………………………………………………………………………(35-38)
a) Skilled based pay programs to motivate employees
b) Skill based par programs at GSK
c) Skill based promotions
d) Job rotation
10. Variable pay programs……………………………………………………………………………..(38-45)
a) Components of variable pay plans
b) Piece rate pay
c) Merit based pay
d) Bonus
e) Profit sharing
f) Gain sharing
11. Relating to motivational theories………………………………………………………………(45-46)
12. Conclusion and recommendations……………………………………………………………..(46-48)
13. Sources……………………………………………………………………………………………………….(48)
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EXECUTIVE SUMMARY
The purposes of this report are (1) to analyze different motivational practices used in
GlaxoSmithKline (GSK), (2) to study the impact of motivation on different dependent variables
which include; organization’s productivity, job satisfaction, turnover and absenteeism and to
study different programs run by GSK to motivate their employee. We were instructed to study
the following programs run by GSK which includes; employee recognition, employee
involvement, variable pay, skill-based pay and flexible benefits, and (3) to give conclusions and
recommendations.
An interview was conducted by our group members with H.R executives of commercial and
global management and supply (GMS) section of GSK to gather up the relevant information. The
H.R department is responsible for establishing the policies relating to its employees at all levels
that is the top, middle and lower level management. The commercial section is responsible for
the top and middle, where as the GMS section is responsible for the lower management.
After the complete research relating to each of the given topics relating to employee motivation
mentioned above we have made a detailed analysis separately. The summary of the analysis is as
follows:
Their performance is recognized through out the year with different recognition programs and
the best of all are the bonuses. The employees of commercial section are encouraged to give
innovative ideas to the company at the idea engine website where as the GMS section has the
union of workers which communicate their ideas through their leader representing them.
The bonuses are given to the employees relating to their employees performance and those with
additional academic qualifications are preferred at the time of recruitment. Many flexible
benefits motivate the employees to achieve their individual and collective goals.
1) There should be employee stock option program for the middle level manager and gain
sharing program for the workers of lesser productive factories.
2) Over time pay with more night shifts should be regulated, especially in high demand
seasons.
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3) Skill-based pay program for technical staff should be implemented, for which there will
be a need to conduct feasibility test.
4) Quality circle programs run in foreign branches of GSK should also be run here in
Pakistan.
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GSK leads the industry in value, volume and prescription market shares. We are proud of our
consistency and stability in sales, profits and growth. Some of our key brands include
Augmentin, Panadol, Seretide, Betnovate, Zantac and Calpol in medicine and renowned
consumer healthcare brands include Horlicks, Aquafresh, Macleans and ENO.
In addition, we are also deeply involved with our communities and undertake various Corporate
Social Responsibility initiatives including working with the National Commission for Human
Development (NCHD) for whom we were one of the largest corporate donors. We consider it our
responsibility to nurture the environment we operate in and persevere to extend our support to
our community in every possible way. GSK participates in year round charitable activities which
include organizing medical camps, supporting welfare organizations and donating to/sponsoring
various developmental concerns and hospitals. Furthermore, GSK maintains strong partnerships
with non-government organizations such as Concern for Children, which is also extremely
involved in the design, implementation and replication of models for the sustainable
development of children with specific emphasis on primary healthcare and education.
On January 30, 2009, GSK acquired Bristol Myers Squibb Pakistan (Private) Limited. On March
31, 2009, it acquired from UCB S.A. On April 21, 2009, the Company acquired AZ Tika, a
wholly owned subsidiary of Astra Zeneca plc. On July 22, 2009, the Company acquired Stiefel
Laboratories, Inc. On October 30, 2009, GSK acquired Pfizer Inc.’s HIV business and combined
it with its own HIV business to form ViiV Healthcare Limited. On November 10, 2009, GSK
acquired the Algerian pharmaceutical, manufacturing and distribution group, Laboratoire
Pharmaceutique Algerien. On December 18, 2009, GSK acquired NovaMin Technology Inc. In
June 2010, the Company acquired Laboratorios Phoenix S.A.C.yF.GlaxoSmithKline plc (GSK)
completed its acquisition of Stiefel Laboratories, Inc. GSK has acquired the total share capital of
Stiefel for a cash consideration of $2.9 billion. GSK also assumed $0.4 billion of net debt. Under
the terms of the agreement, GSK may be obligated to make additional cash payments of up to
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$0.3 billion depending on the future performance of the business. The new dermatology business
unit within GSK will operate under the name Stiefel, a GSK company.
Prescription medicines
Medicines prescribed by
a healthcare professional
Consumer healthcare
Vaccines
ViiV Healthcare
Overview:
Different motivational practices are used in GSK to motivate individuals, groups and
organization as a whole. GSK has divided its employees in two parts. The first group is for
commercial level employees and the other group is for the global manufacturing and supplies
which includes the factory workers. GSK’s H.R department is responsible for setting
motivational practices and establishing different policies regarding motivation.
As per the direction from the instructor we have analyzed the motivational practices of GSK in
six different heads, which are discussed below in detail separately.
Before going into details two questions need to be answered, first is why we select this topic and
its importance. Secondly what we want to prove from this topic.
We select motivation as our topic for term report because our group found it interesting and on
daily basis motivation is necessary for every one to direct towards the achievement of goal and
targets in different walks of our life. Sine we are studying “organizational behavior” so we find it
more interesting and decide to apply what we have learn through lectures on motivation.
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Importance of motivation:
As far as organizations are concerned motivation plays a very important role to direct the
employees to work hard consistently to attain their goals which is the sole objective for every
individual, group, structure and the organization as a whole. If the organizations don’t focus on
how to motivate their employees then things won’t go in favor of it. At times some employees
who are not self –motivated improve their performance just because of the different motivational
practices.
Hypothesis
By applying our learning related to motivation on GSK we would like to prove the importance of
motivation, consequences that occur if organizations don’t give importance to this topic and after
complete collective research we would like to give conclusions and recommendations, especially
to GSK regarding different motivational practices they should apply to get the desired outcomes.
This is the first topic of our research on motivational practices used by GSK. For analysis we
have divided this topic into four sub-heads as follows:
Organization’s productivity plays a very a important role for every organization to achieve its
goals and targets and when talking about a multi-national company like GSK it’s very important
for them to maintain their productivity since they are industry giant of pharmaceutical in
PAKISTAN. To have a respectable image in front of their stakeholders its very necessary for
them to improve the productivity of GSK as a whole on daily basis and that what GSK does and
have a reputation for it in front of their stakeholders. To maintain their productivity level their
motivational practices play a very important role.
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As we have said earlier that motivation plays a very important role in improving the productivity
of GSK. Definitely motivation has its impact. During the interview when we ask the question
related to this topic the interviewee explain that GSK is a learning organization and it is the duty
of GSK to help its employees to improve their skills that why they practice learning through out
the year. Employees are even allowed to continue their education so that they can learn new
things and eventually this will help in improving the productivity of the employees in particular
and the organization in general.
At GSK GMS employees are encouraged to work overtime, because they are paid double as
compared to normal days. Factory workers like to work for overtime and because of which there
are minimum wastage of material and thus profits are increased. The workers are ready to work
at night shifts because they know that this way they will earn more. More over GSK is able to
save costs through overtime as the machines are operational throughout the day and night so they
keep them running instead of restarting them the next day.
A Company like GSK has an open door policy for its employees especially for those who are
dissatisfied from their jobs; employees can have direct conversation with
Their line managers and explain them their problems without any hesitation. If they think that the
current department in which they are working is not fit for them and they will be comfortable in
any other department. So the line manager will move him to other department according to his or
her abilities. That co-operation from the manager will be motivating for the employee and its
impact will result in positive performance.
The employees at GSK are recognized verbally and non-verbally for job well done and the bi-
annual performance appraisal system is designed to give positive and negative reinforcement and
it gives leeway to its staff by issuing three warnings instead of the industry norm of two.
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The environment at GSK is designed to satisfy personal goals and organizational goals
simultaneously through a pay for performance reward system and a clear career progression
ladder.
Turnover is basically the voluntary or involuntary permanent withdrawal from the organization.
Now a day’s turnover rate is quite high in many organizations and one of the biggest reasons is
the recession that affects many of the giants of the industries and in Pakistan people also become
the victims of the recession. This is the involuntary permanent turnover, but here we will discuss
about the voluntary permanent turnover which happens when the employees are not happy with
their current jobs because of many reasons. it depends on the organization, how it will retain
their employees. Organization plan retaining strategies for their employee’s especially those who
are special for them, because it will cost a lot to lose an employee, and then hire another with
same abilities. Motivation is the major key to retain the employees.
To retain their commercial employees GSK pays competitive salaries so that employees do not
even think of leaving the organization. Apart from the salary there are many other things which
retain the employees which include good working conditions, the re-creational facilities, good
co-worker relation ship, and the reputation of GSK itself. That is why no one wants to leave the
company and the turnover rate is quite low.
As far as the workers of GMS are concerned their turnover rate is also low. They receive their
salary on the 20th of every month because of which they are able to fulfill their needs before time.
If they work overtime they receive double pay from the normal working day and if they work on
Sunday they will receive triple salary and additional one added leave. So the impact of
motivation on turnover is that there is a low turnover.
and go for work. The unavoidable ones are those and taken by the employees when they are ill
due to any reason and organizations take care of their employees because they are their assets.
But organizations benefits when absenteeism is low and for this many organizations motivates
their employees, so that they come for work every day.
The employees at GSK are provided 22days leave per year, casual or sick leaves of 2days are
allowed, after two days they are send written notice if they do not inform about their
absenteeism. There are other types of leaves which include paternity leaves of 5 days, maternity
leaves, flexible hours and half day are provided to parents attending their children.
As far as the GMS employees are concerned, there is a collective bargaining system for them.
There is a union of workers who are lead by the union leader who makes all the communication
on behalf of the workers with the top management for making any demands or negotiations
which are their legal right given by the company law of Pakistan. They are also provided 22days
leave per year and 10days casual or sick leave. The employees are allowed to cashed their both
the leaves and most of the employees work throughout the year and choose this option.
Purpose:
In creating a high-performance workplace, recognition is a motivating factor which provides
employees with increased job satisfaction and encouragement to perform their jobs more
effectively, recognition programs are excellent motivators and critical to employee retention.
when employees are recognized for their accomplishments – and done so in a manner that is
meaningful to them, they feel appreciated for their efforts and feel their work is valuable.
recognition programs acknowledge employees’ contributions to the overall objectives.
they can help to define standards of performance, and Establish guidelines for evaluation
methods of employee behavior. Happy workers, high productivity and strong customer
satisfaction characterize high Performance in workplaces. Why is it that some companies achieve
contentment while Others merely breed contempt? The answer is simple. The companies that
excel recognize How much value employees contribute to their success. Recognition programs
can play a vital role in a company’s growth. They do this by Creating a positive work
environment, reinforcing desired behaviors, motivating Performance and supporting the mission
and values of the company. When done Correctly, not only can recognition programs
differentiate your company from the Competition, it can also impact recruitment and retention.
There are a few basic Guidelines that must be followed, in that programs must: be targeted to the
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objectives of The company, be able to be measured and tracked to determine success, and be able
to Appropriately recognize the employees by providing awards that employees will value
Recognition Approaches:
Either an informal or formal approach may be used to recognize individuals or teams who have
Made significant contributions toward the university’s goals, priorities, and successful
Operations.
Informal Recognition:
An informal approach provides recognition at any time, typically by the employee’s Supervisor.
Examples include on-the-spot awards to recognize teamwork, project Completion, a new or
modified work practice, exemplary effort, employee appreciation,
Formal Recognition:
Departments or divisions may want to plan a more formal approach to acknowledge Employee
accomplishments. Examples include awards for attendance, safety, and customer Service,
productivity, honoring separating employees, outstanding achievements.
Total reward is how GSK rewards its employees for their contribution to its success. But it's
more than just a salary - it rewards high performance, invests in development, partners with
employees to save for the future, and supports employees’ health and wellbeing:
● Pay- salary, bonus/sales incentives and recognition awards
● Shares & Savings - share plans, savings plans, pension plan
● Health & Life - Healthcare Plan, Health MOT, Holidays, Employee Assistance
Program, Tax-free: Plans, Discounts
● Development - Performance and Development Plan
Pay:
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Offering competitive pay that rewards performance is critical to our long-term success. Our pay
programs are designed to give you the opportunity to earn good rewards for good performance
and superior rewards for superior performance.
Key features:
Key features:
GSK's mission is to help people 'do more, feel better and live longer', and this approach is
extended to GSK employees. Health & Life plans are designed to make it easier for you to
balance your work and personal life and to care for yourself and your family – whatever your
circumstances.
Key features:
● Healthcare: designed to give you and your family access to prompt medical
treatment when and where you need it
● Employee Assistance Program: designed to offer a helping hand when it comes
to organizing and dealing with the pressures of work and family life
● Tax-free: bikes, childcare, health assessment and holiday: a range of salary
sacrifice plans designed to save you money in exchange for benefits
● Car Allowance: if eligible, a monthly car allowance which you can use to
purchase a car through the scheme or take as cash – the choice is yours
● Discounts: a range of discounted products and services designed to support your
health, wealth and well-being
● Holidays: you are entitled to 26 paid personal holiday days each year (increasing
to 27 days after five years service and 28 days after 10 years service) plus eight
paid public holidays and the opportunity to sacrifice salary to buy five more
additional days. If you join during the year (January to December) your
entitlement will be prorated
Development:
Be the best that you can be. At GSK, your Performance and Development Plan helps you
understand what you need to do to contribute to GSK's success, how you need to perform and
how to develop your career at GSK.
Key features:
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PDP: helps you identify what you need to do and the behaviors you need
to demonstrate to achieve success as well as the areas you need to develop
to attain greater reward
GSKA adopts a Total Compensation and Benefits approach in the design of its salary packaging
model. We aim to provide:
● Optimum flexibility.
● Choice; and
● Targeted incentive programs to provide us with the best opportunity to attract and
retaining world class employees.
Bonus Plans are an integral component of the GlaxoSmithKline Total Compensation and benefits
philosophy. A Long Term Incentive Scheme is offered to Senior Managers.
Employees are able to participate in the GlaxoSmithKline Employee Share Plan on reaching the
eligibility criteria.
GSK Spirit:
“We undertake our quest with the enthusiasm of entrepreneurs, excited by the constant search
for innovation. We value performance achieved with integrity. We will attain success as a world
class global leader with each and every one of our people contributing with passion and an
unmatched sense of urgency.”
Outstanding achievements from our employees in any of our 12 High Performance Behaviors
underpin our continual success as individuals and collectively as an organization.
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Awards:
Employees may be recognized with monetary and/or non-monetary awards and recognition
leave. An employee may receive the maximum for each type of awardLong service Awards
this award is a mark of completing Five years at GSK and is subsequently given for further
service as a token of recognizing the loyalty of the employees Incentives only work if they are
meaningful and if the goals set are realistic, attainable, and Measurable Recognition programs
that are evaluated subjectively are tougher to develop Because employees may not perceive them
to be fair. The key is to set goals and evaluate Employee behavior objectively, i.e., improve
safety record with a lower number of accidents,Improve attendance with fewer days missed.
These are objective criteria and can be easily Understood by participants
Performance appraisal:
A bi-annual performance evaluation of the staff is conducted at GSK Pakistan and the individual
will be given a final rating as Outstanding, successful, partial or low and employees are
rewarded accordingly.Verbal and non verbal recognition thank you e-mails acknowledging a job
well done and verbal praise , a pat on the back and appreciating good work of an employee in
front of the colleagues are widely used across the organizations boundaries.Bravo and
empowerment cards are also given to employees for an exceptional job which carry some perks
which includes shopping discounts, Lunch or Dinner coupons to BBQ tonight etc. These rewards
are not in the form of cash and therefore for lower order employees it gives them a sense of pride
to dine at a place which they cannot easily afford and hence it increases organizational
ownership.
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The primary source of motivation at GSK is that pay is directly linked to performance and a
good performance evaluation will lead to high payback.Performance related bonuses are
common at GSK and this is only achieved if the overall organization has increased its
productivity. Even the temporary workers get a certain percentage of bonuses.Salaries are also
increased annually according to the performance evaluation. This not only keeps the talented
workforce as their salaries are already higher than the industry average and the cumulative
increment encourages them to stay at the organization and hence very low turnover.
Empowering people:
The single greatest source of competitive advantage of any organization is its people. Employees
can share ideas with their immediate superiors without any constraint. One of
GlaxoSmithKline’s ambitions is to empower people and be the place where great people apply
their energy and passion to make a difference in the world, their skills and intellect are key
components in the successful implementation of GSK’s strategy. The work environment supports
an empowered and resilient and autonomous workforce, in which the group values and draws on
the diverse knowledge, perspective and styles of global community.
Participation management:
Employee participation is a narrow term which is a part of a much broader area that is employee
involvement. At GSK the importance of employee involvement is greatly recognized. Getting
employees' ideas and getting their involvement is critical in our rapidly changing world. If the
company is going to be competitive, it's mandatory to involve not just hands, but the ideas from
everyone in your organization.GSK is one of those organizations which takes good care that the
tasks employees are involved in are relevant to their interest and personal needs so that they can
be properly motivated.
morale. Involvement programs help capture the creativity, energy, and ideas many people have.
They also allow departments and individuals to work cross-functionally, and create an
environment of learning and constant renewal.
They improve work methods and processes continually, reduce the costs of doing business,
improve safety, and reduce accidents. Exchanging ideas always improves communication and
the knowledge that top management is open and willing to act on the ideas improves trust.
Representative participation:
In various organizations workers are represented by various groups formed by the top
management. The goal of representative participation is to redistribute power with the interest of
firms employees. Thus the firms create various committees and unions who are consulted by the
top management while making decisions about the employees. Thus these groups represent the
employees and forwards their needs and demands to the top management.
Work councils:
Work councils are formed so that a group can collectively control the workers in a factory or
organization. They are also consulted when the management wants to make some decision about
the workers. This way the workers can deliberate their agenda and their needs and that group can
pursue them. This group is selected from among the workers. Although there are no formal work
councils in GSK but to fulfill the needs of the workers service meeting s are held to discuss their
problems and listen to suggestions.
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Board representatives:
Board representatives are the members who sit in the board meeting and convey the interests of
the workers and employees to the management. However there is no such board in GSK although
they accept suggestions openly from employees themselves.
In a country like Pakistan work councils and board of representatives are not that successful,
these groups are selected to look after the interests of the people but top management is the sole
decision maker in the end. Thus these groups end up being dominated by top management.
Quality circles:
Quality circle programs were initiated by Japan in 1962.a quality circle is a group of eight to ten
people selected for the purpose of monitoring the quality of production. They meet every week to
discuss the quality problems, offer solutions and take corrective action.
However it has been observed that quality circles do not have that much effect on employee
motivation.
GSK Pakistan does not have any quality circle program. But it does have a suggestion box
system. It welcomes suggestions from production line employees regarding the production and
quality. If there are any problems the workers are facing regarding their work conditions and
environment they can convey them to the line manger or submit it in the suggestion box.
wants.GSK does not follow traditional benefit programs as they do not meet all the diverse needs
of the employees.
At GlaxoSmithKline, they conduct their business with integrity and honesty, and aspire to
excellence in all they do. They know their people are vital to the success of the business,
and encourage everyone to achieve their maximum potential. They offer a competitive
benefits package and recognize the need for a healthy balance between work and family
life. Thus to best motivate employees the following benefits are provided by the company.
Flexible timings:
This benefit is especially beneficial for working women who have to take care of
their children. They can take time off work or use the benefit of flexi hours. Other
then that the employees can take their work home with them so rather then
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working in one room all day at the office they can comfortably do their work at
home.
All through the year training fairs are conducted so that the employees can
improve their skills. Various training programs are initiated so that modify their
techniques and gain knowledgeable information about the happenings at the
company.
Medical facilities:
Transport:
The best rewards for truly exceptional performance are unique items that the
recipient would not have seen before. The element of surprise adds something
special to the act of giving the award, and the employee will remember it for
years to come. More importantly, the recipient will remember the quality
work that netted the award in the first place, and continue to perform at the top
of his game. Transportation services are provided to employees depending on
the employees’ position in the organization company vehicles are provided to
them for personal use.
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Fuel:
The employees get a certain percentage of fuel on monthly basis. Fuel cards are
provided to them and the employees using company vehicles can use them to
obtain fuel which is paid for by the company.
Salary increases:
Performance based promotions and salary increments are also subjected. As
salary is the main factor of motivation for the employees it can work wonders
in achieving better productivity.
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Total reward:
GlaxoSmithKline Pakistan has introduced a total reward system. Total reward system is designed
to attract, motivate, and develop its employees. Total reward system includes:
Cash opportunities.
Lifestyle benefits.
Saving choices.
Cash opportunities:
Cash incentives have frequently been the easiest way to reward employees. With many of
the current market challenges cash and bonus programs are one of the best tools available
to lower the budget and still keep the motivation alive in the divisions. These include:
Salary.
Bonus.
Lifestyle benefits:
GSK delivers lifestyle rewards for employee recognition and customer loyalty
programs. Giving an employee a gift, particularly an unexpected gift tailored to her hobbies
and lifestyle, can be an effective way to recognize and reward outstanding performance.
These include:
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Holidays.
Corporate discounts.
Housing schemes.
Car scheme.
Saving choices:
The Employee Savings Benefit Program is an innovative, high value employee benefit
program. This program enables employees to plan, save, and improve the quality of their
retired life. The program represents a fresh opportunity for employers to add a dynamic,
differentiated, and compelling offering to their benefits portfolio. The saving plans include:
Share reward and share shave is basically gives employees to buy GlaxoSmithKline shares
efficiently. However GSK Pakistan does not follow these practices.
The GlaxoSmithKline Pakistan provides all employees with an annual Total Reward summary
which brings together all these elements so that staff can understand, plan how to use and make
the most of the GSK benefits package.
All employees are also offered short, focused sessions with a GlaxoSmithKline Pakistan Benefits
Advisor for an explanation of any element of the Total Reward benefits package.
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“A pay plan that sets pay levels on the basis of how many skills employees have or how many
jobs they can do”
Skilled based pay programs are used by many organizations in order to motivate their employees
give them economic benefits and to provide them more job satisfaction. IT Facilitates
Communication across the organizations people gain a better understanding of other diversified
jobs .where pay based on skill exist, employees are less likely to be dissatisfied. Pay based on
skills additionally helps meet the needs of ambitious employees who confront minimal
opportunities. These people can increase their earning and knowledge without a promotion in job
title. Finally, skill-based pay appears to lead to performance improvements.
Employees with additional academic accomplishments are more preferable at the time of hiring.
For instance while hiring CA’s they preferred candidates who have done article ships from
reputable organizations and bi-major MBA’s.
Job rotation:
At GSK, technical skills in finance have to be constantly updated and enhanced through CPD
(continuous professional development) and acquiring further technical skills will give the
opportunity to work in different departments and within the same department but in a different
To sum it up GSK supports its employees financially if they want to enhance and learn relevant
new skills but pay is directly associated to your performance and bottom line results and Skill
based pay is not applied in its traditional sense and employees are encouraged not only to learn
new skills and apply them to improve the organizations performance.
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One of the main triggers for ’’jumping ship” was said to be further education:
GSK is famous for rewarding its employees if they perform well during the initial training course
and they are constantly encouraged to take active part in the training fares all year round.
The employees at GSK are self motivated and the best in the country and the retention program
is strong enough not only to retain the employees. But to make them grow and according to a
survey this is a major motivator for potential recruits.
Piece-rate pay gives a payment for each item produced – it is therefore the easiest way for a
business to ensure that employees are paid for the amount of work they do. Piece-rate pay is also
sometimes referred to as a “payment by results system”.
Piece-rate pay encourages effort, but, it is argued, often at the expense of quality. From the
employee’s perspective, there are some problems. What happens if production machinery breaks
down? What happens if there is a problem with the delivery of raw materials that slows
production? These factors are outside of the employee’s control – but could potentially affect their
pay.
The answer to these problems is that piece-rate pay systems tend, in reality, to have two elements:
• An output-related element (piece-rate). Often the piece-rate element is only triggered by the
business exceeding a target output in a defined period of time
Global manufacturing and supply develops manufacturing processes for full scale volume
production of active compounds at primary manufacturing sites. Converting active compounds into
finished dosage formulation is the responsibility for the secondary manufacturing sites.
There is no specific piece rate pay plan structure followed in GSK but output related (piece plan) i.e
based on assigned targets for the production department(GMS) only is used in GSK but except that
pay scales of the employees of other departments are fixed according to their designations in
company.
Merit Based Pay is a pay rate that is increased by an employee's exceptional job performance rating
which is based on criteria set by the employer. This pay rate is usually awarded after a job
performance review for a specific time period has been conducted by the employer with the
employee.
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Allows the employer to satisfactorily reward an employee for accomplishing a task that
might not be repeated (such as implementation of new systems)
Merit pay, commonly called “pay for performance,” is perhaps the most widely
organization will thrive. The logic behind merit pay is straightforward: If pay is
performance is increased.
reward employees for achieving performance results and exhibiting behaviorsaligned with the
objectives of the organization, which often are linked directly to
provide rewards commensurate with contributions (ie., bigger pay increases for stronger
performers)
There is no such structured or fixed merit base pay plans followed in GSK instead of that they follow the
policy of increments on annual basis not on the performance of its white collar employees.
For blue collar employees there is a structured and logically administered pay for performance
program which is reviewed bi annually but besides performance related pay(prp) GSK provides long
term incentives to its employees but it is not largely dependent on the performance of an employee in
the long run.
1.outstanding
2.satisfactory
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3.partial
4.low
Bonuses:
A bonus is a kind of a pay plan that rewards employees for recent performance rather than historical
performance.
Most companies now routinely reward production employees with bonuses in thousands of dollars
when company profit improves. One advantage o merit pay is the bonuses reward employees for recent
performances rather than historical performances.
GSK offers bonuses not only to the commercial department employees who are permanent members of
the organization but they are also reward temporary staff a certain percentage of bonuses annually.
Bonuses are also offered to the employees of other departments.they also get increments on annual
bases depending on their positions in the company.
at GSK there is no profit sharing formula to reward employees a percentage of the annual profits in
the form of cash outlays or shares .
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Gain sharing:
A technique that compensates workers based on improvements in the company's productivity.
Gain sharing is a bonus incentive system designed to improve productivity through employee
involvement, with the gains from "working smarter" shared between the employer and the
employees according to a predetermined formula. It includes:
(1) A financial measurement and feedback system to monitor company performance and
distribute gains in the form of bonuses when appropriate.
Gain sharing most definitely is NOT profit sharing, although there are some similarities. Profit
sharing is generally tied to the company's overall performance, whereas gain sharing focuses on
the company's most vital performance metrics. Payments come out of increased revenue or
reduction in costs. Profit sharing typically runs on a quarterly or annual cycle, whereas gain
sharing generally cycles on a monthly basis. As a result, more frequent performance discussions
take place; with the added benefit that mediocre or poor performance is addressed sooner. While
there are both similarities and differences between profit sharing and gain sharing, this does not
mean that the two programs must be implemented exclusively of one another. Many companies
that use profit-sharing use gain sharing also and the two systems work well together.
GSK does not follow any particular theories for motivating the employees but
according to the executives interviewed Maslow’s hierarchy of needs plays an influential role in
the organizations motivational practices.GSK fulfills the physiological needs of the employees,
be it the lower middle or top management. it provides them with job security as well social
relatedness. the management at GSK has a high standard of living and earns quiet well so their
esteem needs are also fulfilled.
Since it is evident that Maslow’s hierarchy of needs theory is obsolete and we can
conclude that ERG theory has been applied thoroughly across GlaxoSmithKline’s organizational
boundaries. The Existence needs include all basic necessities like the basic pay, safety, food etc.
have been satisfied with relatedness needs not being an issue as GSK is considered a status
symbol and instills a sense of pride to belong to a group which represents the best in the
business. Growth needs and the need of intrinsic rewards in the form of being recognized for a
job well done and a clear career progression make it a very happy workplace.
After that we analyze ‘Theory X’ and ‘Theory Y’ and we found that the motivational practices at
GSK coincide with ‘Theory Y’, the reason is that the employees at GSK love to do their job, they
are creative, self-directed and seek responsibility. The best thing at GSK is that they are
empowered and they are provided empowerment cards. In the empowerment cards it is
mentioned that how much they are empowered and what is expected form them to do. Since it is
a learning organization, they are encouraged to enhance their learning and there is initial training
course (ITC) conducted.
Then there is the two factor theory also called the motivation hygiene theory which motivates
employees according to intrinsic and extrinsic factors. Intrinsic factors which motivate
employees at GSK include advancement, Recognition, Responsibility and achievement while
extrinsic include supervision pay company policies and work conditions and relations with other.
Employees have a high need of achievement they want to excel in their field and gain a
respectable position in the society. more over they want to belong to a certain class of people.
thus it can be said that McClelland’s theory of needs is applicable.
Difficult and challenging tasks are assigned to the employees and their performance evaluated
regularly. feedback is provided to them so they can modify their performance standards if
needed. thus this process leads to better productivity. thus their practices also align with goal
setting theory.
Reinforcement theory can be applied as well as the management makes use of reinforcement
practices to motivate its employees. Positive reinforcement is used by appreciating the
employees if they perform well. Bravo cards and thank you emails and verbal recognitions can
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work wonders in motivating employees. other then that recognition programs and service awards
are provided to employees who have served a long tenure at the company. as far as punishment is
concerned if the employees are not able to match the standards of the company they are provided
warnings. Although according to common practice a company can fire the employee after two
warnings but GSK does so after 3 warnings.
GSK takes good care to take care of its Employees personal needs. They design their benefit
programs so that they employees can be fully satisfied. the pay for performance program directly
affects the needs of the employees. by rewarding employees not only through cash incentives but
also clear career advancement and recognition in magazines, bravo cards leading to high
organizational commitment.
After having complete analysis and research of different motivational practices used by GSK we
have made the following conclusion:
GSK focuses on motivating them to learn throughout the year by giving them bonuses and
overtime facilities to the GMS employees. The job satisfaction of the employees is improved day
by day by providing them chance to express their feelings to their in line managers and they have
the chance to switch their departments. Absenteeism rate is also low because GSK provide their
employees; proper leaves of 22 days in a year and the workplace environment also motivate
them to come for work daily. Employees take pride to be a part of GSK; and it considers it a
platform to build a career, and they are paid competitive salaries. So they do not leave GSK but
like to continue their career. Thus the turnover rate is quite low.
The verbal and non verbal recognition programs at GSK are comprehensively designed to create
a lasting drive to perform better as the rewards are directly related to the level of performance.
The long service awards are also a token of gratitude to its staff for serving the organization
which has proven their worth by having the lowest turnover rate in the industry. The number of
absences has yet not reduced as employees are encouraged to take valid leaves instead of
encashment.
GSK encourages employee involvement in decision making. It empowers them to come forward
with innovative ideas. Employee skills and ideas are a major factor in insuring the organizations
efficiency and effectiveness.GSK captures employee ideas through various sources which
include the ideas engine website operated by them. The employees can provide their ideas and
suggestions on this site. They encourage participative management and representative
participation through various groups formed within the organization which include unions.
Service meetings are held to discuss the various problems and ideas of employees which insures
employee participation in decision making.
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The variable pay is an element essential to the success of GSK. Performance related bonuses are
rewarded on an annual basis to keep the employees happy to meet organizational goals. Goal
congruency has not only led to productivity gains but also helped increase work place
satisfaction manifold.
Skill based pay programs are a very effective motivational tool. The organizations implementing
employees help them achieve a higher pay based on their skills.GSK does not have any such
programs but it encourages employees who have additional academic qualifications for
recruitment. Moreover they support employees who are studying along with jobs and if they get
higher degrees they get rewards.
The flexible benefits motivates employee to work willingly and enthusiastically to achieve their
personal goals as well as of the organization. GSK understands the needs of their employees at
all level and try to full fill them at their best. The benefits includes; medical, transport, well-
being, training, fuel and saving choices.
Recommendations:
GSK is one of the most successful organizations in Pakistan and a leading giant in the
pharmaceutical industry. The above mentioned are the different motivational practices of GSK at
present, now we would like to make the following recommendations to GSK, which will be
useful for them to apply to get much more better results in the future
The recommendation programs are overall very ingeniously designed to provide intrinsic
and extrinsic form of motivation. GSK should also provide employee stock options to
middle level managers and gain sharing can also be implemented in the GMSs lesser
productive factories inside this region.
Piece-rate program is not exercised currently at GSK but instead of implementing this
system GSK should further used it’s over time pay system by running night shifts
especially in times high seasonal demand.
Skill based pay programs are a potential motivator for technically skilled employees to
learn relevant skills and constantly update their academic and professional skills set. A
feasibility study should be conducted before the implementation of this program
GSK does not have a proper quality circle program. Although it has a suggestion box
system in which production line employees can submit their ideas and problems related
to production. but an efficient quality circle program might produce much better results.
Sources:
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