CONTENTS

Page. No

CHAPTER – I 1-9
➢ INTRODUCTION
➢ NEED FOR THE STUDY
➢ SCOPE OF THE STUDY
➢ OBJECTIVES OF THE STUDY
➢ METHODOLOGY OF THE STUDY
➢ LIMITATIONS OF THE STUDY

CHAPTER – II 10- 23
➢ COMPANY PROFILE
CHAPTER – III 24-45
➢ INDUSTRY PROFILE
CHAPTER – Ⅳ 46-70
➢ THEORETICAL FRAME WORK

CHAPTER – V 71-85
➢ DATA ANALYSIS AND
INTERPRETATION
CHAPTER – Ⅵ 86-91

➢ FINDINGS
➢ SUGGESTIONS
➢ CONCLUSION

ANNEXURE 92-96

➢ BIBLIOGRAPHY
➢ QUESTIONNAIRE
 List of Tables

Table Table Title Page

No. No.
Table showing the performance appraisal system encourage 71
1.
people to plan their work well in advance

2. Table showing feel that low performance appraisal is due to 72

lack of skills ?
3. Table showing Performance appraisal system helps in assessing 73
competency?

4. Table showing Training / retaining is the indicator of 74

performance to what extent?
Table showing performance evaluation help the 75
5. compensation adjustment like pay increase bonus,
incentives
Table showing Promotional activities are done by the 76
6.
performance appraisal in the organisation?

Table showing in your opinion performance is directly linked 77

7. with career growth opportunity in MYLAN?

Table showing Which one do you think is the best performance 78

8. appraisal system in your organization?

Table showing According to your opinion who is the best person to 79

9. conduct performance appraisal system?

Table showing Are you satisfied with periodic review of appraisal 80

10. in VSP?

Table showing Performance appraisal helps in creating an effective 81

11. work environment and positive relationship?

Table showing . Performance appraisal system helps in 82

12. knowing strength & weaknesses of subordinates?

Table showing Do you think performance appraisal helps in 83

13. assessing the training needs of the subordinates ?

Table showing is there any performance indicator in VSP? 84

14.
Table showing do you think performance 85
15. appraisal system affects the organization
development?
 List of Graphs

Table Graph Title Page

No. No.
Graph showing. Will the performance appraisal system encourage 71
1.
people to plan their work well in advance?

2. Graph showing feel that low performance appraisal is due 72

to lack of skills ?
73
3. Graph showing Performance appraisal system helps in
assessing competency?

4. 74
Graph showing Training / retaining is the indicator of
performance to what extent?
Graph showing performance evaluation help the 75
5. compensation adjustment like pay increase bonus,
incentives
Graph showing Promotional activities are done by the 76
6.
performance appraisal in the organisation?

Graph showing in your opinion performance is directly linked 77

7. with career growth opportunity in MYLAN?
Graph showing Which one do you think is the best performance 78
8. appraisal system in your organization?

Graph showing According to your opinion who is the 79

9. best person to conduct performance appraisal system?
Graph showing Are you satisfied with periodic review of appraisal 80
10. in VSP?
Graph showing Performance appraisal helps in creating an 81
11. effective work environment and positive relationship?

Graph showing Performance appraisal system helps in 82

12. knowing strength & weaknesses of subordinates?

Graph showing Do you think performance appraisal 83

13. helps in assessing the training needs of the
subordinates ?
Graph showing is there any performance 84
14. indicator in VSP?

Graph showing do you think performance 85

15. appraisal system affects the organization
development?
 CHAPTER-1

INTRODUCTION
INTRODUCTION

HUMAN RESOURCE MANAGEMENT:

Human Resource Management (HRM) involves all management decisions and
practices that directly affect or influence the people, or Human resources, who work
for the organization. In recent years, increased attention has been devoted to how
organizations manage human resources. This increased attention comes from the
realization that an organization‘s employees enable an organization to achieve its
goals, and the management of these human resources is critical to an organization‘s
success.
In other words, Human Resource Management can be defined as a management
function that manages different phases of human resources such as planning,
recruitment, selection, placement, training and development, performance appraisal
and welfare of the employees in the organization. In any organization, the HR
department has to monitor all the undergoing activities of the employees are the
departments of the organization.
The role of Human Resource Management in organizations has been evolving
dramatically in recent times. The days of personnel department performing clerical
duties such as record keeping, paper pushing and file maintenance is over. Human
Resource is increasingly receiving attention as a critical strategic partner, assuming
stunningly different, for reaching transformational roles and responsibilities.
In any organization, the effective utilization of human resources can assist the
organizations in achieving competitive advantage. People have always been central to
organizations, but their strategic importance is growing in today‘s knowledge-based
industries. An organization‘s success increasingly depends on the knowledge, skills
and abilities and Key Success Areas (KSA‘s) of the employees particularly, as they
help to establish a set of core competencies that distinguish an organization from its
competitors. With appropriate Human Resource Policies and Practices an organization
can hire, develop and utilize best brains in the market place, realize its professed goals
and deliver results better than others.

1
OBJECTIVES OF HUMAN RESOURCE MANAGEMENT:

❖ To provide, create, utilize and motivate employee to achieve organizational

goals.

❖ To provide attractive incentives, rewards, benefits, social security measures

to ensure retention of competent employees.

❖ To maintain high morale, encourage value system and create environment of

trust, mutuality of interest.

❖ To create opportunities to motivate employees for their growth, obviously

the organization will also grow simultaneously by training and development
programs.

❖ To create sense and feeling of belongingness, team spirit and encourage

suggestion from employees.

In the present study, the survey is based on Performance Appraisal which is

one of the most important functions in Human Resource Management. In any
organization, Performance Appraisal is done depending upon the overall results of the
individual employees. This Performance Appraisal System will be planned and
managed by the Human Resource Department.

2
 NEED FOR THE STUDY
The need for the study is due to the following aspects.

➢ Providing information about performance ranks.

➢ Providing feedback information about the level of achievement and behavior
of the employees.
➢ Providing information which helps to counsel the subordinates.
➢ Providing information to diagnose deficiency in the employees, regarding
skills.
➢ Determine training and development needs and prescribing the mean for
employee growth.
➢ Providing information about correcting the placement.

3
 SCOPE OF THE STUDY

➢ The study on the topic aims to gain the feedback of the employees and suggest
some new methods for organizational development.

➢ The population was limited only to the administrative staff and not to the
workmen since the Performance Appraisal System is not implemented to the
workmen

4
 OBJECTIVES OF THE STUDY

➢ To identify the measures to be taken to improve performance.

➢ To make suggestions to improve capability of the firm.
➢ To identify the training and development needs of the employees.
➢ To find out how well an employee is performing the job and his role in the
company.
➢ To identify various problems faced by the organization in measuring the performance.

5
 METHODOLOGY

Collection of data plays a key role in research of the Training and

Development. The accuracy of the collected data is of great significance for drawing
correct and valid conclusions from the investigation.
Following are the steps in the data collection process.
❖ The type of the steps in the data collection process.
❖ Establishing the facts that are available at present and the additional facts
required.
❖ Identification of the sources from where the information can be available.
❖ Selection of the appropriate information i.e., collection method.

The project is based on primary and secondary data. The research design for
the study is as follows:
SAMPLE SIZE
STATISTICAL DATA
PRIMARY DATA
SECONDARY DATA

SAMPLE SIZE:
A sample size of 60 correspondents was chosen as it was worked out to be
optimum considering the constraints of the resources.

STATISTICAL DATA:
Stastical tools like pie charts have been used to analyse the data.

6
PRIMARY DATA:
The primary data has been collected by means of Personnel Interviews with the
help of questionnaire. The questionnaire was used keeping in view the objectives and
proposed mode of analysis based on different standards of measurement determined
for evaluation of objectives. A lot of information was collected by some observations,
also some points were noted while observations. Some respondents were not able to
understand the questionnaire properly so I explained the questionnaire and asked them
to fill it.

SECONDARY DATA:
The secondary information relating to the Mylan Laboratories Limited
collected from articles, websites, magazines etc.

7
 LIMITATIONS OF THE STUDY

→ The study is confined to the Poosapatirega MandalinVizianagaram District.

→ Since the sample size is 60, I could not cover all the employees from all
departments.

→ Most of the employees are not ready to share their opinions on the topic.

→ Some of the employees are busy in their work, they cannot respond to the
concerned topic exactly.

8
 PRESENTATION OF THE STUDY

Present study is divided into 6 chapters. The framework of the data is as

follows:
→ The First Chapter consists of Introduction of the study . It also explains the
Need, Scope, Objectives, Methodology and Limitations of the study.

→ The Second Chapter describes the Industry Profile (the Industry Profile
describes The International and National Scene of Medicines, Drugs, Guiding
principles of Mylan, etc),

→ The Third Chapter explains the Company Profile (This chapter describes the
Mission of the Mylan Laboratories, Mylan laboratories in India, Brief History
of Poosapatirega Mandal Plant etc), Organization Structure.

→ The Fourth Chapter shows the theoretical information of the Study

Performance Appraisal.

→ The Fifth Chapter consists of Data Analysis and Interpretation.

→ The Sixth Chapter provides elaborative summary, relevant findings over the
observations, suggestions and Conclusion.

9
 CHAPTER-2

COMPANY PROFILE
 COMPANY PROFILE

COMPANY PROFILE

First known as Mylan, the company starts doing business in White Sulphur
Springs, West Virginia. U.S. Army buddies, Milan "Mike" Puskar and Don Panoz flip
a coin to see who will name the business and who will be the company‘s first
president. They start distributing products to doctors and pharmacists from an old
Pontiac Bonneville.

Moves to Morgantown

Mylan move to Morgantown, West Virginia in 1965 and begin manufacturing

various over-the-counter products the next year. Success leads to a decision to switch
production to generic pharmaceuticals.

First Medicine

After receiving approval from the FDA to manufacture Mylan first medicine,
Penicillin G, Mylan broaden their product line to include other generic antibiotics as
well as analgesics, antihistamines, diuretics and tranquilizers. They market these to
large drug companies, drug store chains and mail-order drug providers, all for resale
under the customers‘ own labels.

Parke-Davis is the first major pharmaceutical company to purchase and privately label
Milan products. We also introduce a new logo—the letter ―M‖ formed by three test
tubes suggests scientific leadership and teamwork.

From Milan to Mylan

We change the spelling of Mylan to stand out at the bottom of the list of stocks
that begin with the letter "M."

10
Going Public

To fuel expansion, Mylan goes public.

By the end of the 1970s, we produce five of the 10 most prescribed generic
medicines—all five are antibiotics.

New Leadership

Mike Puskar, who had left the company, returns as president. He and chairman
and CEO Roy McKnight lead Mylan through a period of unprecedented
growth.

GPIA and Hatch-Waxman

Mike Puskar helps establish the Generic Pharmaceutical Industry Association,

GPIA, to give the industry a voice. During the next few years, GPIA lobbies
for the Hatch-Waxman Act, which passes in 1984.

First to Market

Our first branded product approval, for MAXZIDE® TABLETS (triamterene

and hydro chlorothiazide tablets, US), is a first for a generics company

Doing What’s Right, Not What’s Easy

We see irregularities in how the Food and Drug Administration (FDA) acts on
ANDAs, abbreviated new drug applications. Our investigation helps expose
fraudulent practices and corruption in the industry.

This results in reform of the FDA‘s review procedures for generic drugs and
new precautions to help ensure consumer safety.

11
Diversification

The market is becoming increasingly competitive as demand for high quality,

affordable medication rises.

o In 1993, we acquire Bertek Inc., an innovator of transdermal medicine

systems. Bertek is later renamed Mylan Technologies Inc., or MTI
o In 1996, Mylan adds unit dose packaging with the acquisition of UDL,
the largest pharmaceutical unit dose packaging company in the United
States
o At the same time, generic utilization rises to about 47%, and we
continue to capture market share while discontinuing private labeling
and growing our own ―Mylan‖ label

Another First

We become the most-dispensed line of brand and generic pharmaceuticals in

the U.S.

Growing Into the 21st century

Soon after entering our fifth decade, we post revenue of $1 billion.

Organic Growth

In the U.S., the Medicare Prescription Drug, Improvement and Modernization Act
and an aging Medicare population fuel generic utilization, which reaches 78% by
decade‘s end. We are ready, having put in place a plan to expand through organic
growth and acquisitions from a mid-size company into a global leader.

Setting New Standards in Health Care

Executive Heather Bresch testifies before the U.S. Senate‘s Special Committee
on Aging regarding issues that put billions of dollars of consumer health care savings
at risk.

12
Going Global

We become a global company by acquiring a controlling interest in Matrix

Laboratories, a supplier of active pharmaceutical ingredients (API), and by
purchasing Merck KGaA‘s generics business.

o Matrix has low-cost manufacturing facilities in India and China and

marketing capabilities in Western Europe and Africa.
o Matrix gives us unprecedented control over our supply chain and
expands our dosage forms and therapeutic categories. This includes the
addition of antiretroviral medicines for people living with HIV/AIDS
o Merck KGaA‘s generic business sells products in more than 90
countries. Combining forces provides massive global scale, expands
our product portfolio and provides entry into new commercial markets.
o With the acquisition of Merck KGaA generic business, we acquire the
rights to EpiPen®(epinephrine) Auto-Injector, the world's No. 1
dispensed epinephrine auto-injector.

Global Leadership

o Mike Puskar retires and Robert J. Coury is named chairman of the

board.
o Our first global product, LANSOPRAZOLE (lansoprazole capsule,
delayed release pellets), launches.
o Lopinavir/Ritonavir, an innovative heat-stable ARV treatment, is
created for use certain countries where refrigeration isn't readily
available.
o Robert J. Coury and former President Bill Clinton announce an
agreement for better, more affordable treatment for HIV/AIDS patients
in the developing world.
o Mylan is named to the Fortune 500 list.

13
Bioniche Pharma

Our acquisition of Bioniche Pharmaexpands our injectable portfolio with products for
use in orthopaedics, rheumatology, urology and dermatology.

First 50 Years

o Mylan celebrates 50 years of unconventional success.

o We acquire Pfizer‘s respiratory delivery platform.

Championing National Policy

Mylan, led by Heather Bresch, champions the Food and Drug Administration Safety
and Innovation Act (FDASIA), which holds both foreign and domestic manufacturers
to one global quality standard. The Act includes the Generic Drug User Fee Act
(GDUFA). Together, FDASIA and GDUFA aim to speed access to safe and effective
generic medicines while providing more visibility into how medicines and their
ingredients are manufactured and shipped around the world.

Expanding Leadership

We introduce a new and expanded management structure to help fuel our

continued growth and success. Robert J. Coury transitions into the role of executive
chairman of the board. Heather Bresch is promoted to CEO, Rajiv Malik is
promoted president.

Unprecedented Growth

o We launch commercial operations in India and team up with Pfizer in

Japan
o Mylan is selected as a supplier to India‘s National AIDS Control
Organization and is named the leading antiretroviral supplier to the
South African National Department of Health
o Nearly 40% of patients receiving treatment in developing countries are
using a Mylan product

14
New Global Canter

Operations begin at our new Robert J. Coury Global Center in Pittsburgh,

Pennsylvania, a 280,000-square-foot, five-story innovative workspace.

Ongoing Global Leadership

o Our antiretroviral portfolio launches in South Africa

o EpiPen(epinephrine) Auto-Injector celebrates 25 years as the No. 1
prescribed epinephrine auto-injector in the U.S.*
o Mylanacquires Agila Specialties creating a global inject tables leader

Better Health for a Better World

Mylan acquires Abbott's non-U.S. developed markets specialty and branded

generics business

Mylan’s Mission

At Mylan, we are committed to setting new standards in health care. Working

together around the world to provide 7 billion people access to high quality medicine,
we:

• Innovate to satisfy unmet needs

• Make reliability and service excellence a habit
• Do what‘s right, not what‘s easy
• Impact the future through passionate global leadership

Innovation

We are unconventional, visionary and bold. We ―connect the dots‖ others overlook.
We see possibilities and bring them to life. We love to challenge the status quo and
introduce new and better ways to help people everywhere enjoy a higher quality of
life. Having the courage to be a force for constructive change is in our DNA.

15
Integrity

Doing what's right is sacred to us. We behave responsibly, even when nobody's
looking. We set high standards from which we never back down. This
uncompromising ethical stance helps to keep our products pure, our workers safe and
the environment clean.

Reliability

Dependable. Reliable. Call it what you will, we've made it a habit. We strive to be
there through thick and thin, rain or shine, delivering on every promise, every time.
That's why people around the corner and across the world count on Mylan.

Service

We understand that "it's not about us"—it's about helping others—and we believe
there's no situation we can't handle. We would do whatever it takes, work ‗round the
clock, cross any river and spare no effort—all to meet someone‘s need. We wrap our
high quality products in high quality service.

Teamwork

Together, we can run faster, reach higher and achieve more than any one of us can
alone. We relish opportunities to collaborate because it‘s invigorating, enlightening
and powerful. When we join forces and plow through boundaries, we move
mountains.

Mylan India

Mylan‘s journey in India started with the acquisition of Matrix Laboratories

Limited in 2007. Matrix was renamed as Mylan Laboratories Limited in 2011. Today,
Mylan has established a formidable footprint in India in terms of its finished dosage
formulations (FDF) manufacturing capabilities, providing high quality medicine to
patients around the world.

16
A vertically integrated operating structure, through our large active pharmaceutical
ingredient (API) manufacturing capability has enabled a number of drug master
filings (DMFs) with multiple regulatory authorities across the globe.

With the acquisition of Agile Specialties in 2013, Mylan significantly expanded and
strengthened its global injectable platform by adding six additional injectable facilities
in India and providing Mylan‘s entry into new high-growth geographic markets.

Our state-of-the-art Research & Development (R&D) facilities for API & FDF are
located at Hyderabad and for Injectables at Bengaluru. These facilities have more than
1000 scientists, providing end-to-end pharmaceutical services.

Mylan India also houses a Biologics R&D Laboratory involved in complex-analytic

research primarily focusing on oncology and autoimmune disease and expects to
begin launching products from 2015.

Mylan started commercial operations in India in August 2012 with an innovative

range of ARVs used in the treatment of HIV/AIDS in adults and children, further
expanding to include women‘s care, oncology and critical care.

Our sales force of more than 400 representatives, work closely with health care
professionals to create access in India for Mylan‘s high-quality, innovative medicines
across the country.

Mylan India also houses a Biologics R&D Laboratory involved in complex-analytic

research primarily focusing on oncology and autoimmune disease and expects to
begin launching products from 2015.

Mylan India comprises of nearly 50% of Mylan‘s global workforce.

Businesses

At Mylan, our global workforce is engaged around the clock in providing the
world‘s population with access to high quality medicines. Our products range from
difficult-to-manufacture dosage forms, such as injectables and transdermal patches, to

17
HIV/AIDS antiretroviral (ARV) therapies and include generic, brand and specialty
products.

The company has exceptional research and development capabilities and is one of the
world‘s largest active pharmaceutical ingredient manufacturers.

Our world class manufacturing facilities in India play an active role in providing
patients with high quality, affordable medicines.

India Domestic Business

Since the launch of its commercial operations in India in 2012, Mylan has taken
significant strides towards setting new standards in health care for patients in India.

Manufacturing

Since its entry into India in 2007, Mylan has been expanding its operations in the
region and now has a formidable manufacturing footprint comprising of nine active
pharmaceutical ingredient (API), four finished dosage formulation (FDF) and eight
injectable manufacturing units spread across the states of Telangana, Andhra Pradesh,
Maharashtra, Madhya Pradesh, Karnataka and Tamil Nadu.

They are approved by global regulatory agencies such as the U.S. Food and Drug
Administration, Europe's Medicines and Health care Products Regulatory Agency,
Australia's Therapeutic Goods Administration and the World Health Organization.

Mylan offers one of the industry‘s broadest and highest quality active pharmaceutical
ingredient (API) portfolios and a robust product pipeline to a global customer base in
more than 100 countries. We service the requirements of top generic players in
diverse markets with a wide portfolio of more than 200 APIs spread across varied
therapeutic segments.

We support our API customers with integrated services, which include early
development, intellectual property support, drug master files submissions, query
responses and timely commercial supplies for launch. We are an ideal partner for API
customers due to:

18
 • High quality products
• Multiple manufacturing facilities with accreditations from global regulatory
bodies
• Robust product pipeline with wide therapeutic range
• Speed to market capabilities

We have diverse chemistry capabilities and over four million liters of reactor volume
in a Current Good Manufacturing Practice environment. This makes us one of the
largest, high quality API manufacturers in the world.

Mylan India manufactures and supplies generic and branded generic formulations to
various markets including North America, Europe and Asia Pacific. Our
manufacturing capabilities cover various therapeutic categories such as antiretrovirals,
cardiovascular, antibacterial, antidiabetics and central nervous system. Mylan has four
state-of-the-art formulation manufacturing facilities located near Nashik and
Aurangabad, Indore and Hyderabad.

Since 2000, Mylan has been at the forefront of addressing the HIV/AIDS pandemic
by providing high-quality and cost-effective antiretrovirals-active pharmaceutical
ingredients (ARV-APIs). Today, our manufacturing capabilities in India enable
HIV/AIDS treatment for over 40% of the world‘s population.

Our Indian operational capabilities are continuously expanding at an industry leading

pace so as to bring new innovations to patients in India and around the world.

Mylan has eight injectable manufacturing facilities in India, which provide patients
high quality products in more diverse forms than ever before. Our injectable
manufacturing facilities offer expanded focus on important therapeutic categories.
Our technological capabilities have been significantly enhanced with our industry
leading sterile manufacturing, state-of-the-art lyophilization process with the
acquisition of Agila in 2013, Mylan commands one of the largest injectables portfolio
in the industry which will benefit more people around the world. Mylan now has a
leadership role in oncology and an expanded focus on essential therapies.
Mylan develops and manufactures sterile injectable generics and specialties across
therapeutic areas:

19
 • Key domains – oncolytic and anti-infectives.
• Key formats – lyophilized and liquid vials, pre-filled syringes, ampoules, and
mini bags
• One of the largest lyophilization capacities in the world

Locations

Mylan Laboratories Limited

Plot No 564/A/22, Road No 92,
Jubilee Hills,
Hyderabad – 500034.
[Tel]: +91 – 40-3086 6666 / 6444 / 23550543
[Fax]: + 91- 40- 30866699

Commercial Operations
Subramanya Arcade, Tower D,
No. 12, 6th Floor,
Bannerghatta Road,
Bangalore – 560029.
[Tel]: 080 – 6569 1680

Agila (A Mylan Company)

Opp IIM, Bilekahalli,

Bannerghatta Road,

Bangalore – 560076.

R & D & RA – (API & FDF)

Plot No. 34- A, ANRICH Industrial Estate,
Bollaram, Jinnaram Mandal,
Medak – 502325.
[Tel]: + 91 – 40 –3049200 / 8458 – 279301
[Fax]: + 91 – 8458 – 279305

20
Clinical Research Centre
Saradhi Chambers, A – 4, Rukminipuri,
Near Poulomi Hospital, Main Road,
Dr. A.S. Rao Nagar, Hyderabad – 500062.
[Tel]: + 91 – 40 – 30492900, 2922
[Fax]: + 91– 40 – 27138562

Biologicals (R &D )
Mylan Pharmaceuticals Pvt. Ltd.2nd Floor,
Building – 450, Alexandria Knowledge Park,
Genome Valley, Shameerpet, Thurkapally,
R.R. Dist.,Hyderabad – 500078.
[Tel]: 040 – 30495100

Unit-1 ( API Manufacturing)

Survey No. 10, Gaddapotharam Village,
KazipallyIndl. Area, Jinnaram Mandal,
Medak – 502319.
[Tel]: + 91 – 40 – 3049 1373, 8458 – 277248
[Fax]: + 91 – 8458 – 277211

Unit – 2 Astrix (API Manufacturing)

Survey No. 10 & 42, Gaddapotharam Village,

KazipallyIndl. Area,

Jinnaram Mandal,

Medak – 502319.
[Tel]: + 91 – 40 – 3049 3333

Unit – 3 (API Manufacturing)

Plot No. 36, 38 to 40 & 49 to 51, Phase – IV,
IDA Jeedimetla,
Hyderabad – 500055.
[Tel]: + 91 – 40 – 30493800 / 23097777
[Fax]: + 91 – 40 – 23098572

21
Unit – 4 (API Manufacturing)
16/B/1&2, S.V. Co-op, Industrial Estate
Phase 1, IDA Jeedimetla,
Hyderabad – 500055.
[Tel]: + 91 – 40 – 23095576
[Fax]: + 91 – 40 – 23098572

Unit -5 (API Manufacturing)

Plot No. 14, 99 &100, Chemical Zone,
Patancheru Mandal, Medak – 502307.
[Tel]: + 91 – 40 – 30497901 / 8455 – 226962 / 226020
[Fax]: + 91 – 8455 – 226481

Unit -6 (API Manufacturing)

G. Chodavaram Village,
Poosapatirega Mandal,
Vizianagaram – 535204.
[Tel]: + 91 – 8922 – 258001 / 02 / 03 / 07 / 08
[Fax]: + 91 – 8922 – 258004

Unit -7 (API Manufacturing)

Plot No. 5, Road No.12,Jawahar Lal Nehru
PharmaCity,Tadi Village, Parawada,
Visakhapatnam – 531021.
[Tel]: + 91 – 8924 – 236025
[Fax]: + 91 – 8924 – 236024

Injectables – 2
Sy. No. 47 1A, 1B1, 1B2 & 48 MukteswarapuramVillage,Jaggaiahpet Mandal,
Krishna District, Andhra Pradesh.

22
HIV Care Products

Mylan‘s HIV Care has comprehensive portfolio of antiretroviral (ARV) products for
the treatment of HIV/AIDS. We believe that Mylan can set a new standard in the
treatment of HIV/AIDS in India by providing health care providers and those living
with the disease access to high quality, affordable medicines.

Women's Care Products

Mylan‘s Women‘s Care focuses on therapies such as Hormone Replacement

Therapy (HRT), infertility, maintenance of early pregnancy, in In-Vitro Fertilization
(IVF) or patients with history of miscarriages, pre- and post-natal nutrition.

Infertility Care Products

Mylan‘s high-quality product portfolio in the Infertility Care segment will help
strengthen the capabilities of health care providers in this area. The comprehensive
range of products includes highly purified forms of Follicle Stimulating Hormone,
Human Menopausal Gonadotropins, and Human Chorionic Gonadotropins.

Onco Care Products

Mylan‘sOnco Care aims at providing holistic cancer care and follows one global
quality standard across its facilities. Our portfolio of cancer-related cytotoxic.

Our mission is to provide cancer patients access to our strong portfolio of high-quality
medicines available at affordable prices for treating common types of cancers.

Critical Care Products

Mylan‘s Critical Care division caters to the need of seriously ill patients in
Intensive Care Units (ICUs), offering anti-fungal, antibiotic and anticoagulant
therapies which adhere to one global quality standard of Mylan.

The product range offered by Mylan in India is manufactured at globally accredited

sites, which are subjected to frequent audit and inspection by multiple authorities.

23
 CHAPTER-3

INDUSTRY PROFILE
 INDUSTRY PROFILE

The pharmaceutical industry develops, produces, and markets drugs or

pharmaceuticals licensed for use as medications. Pharmaceutical companies are
allowed to deal in generic or brand medications and medical devices. They are subject
to a variety of laws and regulations regarding the patenting, testing and ensuring
safety and efficacy and marketing of drugs.

History

Mid-1800s – 1945: From botanicals to the first synthetic drugs

The modern pharmaceutical industry traces its roots to two sources. The first of these
are local apothecaries that expanded from their traditional role distributing botanical
drugs such as morphine and quinine to wholesale manufacture in the mid-1800s.
Multinational corporations including Merck, Hoffman-La Roche, Burroughs-
Welcome (now part of Glaxo Smith Kline), Abbott Laboratories, Eli Lilly and Upjohn
(now part of Pfizer) began their histories as local apothecary shops in the mid-1800s.

By the late 1880s, German dye manufacturers had perfected the purification of
individual organic compounds from coal tar and other mineral sources and had also
established rudimentary methods in organic chemical synthesis. The development of
synthetic chemical methods allowed scientists to systematically vary the structure of
chemical substances, and growth in the emerging science of pharmacology expanded
their ability to evaluate the biological effects of these structural changes.

By the 1890s the profound effect of adrenal extracts on many different tissue types
had been discovered, setting off a search both for the mechanism of chemical
signalling and efforts to exploit these observations for the development of new drugs.

The blood pressure raising andvasoconstricture effects of adrenal extracts were of

particular interest to surgeons as haemostatic agents and as treatment for shock, and a
number of companies developed products based on adrenal extracts containing
varying purities of the active substance.

24
In 1897 John Abel of Johns Hopkins University identified the active principle as
epinephrine, which he isolated in an impure state as the sulphate salt. Industrial
chemist TakamineJokichilater developed a method for obtaining epinephrine in a pure
state, and licensed the technology to Parke Davis.

Parke Davis marketed epinephrine under the trade name Adrenalin. Injected
epinephrine proved to be especially efficacious for the acute treatment of asthma
attacks, and an inhaled version was sold in the United States until 2011 (Primatene
Mist). By 1929 epinephrine had been formulated into an inhaler for use in the
treatment of nasal congestion.

While highly effective, the requirement for injection limited the use of nor
epinephrine and orally active derivatives were sought. A structurally similar
compound, ephedrine, was identified by Japanese chemists in the Ma Huang plant and
marketed by Eli Lilly as an oral treatment for asthma. Following the work of Henry
Dale and George Barger at Burroughs-Welcome, academic chemist Gordon Ales
synthesized amphetamine in and tested in asthma patients in 1929.

The drug proved to have only modest anti-asthma effects, but produced sensations of
exhilaration and palpitations. Amphetamine was developed by Smith, Kline and
French as a nasal decongestant under the trade name Benzedrine Inhaler.
Amphetamine was eventually developed for the treatment of narcolepsy, post-
encephalitic parkinsonism, and mood elevation in depression and other psychiatric
indications. It receives approval as a New and Nonofficial Remedy from the
American Medical Association for these uses in 1937 and remained in common use
for depression until the development of tricycle antidepressants in the 1960s.

25
Discovery and development of the barbiturates

Diethyl barbituric acid was the first marketed barbiturate. It was sold by Bayer under
the trade name Vernal.

In 1903 Hermann Emil Fischer and Joseph von Mering disclosed their discovery that
diethyl barbituric acid, formed from the reaction of diethyl malonic acid, phosphorus
oxychloride and urea, induces sleep in dogs. The discovery was patented and licensed
to Bayer pharmaceuticals, which marketed the compound under the trade name
Vernal as a sleep aid beginning in 1904.

Systematic investigations of the effect of structural changes on potency and duration

of action led to the discovery of Phenobarbital at Bayer in 1911 and the discovery of
its potent anti-epileptic activity in 1912. Phenobarbital was among the most widely
used drugs for the treatment of epilepsy through the 1970s, and as of 2014, remains
on the World Health Organizations list of essential medications.

The 1950s and 1960s saw increased awareness of the addictive properties and abuse
potential of barbiturates and amphetamines and led to increasing restrictions on their
use and growing government oversight of prescribers. The major use of these drugs
today is restricted to the use of amphetamine for the treatment of attention deficit
disorder and Phenobarbital for epilepsy.

Insulin

A series of experiments performed from the late 1800s to the early 1900s revealed
that diabetes is caused by the absence of a substance normally produced by the
pancreas. In 1869, Oskar Murkowski and Joseph von Mering found that diabetes
could be induced in dogs by surgical removal of the pancreas.

In 1921, Canadian professors Frederick Bating and his student Charles Best repeated
this study, and found that injections of pancreatic extract reversed the symptoms
produced by pancreas removal. The extract was demonstrated to work in people soon
thereafter, but development of insulin therapy as a routine medical procedure was
delayed by difficulties in producing the material in sufficient quantity and with
reproducible purity.

26
The researchers sought assistance from industrial collaborators at Eli Lilly and Co.
based on the company's experience with large scale purification of biological
materials.

Chemist George Walden of Eli Lilly and Company found that careful adjustment of
the pH of the extract allowed a relatively pure grade of insulin to be produced.

Under pressure from Toronto University and a potential patent challenge by

academic scientists who had independently developed a similar purification method,
an agreement was reached for non-exclusive production of insulin by multiple
companies. Prior to the discovery and widespread availability of insulin therapy the
life expectancy of diabetics was only a few months.

Early anti-infective research: Salvarsan, Prontosil, Penicillin and

vaccines

The development of drugs for the treatment of infectious diseases was a major focus
of early research and development efforts; in 1900 pneumonia, tuberculosis, and
diarrhoea were the three leading causes of death in the United States and mortality in
the first year of life exceeded 10%.

In 1911, the first synthetic anti-infective drug, was developed by Paul Ehrlich and
chemist Alfred Bernheim of the Institute of Experimental Therapy in Berlin. The drug
was given the commercial name Salvarsan.

Ehrlich, noting both the general toxicity of arsenic and the selective absorption of
certain dyes by bacteria, hypothesized that an arsenic-containing dye with similar
selective absorption properties could be used to treat bacterial infections.
Arsphenamine was prepared as part of a campaign to synthesize a series of such
compounds, and found to exhibit partially selective toxicity.

Arsphenamine proved to be the first effective treatment for syphilis, a disease which
prior to that time was incurable and led inexorably to severe skin ulceration,
neurological damage, and death.

27
Ehrlich‘s approach of systematically varying the chemical structure of synthetic
compounds and measuring the effects of these changes on biological activity was
pursued broadly by industrial scientists, including Bayer scientists Josef Klarer, Fritz
Mietzsch, and Gerhard Domagk.

This work, also based in the testing of compounds available from the German dye
industry, led to the discover of Prontosil, the first representative of the sulphonamide
class of antibiotics. Compared to arsphenamine, the sulphonamides had a broader
spectrum of activity and were far less toxic, rendering them useful for infections
caused by pathogens such as streptococci.

In 1939, Domagk received the Nobel Prize in Medicine for this discovery.
Nonetheless, the dramatic decrease in deaths from infectious diseases that occurred
prior to World War II was primarily the result of improved public health measures
such as clean water and less crowded housing, and that the impact of anti-infective
drugs and vaccines was significant mainly after World War II.

In 1928, Alexander Fleming discovered the antibacterial effects of penicillin, but its
exploitation for the treatment of human disease awaited the development of methods
for its large scale production and purification. These were developed by a U.S. and
British government-led consortium of pharmaceutical companies during the Second
World War.

Early progress toward the development of vaccines occurred throughout this period,
primarily in the form of academic and government funded basic research directed
toward the identification of the pathogens responsible for common communicable
diseases. In 1885 Louis Pasteur and Pierre Paul Émile Roux created the first rabies
vaccine.

The first diphtheria vaccines were produced in 1914 from a mixture of diphtheria
toxin and antitoxin (produced from the serum of an inoculated animal), but the safety
of the inoculation was marginal and it was not widely used.

The United States recorded 206,000 cases of diphtheria in 1921 resulting in 15,520
deaths. In 1923 parallel efforts by Gaston Ramon at the Pasteur Institute and

28
Alexander Glenny at the Welcome Research Laboratories (later part of
GlaxoSmithKline) led to the discovery that a safer vaccine could be produced by
treating diphtheria toxin with formaldehyde.

In 1944, Maurice Hilleman of Squibb Pharmaceuticals developed the first vaccine

against Japanese encephalitis. Hilleman would later move to Merck where he would
play a key role in the development of vaccines against measles, mumps, chickenpox,
rubella, hepatitis A, hepatitis B, and meningitis

Unsafe drugs and early industry regulation

In 1937 over 100 people died after ingesting a solution of the antibacterial
sulphanilamide formulated in the toxic solvent diethylene glycol

Prior to the beginning of the 20th century drugs were generally produced by small
scale manufacturers with little regulatory control over manufacturing or claims of
safety and efficacy. To the extent that such laws did exist, enforcement was lax. In the
United States, increased regulation of vaccines and other biological drugs was spurred
by tetanus outbreaks and deaths caused by the distribution of contaminated smallpox
vaccine and diphtheria antitoxin.

The Biologics Control Act of 1902 required that federal government grant premarket
approval for every biological drug and for the process and facility producing such
drugs. This was followed in 1906 by the Pure Food and Drugs Act, which forbade the
interstate distribution of adulterated or misbranded foods and drugs.

A drug was considered misbranded if it contained alcohol, morphine, opium, cocaine,

or any of several other potentially dangerous or addictive drugs, and if its label failed
to indicate the quantity or proportion of such drugs. The government's attempts to use
the law to prosecute manufacturers for making unsupported claims of efficacy were
undercut by a Supreme Court ruling restricting the federal government's enforcement
powers to cases of incorrect specification of the drug's ingredients.

29
In 1937 over 100 people died after ingesting Elixir of Sulphanilamide manufactured
by S.E. Massengill Company of Tennessee. The product was formulated in diethylene
glycol, a highly toxic solvent that is now widely used as antifreeze. Under the laws
extant at that time, prosecution of the manufacturer was possible only under the
technicality that the product had been called an "elixir", which literally implied a
solution in ethanol.

In response to this episode, the U.S. Congress passed the Federal Food, Drug, and
Cosmetic Act of 1938, which for the first time required pre-market demonstration of
safety before a drug could be sold, and explicitly prohibited false therapeutic claims.

Development and marketing of antihypertensive drugs:

Hypertension is a risk factor for atherosclerosis, heart failure, coronary artery

disease, stroke, renal disease, and peripheral arterial disease, and is the most important
risk factor for cardiovascular morbidity and mortality, in industrialized countries.
Prior to 1940 approximately 23% of all deaths among persons over age 50 were
attributed to hypertension. Severe cases of hypertension were treated by surgery.

Early developments in the field of treating hypertension included quaternary

ammonium ion sympathetic nervous system blocking agents, but these compounds
were never widely used due to their severe side effects, because the long term health
consequences of high blood pressure ha

In 1952 researchers at Ciba discovered the first orally available vasodilator,

hydralazine. A major shortcoming of hydralazine monotherapy was that lost its
effectiveness over time (tachyphylaxis). In the mid-1950s Karl H. Beyer, James M.
Sprague, John E. Baer, and Frederick C. Novello of Merck and Co. discovered and
developed chlorothiazide, which remains the most widely used antihypertensive drug
today.

This development was associated with a substantial decline in the mortality rate
among people with hypertension. The inventors were recognized by a Public Health
Lasker Award in 1975 for ―the saving of untold thousands of lives and the alleviation
of the suffering of millions of victims of hypertension‖.

30
A 2009 Cochrane review concluded that thiazide antihypertensive drugs reduce the
risk of death (RR 0.89), stroke (RR 0.63), coronary heart disease (RR 0.84), and
cardiovascular events (RR 0.70) in people with high blood pressure.

In the ensuring years other classes of antihypertensive drug were developed and found
wide acceptance in combination therapy, including loop diureteics (Lasix/furosemide,
Hoechst Pharmaceuticals, 1963), beta blockers (ICI Pharmaceuticals, 1964) ACE
inhibitors, and angiotensin receptor blockers. ACE inhibitors reduce the risk of new
onset kidney disease [RR 0.71] and death [RR 0.84] in diabetic patients, irrespective
of whether they have hypertension.

Prior to the second world war, birth control was prohibited in many countries, and in
the United States even the discussion of contraceptive methods sometimes led to
prosecution under Comstock laws.

The history of the development of oral contraceptives is thus closely tied to the birth
control movement and the efforts of activists Margaret Sanger, Mary Dennett, and
Emma Goldman.

Based on fundamental research performed by Gregory Pincus and synthetic methods

for progesterone developed by Carl Djerassi at Syntex and by Frank Colton at G.D.
Searle & Co., the first oral contraceptive, Enovid, was developed by E.D. Searle and
Co. and approved by the FDA in 1960.

The original formulation incorporated vastly excessive doses of hormones, and caused
severe side effects. Nonetheless, by 1962, 1.2 million American women were on the
pill, and by 1965 the number has increased to 6.5 million.

The availability of a convenient form of temporary contraceptive led to dramatic

changes in social mores including expanding the range of lifestyle options available to
women, reducing the reliance of women on men for contraceptive practice,
encouraging the delay of marriage, and increasing pre-marital co-habitation.

31
Thalidomide and the Kefauver-Harris Amendments

In the U.S., a push for revisions of the FD&C Act emerged from
Congressional hearings led by Senator Estes Kefauver of Tennessee in 1959. The
hearings covered a wide range of policy issues, including advertising abuses,
questionable efficacy of drugs, and the need for greater regulation of the industry.

While momentum for new legislation temporarily flagged under extended debate, a
new tragedy became apparent that underscored the need for more comprehensive
regulation and provided the driving force for the passage of new laws.

On September 12, 1960, an American licensee, the William S. Merrell Company of

Cincinnati, submitted to FDA a new drug application for Kevadon (thalidomide), the
brand name of a sedative that had been marketed in Europe since 1956: thalidomide.
The FDA medical officer in charge of this review, Frances Kelsey, believed the data
were incomplete to support the safety of this drug.

The firm continued to pressure Kelsey and the agency to approve the application—
until November 1961, when the drug was pulled off the German market because of its
association with grave congenital abnormalities. Several thousand new-born‘s in
Europe and elsewhere suffered the teratogenic effects of thalidomide.

Though the drug was never approved in this country, the firm distributed Kevadon to
over 1,000 physicians under the guise of investigational use. Over 20,000 Americans
received thalidomide in this "study," including 624 pregnant patients, and about 17
known new-borns suffered the effects of the drug.

The thalidomide tragedy resurrected Kefauver's bill to enhance drug regulation that
had stalled in Congress, and the Kefauver-Harris Amendment became law on October
10, 1962. Manufacturers henceforth had to prove to FDA that their drugs were
effective as well as safe before they could go on the market.

FDA received authority to regulate advertising of prescription drugs and to establish

good manufacturing practices. Finally, the law required that all drugs introduced
between 1938 and 1962 had to be effective.

32
An FDA - National Academy of Sciences collaborative study showed that nearly 40
percent of these products were not effective. A similarly comprehensive study of
over-the-counter products began ten years later.

1970–1980s

Statins

In 1971, Akira Endo, a Japanese biochemist working for the pharmaceutical company
Sankyo, identified mevastatin (ML-236B), a molecule produced by the fungus
Penicilliumcitrinum, as an inhibitor of HMG-CoA reductase, a critical enzyme used
by the body to produce cholesterol.

Animal trials showed very good inhibitory effect as in clinical trials, however in a
long term toxicity study in dogs it resulted in toxic effects at higher doses and as a
result was believed to be too toxic to be given to humans. Mevastatin was never
marketed, because of its adverse effects of tumour‘s, muscle deterioration, and
sometimes death in laboratory dogs.

P. Roy Vagelos, chief scientist and later CEO of Merck & Co, was interested, and
made several trips to Japan starting in 1975. By 1978, Merck had isolated lovastatin
(mevinolin, MK803) from the fungusAspergillusterreus, first marketed in 1987 as
Mevacor.

In April 1994, the results of a Merck-sponsored study, the Scandinavian Simvastatin

Survival Study, were announced. Researchers tested simvastatin, later sold by Merck
as Zocor, on 4,444 patients with high cholesterol and heart disease. After five years,
the study concluded the patients saw a 35% reduction in their cholesterol, and their
chances of dying of a heart attack were reduced by 42%.

In 1995, Zocor and Mevacor both made Merck over US$1 billion. Endo was awarded
the 2006 Japan Prize, and the Lasker-DeBakey Clinical Medical Research Award in
2008. For his "pioneering research into a new class of molecules" for "lowering
cholesterol,"

33
Research and development

Drug discovery is the process by which potential drugs are discovered or

designed. In the past most drugs have been discovered either by isolating the active
ingredient from traditional remedies or by serendipitous discovery.

Modern biotechnology often focuses on understanding the metabolic pathways

related to a disease state or pathogen, and manipulating these pathways using
molecular biology or biochemistry. A great deal of early-stage drug discovery has
traditionally been carried out by universities and research institutions.

Drug development refers to activities undertaken after a compound is identified as a

potential drug in order to establish its suitability as a medication. Objectives of drug
development are to determine appropriate formulation and dosing, as well as to
establish safety.

Research in these areas generally includes a combination of in vitro studies, in

vivo studies, and clinical trials. The amount of capital required for late stage
development has made it a historical strength of the larger pharmaceutical companies.

Often, large multinational corporations exhibit vertical integration, participating in a

broad range of drug discovery and development, manufacturing and quality control,
marketing, sales, and distribution. Smaller organizations, on the other hand, often
focus on a specific aspect such as discovering drug candidates or developing
formulations.

Often, collaborative agreements between research organizations and large

pharmaceutical companies are formed to explore the potential of new drug substances.
More recently, multi-nationals are increasingly relying on contract research
organizations to manage drug development.

34
The cost of innovation

Drug discovery and development is very expensive; of all compounds investigated for
use in humans only a small fraction are eventually approved in most nations by
government appointed medical institutions or boards, who have to approve new drugs
before they can be marketed in those countries.

In 2010 18 NMEs (New Molecular Entities) were approved and three biologics by the
FDA, or 21 in total, which is down from 26 in 2009 and 24 in 2008. On the other
hand, there were only 18 approvals in total in 2007 and 22 back in 2006. Since 2001,
the Center for Drug Evaluation and Research has averaged 22.9 approvals a year.

This approval comes only after heavy investment in pre-clinical development and
clinical trials, as well as a commitment to ongoing safety monitoring. Drugs which
fail part-way through this process often incur large costs, while generating no revenue
in return.

If the cost of these failed drugs is taken into account, the cost of developing a
successful new drug (new chemical entity, or NCE), has been estimated at about 1.3
billion USD (not including marketing expenses).

Professors Light and Lexchin reported in 2012, however, that the rate of approval for
new drugs has been a relatively stable average rate of 15 to 25 for decades.

Industry-wide research and investment reached a record $65.3 billion in 2009. While
the cost of research in the U.S. was about $34.2 billion between 1995 and 2010,
revenues rose faster (revenues rose by $200.4 billion in that time).

A study by the consulting firm Bain & Company reported that the cost for
discovering, developing and launching (which factored in marketing and other
business expenses) a new drug (along with the prospective drugs that fail) rose over a
five-year period to nearly $1.7 billion in 2003. According to Forbes, by 2010
development costs were between $4 billion to $11 billion per drug.

Some of these estimates also take into account the opportunity cost of investing
capital many years before revenues are realized (see Time-value of money). Because

35
of the very long time needed for discovery, development, and approval of
pharmaceuticals.

Controversies

Due to repeated accusations and findings that some clinical trials conducted or funded
by pharmaceutical companies may report only positive results for the preferred
medication, the industry has been looked at much more closely by independent groups
and government agencies.

In response to specific cases in which unfavourable data from pharmaceutical

company-sponsored research was not published, the Pharmaceutical Research and
Manufacturers of America have published new guidelines urging companies to report
all findings and limit the financial involvement in drug companies of researchers. US
congress signed into law a bill which requires phase II and phase III clinical trials to
be registered by the sponsor on the clinicaltrials.gov website run by the NIH.

Drug researchers not directly employed by pharmaceutical companies often look to

companies for grants, and companies often look to researchers for studies that will
make their products look favourable. Sponsored researchers are rewarded by drug
companies, for example with support for their conference/symposium costs. Lecture
scripts and even journal articles presented by academic researchers may actually be
"ghost-written" by pharmaceutical companies.

An investigation by ProPublica found that at least 21 doctors have been paid more
than $500,000 for speeches and consulting by drugs manufacturers since 2009, with
half of the top earners working in psychiatry, and about $2 billion in total paid to
doctors for such services.

AstraZeneca, Johnson & Johnson and Eli Lilly have paid billions of dollars in federal
settlements over allegations that they paid doctors to promote drugs for unapproved
uses. Some prominent medical schools have since tightened rules on faculty
acceptance of such payments by drug companies.

36
Product approval

In the United States, new pharmaceutical products must be approved by the Food and
Drug Administration (FDA) as being both safe and effective. This process generally
involves submission of an Investigational New Drug filing with sufficient pre-clinical
data to support proceeding with human trials.

Following IND approval, three phases of progressively larger human clinical trials
may be conducted. Phase I generally studies toxicity using healthy volunteers. Phase
II can include Pharmacokinetics and Dosing in patients, and Phase III is a very large
study of efficacy in the intended patient population.

Following the successful completion of phase III testing, a New Drug Application is
submitted to the FDA. The FDA review the data and if the product is seen as having a
positive benefit-risk assessment, approval to market the product in the US is granted.

A fourth phase of post-approval surveillance is also often required due to the fact that
even the largest clinical trials cannot effectively predict the prevalence of rare side-
effects. Post marketing surveillance ensures that after marketing the safety of a drug is
monitored closely. In certain instances, its indication may need to be limited to
particular patient groups, and in others the substance is withdrawn from the market
completely.

The FDA provides information about approved drugs at the Orange Book site.

In the UK, the Medicines and Healthcare Products Regulatory Agency approves drugs
for use, though the evaluation is done by the European Medicines Agency, an agency
of the European Union based in London.

Normally an approval in the UK and other European countries comes later than one
in the USA. Then it is the National Institute for Health and Care Excellence (NICE),
for England and Wales, who decides if and how the National Health Service (NHS)
will allow (in the sense of paying for) their use. The British National Formulary is the
core guide for pharmacists and clinicians.

37
In many non-US western countries a 'fourth hurdle' of cost effectiveness analysis has
developed before new technologies can be provided. This focuses on the efficiency (in
terms of the cost per QALY) of the technologies in question rather than their efficacy.

In England and Wales NICE decides whether and in what circumstances drugs and
technologies will be made available by the NHS, whilst similar arrangements exist
with the Scottish Medicines Consortium in Scotland, and the Pharmaceutical Benefits
Advisory Committee in Australia.

A product must pass the threshold for cost-effectiveness if it is to be approved.

Treatments must represent 'value for money' and a net benefit to society.

Orphan drugs

There are special rules for certain rare diseases ("orphan diseases") involving fewer
than 200,000 patients in the United States, or larger populations in certain
circumstances.

Because medical research and development of drugs to treat such diseases is

financially disadvantageous, companies that do so are rewarded with tax reductions,
fee waivers, and market exclusivity on that drug for a limited time (seven years),
regardless of whether the drug is protected by patents.

Industry revenues

For the first time ever, in 2011, global spending on prescription drugs topped $954
billion, even as growth slowed somewhat in Europe and North America.

The United States accounts for more than a third of the global pharmaceutical market,
with $340 billion in annual sales followed by the EU and Japan.(pdf) Emerging
markets such as China, Russia, South Korea and Mexico outpaced that market,
growing a huge 81 percent. According to IMS the global pharmaceutical industry can
reach to US$1.1 trillion by 2014.

38
The top ten best-selling drugs of 2013 totalled $75.6 billion in sales, with the anti-
inflammatory drug Humira being the best-selling drug world-wide at $10.7 billion in
sales.

The second and third best selling were Enbrel and Remicade, respectively. The top
three best-selling drugs in the United States in 2013 were Abilify ($6.3 billion,)
Nexium ($6 billion) and Humira ($5.4 billion). The best-selling drug ever, Lipitor,
averaged $13 billion annually and netted $141 billion total over its lifetime before
Pfizer's patent expired in November 2011.

IMS Health publishes an analysis of trends expected in the pharmaceutical industry in

2007, including increasing profits in most sectors despite loss of some patents, and
new 'blockbuster' drugs on the horizon.

Teradata Magazine predicted that by 2007, $40 billion in U.S. sales could be lost at
the top 10 pharmaceutical companies as a result of slowdown in R&D innovation and
the expiry of patents on major products, with 19 blockbuster drugs losing patent.

As the number of patents that expire accumulates faster than the number of marketed
drugs, this amount is expected to increase even more in the near future.

Patents and generics

Depending on a number of considerations, a company may apply for and be granted a

patent for the drug, or the process of producing the drug, granting exclusivity rights
typically for about 20 years.

However, only after rigorous study and testing, which takes 10 to 15 years on
average, will governmental authorities grant permission for the company to market
and sell the drug.

Patent protection enables the owner of the patent to recover the costs of research and
development through high profit margins for the branded drug. When the patent
protection for the drug expires, a generic drug is usually developed and sold by a
competing company.

39
The development and approval of generics is less expensive, allowing them to be sold
at a lower price. Often the owner of the branded drug will introduce a generic version
before the patent expires in order to get a head start in the generic market.
Restructuring has therefore become routine, driven by the patent expiration of
products launched during the industry's "golden era" in the 1990s and companies'
failure to develop sufficient new blockbuster products to replace lost revenues.

Prescriptions

In the U.S., prescriptions have increased over the past decade to 3.4 billion annually, a
61 percent increase. Retail sales of prescription drugs jumped 250 percent from $72
billion to $250 billion, while the average price of prescriptions has more than doubled
from $30 to $68.

Marketing

Advertising is common in healthcare journals as well as through more mainstream

media routes. In some countries, notably the US, they are allowed to advertise directly
to the general public.

Pharmaceutical companies generally employ sales people (often called 'drug reps' or,
an older term, 'detail men') to market directly and personally to physicians and other
healthcare providers. In some countries, notably the US, pharmaceutical companies
also employ lobbyists to influence politicians. Marketing of prescription drugs in the
US is regulated by the federal Prescription Drug Marketing Act of 1987.

To healthcare professionals

The book BadPharma also discusses the influence of drug representatives, how
ghostwriters are employed by the drug companies to write papers for academics to
publish, how independent the academic journals really are, how the drug companies
finance doctors' continuing education, and how patients' groups are often funded by
industry.

40
Direct to consumer advertising

Since the 1980s new methods of marketing for prescription drugs to consumers have
become important. Direct-to-consumer media advertising was legalised in the FDA
Guidance for Industry on Consumer-Directed Broadcast Advertisements.

Controversy about drug marketing and lobbying

There has been increasing controversy surrounding pharmaceutical marketing and

influence. There have been accusations and findings of influence on doctors and other
health professionals through drug reps, including the constant provision of marketing
'gifts' and biased information to health professionals; highly prevalent advertising in
journals and conferences; funding independent healthcare organizations and health
promotion campaigns; lobbying physicians and politicians (more than any other
industry in the US); sponsorship of medical schools or nurse training; sponsorship of
continuing educational events, with influence on the curriculum; and hiring
physicians as paid consultants on medical advisory boards.

Some advocacy groups, such as No Free Lunch, have criticized the effect of drug
marketing to physicians because they say it biases physicians to prescribe the
marketed drugs even when others might be cheaper or better for the patient.

There have been related accusations of disease mongering (over-medicalising) to

expand the market for medications. An inaugural conference on that subject took
place in Australia in 2006. In 2009, the Government-funded National Prescribing
Service launched the "Finding Evidence – Recognising Hype" program, aimed at
educating GPs on methods for independent drug analysis.

A 2005 review by a special committee of the UK government came to all the above
conclusions in a European Union context whilst also highlighting the contributions
and needs of the industry.

Meta-analyses have shown that psychiatric studies sponsored by pharmaceutical

companies are several times more likely to report positive results, and if a drug

41
company employee is involved the effect is even larger. Influence has also extended
to the training of doctors and nurses in medical schools, which is being fought.

It has been argued that the design of the Diagnostic and Statistical Manual of Mental
Disorders and the expansion of the criteria represents an increasing medicalization of
human nature, or "disease mongering", driven by drug company influence on
psychiatry.

The potential for direct conflict of interest has been raised, partly because roughly half
the authors who selected and defined the DSM-IV psychiatric disorders had or
previously had financial relationships with the pharmaceutical industry.

In the US, starting in 2013, under the Physician Financial Transparency Reports (part
of the Sunshine Act), the Centers for Medicare & Medicaid Services has to collect
information from applicable manufacturers and group purchasing organizations in
order to report information about their financial relationships with physicians and
hospitals.

Data are made public in the Centers for Medicare & Medicaid Services website. The
expectation is that relationship between doctors and Pharmaceutical industry will
become fully transparent.

Regulatory issues

Ben Goldacre has argued that regulators – such as the Medicines and Healthcare
products Regulatory Agency (MHRA) in the UK, or the Food and Drug
Administration (FDA) in the United States – advance the interests of the drug
companies rather than the interests of the public due to revolving door exchange of
employees between the regulator and the companies and friendships develop between
regulator and company employees.

Others have argued that excessive regulation suppresses therapeutic innovation, and
that the current cost of regulator-required clinical trials prevents the full exploitation
of new genetic and biological knowledge for the treatment of human disease.

42
A 2012 report by the President's Council of Advisors on Science and Technology
made several key recommendations to reduce regulatory burdens to new drug
development, including

1) expanding the FDA's use of accelerated approval processes,

2) creating an expedited approval pathway for drugs intended for use in narrowly
defined populations, and

3) undertaking pilot projects designed to evaluate the feasibility of a new, adaptive

drug approval process.

Pharmaceutical fraud

Pharmaceutical fraud involves activities that result in false claims to insurers or

programs such as Medicare in the United States or equivalent state programs for
financial gain to a pharmaceutical company. There are several different schemes used
to defraud the health care system which are particular to the pharmaceutical industry.

These include: Good Manufacturing Practice (GMP) Violations, Off Label Marketing,
Best Price Fraud, CME Fraud, Medicaid Price Reporting, and Manufactured
Compound Drugs. Of this amount $2.5 billion was recovered through False Claims
Act cases in FY 2010.

Examples of fraud cases include the GlaxoSmithKline $3 billion settlement, Pfizer

$2.3 billion settlement and Merck & Co. $650 million settlement. Damages from
fraud can be recovered by use of the False Claims Act, most commonly under the qui
tam provisions which rewards an individual for being a "whistleblower", or relator
(law).

Every major company selling the antipsychotics — Bristol-Myers Squibb, Eli Lilly,
Pfizer, AstraZeneca and Johnson & Johnson — has either settled recent government
cases, under the False Claims Act, for hundreds of millions of dollars or is currently
under investigation for possible health care fraud. Following charges of illegal
marketing, two of the settlements set records last year for the largest criminal fines
ever imposed on corporations.

43
One involved Eli Lilly's antipsychotic Zyprexa, and the other involved Bextra. In the
Bextra case, the government also charged Pfizer with illegally marketing another
antipsychotic, Geodon; Pfizer settled that part of the claim for $301 million, without
admitting any wrongdoing.

On 2 July 2012, GlaxoSmithKline pleaded guilty to criminal charges and agreed to a

$3 billion settlement of the largest health-care fraud case in the U.S. and the largest
payment by a drug company.

The settlement is related to the company's illegal promotion of prescription drugs, its
failure to report safety data, bribing doctors, and promoting medicines for uses for
which they were not licensed.

The drugs involved were Paxil, Wellbutrin, Advair, Lamictal, and Zofran for off-
label, non-covered uses. Those and the drugs Imitrex, Lotronex, Flovent, and Valtrex
were involved in the kickback scheme.

The following is a list of the four largest settlements reached with pharmaceutical
companies from 1991 to 2012, rank ordered by the size of the total settlement.

Developing worldPatents

Patents have been criticized in the developing world, as they are thought to reduce
access to existing medicines. Reconciling patents and universal access to medicine
would require an efficient international policy of price discrimination. Moreover,
under the TRIPS agreement of the World Trade Organization, countries must allow
pharmaceutical products to be patented.

In 2001, the WTO adopted the Doha Declaration, which indicates that the TRIPS
agreement should be read with the goals of public health in mind, and allows some
methods for circumventing pharmaceutical monopolies: via compulsory licensing or
parallel imports, even before patent expiration.

In March 2001, 40 multi-national pharmaceutical companies brought litigation against

South Africa for its Medicines Act, which allowed the generic production of
antiretroviral drugs (ARVs) for treating HIV, despite the fact that these drugs were

44
on-patent. HIV was and is an epidemic in South Africa, and ARVs at the time cost
between 10,000 and 15,000 USD per patient per year.

This was unaffordable for most South African citizens, and so the South African
government committed to providing ARVs at prices closer to what people could
afford. To do so, they would need to ignore the patents on drugs and produce generics
within the country (using a compulsory license), or import them from abroad

After international protest in favour of public health rights (including the collection
of 250,000 signatures by MSF), the governments of several developed countries
(including The Netherlands, Germany, France, and later the US) backed the South
African government, and the case was dropped in April of that year.

Charitable programs

Charitable programs and drug discovery & development efforts by pharmaceutical

companies include:

• "Merck's Gift", wherein billions of river blindness drugs were donated in

Africa
• Pfizer's gift of free/discounted fluconazole and other drugs for AIDS in South
Africa
• GSK's commitment to give free albendazole tablets to the WHO for, and until,
the elimination of lymphatic filariasis worldwide.
• In 2006, Novartis committed US$755 million in corporate citizenship
initiatives around the world, particularly focusing on improved access to
medicines in the developing world through its Access to Medicine projects,
including donations of medicines to patients affected by leprosy, tuberculosis,
and malaria; Glivec patient assistance programs; and relief to support major
humanitarian organisations with emergency medical needs

45
 CHAPTER-4

THEORETICAL FRAME WORK

 PERFORMANCE APPRAISAL
Performance Appraisal is the systematic evaluation of the individual with
respect to his or her performance on the job and his or her potential for development.
Performance Appraisal is a formal, structured system of measuring and
evaluating an employee‘s job related behaviours and outcomes that discovers how and
why the employee is presently performing the job and how the employee can perform
more effectively in the future for the employee, organization and societal benefit.
In another words, performance appraisal may be defined as the assessment of
individuals performance in a systematic way, the performance of an individual should
be measured by some factors such as the quality and quantity of output i.e., being
produced by him or her, leadership abilities, his or her knowledge on the job, his or
her co-operation, judgment etc.
Appraising the performance of individuals, groups and organizations is a
common practice of all societies. While in some instances these appraisal processes
are structured and formally sanctioned, in other instances they are informal and
integral part of daily activities. In social interactions, performance is conducted in a
systematic and planned manner to achieve widespread popularity in recent years.
Thus teachers evaluate the performance of students, bankers evaluate the performance
of creditors parents evaluate the behaviour of their children, and all of us consciously
or unconsciously evaluate our own actions from time to time.
Performance Appraisal is a process of assessing, summarizing and
developing the work performance of an employee. In any organization, the employee
has the option to submit a self-appraisal which will be considered in the development
of the appraisal.
Over the years, a great deal of research has been devoted to Performance
Appraisal System. This research has looked at who should do the appraisal, what
methods of appraising are best, when and how often appraisals should be done, and
for what purposes appraisal information should be used. The conclusions from this
vast body of research are not always straightforward.

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 FEATURES OF PERFORMANCE APPRAISAL:

Some important features of performance appraisal may be captured as follows:

1. Performance Appraisal is the systematic description of an employee‘s job
relevant strengths and weaknesses.
2. The basic purpose is to find out how well the employee is performing the job and
establish a plan for improvement.
3. Appraisals are arranged periodically according to a definite plan.
4. Performance Appraisal refers to how well someone is doing the assigned job. Job
evaluation determines how much a job is worth to the organization and therefore,
what range of pay should be assigned to the job.
5. Performance Appraisal is a continuous process in every large-scale organization.

NEED FOR PERFORMANCE APPRAISAL:

There are some basic needs for performance appraisal. They are as follows:
1. Provide information about performance ranking basing on which decisions
regarding salary fixation, confirmation, promotion, transfer, demotion are taken.
2. Provide feedback information about the level of achievement and behavior of the
subordinate. This information helps to review the performance of the
subordinate, rectifying performance deficiencies and to set new standards of
work.
3. Provide information which helps to counsel the subordinate.
4. Provide information to diagnose the deficiency in employees regarding skills,
knowledge, determine the training and development needs and to prescribe the
means for employee growth.
5. Provide information for correcting placements, to enable employees to achieve
organizational objectives and preventing grievances & other indisciplinary
activities.

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PURPOSE OF PERFORMANCE APPRAISAL:
Performance Appraisal aims at attaining different purposes. They are:
1. To create and maintain a satisfactory level of performance.
2. To contribute to the employee growth and development through training, self and
management development programs.
3. To help the superiors to have a proper understanding about their subordinates.
4. To guide the job changes with the help of continuous ranking.
5. To facilitate fair and equitable compensation based on performance.
6. To facilitate for testing and validating selection tests, interview techniques
through comparing their scores with performance appraisal ranks.
7. To provide information for making decisions regarding lay-off, retrenchment,
etc.
8. To ensure organizational effectiveness through correcting employee for standard
and improved performance and suggesting the change in employee behavior.

CONTENT OF PERFORMACE APPRAISAL:

Every organization has to decide upon the content to be appraised before the
program is approved. Generally, content to be appraised is determined on the basis of
job analysis. Content to be appraised may be in the form of contribution to
organizational objectives like production, cost saving, return on capital, etc. The other
measures are based on
1. Behaviour which measure observable physical actions, movements.
2. Objectives which measure job related results like amount of deposits mobilized.
3. Traits which are measured in terms of personnel characteristics observable in
the employee‘s job activities.

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PERFORMANCE EVALUATION TO ANALYSIS AND
DEVELOPMENT:
Performance Appraisal was formerly used for the purpose of evaluating the
employee performance and controlling the performance against the set standards. This
technique was used to control the employee ignoring the human aspects. But with the
emergence of human resource concept, organizations are using this technique to
analyze the employee performance and to further improve or develop it. Thus, this
technique is now used as an enabling and motivating to improve the performance.
The performance analysis and development helps the organization to meet the
following changes:
1. Create a culture of excellence that inspires every employee.
2. Match organizational objectives to individual aspirations.
3. Equip people with the skills necessary to perform their duties.
4. Clear growth parts for especially talented individuals.
5. Provide new challenges for rejuvenate pleating careers.
6. Forge a partnership with people for managing their careers.
7. Empower employees to take decisions without fear of failing.
8. Embedded team work in all the operational processes.
9. All the voices of the workers closest to the customer to be heard.
10. Discuss the structure for free flows of information.

OBJECTIVES OF PERFORMANCE APPRAISAL:

There are some objectives of performance appraisal. They are as follows:

1. To give promotions based on their competence and performance.

2. To confirm the services of probationary employees after completing their

probationary period satisfactorily.
3. To assess the training and development needs for the employees.
4. To take decisions regarding their pay structure i.e., salaries.
5. To determine whether the programs such as selection, training and transfers
have been effective or not.
6. To improve the communication between the superior and subordinate.

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PROCESS OF PERFORMANCE APPRAISAL:
There is a systematic procedure to be followed in performance appraisal.
There are five stages in the process of performance appraisal which are as follows:
1) Establish the performance standards.
2) Communicate the standards.
3) Measure the actual performance.
4) Compare actual performance with standard performance and discuss the
appraisal.
5) Taking corrective actions.

1. ESTABLISH PERFORMANCE STANDARDS:

First of all, the performance standards should be established. That is we

already know the objectives of appraisal i.e., to effect promotions, transfers, assessing
the training needs, decisions regarding salaries, etc. The emphasis is to correct the
problems. These objectives are appropriate as long as the approach is individual. In
performance of an individual, we use systems approach.
Systems approach is nothing but improving the performance of an individual.
The opportunity factors which affect the performance of an individual are ventilation
and lightings, available resources such as human and computer assistance. These
opportunity variables determine the performance of an employee. So, by developing
these opportunity factors, according to the individual, we improve the performance of
an employee.

2. COMMUNICATE THE STANDARDS:

After analysing the objectives of performance appraisal, we should
communicate the standards to parties i.e., appraise and appraiser. Here appraise is the
employee whose performance is being evaluated and appraiser is the employee who
does the appraisal and he should prepare the job descriptions clearly in order to guide
the appraise to set his goals and targets and offer coaching to them whenever they
require and reward good results and the appraise should be very clear with what he is
doing and why he is doing it. So, for this purpose the performance standards

50
communicated to appraise. So, according to that appraises can plan and develop
themselves.

3. MEASURE ACTUAL PERFORMANCE:

After the performance standards were set and accepter, the next step is to
measure actual performance. There are some performances measures which are used
to evaluate the performance of appraise and these measures should be easy to use,
reliable and report on critical behaviour‘s that determine performance. There are four
sources of information which are used by managers or appraisers to measure the
actual performance are personal observation, statistical reports, oral reports and
written reports. The performance measures may be objective or subjective. Objective
performance measures are the indicators or job performance that can be verified by
others which includes the quality of production, degree of training needed,
absenteeism, length of services, etc. The subjective performance measures are the
ratings that are based on personal standards or opinions of doing the evaluation and
are not verifiable by others. Therefore, subjective criteria include ratings by superiors,
overall goals and socio-cultural values to the environment.

4. COMPARE ACTUAL PERFORMANCE WITH STANDARD

PERFORMANCE AND DISCUSS THE APPRAISAL:

After analyzing the actual performance of an employee, it is expected to

compare the actual performance with the standard performance of an employee. It is
not an easy task to assess an employee‘s ability and it affects the self esteems of
appraise.

5. TAKING CORRECTIVE ACTIONS:

Corrective actions are of two types. One puts out the fire immediately, while
the other destroys the root of the problem immediately. Immediate action sets things
right and get things back on track whereas the second type of action rectifies the
problem permanently.

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METHODS OF PERFORMANCE APPRAISAL:
There are some methods to be followed while rating performance
appraisal. There are two methods to evaluate the performance of the employees. They
are as follows:
• Past Oriented Methods.
• Future Oriented Methods.

These two methods are explained below clearly.

• PAST ORIENTED METHODS:

The past oriented methods were categorized into different methods which
were as follows:
RATING SCALE METHOD:
It is the simplest and most popular technique for appraising employee
performance. In this system, there are several numerical sales each representing job
related performance criteria such as dependability, attendance, attitude, co-operation
and their output i.e., nothing but result of their job. Each scale ranges from excellent
to poor. The rater checks the appropriate performance level on each criterion and then
computes the employees total numerical score. The number of points scored may be
linked to salary increases.
The advantages of this method are it is very easy to use and low cost. Nearly
any type of job can be evaluated with the rating scale by changing the job
performance criteria. Large or much number of employees can be evaluated in a short
time and the rater does not need any training to use the scale.
There are also some disadvantages in this system. They are the rater shows
partiality towards the employees regarding their co-operation, attitude, etc.

52
 a.) CHECK LIST METHOD:

In this method, a check list of statements on the traits of the employee and
their job is prepared in two columns i.e., ‗YES‘ column and ‗NO‘ column. The rater
should tick the ‗YES‘ column if the answer of the statement is positive and ‗NO‘ if
the answer is negative. After ticking each item, the rater forwards the list to the HR
department where the actual assessment of the employee takes place. The HR
department assigns certain points to each ‗YES‘ ticked and they will count the
number of yes and points were allotted to the check list.
The advantage of this method is it is very easy to evaluate. The disadvantage
of this method is there is a chance to evaluate the personality criteria instead of the
performance criteria.

b.) FORCED CHOICE METHOD:

In this method, rater is given a series of statements about an employee which

were arranged in blocks of two or more and the rater indicates which statement is
most or least descriptive of the employee. As we already know, the rater should
simply tick yes or no that describes the rate. But in this method, the rater is forced to
select statements which are readymade, that is why this method was known as forced
choice method.
The advantage of this method was that it was done in the absence of personal
bias rating. The disadvantage of this method is that if the statements were not framed
properly it damages the traits of rate.

c.) FORCED DISTRIBUTION METHOD:

In this method, the appraiser should appraise the employee according to a

rating scale. Here, we should discuss about the job performance of an employee. Here,
the five point performance scale is used for rating without any mention of the
descriptive statements. Workers are placed between the two extremes of good and bad

53
performances. For example, the employees of excellent performance were placed at
20% - good, 40% - average, 20% - below average and 10% - unsatisfactory.
The advantages of this method are it eliminates the usage of different raters
with different scales and it also eliminates the rater‘s bias. The disadvantage of this
method is they should explain the rate that why they are placed in a particular group.

d.) CRITICAL INCIDENTS METHOD:

In this method, it focuses on certain critical behavior of an employee that

makes the difference between effective and non-effective performance of the job.
Such incidents were recorded by the superiors. At the end of rating period, these
critical incidents were used in the evaluation of workers performance.
The advantages of this method are it provides a basis for conducting a
thorough discussion of an employee‘s performance and it also avoids the bias of the
employees. The disadvantages of this method are negative incidents may be more
noticeable than positive incidents, it results to very closely supervision which may not
be liked by the employee, and the recording of incidents may not be done by the
managers or supervisors due to their busy work or they forget to do it.

e.) BEHAVIORALLY ANCHORED RATING SCALES:

This method is also known as Behavioral Expectation Scale. The scale points
were determined by statements of effective or ineffective behaviors. They are
behaviorally anchored in the scales that represent a range of descriptive statements of
behavior varying from least to the most effective. A rate must indicate which behavior
on each scale best describes an employee‘s performance. BARS were developed to
provide results in which the subordinates could use to improve the performance.
Superiors should feel comfortable to give feedback to the rates. BARS help to
overcome rating errors.

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f.)FIELD REVIEW METHOD:
In this method, an outsider assesses an employee‘s performance. The outsider
reviews employee records and holds interview with the appraisee and with their
superior. This method is primarily used for taking promotional decision at the
managerial level.
The advantage of this method is since an outsider measures the performance of
an employee, there is no chance to show bias on an employee. The disadvantages of
this method are an outsider is not familiar with the conditions of an employee‘s work
environment which may affect the employee‘s work ability or motivation; an outsider
cannot observe an employee behavior or performance over a period of time and in a
variety of situations.

g.)CONFIDENTIAL RECORDS:

Confidential records are maintained mostly in government departments. It

includes 14 items they are attendance, self-expression, ability to work with others,
leadership, initiative, technical ability, ability to understand new material, ability to
reason, originality and resourcefulness, areas of work that suits the person suit,
judgment, integrity, responsibility and any defect. Twelve of these were filled on a
four point grade scale. For integrity there were special instructions from the
management. Overall rating on a fine point scale was separately given. The
confidential records contain recommendations and signature of appraiser, the head of
the department, CMD. The system was highly secretive and confidential.

f.) ESSAY METHOD:

The appraiser must describe the employee within a number of broad categories
such as the appraisers overall impression of the employees performance, the promo
ability of the employee, strengths and weaknesses of the employee, the training and
development assistance required by the employee. This method can be used
independently or combination with others. The advantages of this method are the
appraisers were confused about what to say, how much they should say in depth and
it consumes more time since the appraisers must collect the information necessary to

55
develop essay. The disadvantage of this method is the quality appraisals may be
unduly influenced by appearance rather than content.

g.) COST ACCOUNTING METHOD:

This method evaluates performance of an employee by establishing the

relationship between the cost that incurred in keeping the employee and the benefit
that organization derives from them. Therefore, the performance of an employee is
evaluated by establishing the relationship between the cost and benefit.

h.) COMPARITIVE EVALUATION APPROACH:

In this method, the performance of one worker is compared with their co-
workers. Comparative appraisals are conducted by their supervisors. The ranking of
appraisals is done from best to worst. The appraisal is useful in deciding merit-pay
increases, promotions and rewards. There are two types of methods used in this
approach.
1. Ranking Method.

2.. Paired Comparison Method

1. RANKING METHOD:

In this method, the superior ranks their subordinates in order of their merit i.e.,
starting from the best to the worst. The whole man is compared with whole man. The
position of each man or individual is tested in terms of their numerical rank. This
method seems to be very simple but it is very difficult in practice. It is very difficult
when large number of persons were rated.

2. PAIRED COMPARISON METHOD:

In this method, the appraiser compares each employee with the other
employees one at a time. For example, there are five employees named A,B,C,D and

56
E first of all the performance of A is compared with the performance of B and
decision is made about whose performance is better. Then B is compared with C,D
and E, C is compared with D and E, D is compared with E, after comparison, ranks
were allotted to each individual.
The number of comparisons can be calculated by a formula=N(N-1)/2, where
‗N‘ stands for number of employees to be compared. After the completion of
comparison, the results will be tabulated and a rank is given.

• Future Oriented Methods:

In this method, an employee performance should be assessed by setting future

goals. There are some methods to be followed in future oriented techniques. They are
given below:

a.) MANAGEMENT BY OBJECTIVES:

This concept was introduced by Peter. F. Drucker in the year 1954. The steps
involved in this method are as follows:
❖ The first step is to establish the goals to each subordinate to attain. In some
organizations, the superiors and subordinates work together to establish goals.
Here, superiors establish goals for subordinates. The goals which were
established can evaluate an employee performance.

❖ The second step is to set the performance standard for the subordinates. While
performing they know what we should do, what has been done, and what is
remained to do.

❖ The third step is to compare the actual level of goals with the goals we had set.
The evaluator should explain the goals that were met and the goals which were
exceed. It helps to determine the training needs in the organization which may
affect a subordinate.

57
 ❖ The final step is to establish new goals, new strategies for goals that were not
previously attained. At this point, the superior and subordinate involvement in
goal setting may change.

The subordinates who achieved the established goals are allowed to

participate in the goal setting process.

The disadvantage of this method is that it is not applicable for all jobs and for all
organizations i.e., the jobs with little or no flexibility such as assembly line work are
not comfortable with this job because the performance standards and objectives were
already determined.

b.) PSYCHOLOGICAL APPRAISALS:

In this method, large organizations employ full-time industrial psychologists.

These psychologists will assess an individual‘s future potential. The appraisal
normally consist in-depth interviews, psychological tests, discussions with
supervisors, and a review of other evaluations. The psychologist then writes an
evaluation of the potential and may predict future performance. The evaluation by the
psychologist may be for a specific job opening for which the person is being
considered or for the global assessment of their future potential. From these
evaluations, placement and development decisions are made to shape the person‘s
career. This method is used to evaluate the performance of young members.

c.) ASSESSMENT CENTRES:

This method is used to evaluate the performance of executive or supervisory

potential. An assessment centre is a central location where managers come together to
have their participation in job related exercises which were evaluated by trained
observers over a period of that from one to three days by observing their behavior
across a series of selected exercises i.e., in work groups, computer simulations, role
play and other similar activities which have some attributes for successful
performance as in their actual job. The rater will record the observations of rate

58
behaviors. Finally, decisions were taken regarding the performance of rate based upon
the discussion of observation.
The characteristics assessed in a typical assessment center are the
assertiveness, persuasive ability, communicating ability, planning and organizational
ability, self confidence, resistance to stress, energy level, decision-making,
administrative ability, and creative, mental alertness. The characteristics are very
difficult to some accurately over three days.
The disadvantages of this method are it is very expensive and employees who
receive a poor report from the center may react in negative and it demoralizes an
employee performance.

c.) 360 DEGREE FEEDBACK:

In this method, multiple raters were used to evaluate the performance of rate.
So, these multiple raters can be their supervisors, team members, customers and self.
Therefore, it provides a better communication between employee soft skills; inter
personal skills, customer satisfaction and team building skills.
The disadvantages are the usage of multiple raters to evaluate the performance
of employee and this technique takes long time to choose rater and in analyzing the
data.

e.) APPRAISE THE PERFORMANCE:

The performance of an employee can be appraised depending upon the quality

and quantity of output being produced by him or her, timeliness of output, presence at
work, cooperativeness, leadership abilities, attitude towards others, job knowledge,
supervision, judgment, etc. Depending upon these factors an employee performance
can be evaluated. These measures differ from job to job because the parameters used
to evaluate the performance of professor are different from a sales executive.

f.) PERFORMANCE INTERVIEW:

In this method, raters will evaluate the performance of the rates i.e., they
discuss and review the performance of rates to find out where they stand in the eyes of

59
the supervisors. Feedback is very important to improve the performance of rates. The
goals of performance interview are as follows:
1. To change the behavior of employees whose performance does not meet
organizational goals.

2. To maintain the behavior of employees who perform in an acceptable

manner.

3. To recognize superior performance behavior so that they will be continued.

There are different methods to offer feedback from rater to ratee.

➢ Tell and Sell or Directive Interview.

➢ Tell and Listen.

➢ Problem Solving.
➢ Mixed interview.

The four methods are explained below.

➢ Tell and Sell or Directive Interview:

In this method, the interviewer assess the performance of rater to

know how well they are doing sells them on the merits of their performance to
achieve the goals of an organization.
➢ Tell and Listen:

In this method, the subordinates were provided a chance to

participate and discuss with their superiors. The purpose of this technique is to
communicate the rater‘s view regarding the strengths and weaknesses of employees.

➢ Problem Solving.
In this participating interview method, an active and open dialogue is
established between the rater and rate or superior and subordinate where the views
were shared and problems were discussed and solved.

60
 ➢ Mixed interview:
This mixed interview is the contribution of tell and sell and problem solving
interviews.

g.) USE OF APPRAISAL DATA:

The data which was evaluated should be used to appraise the

performance of employees in the organization. So, the appraising will be done in
different ways:-
→ The employees will be given incentives, rewards and benefits for their
excellent performance in the organization.
→ Grievance and discipline programs.
→ HR planning.
→ Assessment of training and development needs.
→ Employees are affected with promotions transfers and lay off decisions.

PERFORMANCE APPRAISAL IS A NINE STEP PROCESS

1. Establish performance standards.

2. Communicate standard to employee.

3. Measure actual performance by following the instructions.

4. Adjust the actual performance due to the environment influence.

5. Compare the adjusted performance with that of others and pervious.

6. Compare the actual performance with that of others and previous.

7. Communicate the actual performance to the employee concerned.

8. Suggest change in job analysis and standards if necessary.

9. Follow – up performance appraisal report.

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KEY ELEMENTS OF PERFORMANCE APPRASIAL SYSTEM
PROBLEMS OF PERFORMANCE APPRASIAL:

Performance appraisals were subjected to a wide variety of inaccuracies and biases

referred to as rating errors. These errors occur in the raters observations; judgment
and information processing that can affect assessment results. The most common
rating errors were discussed elaborately.

1. LENIENCY OR SEVERITY:

Rating is lenient for the following reasons.

1. The judgment given by the rater shouldn‘t affect the ratee‘s worthiness.

2. The rater‘s judgment should affect the job of rate.

3. Harmful rating affects the relationships between the rater and the rate.

4. The rater‘s rate leniently in order to win promotions to their subordinates

and to remain their service in the organization.

2. CENTRAL TENDENCY:

This error occurs when appraisers rate all employees as average performance. For
example, a professor will give a class grades nearly equal to B, regardless of the
differences in individual performance.
1.) HALO ERROR:
Halo error takes place when one aspect of an individual‘s performance
influences the evaluation of the entire performance of the individual. For example, an
attractive or popular employee might be rated very highly.
2.) RATER EFFECT:
It includes favoritism, stereo typing and hostility (enmity). High or low
scores were given to the individuals or groups based on the rater‘s attitude towards the
rate, not on actual outcomes or behaviors, sex, age, race and friendship errors are the
examples of this type of error.

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 3.) PRIMARY AND RECENCY EFFECTS:

The rater‘s ratings are heavily influenced either by behavior exhibited by rate
during the early stages of the review period i.e., primary effect or by outcomes or
behaviors exhibited by the rate by the end of the rate period. For example, a sales
executive captures an important contract or sale, just before the completion of
appraisal. The sales executive will be appraised due to his or her sale even though his
or her overall performance is not satisfied. In the same way, if the example of sales
executive is taken, if the overall performance of the executive is excellent but when he
or she commits a mistake during the appraisal period, it affects the overall
performance of that particular executive.
But the rater should be raised or they should consider the composite
performance of the rate it should be influenced by one incident or one achievement.

4.) PERCEPTUAL SET:

This error occurs when the rater‘s assessment is influenced by previously held
beliefs. For example, if the superior had a belief that the employees recruited from
one particular region are intelligent and hard working, his or her subsequent rating of
an employee hailing from that region tends to be favorably high.

5.) SPILL OVER EFFECT:

This error refers to allowing past performance appraisal ratings to
unjustifiably influence the current ratings. Post ratings may be good or bad result in
similar rating for the current period.
6.) STATUS EFFECT:
It refers to over rating of high employees in higher level jobs or jobs held in
high esteems and under rating employees in lower level jobs or jobs held in low
esteems.

POST APPRAISAL INTERVIEW:

The post appraisal interview is an essential part of the performance appraisal
system. The employee‘s feedback information helps to know how effectively and
efficiently he or she is able to discharge his or her assigned duties. It gives the
opportunity to the employees to explain his views about the ratings, standards, rating

63
methods, internal and external causes for low level of performance. The appraiser gets
a chance to explain the employee about his rating, the traits and behaviors he or she
has taken into account for appraisal, etc. They can utilize this opportunity to offer
suggestions, guidance and coaching to the employees in order to develop them.
Appraisal interview helps to meet the following objectives.
1. To know the employees where they stand.
2. To help the employees to do a better job by clarifying what is expected from
them.
3. To plan opportunities for development and growth.
4. To strengthen the superior – subordinate working relationship by developing
a mutual agreement of goals.

FEEDBACK INTERVIEW:
In feedback interviews, there are two things to be defined. They are
1. Job Performance.
2. Work Related Behavior.

1.) JOB PERFORMANCE:

Whether ‗X‘ is capably performing specific tasks that have been assigned.

2.) WORK RELATED BEHAVIOR:

The way ‗X‘ performs his or her tasks, whether ‗X‘ speaks politely to
customers and works cooperative with other team members.
There are certain things which are needed to be followed by the appraiser and the
appraisee and are given below.

a.) ADEQUATE PREPARATION:

Appraisal process is a continuous one where informal session were held

now and then in order to put the employee on track. Formal meetings were conducted
fortnightly, monthly or quarterly basis depending upon the progress shown by the
employee from time to time. When raters are rated on various jobs, the meetings
could be held more frequently in order to clarify doubts. For performance related

64
discussions, the rater and rate could select a location where they can relax and
exchange notes with ease.
b.) DESCRIBE BEHAVIOR:
The rater should give detailed feedback to the employees which involve the
following questions.
I. What happened?
II. Where and when it occur?
III. Who are involved?
IV. How did it affect others?

ACTS, NOT ATTITUDES:

The rater should never attack personality, educational background, physique, etc.,
do not comment on employee‘s attitude.

FUTURE ORIENTED:
Do not dwell on the past, focus on the future, review the past observe the current
performance and use both to improve employee performance in future.

GOAL ORIENTED:
The employees of an organization should work as team members to reach the
goals of an organization and they should face the hurdles in reaching the goals of an
organization.

LISTEN TO THE RECIPIENT:

The appraiser should give the feedback to the appraise in order to develop
themselves and this is of course depends upon the relationship between the appraiser
and appraise.
DATA BASED FEEDBACK:
Effective feedback gives specific information about where the recipient has
gone wrong and gives him or her data in the form of observations feelings and other
things which his or her behavior has evoked.

65
SUGGESTIVE:
The superior should offer suggestions which were aimed at improving the behavior of
recipient. These suggestions will be received by the subordinates for increasing the
performance of the employee in the organization.

REINFORCEMENT:
Effective feedback should help appraise to decide which style of behavior he or
she should use. To this end, the supervisor should identify job behaviors and
performance of the employee that helps to achieve goals and encourage the employee
to repeat such behaviors and grow gradually.

CONTINUOUS:
The feedback from the employees should be a continuous, ongoing process of
strengthening right behaviors and checking wrong ways.

c.) PROPER TIMING:

Feedback should be well timed. It should be given them immediately after the
event has been taken place.
d.) HELP BOTH PARTIES:

Feedback should satisfy the needs of the rater as well as the rate. The rater
may want to help and establish a better relationship with rate and he moves closer to
the rate to understand his or her problems and suggest remedial steps in a friendly
manner. The rate should listen to the feedback information given by the rater
carefully. There is no use of overreaching to feedback. When the rate is praised for his
talent he or she shouldn‘t feel proud that he has done everything correct and
accurately.

66
PERFORMANCE APPRAISAL WITH REFERENCE TO
HCCBPL:
In Hindustan Coca-Cola Beverages Pvt., Ltd., the Performance Appraisal is
conducted annually for each employee. The performance appraisal is done only for
the staff and not for the workmen. For workmen, performance appraisal is done
depending on the agreement of the Trade Union and the Management.
The performance Appraisal for staff will be measured for a year depending
upon the targets achieved by each individual employee. The targets will be allotted to
the employees at the beginning of the year, so that they should reach their target at the
end of the year.
1.) EXCEPTIONAL PERFORMANCE:

Exceptional performance is the highest level of the employees to be achieved

for performance appraisal. This is the first level of performance calculation. In
this Exceptional performance, the achievement will be more than 110 points.
If the target achievement of the employee is 110 points, then the employee is
said to be in Exceptional performance.

2.) SUCCESSFUL PERFORMANCE:

Successful performance is the second highest level of the employees to be
achieved for performance appraisal. This is the next level of Exceptional performance.
In this successful performance, the achievement will exist between 90 to 109 points. If
the target achievement of the employee lies between 90 to 109 points, then the
employee is said to be in successful performance.
3.) DEVELOPING PERFORMANCE:

This is the third level of performance management system in this organization. This
performance level will be achieved by the fresh employees. If the target achievement
of the individual employee lies between 70 to 89 points, then that employee is under
this Developing Performance. This is last but one stage for which the individual
employees are eligible for Performance appraisal.

67
4.) DO NOT MEET PERFORMANCE:

This is the final stage allotted for the employees of the organization in the
measurement of individual performance. If the target achievement is less than 69
points at the end of the year, then the employee is said to be under this No
Performance Level. It means that the employees are unable to achieve the minimum
performance level.

STEPS FOR PERFORMANCE REVIEW DISCUSSION:

Step – 1:- First discussion between Associate and Supervisor.
Process:-
➢ No overall rating communicated.
➢ KRA 1 Business Performance – automatic rating.
➢ People KRA and Competencies discussed with examples but no rating
given.
➢ Wherever possible, unit HR personnel will be a part of all discussions
as facilitator.
Step – 2:- Local Calibration.
Process: -
➢ Local HR checks Performance Management System (PMS) forms and
recommended ratings to ratify calculation and logic.
➢ Any information gaps are plugged in before the calibration meetings.
➢ HR facilitates discussion and closure of all DNM, DP and SP rating
with functional head.
➢ Any discrepancies in SP ratings are flagged off for discussion in
Region Calibration Meeting.

Step – 3:- Functional Calibration.

Process: - EP and flagged of SP cases are discussed and ratings are finalized.
Step – 4:- Second discussion between Associate and Supervisor in the presence of
Functional supervisor.

68
KEY RESULT AREAS FOR PERFORMANCE APPRAISAL:
There are some Key Result Areas (K.R.A) in which the Performance
Appraisal is conducted. There are three types of K.R. A‘s used for Performance
Appraisal System. They are as follows:
BUSINESS PLAN ACHIEVEMENT:

In this organization, the performance appraisal is conducted depending upon

the Key Result Areas of the individual employees. The targets for the employees will
be allotted at the beginning of the year about the business plan and what are the goals
to be achieved by them. Then they will reach the goals. At the end of the year the
performance will be measured through this Business Plan Achievement. The weight
age given for this KRA # 1 is 60%. This is the first Key Result Area used to measure
the performance of the individual employees and appraise the performance.

PEOPLE DEVELOPMENT:

People Development is the second Key Result Area in measuring the

performance. This is a very tough task to be performed. There are two types of People
Developments. The first is the development of the subordinates. If the employee is a
manager or a team leader, then he or she will be measured on how he or she is
developing his or her subordinates to reach the organizational objectives. The weight
age given for this is 20%. The second is the self development. If the employee is a
subordinate, then he or she will be measured on how he or she is developing himself
or herself to reach the organizational objectives. These two are used for performance
Measurement.
KEY BEHAVIORAL COMPETENCIES:

This is the third Key Result Area used to measure the performance of the
individual employees in the organization. The weightage given for this Key Result
Area is 20%. This key behavioral competency is measured on how the employee is
behaving at the work spot and how he or she is behaving with his/her subordinates
and coordinates. All these competencies are considered to measure the performance in
this area. There are some competencies which are used by this organization to

69
measure the actual performance of the employees depending on the behavior. They
are given below:

A) DEMONSTRATING FINANCIAL ABILITY:

Understands the financial aspects of the business completely, and is able to

add to the economic value chain of the organization. It foresees the trends and cost
benefit areas. It is able to coach others in building financial acumen. This is the
extreme achievement in this competency.

b) ACCOUNTABILITY:

Accepts responsibility of outcomes and fulfills his or her commitments more

often than not. It sets meaningful performance objectives and high standards of
performance or direct reports. Communicates accountabilities to subordinates and
manages against these accountabilities. This is the extreme achievement for
accountability.

c) COLLABORATION:

It is also known as team work. Promotes industry at all levels, champions the
notion of one global team and a boundary less organization.

d) PLANNING AND EXECUTION:

e)
Prioritizes alternatives and leverages available resources. Draws up a detailed
action plan with time and quality parameters foresee problems and has fall back
options accordingly.

70
 CHAPTER-5
DATA ANALYSIS AND INTERPRETATION
 DATA ANALYSIS AND INTERPRETATION

1. Will the performance appraisal system encourage people to plan their work
well in advance?

a) Strongly Agree b) Agree c) Disagree d) Strongly Disagree E) Neutral

Table -1

SL.
RATING RESPONDENTS PERCENTAGE %
NO.

1. Strongly Agree 20 33

2. Agree 28 47
3. Disagree 12 20
4. Strongly disagree 0 0
5. Neutral 0 0
TOTAL 60 100

Graph -1

30
25
Strongly Agree
20
Agree
15
Disagree
10
5 Strongly disagree

INTERPRETATION

The Table -1 shows that 47% of respondents agreed to that performance

appraisal system encouraging them to plan their work in advance and 33% of the
respondents strongly agreed .

71
 2 .Do you feel that low performance appraisal is due to lack of skills ?

a) Strongly agree b) Agree c) Strongly disagree d) Disagree

e) Neutral

Table -2

PERCENTAGE
SL. NO. RATING RESPONDENTS
%
1. Strongly Agree 6 10
2. Agree 30 50
3. Disagree 0 0
Strongly
4. 24 40
disagree
5. Neutral 0 0
TOTAL 60 100

Graph-2

No of Respondents
35
30
25
20
15
10
5
0
Strongly Agree Agree Disagree Strongly Neutral
Disagree
No of Respondents

INTERPRETATION
The above Table-2 shows that the majority of 50% respondents expressed
agree to the above statement. Employees are happy to work with the organization.
10% of the respondents strongly agree do feel that low appraisal in due to lack of skill
with the above statement remaining 40% employees expressed strongly disagree.

72
 3.) Performance appraisal system helps in assessing competency?

a) Strongly agree b) Agree c) Disagree d) Strongly disagree e ) Neutral

Table -3
PERCENTAGE
SL.NO. RATING RESPONDENTS
%
Strongly
1 20 33
Agree
2 Agree 20 50
3 Disagree 10 17
Strongly
4 0 0
disagree

5 Neutral 10 0

TOTAL : 60 100

Graph -3

Respondents
25

20

15

10

0
Strongly Agree Agree Disagree Strongly Neutral
Disagree

Respondents

INTERPRETATION
The above Table-3 explains the performance appraisal system helps in
assessing competency of employees. Here, 50% employees agree the above statement
and 33% employees expressed strongly agree, remaining 17% employees disagree.

73
 4.) Training / retaining is the indicator of performance to what extent?

a) Absolute b) Moderate c)No comments

Table-4

PERCENTAGE
SL.NO. RATING RESPONDENTS
%

1 Absolute 6 10

2 Moderate 24 40

No
3 30 50
comments

Total 60 100

Graph -4

60

50

40
Absolute
30
Moderate
No comments
20

10

INTREPRETATION
From the above Table-4 it is observed that 50% of the employees expressed
No comment, 40% of the employees expressed moderate and the remaining 10%
employees expressed absolute in training is the indicator of performance to extent.

74
 5.) Can performance evaluation help the compensation adjustment like pay
increase bonus, incentives?

a) Strongly agree b) Agree c) Strongly disagree d) Disagree e) Neutral

Table -5
PERCENTAGE
SL.NO. RATING RESPONDENTS
%
Strongly
1 0 0
agree
2 Agree 20 40
3 Disagree 12 20
Strongly
4 24 40
disagree
5 Neutral 4 0
TOTAL
60 100
:

Graph -5

25

20

15

10

0
Strongly Agree Disagree Strongly Neutral
Agree Disagree

Series 1

INTREPRETATION
From the above Table-5 it is evident that 40% of the employees expressed
agree, 40% of the employees expressed strongly disagree and performance evaluation
help the compensation adjustment like pay bonus the remaining 20% employees
expressed disagree.

75
 6.) Promotional activities are done by the performance appraisal in the
organisation?
a) By merit b) By seniority c) By both d) None

TABLE -6
SL.NO. RATING RESPONDENTS PERCENTAGE%

1 By merit 0 0

2 By seniority 24 40

3 By both 36 60

4 None 0 0

TOTAL : 60 100

Graph-6

40
35
30 By merit

25 By seniority
By both
20
None
15
10
5
0

INTERPRETATION
Table-6 result says that 60 % of the employees expressed by both, 40% of the
employees expressed by seniority about the promotional activities are done by the
performance appraisal in the organisation.

76
 7 .In your opinion performance is directly linked with career growth
opportunity in MYLAN?
a) Strongly agree b)Agree c)Disagree d)Strongly disagree e)Neutral

Table -7

PERCENTAGE
SL.NO. RATING RESPONDENTS
%

1 Strongly agree 6 10

2 Agree 44 75

3 Disagree 0 0

Strongly
4 6 10
disagree

5 Neutral 4 5

TOTAL : 60 100

Graph -7

No of Respondents

50
40
30
20
10
0
Category 1 Agree Disagree Strongly Neutral
Disagree

No of Respondents

INTERPRETATION
Table-7 it is observed that 75% of the employees expressed agree, 10% of the
employees expressed strongly agree and the remaining 10% employees expressed
strongly disagree in your opinion performance is directly linked with career growth
opportunity in MYLAN.

77
 8. Which one do you think is the best performance appraisal system in your
organization?

a )Performance appraisal b) Team appraisal c)Self appraisal d) 360 degree

appraisal

Table-8
PERCENTAGE
SL.NO. RATING RESPONDENTS
%
Performance
1 & potential 18 30
appraisal
Team
2 12 20
appraisal
Self-
3 12 20
appraisal
360degree
4 18 30
appraisal
TOTAL : 60 100

Graph -8

Chart Title
30

20

10

Performance & potential appraisal Team appraisal

Self appraisal 360degree appraisal

INTERPRETATION
Table-8 shows that 30% of the employees expressed performance appraisal
and potential appraisal, 30% expressed 360 degree, 20% expressed team appraisal
and remaining 20% expressed self-appraisal the best performance appraisal system in
your organization.

78
 9. According to your opinion who is the best person to conduct performance
appraisal system?

a) Superiors b) Subordinates c)Peers d)H0D

Table -9

PERCENTAGE
SL.NO. RATING RESPONDENTS
%

1 Superiors 48 80

2 Subordinates 6 10

3 Peers 0 0

4 HOD 6 10

5 Total 60 100

Graph -9

80
70
60
50
40
30
20
10
0

Superiors Subordinates Peers HOD

INTERPRETATION
Table-9 shows that 80% of the employees expressed supeiors,10% of the
employees expressed subordinates and our opinion who is the best performance to
conduct performance appraisal system .the remaining 10% employees expressed
HOD.

79
 10. Are you satisfied with periodic review of appraisal in VSP?

a) Strongly agree b)Agree c) Strongly disagree d)Disagree e)Neutral

Table -10

SL.NO. RATING RESPONDENTS PERCENTAGE%

1 Strongly agree 12 20

2 Agree 30 50

Strongly
3 0 0
Disagree

4 Disagree 12 20

5 Neutral 6 10

TOTAL : 60 100

Graph -10

No of Respondents
35
30
25
20
15
10
5
0
Strongly Agree Agree StronglyDisagree Disagree Neutral

No of Respondents

INTERPRETATION
Table- 10 shows that 50% of the employees expressed agree, 0% of the
employees expressed strongly agree and the remaining 20% employees expressed
disagree in the satisfied with periodic review of appraisal in organization.

80
 11. Performance appraisal helps in creating an effective work environment and
positive relationship?

a) Strongly agree b)Agree c)Strongly disagree d) Disagree e) Neutral

Table -11

PERCENTAGE
SL.NO. RATING RESPONDENTS
%
Strongly
1 18 30
agree
2 Agree 30 50
Strongly
3 0 0
Disagree
4 Disagree 6 10
5 Neutral 6 10
TOTAL 60 100

Graph-11

35
Series 1
30
25
20
15
10
5
0
Strongly Agree Agree Strongly Disagree Neutral
Disagree

INTERPRETATION

Table-11 shows that 50% of the employees expressed agree, 30% of the
employees expressed strongly agree and performance appraisal helps in creating an
effective work environment and positive relationship. the remaining 10% employees
expressed disagree.

81
12. Performance appraisal system helps in knowing strength &weaknesses
ofsubordinates?
a) Strongly agree b) Agree c) Strongly disagree d) Disagree e) Neutral

Table -12
PERCENTAGE
SL.NO. RATING RESPONDENTS
%
1 Strongly agree 12 20
2 Agree 36 60
Strongly
3 0 0
Disagree
4 Disagree 6 10
5 Neutral 6 10

Graph-12

Series 1
40

30

20

10

0
Strongly Agree Agree Strongly Disagree Disagree Neutral

INTERPRETATION:

Table-12 shows that 60% of employees agreed and 20% employees are
strongly agreed the statement the remaining 10% employees disagree of performance
appraisal system helps in knowing strength and weaknesses of subordinates .

82
 13. Do you think performance appraisal helps in assessing the training needs of
the subordinates ?

a) Strongly agree b) Agree c) Strongly disagree d) Disagree e) Neutral

Table -13

PERCENTAGE
SL.NO. RATING RESPONDENTS
%
Strongly
1 6 10
agree
2 Agree 36 60

Strongly
3 0 0
Disagree

4 Disagree 12 20
5 Neutral 6 10

TOTAL : 60 100

Graph - 13

No of Respondents

40
30
20
10
0
Strongly Agree Strongly Disagree Neutral
Agree Disagree

No of Respondents

INTERPRETATION
Table -13 shows that 60% respondents agree, 20% disagree, 10% strongly
agree and 10% neutral of performance appraisal helps in assessing the training needs
of the subordinates..

83
14. Is there any performance indicator (KPI) in vsp ?
a) yes b) No

Table-14
SL.NO RATING RESPONDENTS PERCENTAGE %
1 Yes 45 75
2 No 15 25
TOTAL 60 100

Graph-14

50
45
40
35

30
25
RESPONDENTS
20
15
10
5

0
Yes No

INTERPRETATION
Table -14 shoes that 75% of the employees expressed Yes and the remaining 25%
for No in the case of any performance indicator (KPI) in vsp.

84
15. Do you think Performance appraisal system affects the organization
development?
a) Yes b) No c) No idea

Table -15

SL.NO. RATING RESPONDENTS PERCENTAGE

1 Yes 50 83
2 No 6 10
3 No idea 4 7
TOTAL : 60 100

Graph -15

No of Respondents

6
5
4
3
2
1

0
Yes No No idea

No of Respondents

INTERPRETATION
Table-15 shows that 83% of the employees expressed yes and the remaining
10% for No in the case of performance appraisal system effect the organization
development.

85
 CHAPTER-6
SUMMARY,
FINDINGS AND SUGGESTIONS
QUESTIONNAIRE
CONCLUSION
 FINDINGS

➢ 99% of the employees in the organization are of performance appraisal

system of the organization .

➢ 85% of employees said that performance appraisal system is good in

organization.

➢ 68% of the employees say that they were highly satisfied with the
performance appraisal done by superior.

➢ 50% of the employees say that superiors give feedback to their subordinates
with adequate care and concern.

➢ 88% of the employees say that performance appraisal procedure is transparent

and free from prejudice.

➢ 90% of the employees were aware of HRIS in the company .

➢ 75% of the employees says that performance appraisal takes into account the
past performance of the employees and focuses on the future performance of
employees.

86
 SUGGESTIONS

➢ Performance of the worker is not measured properly, so it should be measured in

a proper manner.
➢ Measurement of performance should be accurate.
➢ Feedback after measuring the performance should be in a clear, understanding
way to the appraisal.
➢ Monthly performance reports should be maintained.
➢ Self-review techniques should be implemented in the organization in order to
improve the performance of the employees.
➢ The efficient and experienced persons should conduct orientation programs.
➢ By assessing the performance appraisal continuously, the employees can
improve their skills.

87
 CONCLUSION

Performance appraisal is the process of reviewing employee performance

vis-à-vis the set expectations in a realistic manner, documenting the review, and
delivering the review verbally in a face-to-face meeting, to raise performance
standards year over year through honest and constructive feedback. In the process
management expects to reinforce the employee‘s strengths, identify improvement
areas so that one can work on them and also set stretched goals for the coming year.
Effective performance management requires a good deal of face-to-face
supervisor-employee interaction. By knowing the subordinates, a supervisor can steer
them onto a path of greater productivity and optimized output. It is one of the most
significant and indispensable tool for an organization as it helps in getting to know the
people who work for them. provides information, which helps in taking important
decisions for the development of an individual and the organization.

88
 SUMMARY
In this chapter the overall summary was given briefly to understand the total
project at glance. The project entitled ―A study on performance appraisal‖ with
reference to Mylan laboratories has been divided into five chapters to arrange the total
information in perfect manner.
The first chapter includes the introduction, need of the study objectives of the
study, limitations of the study and methodology used for collection of data and its
analysis is given. Through this chapter we can understand the opinion of the
investigator on the project and the interest she paid on the project. From this chapter
we can know the over view of the performance appraisal and the Mylan laboratories
in a detailed manner. In this ‗introduction‘ the details of the performance appraisal
origin of the performance appraisal, growth of the industry and the major players and
the total details of the Mylan laboratories and the position of Mylan laboratories in
India and some other details pertaining to the industry, the topic introduction was
given like the definitions of the collected from different sources and the analysis of
those definitions were explained. After the explanations of the definition, the
importance of the study and the use of the study to the industry were clearly
explained. This will help to understand why the investigator has chosen the topic as
her project.
After the introduction the ‗Objectives of the study‘ has been explained briefly.
In this part, what information the investigator wanted collect and why he wanted to do
the project in that particular company and what goal she wanted to reach through this
project has been clearly explained. After explaining the objectives of the study the
‗Need for the study‘ was given. In this way why investigator has chosen that topic and
what can he get from that study and how it is useful to her is explained briefly.
Because without any need the study will not be conducted.
Methodology, in this methodology the data was collected by two sources
i.e., is primary and secondary data, primary data was collected by distributing
questionnaire to respondent the questionnaire was designed in such a way that it
covers all the aspects of the product. The data was also collected by observation,
personal interviews and interaction with workers and officers done by me with the
permission of HR guide in Mylan laboratories.

89
 Secondary data was collected by the information regarding the study is also
collected from various reports and journals of Mylan laboratories and also from
various textbooks. Information was also gathered from web sites in this connection.
Then collected data was analysed with the help of statistical tools such as tables
and graphs and interpreted accordingly.
Finally the ‗limitations of the study‘ were given in the first chapter. For every there
will be some limitations and we may call those as hurdles for the study. The
limitations may be the time limits, low information.
The second chapter includes profile of Mylan laboratories is given. Genesis
and growth of the industry, organization structure of the company, demands for
company finally RINL‘s major competitors are discussed. The origin of the
performance appraisal system and Mylan laboratories its gradual growth of the
industry has been explained. The growth of the industry has shown year by year. After
the explanation profile of the collaboration with foreign countries in a very detailed
manner. In this background of the steel plant explained setting co-operation with
different esteemed prices around on the integrated steel plant in India.
Then major sources of the raw material where they are brought from to use in
production for output units at annual capacity, and what they are introduce products
for demand by others are foreign countries. After completion of the major sources
then the industry explained the code of conduct of the company and the respect the
industry is giving to the employees and the facilities provided and the precautionary
steps taken for the health and safety of employees has been explained in this portion.
And the HR policy and HRD policy defines committed to create employees believes
for the company profile and to create an organizational culture which nurtrates
employee‘s potential for the organization. The ―quality‖ revolution has changed the
ways in which many organizations operate. With global competition, the drive to
provide better quality and to satisfy external and internal customers has been
activated. At Mylan laboratories, an attempt was made to integrate this thought in
Performance Appraisal System.
Their system of appraisal, in the first instance, looked ―fool-proof‖ and well designed
to suit the quality genre, for it has integrated in itself some wonderful concepts. But,
when
▪ this study is completed the result/conclusion showed that the employees, who
actually are participants in the system, do feel that this system is not very

90
 effective. Surprised by this result, an attempt was made to analyse the
REASONS FOR DISSATISFACTION of executives their Performance
Appraisal System. They are:
▪ Mostly this system is not helping the person to assess his capabilities the
assessment is mostly dependent upon the obedience with his boss.
▪ Self-assessment does not carry enough weight age. So, the drive to sincerely
appraise one‘s own self is lacking.
▪ Potential review is integrated in the PAS. But. Potential being the capability to
take up the future job cannot be judged by the performance on the present job
▪ Training needs identified either through self-assessment or team assessment
consolidated and only a few of them are finalized after several rounds of
filtering. This indirectly is resulting in training programmers, which do not
cater to all the employees, being designed. And as employees perceive that the
training they asked for is not being provided, there would by a little or no
commitment at all.
➢ The employees are assessed by a team of appraisers, who are their superiors.
The problem here is that the team of appraisers to not have regular interaction
with the appraise, may give a rating which can be mostly subjective.
➢ Tasks and targets do not reflect the efficiency of executing them.
➢ Absence of a proper reward and punishment system.
➢ Lack of time spent by the appraiser and appraisee during the performance
review.
➢ A good number of employees are not satisfied with the ceiling prescribed for
distribution in an appraisal group.
➢ Employees feel that filling the application form is a routine job at the
procedure and method should keep on changing time to time.
The fourth chapter includes the data analysis and interpretation. In this
chapter, the 60 employees through the questionnaire conducted personally during the
project period has been summarized, tabulated, analyzed and interpreted very clearly.
This is very important chapter in this project work. This chapter gives the
clear picture of the total study to the observer. A specified questionnaire was prepared
to collect the information from the employees regarding their opinions on the Mylan
laboratories.

91
ANNEXURE
 BIBILIOGRAPHY

1) P. Subba Rao, Personnel and Human Resources Management, Himalaya

Publishing House.

2) BiswajeetPatnayak, Human Resources Management, Pentice-Hall Of

India-2002.

3) Arun Monappa, Mirza. S. Saiyadain, Personnel Management, Tata Mc

Graw-Hill Publishing Company Ltd, 1998.

4) Annual Reports and Magazines of Dr. Reddy Labs.

5) William. B. Werther, Jr. Keith Davis, Human Resources and Personnel.

6) C.R.Kothari, Research Methodology, Vikas Publishing House.

WEBSITES:

www. mylan.com

www.wikipedia.com

www.google.com

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 QUESTIONNAIRE FOR EMPLOYEE

Name of the employee (optional):

Designation of the employee:
Experience:
Department:

1) Will the performance appraisal system encourage people to plan their work well
in advance? [ ]
a) strongly agree
b) Agree
c) Strongly disagree
d) Disagree
e) Neutral

2) Do you feel that low performance appraisal is due to lack of skill? [ ]

a) Strongly agree
b) Agree
c) strongly disagree
d) Disagree
e) Neutral

3) Performance appraisal system helps in assessing competency? [ ]

a) strongly agree
b) Agree
c) strongly disagree
d) Disagree
e) Neutral

4) Training/retaining is the indicator of performance to what extent? [ ]

a) Absolute
b) moderate
c) No comments
d) Average

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5) Can performance evaluation help the compensation adjustment like pay increase,
bonus, incentives? [ ]
a) strongly agree
b) Agree
c) strongly disagree
d) Disagree
e) Neutral

6) Promotional activities are done by the performance appraisal in the [ ]

organitionsation ?

a) By merit
b) By seniority
c) By both
d) Both

7) In your opinion performance is directly linked with career growth

opportunities in MYLAN? [ ]
a) strongly agree
b) Agree
c) strongly disagree
d) Disagree
e) Neutral

8) Which one do you think is the best performance appraisal system in your
organization? [ ]
a) performance& potential appraisal
b) team appraisal
c) self-appraisal
d) 360-degree appraisal

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9) According to your opinion who is the best person to conduct performance
appraisal system? [ ]
a) Superiors
b) Subordinates
c) Peers
d) HOD

10) Are you satisfied with periodical review of appraises in vsp? [ ]

a) Strongly agree
b) Agree
c) Strongly disagree
d) Disagree
e) Neutral

11) Performance Appraisal helps in creating an effective work Environment and

Positive relationship? [ ]
a) strongly agree
b) Agree
c) strongly disagree
d) Disagree
e) Neutral

12) Performance Appraisal system helps in knowing strength &weaknesses of

subordinates? [ ]
a) strongly agree
b) Agree
c) strongly disagree
d) Disagree
e) Neutral

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13) Do you think performance appraisal helps in assessing the training needs of the
subordinates? [ ]
a) strongly agree
b) Agree
c) strongly disagree
d) Disagree
e) Neutral

14) Is threre any performance Indicator (KPI) in vsp? [ ]

a) Yes b) No

15) Do you think performance appraisal system effects the organization development?
a) Yes [ ]
b) No

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