GLAXOSMITHKLINE: REINVENTING INCENTIVES

AND PERFORMANCE

FORE SCHOOL OF MANAGEMENT

TEAM- MAVERICKS
CHHAVI KHURANA
SHIVESH TOLANI
AYUSHI VOHRA
 X Context and Relevance

X Consequences
PM before 2014
X Need for Change

X Features and rationale for changes

ROUTE
MAP X Effectiveness of changed system
New PM
X Limitations of changed systems

Recommendations
CONTEXT AND RELEVANCE
Prior to 2014

Company Objectives – Competitive Strategy – Functional (HR)

Strategy – Performance and Compensation Management
A
Current strategy was an increase in market share through
aggressive sales (like most other pharma companies)
B
Medical Representative Behavior shaped (in part) by
compensation i.e. variable part of compensation

C
‘Performance’ meant sales numbers

D
CONTEXT AND RELEVANCE CONTD.

Development of new molecules – Marketing and Sales – Marketing and

Sales Organization – Medical Representatives – Performance Parameters
E = Sales

The Performance Management System was target based i.e

it focused only on ‘results’ and not on competencies or
F behavior or processes

Performance (sales) was linked to reward

(variable component of pay)
G
 NEED FOR CHANGE
Corporate Image
Ethical concerns
Results as well as the
process matters

Hark back to
organizational
values -
• Patient focus
• Integrity
• Respect for
people
• Transparency
A cultural transformation
by driving these values to
All these would lead to an enhanced the frontline (and other)
corporate image and thereby an sales personnel using
increase in shareholder value
 PRINCIPLES OF CHANGE

To translate this into Correct identification and

action values through linking of KSAs to the
redefining rewards is essential for
‘performance’ performance

Differentiate oneself Performance = fn(KSA Approach to be applied

on the basis of being x M)* where especially for frontline
a value-driven sales persons to take
organization K=knowledge, S = their focus away from
Skills, A = Abilities and quotas/targets
M = Motivation
 FEATURES OF CHANGE – PERFORMANCE MANAGEMENT AND
REWARD SYSTEM

Reward was linked to Out of this 25%,

a composite score Approximately 25% around 40% was
that was calculated of total based on local sales
on the basis of compensation was and 60% on
attainment of KPIs variable individual KPI
achievement

KPI Evaluation Criteria Evaluation Process

Knowledge DPK, Commercial Knowledge, Testing, Quad Tests supervised by RBM, Training
Compliance Manager and Product Management Team,
Bell Curve
Action Coverage and Reach Evaluated on defined criteria, no bell
curve
Application of Business Planning, Role-Play Assessment, Evaluation by Panel, RBMs, ABMs
Knowledge In-Clinic assessment
 EFFECTIVENESS OF CHANGED SYSTEM
More academic
and science based
approach

01 03 05
Seemed in sync Business planning
with the values of helps identify
the company performance gaps
and eventually
improve

02 04
performance

Relevant knowledge
and skill acquisition
(monitored through Discouraged hard
quad tests and role- selling – focus on
plays) patient welfare
 EFFECTIVENESS OF CHANGED SYSTEM CONTD.

Performance gaps can be measured through “P =

KSA x M”

The performance is now ‘process’ oriented rather than

‘sales-target’ oriented, at least for the frontline sales people

9 8 7 6 Employee engagement increased to 4.07 on a scale of

5

Ratings based on ‘documentation’ – hence not arbitrary

and system made transparent
 LIMITATIONS
Perceived as ‘unfair’ by RBMs –
Incentive system was too
they had the sales responsibility
complicated – incentive/reward
but perhaps not adequate
systems are effective when they
authority to hold sales people
are simple and understood by
accountable for sales
everyone

Very high demand on the time of RBM Very high

and ABM for in-clinic visits, role play requirement for
assessments and multiple evaluations documentation
RECOMMENDATIONS- WHAT
SHOULD STAY OR BE ADDED 05
Continuous two-way
communication on rationale

04
‘Recognition’ of some kind to frontline sales
person for outstanding sales – subject to
03 his/having adhered to all process parameters

The KPIs and the components for

02 measurement

The basic belief in behavior/competency based approach – if

01 we have acquired and developed competency and
introduced right motivation then results will follow

The strategic approach – link between objectives –

strategy – values – performance management –
reward and recognition
 RECOMMENDATIONS – WHAT SHOULD GO
OR DILUTED?
RBM’s In-clinic visits be
reduced – could be done on
random sample
representative of the
Documentation – should be population of salespersons
judiciously reduced through from all regions, areas
discussions facilitated by HR
– maybe the frequency
could be reduced (instead
of quad, have annual or bi- The reward calculation
annual tests) needs to be simplified –
complicated calculation
conveys lack of trust
THANK YOU!