Compensation Structure Compensation Structure inin

Pharmaceutical SectorPharmaceutical Sector

What is a Compensation What is a Compensation Package?Package?

The compensation package comprises of monetary and The compensation package comprises of monetary and non-monetary benefits that includes salary, special non-monetary benefits that includes salary, special allowances, house rent allowance, travel allowance, mobile allowances, house rent allowance, travel allowance, mobile allowance, employee stock options, club memberships, allowance, employee stock options, club memberships, accommodations, retirement benefits and other benefits.accommodations, retirement benefits and other benefits.It may include a number of other benefits, including It may include a number of other benefits, including insurance, insurance, employee discountsemployee discounts, extended leaves, and , extended leaves, and retirement programs. retirement programs.

The basic tools of any compensation systemWage surveysJob analysis/evaluationPerformance appraisal

The basic goals of any compensation systemThe basic goals of any compensation systemto retain high quality employeesto retain high quality employeesto stimulate high performanceto stimulate high performanceto attract high quality employeesto attract high quality employees

Total Compensation = Direct + Indirect Compensation

Base Pay Incentives Benefits

About..About..

The first Indian pharmaceutical company, Bengal Chemicals and Pharmaceutical Works, that exists today as one of 5 government-owned drug manufacturers, appeared in Calcutta in 1930.

For the next 60 years, most of the drugs in India were imported by multinationals either in fully-formulated or bulk form.

The government started to encourage the growth of drug manufacturing by Indian companies in the early 1960s, and with the Patents Act in 1970, enabled the industry to become what it its today.

The pharmaceutical sector is witnessing the highest salary hike The pharmaceutical sector is witnessing the highest salary hike of 11.1 percent for the fiscal year 2009-10 of 11.1 percent for the fiscal year 2009-10

India is the world’s fourth largest producer of pharmaceuticals India is the world’s fourth largest producer of pharmaceuticals by volume, accounting for around 8% of global production.by volume, accounting for around 8% of global production.

The Indian pharmaceutical industry directly employs around The Indian pharmaceutical industry directly employs around 500,000 people and is highly fragmented with 20,000 registered 500,000 people and is highly fragmented with 20,000 registered units.units.

The leading 250 pharmaceutical companies control 70% of the The leading 250 pharmaceutical companies control 70% of the market with market leader holding nearly 7% of the market market with market leader holding nearly 7% of the market share.share.

Major Player in the IndustryMajor Player in the Industry

Ranbaxy Laboratories Dr. Reddy's Laboratories Cipla Nicolas Piramal India Aurobindo Pharma GlaxoSmithKline Lupin Laboratories Sun Pharmaceutical Industries Cadila Healthcare Wockhardt

Salary Package for Junior Managers

DesignatioDesignationn

A (Basic A (Basic Salary)Salary)

B B (Bene(Bene

fits fits and and

ReimReimbursebursementsments

))

C C (Perfor(Performance mance Pay)Pay)

D D (Retiral (Retiral

Benefits)Benefits)

E E (Valued (Valued PerquisiPerquisi

tes)tes)

Average Average Annual Annual

CTCCTC

MinimumMinimum 1165511655 1177411774 10001000 19591959 00 316658316658

AverageAverage 2044320443 1992619926 51735173 36083608 16411641 609498609498

MaximumMaximum 1761617616 4050740507 97799779 29612961 1742017420 10593910593966

Salary Package for Middle Managers

DesignaDesignationtion

A A (Basic (Basic Salary)Salary)

B B (Benefit(Benefit

s and s and ReimbuReimbursemenrsemen

ts)ts)

C C (Perfor(Performance mance Pay)Pay)

D D (Retira(Retira

l l BenefitBenefit

s)s)

E E (Valued (Valued

PerquisitPerquisites)es)

Average Average Annual Annual

CTCCTC

MinimuMinimumm

2553025530 2436224362 33333333 81228122 1290212902 890988890988

AveragAveragee

5673156731 8172981729 2288822888 1816018160 1475814758 23311732331173

MaximuMaximumm

1360013600 164773164773 10661066 4326343263 2754927549 44718184471818

Salary Package for Senior Managers

DesignDesignationation

A A (Basic (Basic Salary)Salary)

B B (Benefi(Benefits and ts and

ReimbuReimbursemenrsemen

ts)ts)

C C (Perfor(Performance mance Pay)Pay)

D D (Retiral (Retiral BenefitBenefit

s)s)

E E (Valued (Valued PerquisPerquis

ites)ites)

AveragAverage e

Annual Annual CTCCTC

MinimuMinimumm

6720067200 9089990899 2675026750 2137621376 2271822718 27473127473111

AveragAveragee

147374147374 222854222854 6787467874 4688046880 3208532085 62048062048022

MaximMaximumum

280000280000 453901453901 220002200000

8906889068 4166741667 1301561301563333

Salary Structure for MBA Salary Structure for MBA TraineeTrainee

Salary Structure after Salary Structure after ConfirmationConfirmation

Compensation Structures in Compensation Structures in Major Cities in India for Major Cities in India for

fresherfresherMajor CitiesMajor Cities Salary Packages Per Salary Packages Per

AnnumAnnum

(in Rs)(in Rs)

Mumbai 240000- 340000

Delhi 210000- 320000

Kolkata 160000 – 220000

Chennai 200000 - 310000

Bangalore 190000- 320000

Some facts & figuresSome facts & figures 28 %of all jobs in the pharmaceutical and medicine 28 %of all jobs in the pharmaceutical and medicine

manufacturing industry are in professional and related manufacturing industry are in professional and related occupations, mostly scientists and occupations, mostly scientists and science techniciansscience technicians

18 % are in management occupations18 % are in management occupations

12 % are in office and administrative support12 % are in office and administrative support

3 % in sales and related occupations3 % in sales and related occupations

3 out of 10 jobs in the industry are in production 3 out of 10 jobs in the industry are in production occupations, including both low-skilled and high-skilled occupations, including both low-skilled and high-skilled jobs jobs

Salary Packages across Salary Packages across various B-Schoolsvarious B-Schools

The Students from IIMs get a package of 30% The Students from IIMs get a package of 30% plus the packagesplus the packages

Students from other B-schools that fall in the A+Students from other B-schools that fall in the A++ category gets the aforesaid salary packages+ category gets the aforesaid salary packages

The package also depends on the individual The package also depends on the individual performance and quality.performance and quality.

ConclusionConclusion

Decisions concerning compensation issues are some of the Decisions concerning compensation issues are some of the most critical decisions faced by organizations today, most critical decisions faced by organizations today, because of their influence on:because of their influence on:

-- organizational survival and growth-- organizational survival and growth

-- employee perceptions of fairness and equity-- employee perceptions of fairness and equityRemuneration has now become the central issue for attracting and retaining employees across industries. The compensation structure within the pharma industry has also undergone a sea change over the past couple of years due to the phenomenal growth in this sector