Bangladesh Institute of Management

Term Paper

Impact of Manpower Planning On

Organizational Performance
Pharmaceutical Firms of Bangladesh Perspective

Group ID: 1147

Submitted to: Mohammad Sayeedur Rahman

Group Members
Ahammadul Kabir, Roll No 132
A.I.M. Moniruzzaman, Roll No 198
Mohammad Nazmul Hussain, Roll No 186
Abdullah-Al-Maruf, Roll No 157

Table of Contents
Page
Chapter I: Theoretical Frame
1.1 Manpower Planning........................................................................................................................................ 10
1.2 Organizational Performance ........................................................................................................................... 11
1.3 The Study Proposal......................................................................................................................................... 13
1.4 Objective of the Study .................................................................................................................................... 14
1.5 Benefits of Manpower Planning ..................................................................................................................... 14
Chapter II: Literature Review
2.1 Literature Review ........................................................................................................................................... 15
Chapter III: Methodology
3.1 Methodology .................................................................................................................................................. 21
3.1.1 Analysis ................................................................................................................................................ 21
3.1.2 Sample Size .......................................................................................................................................... 22
3.1.3 Instrument............................................................................................................................................. 22
3.2 Plan of Action ................................................................................................................................................. 22
Chapter IV: Pharmaceutical Firms
4.1 Pharmaceutical Industries ............................................................................................................................... 23
4.2 Overview of Some Pharmaceutical Firms ...................................................................................................... 24
Chapter IV: Study Findings
5.1 Organizational Performance ........................................................................................................................... 29
5.2 Factors Contributing Organizational Performance ......................................................................................... 31
5.2.1 Departmentation and HR Plans ............................................................................................................ 31
5.2.2 HR in Decision Making ....................................................................................................................... 33
5.2.3 Human Resource Information System .................................................................................................. 34
5.2.4 Human Resource Policies ..................................................................................................................... 36
5.2.5 Employee Gap ...................................................................................................................................... 38
5.2.6 Employee Turnover .............................................................................................................................. 39
5.2.7 Performance Appraisal and Level of Practice ...................................................................................... 40
5.2.8 Technological Change .......................................................................................................................... 41
5.2.9 Compensation ....................................................................................................................................... 42
5.3 Summary Findings ................................................................................................................................................. 43
Reference
.............................................................................................................................................................................. 47
Annex
Annex A: .................................................................................................................................................................... 49
Annex B:...................................................................................................................................................................... 51

List of Tables
Page
Table 1.1: Areas of manpower planning and issues related with different area .......................................................... 12
Table 3.1: Activity Chart ............................................................................................................................................. 22
Table 4.1: The distribution of pharmaceutical industries of the Bangladesh with respect to time .............................. 24
Table 5.1: Yearly employee, sales and profit turnover of considered pharmaceutical firms of Bangladesh ............... 30
Table 5.2: The correlation values between sales turnover and profit turnover ........................................................... 31
Table 5.3: Distribution of different departments in the pharmaceutical firms ............................................................. 32
Table 5.4: Regression statistics of sales & profit turnover and departmentation with having HR plans ..................... 33
Table 5.5: Distribution of involvement of HR manager at different stage of decision-making process ...................... 33
Table 5.6: Regression statistics of sales & profit turnover and HR manager's involvement in
decision-making process .................................................................................................................... 34
Table 5.7: Distribution use of human resource information system ............................................................................ 35
Table 5.8: Regression statistics of sales & profit turnover and use of human resource information system .............. 36
Table 5.9: Distribution number of human resource policies ....................................................................................... 36
Table 5.10: Regression statistics of sales & profit turnover and existence of human resource policies ..................... 37
Table 5.11: Regression statistics of sales & profit turnover and employee gap .......................................................... 38
Table 5.12: Regression statistics of sales & profit turnover and employee turnover ................................................... 40
Table 5.13: Regression statistics of sales & profit turnover and level of practice of performance appraisal .............. 41
Table 5.14: Regression statistics of sales & profit turnover and technological change ............................................... 41
Table 5.15: Regression statistics of sales & profit turnover and compensation package............................................. 43
Table 5.16: The comparative regression statistics of independent variable on sales turnover..................................... 44
Table 5.17: The comparative regression statistics of independent variable on sales turnover..................................... 45

List of Figures
Page
Fig. 1.1: A typical human resource-planning model.................................................................................................... 11
Fig. 3.1: Schematic presentation of the methodology.................................................................................................. 22
Fig. 5.1: Relationship between departmental HR plans and sales turnover ................................................................. 32
Fig. 5.2: Relationship between HR manger's involvement in decision making process and sales turnover ................ 34
Fig. 5.3: Relationship between use of HRIS and sales turnover .................................................................................. 35
Fig. 5.4: Relationship between existence of human resource policies and sales turnover ........................................... 37
Fig. 5.5: Relationship between employee gap and sales turnover ............................................................................... 38
Fig. 5.6: Relationship between employee turnover and sales turnover........................................................................ 39
Fig. 5.7: Relationship between level of practice of performance appraisal and sales turnover ................................... 40
Fig. 5.8: Relationship between readiness for accepting any technological change and sales turnover........................ 42
Fig. 5.9: The relationship between compatibility compensation package and sales turnover ..................................... 43
Fig. 5.10: Contribution of different factors on organizational performance ................................................................ 46

Abbreviation
API

Active Pharmaceuticle Ingradients

BDT

Bangladeshi Taka

GDP

Gross Domestic Product

GNP

Gross National Product

HIRS

Human Resource Information System

HR

Human Resource

R&D

Research and Development

Executive
Summary

The importance of manpower planning in a business organization is broad and

outsized. It is related with the basic managerial functions like planning, organizing,
directing and controlling and those are based upon the manpower. Based on the
human resources all of theses functional managerial activities are generally
conducted. Efficient management of personnel or manpower becomes an important
function in the industrialization world of today. Setting of large-scale enterprises
requires management of large-scale manpower, which required better planning in all
aspects of management. Better planning will bring higher productivity and that will
ultimately increase sales and profit turnover of the organization and hence
organizational performance will be increased.
The human are the most important resources of an organization because it is driving
force of every production process of the organization form input to output. In other
words effective manpower planning is one of the most important prerequisite of good
performance of every business organization. The area of manpower planning
consists of goals of the organization, analyzing the current manpower resources,
human resource forecasts, implementation program, audit and adjustment. Not all of
these impact the organizational performance in a variable degree. However the
issues related with the broader areas of the manpower planning is presented in the
following.
Area of manpower
planning
Goals of the
Organization

Analyzing the current

manpower resource

Human Resource
Forecast

Implementation
Program

Issues of the respective area

Production turnover
Sales turnover
Profit turnover
Strategy
Skill Inventory
No of People Grouped by Organization
No of People Grouped by Department
No of People Grouped by Jobs
Education
In Service Training
Complete Performance
Projected workforce requirement per year
Layoffs
Promotion
Quits
Projected workforce need per year
Workforce gap per year
Succession plan
Recruitment
Selection and placement

Factors Considered in the

Study

1. Departmentation and
HR Plans
2. HR in Decision
Making Process
3. Human Resource
Information System
4. Human Resource
Policies
5. Employee Gap
6. Employee Turnover
7. Performance
Appraisal & Level of
Practice
8. Technological Change
9. Compensation

Area of manpower
planning

Issues of the respective area

Factors Considered in the

Study

Performance appraisal
Carrier planning
Transfer
Promotion Layoff
Training and Development
Motivation
Compensation
Progress of implementation
Audit and Adjustment Updating skill inventory
Corrective action for any change

Manpower planning has five essential elements namely analyzing the current
manpower resource, reviewing employee utilization, forecasting the demand for
employees, forecasting supply and developing a manpower plan and those includes
a number of relating issues. Considering these a total of nine factors were selected to
observe the implications over the sales and profit turnover as mentioned in the above
table. The overall objective of the study was the assessment of the manpower
planning on organizational performance/effectiveness and the other objectives of
study was to observe factor wise and overall contribution to the organizational
performance namely sales and profit turnover.
It was assumed that the selected factors has no influence on manpower planning
which will be observed on organizational performance in the field of sales and profit
turnover. The independent variable considered were mainly factors of manpower
planning namely employee turnover, human resource policies, technological change,
performance appraisal and level of practice, compensation, human resource
information system, HR in decision making, employee gap, departmentation and HR
plans and the dependent variables considered were sales and profit turnover. The
influence of different factors on manpower planning were assessed through
regression analysis Three models of regression analysis was conducted namely
linear, quadratic and logistic through statistical package SPSS. The information were
collected by direct interview with HR professional of the organization by designing
questionnaire and from secondary document
The contribution of the pharmaceutical industries in Bangladesh economy is no doubt
indispensable and it is expanding. The pharmaceutical industries in the country
produced medicines worth about $715 million in 2007 with a market growing over
12% annually over the last half a decade. The average increment of the involvement
of the manpower is 36% indicating that the pharmaceutical industries have a wider
prospect in the economy of the country. The pharmaceutical firms are taken as
sample for the study because the involvement of manpower is significant. A total of
around 10% pharmaceutical firms samples were considered in the study.
The regressions analysis indicated that some of the independent variables have
significant impact on sales and profit turnover of the pharmaceutical firms and some
have less significant or insignificant impact. The impact of the independent variables
namely employee turnover, human resource policies, technological change, and the
7

performance appraisal and its level of practice are significant over the sales turnover
in the sample pharmaceutical firms. There is a linear relationship existed between the
employee turnover and the sales turnover that is with the increase of the employee
turnover the sales turnover will be increased. The increase of the number of human
resource policies in the pharmaceutical firms increased the sales turnover. The
existence of the human resources polices have significant impact on the sales
turnover. The considered policies in the study were the recruitment and selection
policy, training and development policy, successions planning, service rule, retention
policy and such policies help the pharmaceutical firms to made more appropriate plan
of its manpower towards the attainment of the sales target. The relation ship between
the sales turnover and the existence of human resource policies was curvilinear in
nature.
The study result illustrated that the readiness of the pharmaceutical firms for the
adoption of the technological change, impacted the sales turnover positively. It will
ensure the standard and quality of product for competing with the national as well as
with the international market. The analysis result indicated the pharmaceutical firms

Employee Gap

RelativeImportanceisvery
highonSalesTurnover

Manpower
Planning
Employee
Turnover
Human Resource
Policies
Technological
Change
Performance Appraisal
and Level of Practice
Compensation
Departmentation & HR Plans

HR in Decision Making

Human Resource
Information System

RelativeImportanceisvery
highonProfitTurnover

those are ready to adopt the technological changes have higher sales turnover. The
levels of practice of the performance appraisal in the pharmaceutical firms impacted
the sales turnover. The level of practice of the performance appraisal varied form
functional, partly functional and non-functional. The relation ship of the level of
practice of performance appraisal impacted the sales turnover in a curvilinear way
that is, the highest level of sales turnover was achieved for those firms where the
system is fully functional. The other independent variable namely compensation,
human resource information system, HR in decision-making, employee gap,
departmentation and HR plans has less significant impact or have no significant
impact on the sales turnover.
The employee turnover and the human resources polices have significant positive
impact on the profit turnover. The relationship between the employee turnover and
the profit turnover is linear that is with the increase of the employee turnover the profit
turnover would be increased. The relationship between the existences of human
resource policies was curvilinear.
The organizational performance of the pharmaceutical firms would increase in terms
of sales turnover, when the firms considers the significant factors in the order of
Employee Turnover > Human Resource Policies > Technological Change >
Performance Appraisal and its Level of Practice. In the case of the profit turnover
order of consideration would be Employee Turnover > Human Resource Policies.
The contribution of other factors over sales and profit turnover under this study may
be interlinked with each other or with the identified significant factors over the sales
and profit turnover rather than directly sales and profit turnover. The order of relative
importance of different independent variable and their impact on the sales and profit
turnover of pharmaceutical firms are presented in the schematic figure in the earlier
page.

Chapter I
Theoretical Frame

1.1 Manpower Planning

The planning is nothing but making decisions in earlier by considering the unpredictable future and the
scarcity of resources regarding what is to be done in future. Therefore, the human resource planning is a
process by which an organization ensures that it has the right number and kinds of people, at the right
time, capable of effectively and efficiently completing those tasks that will help the organization to
achieve its overall strategic objectives. It may also be defined as "An integrated approach to performing
the planning aspects of the personnel function in order to have a sufficient supply of adequately
developed and motivated people to perform the duties and tasks required to meet organizational
objectives and satisfy the individual needs and goals to organizational members."1 The human resource
planning ultimately translates the organizations overall goals into number and types of employees needed
to meet those goals. It is concerned to taking the appropriate decision by guessing the future business and
to take timely and correct decisions in respect of company objectives, policies and cost performances.
Manpower planning is the first and major function of the human resource management along with the
other functions. It is related with the organization's overall performance in terms of quality and quantity
output.
10

The importance of HR planning lies with the contribution it could make to reducing uncertainties with the
employment patterns of a large organization. It is a critical managerial function because it provides
management

with

information

on

resource flows that could used to

Strategic
Planning

calculate amongst the other things,

recruitment needs and succession of
development

plans.

However,

the

Human Resource
Planning

major reasons for HR planning are to

achieve more effective and efficient
use of human resources, more satisfied

Forecasting
Demand for
Labor

Forecasting
Supply of
Labor
Comparison of
requirements and
Availability

and more developed employees and

more effective equal employment
opportunity planning. A typical human
resource-planning model is presented

Demand = Supply

Surplus of Worker

Shortage of Worker

No Action

Restricted Hiring,
Early Retirement,
Retrenchment

Recruitment &
Selection

in the schematic Fig. 1.1.

Through the assessment process the
human
determine

resource

managers

currently

first

Fig. 1.1: A typical human resource-planning model

available

employee in the organization and it serves as guide for supporting new organizational pursuits or in
altering the organization's strategic direction. The details information is also collected regarding the
education, training, performance ratings, current position, salary and other needed information. Analyzing
this information the managers determine whether there is need for new employee or after providing some
training the present employees will achieve the new goals. Ineffective and improper manpower planning
can impact an organization negatively and can make loss in business and even can make business disaster
through over, under and inappropriate staffing of workers in the organization.

1.2 Organizational Performance

The effectiveness of an organization and its successful performance depends on a number of crucial
factors. The effective and harmonized combination of these factors can make an organization effective
and as a consequence the organizational performance will be increased and improved. These factors are
namely, strategy, structure capacity and capability, leadership, people system and process, culture and
values, employee engagement and customer experience.2 Basically, these factors or instruments, which
are mainly related with the manpower, are utilized by the organization through their effective

11

management and planning. Presumably the business organization aligned the employees with its strategy
and engaged the employees with the organization. Basically human resource planning is the process of
using organizations goals and strategy to forecast the organization's demand for supply of employee in
terms of finding, developing and keeping a qualified workforce for the improvement of the organizational
performance.
It was mentioned3 that the organizational performance is related with three major factors namely the
organizational motivation to achieve the performance, objectives of the organization, the influences and
impact of external environment and organizational capacity to achieve the desired performance. These
could be measured by the four ways namely relevance, effectiveness, efficiencies and financial viability.
Relevance could be measured by measuring the degree to which the organization's stakeholders think the
company in relevant to their needs. Client judgment of the relevance of products or services by buying
them, employees by working hard, stakeholders by buying and holding shares and so on. The
effectiveness could be measured by measuring the degree to which the organization is successful in
achieving its strategy, mission and vision. The efficiency could be measured by measuring how well the
organization has been using its resources like financial, human, physical information. The financial
viability could be measured by measuring how viable the organization is not only in short but also in the
long term.
The human are the most important resources of an organization because it is driving force of every
production process of the organization form input to output. In other words effective manpower planning
is one of the most important prerequisite of good performance of every business organization. The area of
manpower planning consists of goals of the organization, analyzing the current manpower resources,
human resource forecasts, implementation program, audit and adjustment. It needs to be mentioned that
the issues covering under these area of manpower planning usually does not impact the organizational
performance equally. However the issues related with the broader areas of the manpower planning is
presented in the following Table 1.1.
Table 1.1: Areas of manpower planning and issues related with different area
Area of manpower planning
Goals of the Organization
Analyzing the current manpower

Issues
Production turnover
Sales turnover
Profit turnover
Duration of strategy
Skill Inventory

12

Area of manpower planning

resource

Human Resource Forecast

Implementation Program

Audit and Adjustment

Issues
No of People Grouped by Organization
No of People Grouped by Department
No of People Grouped by Jobs
Education
In Service Training
Complete Performance
Projected workforce requirement per year
Layoffs
Promotion
Quits
Projected workforce need per year
Workforce gap per year
Succession plan
Recruitment
Selection and placement
Performance appraisal
Carrier planning
Transfer
Promotion Layoff
Training and Development
Motivation
Compensation
Progress of implementation
Updating skill inventory
Corrective action for any change

1.3 The Study Proposal

The overall discussion above indicated that manpower planning has wider impact on organizational
performance. Manpower or personnel planning actually reduces the wastes in employing people and
proper utilization of the employed, which actually increases the production, and ultimately the profit of
the organization and presumably the performance of the organization considering the unpredictable future
need. In addition to these manpower planning also include avoiding worker and skills shortages, stopping
the profit-eroding effects of being over- or understaffed, preparing succession plans and shaping the
optimum future work force. Manpower planning has five essential elements namely analyzing the current
manpower resource, reviewing employee utilization, forecasting the demand for employees, forecasting
supply and developing a manpower plan. Therefore, this term paper aims to find out the effect of

13

manpower planning on effectiveness and performance of the organization in terms of the sales turn over,
production turnover and profit turn over of Pharmaceutical industries of Bangladesh.

1.4 Objective of the Study

The overall objective of the study was the assessment of the impact of the manpower planning on the
organizational performance/effectiveness and the other objectives of the assignment will be
1. Contribution of each factor on sales and profit turnover
2. The overall impact of manpower planning on the sales and profit turnover

1.5 Benefits of Manpower Planning

The benefits of conducting workforce planning are many and varied. Essentially it helps organizations to
get the right people in the right job at the right time. It allows for a more effective and efficient use of
workers and for organizations to prepare for restructuring, reducing or expanding their workforces In
addition to the practical benefits, the process of workforce planning aids organizations by providing over
arching objectives which integrate the various units and allow employees space and time to think about
common goals for the future. The benefits4 of manpower planning has a number of aspects relating with
the corporate planning, change management, employee development, budget anticipation, interpersonal
management, physical development, welfare facilities and improvement of the productivity, sales and
turnover etc. However some of the important benefits of the manpower planning are presented in the
following:

It checks the corporate plan of organization

It offsets uncertainty and & change

It enables the organization to have a right person at the right time & in right place

It provides scope for advancement & development of employees through training and
development etc

It helps to anticipate the cost of salary, benefits &all the cost of human resource, facilitating the
formulation of budgets in organization

To foresee the changes in values, aptitudes &attitude of human resource & to change techniques
of interpersonal management

To plan for physical facilities, working condition & fringe benefits like canteen, school,
conveyance, childcare centers.

It helps to take steps to improve productivity, sales, turnover etc.

14

Chapter II
Literature Review

2.1 Literature Review

The term itself is a relatively new one, which is used interchangeably with older terms such as human
resource planning, succession planning and building bench strength. In the past workforce planning
was predominantly known as manpower planning. Although still used occasionally, there has been a
move away from this latter term due to its gender-unequal connotation and because it suggests a
mechanistic quantitative approach to thinking about the workforce.5 Manpower planning is associated
with a rather centralized, whereas workforce planning allows for a greater recognition of qualitative
issues, especially concerning skills, and is appropriate in a variety of organizational settings.
Organization structure6 expresses managerial, administrative, and operational relationships within the
entity. It also embodies authority, responsibility, and accountability. Organization structure groups
activities for the purposes of administration and control and combines duties and responsibilities into
jobs. Entity structure is the result of and a tool for implementing operational, financial, human resource,
and strategic plans. It influences the entity's ability to communicate, coordinate its functions, and respond
to environmental changes. The structure of an entity must simultaneously facilitate planning, problem

15

solving, policy-making, communications, operations, resource allocation and use, and performance
assessment in order to meet the demands placed upon it. Departmentation is the grouping of jobs
according to some logical arrangement. It is the manner in which activities should be divided and formed
into specialized groups in an organization. The crucial managerial consideration when creating
departments is to determine the basis of grouping jobs. Departmentation is done to achieve similar
advantages by different approaches.
Globalization has introduced tremendous impact on the ways in which human resources are managed and
the ways in which the human resource management (HR) function is positioned. Because HR practices do
not exist in a vacuum, understanding the context within which the role of HR in corporate decisionmaking is affected contributes to better management of people. Such understanding is even more
important as organizational borders are blurred by an increasing movement toward a more global
economy where management entails managing organizations and people in geographic contexts different
from ones own. This study examined the factors explaining HR involvement in strategic formulation and
its consequences using three perspectives: resource-based view of the firm, institutional theory and
political approach. The results showed that HR involvement in strategy formulation did not necessarily
translate into competitive advantage. However, if HR involvement in strategy formulation was an
important goal by itself, it is interesting to note that organizational age was not a deterrent to its adoption.
In addition, positioning HR so as to be involved in top-level decision-making also increased its level of
involvement in strategy formulation.7
On the other hand, as stated8 employees do not respond simply to financial incentives as other kinds of
non-financial incentives such as trust, duty, reputation within peer groups and communities etc. are
equally important. This could probably due to the fact that high powered incentives such as from market
transactions, and low powered incentives found in bureaucratic setting9, which could have contributed
to this result. In the same vain, incentives were not found to moderate the relationship between HR
practices and organizational behavior. This is most likely due to the fact that the willingness to perform
and achieve better organizational performance is influenced by conformity to collectivity-oriented
behavior, which is common in Asian countries. In addition, this finding is further supported by past
researchers affect-based trust behavior is associated with employees enterprising behavior; hence
incentives offered by the companies do not moderate the relationship between HR practices and their
level of performance in the companies.10

16

HRIS has been envisioned as having a substantial impact on the importance of human resource
departments, leading to a more strategic/managerial role and contributing to the organizations
competitiveness11, as well as creating new paths for HR to add value to the organization.12 However, HR
directors did not perceive that the HRIS had a positive impact on the role of the human resources
department in the organization, with only 30% and 40%, respectively, agreeing that the HR department
had become more important and had become more of a strategic partner in the institution. As early as the
mid 1990s the focus of HRIS had begun to shift because of its usefulness in strategic decision-making.13
Regarding the strategic impact, only 50% of the directors responded that the administrators thought the
HRIS helped them to meet strategic goals, and just 40% believed that it had improved the strategic
decision making of top administrators. Finally, only 20% felt that it had aided in the promotion of the
institutions competitive advantage.
HR departments play a critical role, for they are the one who will handle diversified employees. From the
recruitment and selection and from the pool of candidates, the employees are shaped according to the
positions they are qualified in entering into.14 HR functions might be different from each other as well as
the strategies applied by the organizations to improve the performance of the employees. Basically, the
staffing strongly affects the type of the employee and the nature of the company. And in terms of
applying the internal control over the manpower, the organization is in favor of the employees who can
give benefits and can function well according to their job description.15 The operation in
telecommunications companies is composed of various elements that contribute in their current monetary
and non-monetary data. To satisfy the shareholders, the continuous change in the system and roles and
functions of individuals are created. For an instance, the improvement among the people can be realized
through the organizational changes and computerization of other activities that can assist the financial and
cost accounting system, administration, and over all control in the accounting department in
telecommunications organization.16 It is expected that the computerization or the application of the
information system provide the technical basis to develop sound managerial decisions. Therefore, the HR
has the responsibility in finding people who are capable enough to promote and withstand the changes
that may happen in the organization.
Therefore, if the above strategies were taken into account the business would be able to survive in a
dynamic environment by treating their employees as one of their assets, which needs a lot of attention.
Employees are the backbone of any business success17 and therefore, they need to be motivated and
maintained in organization at all cost to aid the organization to be globally competitive in terms of
providing quality products and services to the society. And in the long run the returns on investments on

17

the employees would be achieved. Management should encourage job redesign-task autonomy, task
significance and task identity, open book management; empowerment of employees, recruitment and
selection must be done scientifically with the objective of retaining employees. Managers should examine
the sources of employee turnover and recommend the best approach to fill the gap of the source, so that
they can be in a position to retain employees in their organization to enhance their competitiveness in the
this world of globalization. Managers must understand that employees in their organizations must be
treated as the most liquid assets of the organization, which would make the organization to withstand the
waves of globalization. This asset needs to be monitored with due care, otherwise their organizations
would cease to exist. Employees should be given challenging work and all managers should be hired on
the basis of know how by following laid down procedures of the organization and this would make
organization to have competent managers at all levels of management and hence good supervision.18
Management must compensate employees adequately. They should pay employees based on their
performance and in addition they should given employees incentives like individual bonus, lump sum
bonus, sharing of profits and other benefits. Hence, if these were put in place they would minimize
employee turnover.
Performance appraisal19 is a most valuable human resource tool. It is a vital component for the
development of company as well as for individual employee. The system of performance appraisal
motivates the sincere employees and in certain cases it punishes the dishonest employees. This is
benefited to employees as well as for the organization. Productivity increases if there is a fair
performance appraisal system implemented in the organization. Performance appraisal plays critical role
in organizations ability to achieve its strategic goals. Organization and the HR department has to design
and implement Performance appraisal system in an organization is a core managerial function. The
challenges faced by the present days organization is absolutely depending on the effectiveness of its
performance management system which ultimately acts as a catalyst for Employees effective
performance. The true goal of performance appraisal is employees development & organizational
improvement. Ultimately competitive asset of any organization is its human resources, thus organization
should develop employee competencies, which should be aligned with the organizations business goals.
This can be achieved through performance management system, which also acts as behavioral change
tool, and it can also enable performance management system, which can improve overall organizations
performance.
Organizations vary significantly in their cultures and management styles.20 Some are more progressive
than others particularly when it comes to dealing with stress. A more positive culture will be concerned

18

with the safety, health and welfare of its employees, viewing this area as an important feature of
maintaining good employer-employee relationships, resulting in high levels of performance and
productivity by employees.21 It is important to recognize is that organizational cultures which cannot be
changed according to plan, or through the demands of senior management, or by intervention by the
enforcement authorities. For cultural change to be successful, managers need to consider at the outset
namely the potentially stressful effects on the workforce of enforced change, the need for on-going
consultation at the various stages of the change process, the provision of information, instruction and
training prior to commencing the process, the speed at which the intended changes are scheduled to take
place, methods for assessing how well or how badly individual employees are coping with the changes,
the provision of continuing help, assistance and coaching, together with the regular monitoring of people
who are finding the changes difficult to comprehend and put into practice and the provision of regular
feedback to employees on the success or otherwise of the changes being introduced. Changing culture
requires a methodological support adapted to the organizational specific. Unfortunately, there is no
rigorous methodology whose effectiveness is demonstrated with convincing arguments based on the
obtained performances. Thats the reason why Romanian managers need to have some special
communication skills, a high level of adaptability and the capacity of influencing employees behavior.
The results offered some support for all our propositions: Corporate venture units22 develop
organizational profiles that are to some extent aligned with their strategic objectives; greater internal
alignment around particular organizational profiles is associated with higher cross-sectional performance;
and exploitation-oriented venture units tend to survive for longer than exploration-oriented units.
However, we should also be clear that the significance of the findings was fairly modest. Hypothesis 1
was supported, indicating that the configurations we theorized are found in practice, but the proportion of
venture units whose organizational profiles matched their strategic profiles was only 40%. And in terms
of Hypothesis 2, while fit with the organizational profiles of the four ideal types was associated with
improved cross-sectional performance, the level of fit with the strategic profiles of the ideal types showed
no sign of being important. It is worth exploring the reasons for these modest findings before broadening
our discussion to consider the implications of our research for configuration theory and for strategic
management.
This study tests two sets of hypotheses23 that propose a positive association between organizational
performance and (1) the use of reward and incentive compensation practices; and (2) the effective use of
reward and incentive compensation practices. The results of the statistical analysis show that, in the
context of the Taiwanese semiconductor design industry, the use of a profit-related payment scheme is

19

positively and significantly related to organizational performance; and that the effective use of reward and
incentive compensation is positively related to financial performance. The results of the study indicate
that companies using a profit related payment scheme are more likely to perform better in terms of both
financial and non-financial performance than companies that do not use such a scheme; and, that
companies which are effective in the use of reward and incentive compensation perform better than other
companies. The research findings support the commonly held notion that the effective use of reward
practices has the potential to increase organizational performance; thus, it is recommended that managers
should give special attention to how best to employ such practices to attract and retain talented
individuals; and how to effectively incorporate performance-based payment into their reward system to
strengthen the ties between pay and employees performance. Nevertheless, some scholars suggest that
performance-linked compensation practices have their drawbacks. The findings of extensive experimental
research24 on the association between rewards and motivation show that monetary rewards do not always
increase peoples motivation to perform.
Workforce planning has been becoming a new big factor on the human resource agenda. As organizations
have been facing increasing competition, an ageing workforce and a fluctuating economy, they are
beginning to see the need to plan to avoid getting left behind. The review of the literature illustrated that
departmentation and human resource plans, involvement of human resource in decision-making, level of
human resource practice, human resource Information system, policies and practices, employee turnover
and workforce gap, performance appraisal system and its level of practice, technological change and
readiness, organization business strategies, compensation package has a larger impact on the
organizational performance. Manpower planning is not a stand-alone event, which organizations should
conduct once a year using a fixed template for all units. Rather it should be an ongoing process, which
reacts to both internal and external changes and is sensitive to the different needs of units. It cannot, and
should not aim to predict the future. Rather it should set the context for other plans and challenge the
assumptions of business which short-term thinking

20

Chapter III
Methodology

3.1 Methodology
Assuming that, manpower planning has no impact on the organizational performance in relation to the
sales and profit turnover. The independent variable considered were mainly factors of manpower planning
namely employee turnover, human resource policies, technological change, performance appraisal and
level of practice, compensation, human resource information system, HR in decision making, employee
gap, departmentation and HR plans and the dependent variables considered were sales and profit turnover.
The method of the study was questionnaire survey and information collection from different secondary
documents of the pharmaceutical companies. A questionnaire was developed for collecting information
from the respondents (HR professionals) of different pharmaceutical firms and secondary documents like
annual report, other relevant documents and Internet.
3.1.1 Analysis
A regression analysis was conducted to study the influence of the independent variable over the
dependent variable in a variable degree. Three models of regression analysis was conducted namely

21

linear, quadratic and logistic and pattern of relation was determined and analysis was done by statistical
package, SPSS.

Independent Variable
Y

Dependent Variable
X

Management functions those

influences the Organizational
Performance?

Organizational Performance
Could be measured by

Sales Turnover
Profit Turnover

Sales Turnover
Profit Turnover

Management Functions
Effectiveness
Efficiency
Relevance
Financial viability

Departmentation and
HR Plans
HR in Decision Making
Human Resource
Information System
Human Resource
Policies
Employee Gap
Employee Turnover
Performance Appraisal
and Level of Practice
Technological Change
Compensation

Management function
Planning
Organizing
Motivating
Staffing
Coordinating

Manpower Planning

Fig. 3.1: Schematic presentation of the methodology

3.1.2 Sample size

HR professionals of a total 20 of pharmaceutical industries of Bangladesh were interviewed located in
Dhaka. List is attached in Annex B
3.1.3 Instrument
Questionnaire (Annex A), direct interview and information collection form different secondary document

3.2 Plan of Action

The plan of action of the study is presented in Table 3.1.
Table 3.1: Activity Chart
No
1
2
3
4
5
6
7
8
9

January 2012
Activity
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30
Finalization of the concept note with supervisor
Questioner Development
Literature review
Conduction of survey
Collection of secondary information
Data entry
Data analysis
Report writing
Preparation of presentation

22

Chapter IV
Pharmaceutical Firms

4.1 Pharmaceutical Industries

The contribution of the pharmaceutical industries in Bangladesh economy is no doubt indispensable and it
is expanding with acceleration since its inception and after the promulgation of the Drug control
Ordinance - 1982. In recent years the pharmaceutical market of Bangladesh has been expanding to the
international market and increasing the export earning and contributing to the GDP and GNP of the
country directly. Around 95% of the total medicine requirement of the country is supplied by these
industries through the local market. In 2007 the total size of the pharmaceutical market of Bangladesh
was estimated about US$ 700 million. The pharmaceutical industries in the country produced medicines
worth about $715 million in 2007 with a market growing over 12% annually over the last half a decade.
The country has been exporting different drugs more than 67 different countries of the world. However,
according the Drug Control Administration a total of 262 pharmaceutical industries exist in Bangladesh
some of which are registered and some are not, some are large and some are small and large and those
industries have been using a lager number of skilled, semiskilled and unskilled manpower is involved for
such activities. The prospect of the pharmaceutical industries in Bangladesh is large and its development
is presented in the following Table 4.1:
23

Table 4.1: The distribution of pharmaceutical industries of the Bangladesh with respect to time
No of pharmaceutical Periodic Growth Rate of No of manpower Periodic Growth Rate

No

Period (Year)

1985-1990

172

1991-1995

186

35675

29

1996-2000

204

117146

70

2001-2005

245

17

151203

23

2005-2010

262

202371

25

Firms

pharmaceutical Firms

involved

of manpower involved

25355

In recent years it is also observed that the capacities and impacts of the diseases has been increasing to
make a significant deterioration of the health and consequently the drugs and services for those diseases
needs to be improved. High tech technologies are warranted to improve the quality of the drugs for
combating the diseases. In the background, it is the human resources who develop and upgrade any
services or product with respect to time to meet the need and demand and to address the problem of the
society. Therefore, from the economical point of view the manpower need to be developed and upgraded
properly to with respect to time through proper planning to improve the organizational performance,
which is very important for every economy to success.

4.2 Overview of Some Pharmaceutical Firms

(source: Internet)

General Information: SQUARE PHARMACEUTICALS LTD

Square Pharmaceuticals is the flagship company of Square group, which is one of the largest conglomerates in the
country. Square Pharmaceuticals is in manufacturing and marketing of finished pharmaceuticals products for the last
53 years. Manufacture of Active Pharmaceutical Ingredients (API) is a part of company business since in 1995.
Since 1985 Square Pharma is the leader of Bangladesh Pharma market. The company has 10 manufacturing units in
2 different sites (Dhaka & Pabna) in Bangladesh. 4 other manufacturing units are under construction at Dhaka site
and commissioning of those units are expected to be completed by the year 2013. Solid dosage manufacturing unit
has been approved by UK MHRA in 2007. All the products are developed in house for filing to regulate markets.
Square works for making the latest innovation of medical science available to the people at a reasonable cost. It
believes in introducing latest technology in the field of quality control and manufacturing with economies of scale.
Square looks at the future with increasing confidence. In the times to come Square intends not only to strengthen its
strong local footings but also to extend its global presence.

24

General Information: INCEPTA PHARMACEUTICALS LTD

Incepta began its operation with a handful of highly skilled and dedicated professionals guided by an able
leadership. Proper strategic planning, technical excellence, swift and timely decisions helped us achieve our
objectives leading to much faster growth. Incepta was able to anticipate the need of the market and provide the right
product at the right time. High focus on R&D investment from the very beginning made possible the introduction of
quality products ahead of its competitors in most cases. Incepta Pharmaceuticals Ltd. is now the 2nd largest
company of the country and recognized as the fastest growing of the top five manufacturing company in the country.
Established in the year 1999 the company has come a long way. Incepta now has one of the largest and competent
sales force and large distribution network of its own, operated from 18 different locations throughout the country. A
most dynamic skilled and dedicated marketing team comprising of pharmacists and doctors are at the core of the
marketing operation. These highly skilled professionals play a crucial role in providing the necessary strategic
guideline for the promotion of its product. Beginning in 2000, Incepta has been launching new and innovative
products at a faster pace than its competitors. The company produces a wide variety of dosage forms covering nearly
all the major therapeutic classes. During the last 11 years of operation Incepta launched as many as 118 new
generics for the first time ever in Bangladesh. High focus on quality and timely introduction of much needed
essential medications previously unavailable in the country has enabled Incepta to become the second largest
pharmaceutical company of the country.

C
General Information: Eskayef Bangladesh Limited
Eskayef Bangladesh Limited, the world-class healthcare solution provider, is one of the leading and fastest growing
pharmaceutical company of Bangladesh, which is engaged in the manufacture and marketing of a wide range of
therapeutic drugs, bulk pellets and animal health and nutrition products with annual sales surpassing 60 million US
dollars. With qualified, trained and skilled professionals on its staff and its unswerving standards of quality control,
the company has distinguished itself as one of the most respected names in the pharmaceutical industry. Eskayefs
manufacturing facility has transcended the frontiers after the accreditation of UK MHRA (United Kingdom
Medicines and Healthcare products Regulatory Agency). The dedicated cephalosporin plant of Eskayef Bangladesh
Limited is the top class state-of-the-art manufacturing facility in Bangladesh Pharmaceutical industry. Eskayef is
growing more global since 2005 and exporting bulk pellets and finished products in Asia, Africa, and Central
America and also in the process of exporting in the European countries. The company is also tied up with the world
leader in eye care solution Allergan Inc. Ireland.

25

General Information: RENATA LIMITED

The Company started its operations as Pfizer (Bangladesh) Limited in 1972. For the next two decades it continued as
a highly successful subsidiary of Pfizer Corporation. However, by the late 1990s the focus of Pfizer had shifted from
formulations to research. In accordance with this transformation, Pfizer divested its interests in many countries,
including Bangladesh. Specifically, in 1993 Pfizer transferred the ownership of its Bangladesh operations to local
shareholders, and the name of the company was changed to Renata Limited. It is a Listed Public Limited (Dhaka
Stock Exchange). The main business is manufacture and marketing of human pharmaceuticals and animal
therapeutics. it has two production sites. The Mirpur Site is 12 Acres and Rajendrapur Site is 17 Acres. The
company is present in Afghanistan, Cambodia, Guyana, Jordan, Kenya, Malaysia, Myanmar, Nepal, Philippines,
Hong Kong, Sri Lanka, Vietnam, and United Kingdom.

General Information: BEXIMCO PHARMACEUTICALS LIMITED

Beximco Pharmaceuticals Ltd. belongs to Beximco Group, the largest private sector industrial conglomerate in
Bangladesh, which has diversified into textiles, apparels, pharmaceuticals, ceramics, aviation, real estate, ITC&
media and energy sectors. Most of these companies are actively being traded in the stock exchange of Bangladesh
with a total market capitalization of more than $ 1.65 billion. Incorporated in the late 70s, Beximco Pharma began as
a distributor, importing products from global MNCs like Bayer, Germany and Upjohn, USA and selling them in the
local market, which were later manufactured and distributed under licensing arrangement. Since then, the journey
continued, with a vision to go a long way and today, Beximco Pharma is one of the largest exporters of medicines in
Bangladesh, winning National Export (Gold) Trophy for a record four times. Major global regulatory bodies have
accredited Beximco Pharmas manufacturing facilities and it has expanded its geographic footprint to 40 countries.
The company has the unique distinction to being the only company in Bangladesh to be listed on AIM of London
Stock Exchange. Beximco Pharma produces pharmaceuticals formulations and active pharmaceutical ingredients,
having a current portfolio of more than 400 products and a dedicated team of more than 3500 employees. In its long
journey over three decades, the simple principle on which it was founded remains the same: producing high-quality
generics and providing better access to medicines at a much affordable cost. Each of our activities must benefit and
add value to the common wealth of our society. We firmly believe that, in the final analysis we are accountable to
each of the constituents with whom we interact, namely: our employees, our customers, our business associates, our
fellow citizens and our shareholders. BPL has transformed its activities, culture, style and philosophy to meet the
demands of the new millennium.
26

F
General Information: ACME GROUP
ACME Group started its journey in 1954 with the original name of The ACME Laboratories Ltd. The Group
expanded its business operations over the decades. The chief operation of ACME Group is manufacturing
pharmaceuticals. It has also commenced businesses in line of agro based, service oriented & printing. ACME Group
is one of the leading and diversified global conglomerates in Bangladesh, which employs over 5500 employees. It is
a family owned business with almost BDT 9 billion revenue every year. The Groups business has local and
international sales. It exports to eleven countries worldwide. The main profitable business of ACME Group is
pharmaceuticals. It achieved certifications like ISO 22000:2005 and CCAP. The ACME Groups future plan is to
start R&D with specialized drugs and launch new medicine at a reasonable price.

General Information: ARISTOPHARMA

ARISTO PHARMA LTD. was established in 1986. It is a private limited company and doing business in
manufacturing and marketing of finished pharmaceutical formulations. Skilled human resources are the key driving
force of ARISTO PHARMA. Our success is based on attracting, developing & retaining talented & motivated
human resource. They share both our desire to excel & our commitment to improve the lives of the people. Skill
acquisition & development of all staff is key to a companys growth, we believe. In this regard, we are always on the
look out to identify training needs of our employees in order to enable them to carry out the entrusted
responsibilities. Training programs undertaken, not only address skills relating to the specialty of the individuals
concerned, but also improving leadership & management skills. The total number of employees in ARISTO
PHARMA is around 3000, around 60% of which are white-collar employees. Among them are- Pharmacists,
Chemists, Biochemists, Microbiologists, Engineers, CMAs, CAs, MBAs, Doctors and Other Graduates. It is our
people who make us different from our competitors. The secret of our success story lies in our people.

27

General Information: General Pharmaceuticals Ltd.

The General Pharmaceutical Ltd. is incorporated as Private Limited Company on the 5th day of April 1984. Dr.
Momenul Haq, Managing Director, Dr. Gazi Nurun Nabi, demised Director were friends and classmates since their
boyhood. While they were medical students, countrys poor health conditions truck their mind. They would always
feel that health sector was being deprived and neglected. They cherished in their mind to do something for welfare
of the common people by rendering their professional zeal. With this end in view M/S. General Pharmaceuticals
Ltd. (GPL) stepped into manufacturing of drugs during, 1987 with initial 7 products and minimum manpower.
General Pharmaceuticals Ltd. (GPL) is one of the fastest growing pharmaceutical finished formulation
manufacturing companies in Bangladesh with a mission to provide innovative high quality range of healthcare
products. GPL has been striving for more than 18 years and has devoted entirely to the development of excellent
pharmaceutical finished products. Relentlessly pursuing scientific knowledge, building the strength and developing
the vision required to compete with the best in the future GPL has grown into a company that boosts of world-class
products, excellent production facilities and quality professionals. GPL has crossed numerous milestones in its
journey. There are 2000 skilled professional are working in GPL inclusive of 900 Sales & Marketing Force. The
distribution network is spread all over Bangladesh with a professional team of 500 distributions personnel.
Launching new products in every month, maintaining the strong position in the market since their inception in 1987.

General Information: Nuvista Pharma Limited

Nuvista Pharma Limited has a long history and a strong heritage. It is steeped in tradition and culture. From this
stems the Companys uncompromising dedication to quality. Nuvista is proud of its ethical standards in every sphere
of its operations and refuses to compromise even in the face of daunting odds and the most adverse of
circumstances. We confidently proclaim our products to be the best and truly world class. At Nuvista, our Vision,
Mission and Values are not empty words. These are codes that we honour and live by. We are driven by a zeal that
transcends the merely financial; we believe in fulfilling a spiritual purpose. We are inspired by a dream to leave
behind a legacy that future generations will admire. Nuvista cares for its employees, customers, consumers, the
environment, all who interact with the Company and for society at large.
28

Mr. Shehu Adamu (2008): Manpower planning and administration, National Open University of
Nigeria, Headquarters, 14/16 Ahmadu Bello Way Victoria Island, Lagos, ISBN: 978-058-532-X

Right Management (2010): Organizational Effectiveness: Discovering How to Make It Happen, Right
Management Inc. 1818 Market Street, 33rd Floor Philadelphia, PA 19103-3614. Url: www.right.com

Hugh Mitchell (August 2002): Strategic worth of human resource driving organizational performance,
UNIVERSALIA

Dr. Ajit and D. Shewale: Human Resource Development in http://www.scribd.com/doc/44598946

Benefits-of-Manpower-Planning

Reilly P (1996), Human Resource Planning: An Introduction, IES Report 312

http://www.preciousheart.net/chaplaincy/Auditor_Manual/5org-str.pdf

Vivien T. Supangco, DBA: HR in Corporate Decision Making in url: http://www.upd.edu.ph/~cba/DP

/0406_SUPANGCO.pdf

Bloor, K. (2008). Pay'em or flay 'em: Improving productivity in the medical labor market. Conference
paper for presentation to OPI conference on Institutions, incentives and public sector performance OPI
18 January 2008.

Frant, H. (1996). High-powered and low-powered incentives in the public sector, Journal of Public
Administration and Theory 6, 365381.

10

Abang azlan mohamad, May-Chiunlo and Maw Kingla

(2009): Human Resource Practices and

Organizational performance. Incentives as Moderator, Journal of Academic Research in Economics,

236 volume 1 number 2
11

Nicholas Beadles, Christopher M. Lowery & Kim Johns (2005): The Impact of Human Resource
Information Systems: An Exploratory Study in the Public Sector, Volume 5 Issue 4 Georgia College
and State University, Milledgeville, GA 31061

12

Lengnick-Hall, Mark L. & Moritz, Steve. (2003). The Impact of e-HR on the Human Resource
Management, Function. Journal of Labor Research. 24( 3), 365-379

13

Kovach, Kenneth A, Hughes, Allen A. , Fagan, Paul, & Maggitti, Patick . (2002). Administrative and
Strategic, Advantages of HRIS. Employment Relations Today. 29( 2) 43-48.

14

Mouyiasis, P., (2007) HRM Concepts in Europe: A Comparative Study of Two Member States Sweden
vs. Cyprus, Uppsala University Sociological Institute.

15

Treven, S., (2001) Human Resource Management in International Organizations, Management, Vol. 6

16

Borgstrom, A., Druker, D., & Sparrow, J., (2005) The Technology Opportunities Program (TOP):
Networking Our Nation-A Decade of Lessons Learned, Journal of the Community Development
Society, 36(1):103

29

17

Henry Ongori (2007): A review of the literature on employee turnover, African Journal of Business
Management pp. 049-054, ISSN 1993-8233 2007 Academic Journals

18

Griffeth RW, Hom PW, Gaertner S (2000). "A meta-analysis of antecedents and correlates of employee
turnover: update, moderator tests, and research implications for the next millennium", J. Manage. 26
(3): 463-88.

19

Prof Smita A Kumbhar (2011): Impact of performance appraisal on corporate profitability, Indian
Streams Research Journal, Novel Institute of Management Studies, Chinchwad Pune, Article : I, Vol I , ISSUE - IV

20

COSTIN Mdlina-Adriana (2010): The Importance Of Culture After Implementing A Change Into A
Romanian Organization, ANNALS of the ORADEA UNIVERSITY. Fascicle of Management and
Technological Engineering, Volume IX (XIX), NR2

21

Stranks, Jeremy, Stress at work, Elsevier Hutterworth Heinemann, Oxford, 2006

22

Julian Birkinshaw (2007): Strategyorganization configurations in corporate venture units: Impact on

performance and survival, Journal of Business Venturing, 23 (2008) 423444

23

Chin-Ju Tsai: Reward and incentive compensation and organizational performance: evidence from the
semiconductor industry, University of Warwick

24

Deci, E. L. (1976) The Hidden Costs of Rewards, Organizational Dynamics, 4(3):61-72.

30