26-04-2014, 04:42 PM
Case Presentation on Merck & Co. Inc
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Merck & Co. History
It is a pharmaceutical company headquartered in Rahway, New Jersey.
Expanded in drug manufacturing in 1827.
In 1887, opened a branch office in New York city.
In 1953, merged with the Philadelphia-based pharma firm.
Today, it is nation’s largest provider of prescription medicines.
Introduced Indocin, Aldomet, Timoptic, Clinoril and Mefoxin.
Annual sales grew from $218 million in 1960 to $6.6 billion in
1989.
Performance Appraisal
Merck’s Performance appraisal and Salary Administration program was first introduced in 1978
Supervisors rated employees on a scale of one to five
Five designated exceptional performance and one designated unacceptable performance
The scale was absolute and the rating assigned to an individual was to reflect only the performance of the individual independent of performance of others.
Salary Determination
An employee’s compa-ratio(actual salary as a percentage of the control point) goes up each time he/she gets a merit increase, and falls whenever the salary line formula is moved upward.
Salary revisions are linked to both control point increases and performance ratings through guidelines established by the personnel department
Employees with higher ratings tend to get larger pay increase, while raises for a given performance rating tend to be smaller for employees who have already attained a high compa-ratio.
Employee Relations Review Committee
The committee was formed keeping in mind various flaws in the system and appraisal issues which emphasized on the following issues:
Examine employee policies and practices to determine if they create and environment that encourages and rewards greater productivity and employee excellence.
Determine whether policies and practices are being adequately communicated to employees in a way they can clearly understand.
Review the application of these policies and practices to determine whether they are being applied consistent with objectives set forth.
Conclusion
Merck & Co. is an example of a firm which though very successful in its venture can go wrong when it comes to employees and their demands
What is required is complete introspection of the process the firm follows time to time which will avoid generation of any ill feelings among the employees
Merck & Co. should definitely give away with the absolute rating system and adopt relative grading among the employees which will make the employees more competitive.