The Veritable Paragon In Human Resources Commerce Essay Example

medical market, which included human therapeutics and nosologies, as well as applications in veterinary medicine, and the non-medical markets, including agriculture and industrial applications[3], experienced significant growth in the US biotech industry. Over a period of about thirty years since recombinant DNA technologies were developed in research laboratories, more than 2,000 companies emerged solely to explore and profit from this new field. During the 1990s, the biotech industry in the US underwent rapid expansion and became the largest global biotechnology market by the early 2000s, with over half of worldwide revenues flowing into the US. The size of the US biotechnology industry quadrupled from 1992 to 2003, with revenues increasing from $8 billion to $39 billion (Annexure II). By 2004, its market value reached $60.5 billion with a compound annual growth rate (CAGR) of 14.5% between 2000-04.

The market is expected to slow down slightly, with a projected Compound Annual Growth Rate (CAGR) of 11% from 2004-2009. This growth will drive the market value to $102.2 billion by the end of 2009, a 68.9% increase since 2004 (Annexure III).

In the United States, the biotech industry has developed clusters based on factors like access to venture capital, local research institutes, and strategic connections between biotech firms, government, and academia. These clusters include the San Francisco Bay Area, Boston/New England, San Diego, Washington DC/Maryland,
New Jersey, North Carolina, and the Seattle/Northwest region.

For instance, Seattle-based biotech companies have received significant funding from Microsoft. Boston is notable for its concentration of world-class research institutes nearby. Additionally,North Carolina's biotech firms benefit from strong political support from government representatives.

The global biotech industry not only experiences dynamic growth but also heavily relies on

human resources rather than just finances and investments.

In the US, most of the biotechnology clusters were situated near prominent research centers such as Silicon Valley near Stanford and Berkeley, Boston near Harvard and MIT, and Washington D.C./Maryland near Johns Hopkins University and the NIH. The primary approach of biotech companies to attract talent was through engaging in collaborative research and partnerships with universities. For the biotechnology industry, the recruitment and retention of skilled knowledge workers played a crucial role in achieving success, as it relied heavily on the ability to attract and retain individuals possessing the necessary skills at the appropriate time.

Moreover, employees in the biotech industry, especially those involved in research and scientific roles, desired a stimulating scientific atmosphere within their respective companies. It was challenging to strike a balance between creating an appealing work environment while also retaining limited resources. By 2006, numerous biotech firms had gained recognition as "100 best companies to work for" by Fortune magazine, often implementing similar human resources strategies. These strategies included offering traditional employee benefits like healthcare coverage and retirement plans, along with providing flexibility in the workplace through options such as flexible working hours and telecommuting. However, some companies embraced a distinct culture that combined intellectual integrity with financial incentives. This innovative HR approach allowed scientists and researchers to explore unfamiliar areas of study by collaborating with professionals from various fields. Ultimately, one of the primary attractions of biotech companies lay in their competitive salary packages.

The average base salaries for CEOs in the biotech, medical instrument, and drug companies were $400,000, $300,000, and $381,000 respectively in 2001. In 2004, cash compensation for biotech CEOs (including salary

and bonus) increased to approximately $596,000 from $567,000 in 2003 with a growth of about 5%. Other highly paid individuals in the industry included top R&D executives ($366,000), business/corporate development officers ($298,000), and chief financial officers ($335,000). It's worth noting that high compensation was not limited only to senior-level managers; individuals with master's degrees started with salaries around $65,000 while Ph.D.'s earned around $90,000.

In 2004, the average salary for a biomedical worker in the Bay Area was $67,690. In contrast, Wal-Mart paid their salaried employees an average of $47,791.

Work Life at Genentech

Genentech aimed to incorporate the best aspects of academia into our corporate culture. We prioritized hiring highly skilled and enthusiastic individuals who could contribute to a stimulating and challenging yet supportive environment. We also emphasized publications, peer interaction, and open communication. Our dedication to finding and promoting talented individuals with innovative minds has played a crucial role in our success. I am proud of their commitment and enthusiasm for making valuable contributions to science and human health.

Herbert Boyer, Ph.D., Genentech Co-Founder [5]

Genentech is a biotechnology company that utilizes human genetic information for the discovery, development, commercialization, and manufacturing of biotherapeutics targeting important unmet medical needs.Our main areas of focus are oncology [6], vascular medicine [7], immunology [8], and specialty therapeutics [9]. Genentech, which was founded in 1976 by venture capitalist Robert Swanson and molecular biologist Herbert Boyer, had the goal of revolutionizing mass production of genetically engineered substances using genetic engineering techniques [10]. In a groundbreaking move, Genentech became the first biotech company to go public and release a genetically engineered medication in 1980 [11]. By

December 2005, their overall operating revenue reached an impressive $6.6 billion. The success of Genentech can be attributed to their focus on three key factors known as the "3-Rights": creating and maintaining an ideal environment and culture, recruiting the right individuals, and providing attractive employee benefits to retain highly skilled and motivated professionals across all regions of operation.

Between 1999 and 2005, Genentech's employee count grew significantly from 3,400 to over 9,500. More than 80% of these employees held college degrees, while over 20% possessed advanced degrees like Ph.D.s and M.D.s. Genentech had high expectations for its employees and rewarded their dedication with exceptional benefits. The organization's status as a preferred employer was also affirmed by external recognition (Annexure IV ; V).

For case ; in 2006, Fortune ranked Genentech # 1 on its list of the `` 100 Best Companies to Work for '' in America, Science magazine named Genentech `` the top employer and most admired company in the biotechnology and pharmaceutical industries '' for the 4th twelvemonth in a row ; Working Mother magazine named Genentech one of the `` 100 Best Companies for Working Mothers '' for the thirteenth clip ; and ESSENCE magazine recognized Genentech as one of 17 `` Great Places to Work. ''

Right Values and Culture

"Our employees are the foundation of our concern. We are pleased that our work environment and civilization enable them to continually innovate and achieve consequences that improve and extend the lives of patients."

Levinson[ 12 ]

Genentech's civilization was based on trust and regard homo ( both patients and employees ).

The founding principle of Genentech was to create an academically-oriented environment where cutting-edge scientific research thrived

within a unique corporate culture. Genentech employees likened their workplace to a college campus, with stimulating and supportive surroundings that fostered peer interaction and open communication. According to a company representative, the atmosphere at Genentech can be described as similar to that of a university, with a corporate culture that closely resembles an academic campus. Employees enjoy a laid-back culture with no policy manuals.

'Those in research and development appreciate an ambiance that is "encouraging of freedom". The company understands that its future lies in new products and therefore tries to establish an environment conducive to creativity. This seemingly extends to extracurricular activities: Our scientists are allowed to work on their own projects several times a month (scientists spend 20% of each workweek pursuing their favored projects). Genentech created an informal and enjoyable environment, where people enjoyed coming to work every day.'

Every Friday evening, Genentech hosted social events called Ho-Ho - 'Genentechese for kegger [14]; the company provided free food, drinks, and a chance to socialize with colleagues or meet new friends. There were organization-wide celebrations in honor of corporate milestones, with each milestone requiring a party and a commemorative jersey. Employees traveled between buildings using the company's free commuter bird coach service and bikes provided by the company (campus bikes, also known as "GenenClunkers"). The company relied on minimal guidelines and procedures and instead encouraged employees to contribute their ideas, knowledge, and efforts in order to achieve goals.

At Genentech, the emphasis was on creating effective drugs rather than relying on market information or return-on-investment analysis to drive the scientific discipline. Status was not determined by fancy titles or large offices, as demonstrated by CEO

Levinson's modestly-sized office furnished with low-end metal furniture. Instead, it was based on a willingness to take risks and achieving results. Genentech promoted hard work, teamwork, intellectual honesty, and open participation. The company valued timely decision-making and held individuals accountable for their actions and the resulting outcome.

Genentech implemented a system where staff scientists and researchers had to present and defend their work before the Research Review Committee (RRC), a group of 13 Ph.D.s responsible for allocating the research budget. The primary goal of this review process was to assess the research process, identify any flaws, prevent dead-end projects, and eliminate politics and favoritism. Levinson emphasized that although some may find it nerve-wracking, the experience should not be too easy either. The purpose of this rigorous evaluation is to gather sufficient information in order to make informed decisions on research that has potential for developing an actual drug. Occasionally, scientists may encounter failure or have their work deemed as low priority, which could lead to termination of a project by the RRC [15].

In these cases, not only are the researchers not fired; they typically have input into their next assignment. Genentech's work culture also conveyed a strong sense of their mission and showcased the importance of each employee's work. For example, the company showcased significant patient exposure to the drugs they developed. Additionally, the company had an open and direct communication system to ensure honesty with clients, shareholders, colleagues, and the community. Genentech encouraged new ideas and honest feedback, and assessed them based on their merit. The internal communication system between top management and employees was also exceptional and admired. CEO Levinson, for instance, regularly sent

quarterly email updates and encouraged employees to provide him with direct feedback.

The company also established gCom - Genentech's Conformity and Ethics Phone Line, offering a confidential channel for employees, vendors, and others to report any concerns regarding suspected violations in ethics, compliance requirements, financial accounting, financial auditing matters, or company policies that could potentially result in criminal or civil liability. Additionally, these reports could be made anonymously. Moreover, diversity was a fundamental value and part of Genentech's culture.

The company prioritized having a diverse workforce that valued and celebrated different ideas, manners, cultures, skill sets, and perspectives to support individual performance, potential, and business goals. In 2005, the company had a diverse workforce with 49% female employees, 49% female new hires, and 43% female officers and directors. Additionally, 43% of the workforce, 47% of new hires, and 31% of officers and directors were minorities. The company not only hired individuals from different backgrounds but also sponsored various Employee Associations, including African Americans in Biotechnology, Filipino Americans Coming Together at Genentech, Genentech Out and Equal, Latinos Unidos, and South Asians Network @ Genentech.

Right People

"From 55 employees in 1979 to more than 9,500 today (2006), our growth has been remarkable. Throughout this substantial expansion, we have followed a simple idea: recruit the best people, empower them to perform at their best, trust them, and acknowledge their contributions."

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Genentech's success was primarily attributed to its culture, but it also relied on its ability to hire the right individuals for the right job. When it came to recruitment, Genentech had a policy of

not accepting resumes or placement information from any individual or agency that charged a fee for providing candidates. In order to establish a business relationship with Genentech, a recruitment agency had to complete a supplier registration process and provide its corporate literature. Once the necessary information (the supplier registration form and corporate literature) was received, Genentech would then decide whether to pursue a partnership or not."

Genentech has developed a diverse provider pool to maximize the quality and talent available to the company. In addition to this, Genentech also seeks out talented students with aptitude and ambition to get involved with the company. Specifically, Genentech selects full-time enrolled students from accredited colleges or universities. The company visits campuses across the US to discuss opportunities with students who will be completing their sophomore year by June and plan to return to school in the fall (September). Genentech hires interns in various fields of study, primarily focusing on students majoring in life or chemical sciences or science engineering. Additionally, Genentech recruits MBA students and graduates for both summer internships and full-time positions.

Sing makings, HR employee of Genentech commented

[ 18 ]

: "We seek individuals who can quickly learn new techniques, handle large amounts of well-controlled data, and effectively collaborate within the company." The recruitment process at Genentech was extensive, with candidates typically undergoing five or six visits and approximately 20 interviews with various employees in the lab or department offering the position, as well as with human resources. The main purpose of the process was to assess candidates' understanding of salary, title, and personal advancement. According to Levinson

[ 19 ]

: "We have a nonhierarchical structure."

We don't have any official connections. People don't consider us as doctors. We don't have exclusive dining areas. (Even finding a spot in the morning is a challenge since we don't have assigned parking spaces.) This becomes particularly challenging for executive job seekers from Big Pharma.

Some individuals argue, "I enjoy being unique! I enjoy being specific!" However, at this place, you will not be considered unique. If that's important to you, that's okay. But you won't find happiness here." Genentech had a more relaxed interview process compared to other biotech companies. Moreover, the process was simply to ensure that candidates were aware of what they were getting themselves into.

Genentech's employees commented: [20]: "I think overall, the entire interview process at Genentech is more informal than what you are probably used to. However, this does not mean you shouldn't dress up for an interview. You still want to look stylish, as always (just be prepared to stand out because most people around you will likely be wearing blue jeans, shorts, etc). There are no surprises or tricks; the goal is to match your qualifications and goals to a position that Genentech needs to fill." Genentech's main focus was on finding individuals who were passionate about research. One example is Ellen Filvaroff, a senior scientist in molecular oncology. She had adorned her cubicle walls with pictures of her patients and her young child side by side. The perks she liked the most were small things like being able to purchase birthday cards and gifts and receive packages from company stores, while the biggest perk she enjoyed was

having coworkers who helped her explore the field of science.

To simplify and speed up the hiring process, while also attracting top talent, Genentech implemented the PeopleSoft 8 HRMS. This system allowed Genentech's hiring managers to view resumes, conduct searches, and track the status of job candidates or job requisitions - all through an online platform. Additionally, employees had convenient access to information company-wide and could enroll in benefits programs from any web browser, whether in the office or at home. The eRecruit process also improved Genentech's employee retention efforts. As Carol Bogardus, HRIT manager at Genentech, stated: "We would prefer to have an employee transfer to a different role within the organization rather than lose them completely."

When employees at Genentech apply for new positions, they can easily access job postings and apply through eRecruit. This easy access to information helps us quickly find the best match between individuals and positions. After a candidate is hired, they receive a new-hire orientation which includes discussions on patient care, history lessons from Boyer and other experienced staff, detailed sessions on the company's goals and scientific research. Genentech regularly surveys its employees to identify any complaints and monitor whether the new hires align with the company's goals. However, the company is facing the risk of becoming too large despite having a comprehensive recruitment and orientation process.

By the end of 2006, 40% of the company's workforce would only have three years of experience, while another 40% of its managers would be new to their positions.

Right Employee Benefits

"Genentech employees" receive lots and lots of great fringe benefits, such as a summer farmers' market in the parking lot; on-site child care;

concierge service; and on-site car wash, dental care and hair salon. Genentech also scored high for "fun." It hosts weekly "Ho Hos," a variation of the Friday afternoon happy hour. Its parties are legendary: Elton John performed at one last year. It's a really fun place, they clearly work hard but they play, too.

Robert Levering, co-founder, Great Place to Work Institute, San Francisco[ 22 ]

Genentech provided a wide range of benefits, services, and plans for its employees. These offerings were designed to make it easier for employees to balance work and personal life. As of 2004, the company had a company-subsidized child-care center that looked after 254 children full-time. Additionally, backup care was available. Genentech also provided financial aid of up to $5,000 for each legal adoption and six weeks of paid leave for the primary caregiver. Flexible scheduling options were also offered, with approximately 90% of employees using flextime at least once a year and 12% choosing a compressed workweek.

All new mothers received a generous 24 weeks of job-guaranteed leave, with six weeks fully paid and in addition the company had nursing mother's suites throughout the corporate campus. Genentech not only assisted the employees within the campus, but also provided transportation installation both on campus and outside to reach the campus. Free commuter birds provided transportation to and from the South San Francisco BART [ 23 ] and the CalTrain [ 24 ] station, while the campus bird transported employees around the corporate campus. The company had various transportation programs that included car pools, van pools, and a Guaranteed Ride Home Program offered by Security

Services for emergency situations, as well as car jump starts and assistance if employees were locked out of their car. The Transit Tickets for BART, Muni [ 25 ] , and CalTrain were sold on campus in the Genenstore. The Genenstore also sold various items such as company-logo clothing, book bags, mugs, as well as casts.

The company's benefits plan ensured that the employees' education and training needs were met. Employees had access to two 24-hour libraries operated by the company, which contained Genentech-related literature as well as personal reference books and audio-books for commuting. Additionally, a variety of on-site courses were available to employees, including computer training, personal growth, career management, and diversity training. After one year of service, employees were eligible for reimbursement of tuition, books, and lab fees (up to $10,000 per year) for courses related to their career.

Genentech offered various fiscal and salvaging benefits to its employees, including the 401 ( K ) program. Employees could defer up to 50 % of their wage, and the company would match up to 5 % of the first 5 % contributed by the employee annually. Genentech also took care of its employees' holiday and recreational activities. In addition to 12 paid vacations per year (10 scheduled and 2 floating days), leave of absence was provided for family care, pregnancy, medical conditions, parental care, or personal leave. Moreover, every six years of service, all employees received a six-week paid sabbatical, which could be combined with vacation days to allow up to nine weeks off (over 2,500 sabbaticals were taken by 2004).

Additionally, there were discounts available for Disneyland, Sea World, San Francisco Museum

of Modern Art, the Santa Cruz Boardwalk, Marine World, and free preview passes for upcoming films. Genentech provided subsidized cafeterias that served breakfast, lunch, and dinner, and also offered take-home dinner options. Complimentary iced tea and coffee were also provided. In terms of employee wellness, Genentech ensured that the workspace was ergonomically correct. They sponsored yearly flu shots through Occupational Health Services, organized on-site health seminars, and provided a variety of medical, vision, and dental plans to choose from. Employee's partners, domestic partners, and children under age 19 (or age 25 full-time students) were also included in the employee's chosen plan.

To maintain its focus on academics, Genentech has implemented anniversary acknowledgment awards for employees who have served 3, 5, 10, 15, 20, and 25 years at the company. Additionally, the company also provides cash bonuses, known as GenenChecks, to teams or individuals who achieve significant milestones.

HR Challenges Ahead

Despite being a leader in the biotech industry and regarded as a top employer, Genentech faces its own set of human resource challenges. Analysts have expressed concerns about the high rate of hiring at Genentech, with approximately 1500 new employees hired by December 31, 2005 (representing a 25% increase over the previous year). This brings the total employee count to over 9,500, and Genentech projects a growth rate of around 15% for 2006.

The industry was worried about the challenge of integrating new staff during rapid growth. Additionally, the addition of new employees was causing conflict within a company that valued its culture. Levinson expressed his concerns, stating, "Right now, with the company averaging 151 new employees a month, the thing I worry about most is managing our growth

and protecting Genentech's mission, focus, and culture. It's much easier to get alignment when you have fewer people." In addition to the rapid growth of employees, Genentech also faced issues with employee dissatisfaction regarding pay. Insiders at Genentech noted, "You might find better pay at one of the smaller Biotech companies that seem to be starting up all over the Bay Area."

Genentech pays less than the industry norm, with compensation being meager. However, according to Genentech's human resource team, the company planned to make salary adjustments in line with industry standards. Nevertheless, not everyone was hopeful about these changes.