EXECUTIVE SUMMARY"If you want 10 days of happiness, grow grain.

If
you want 10 years of happiness, grow atree. If you want 100 years of
happiness, grow people."OBJECTIVE OF THE STUDYThe phenomenal
expansion of insurance sector:
The major insurance companies in our country have expanded their
branches phenomally in the last few decades. Also, many newinsurance
companies are being established all over the country.The objective of
the study is therefore, to examine the insurance companies, their
functioningand asses their viability.
IMPORTANCE OF THE STUDY

The need to make profi ts:

Profi ts are essential for the survival and growth of everycommercial
organization.
Increasing emphasis on profi tability:
The profi tability aspect of the insurance companies hasgotten a lot of
attention in the recent years.
Employee satisfaction:
Along with the increasing emphasis on profi tability,
employeesatisfaction has also been generating considerable
interest.This study has thus been undertaken to examine the
importance human resource management ininsurance companies.

HYPOTHESIS STAEMENT
Investments in HRM practices can help a fi rm perform better.
INTRODUCTION
Competitive advantage of a company can be generated from human
resources (HR) andcompany performance is infl uenced by a set of
eff ective HRM practices. In this study, weintended to assess the HR
practices in insurance companiesEvery organization is composed of
people and utilizing their services, developing their skills,motivating
them to enhance their levels of performance and ensuring that they
remain committedto the organization are essential for the
accomplishment of organizational objectives. This is truefor all types of
organizations - government, business, education, health, recreation or
socialaction. Organizations that can do this will be both eff ective as
well as effi cient. Ineffi cient or ineff ective organizations face the danger
of stagnating or going out of business.

The emphasis on proper and eff ective human resource management has
increased in the recent

times. It has come to be identifi ed as an important factor in the

successful management of anorganization. With the growing
importance of knowledge workers to organizations and the
risingexpectations of employees, it is essential to have a good human
resource management system in place.
Human Resource Management
(HRM) consists essentially of four functions acquiring,developing,
motivating and retaining human resources. The acquisition function
starts with planning for the number and categories of employees
required, and end with staffi ng. Thedevelopment function has three
dimensions employee training, management development, andcareer
development.

The motivation function includes identifying the individual motivational

needs of employees andfi nding ways to motivate them. The retention
function is concerned with providing a work environment conducive to
the employees and nurturing them to make them feel committed
andattached to the organization.Human resources are the most
valuable and unique assets of an organization. The
successfulmanagement of an organization's human resources is an
exciting, dynamic and challenging task,especially at a time when the
world has become a global village and economies are in a state of fl ux.
The scarcity of talented resources and the growing expectations of the
modern day worker have further increased the complexity of the human
resource function. Even though specifi chuman resource
functions/activities are the responsibility of the human resource
department, theactual management of human resources is the
responsibility of all the managers in anorganization.It is therefore
necessary for all managers to understand and give due importance to
the diff erenthuman resource policies and activities in the
organization.Human Resource Management outlines the importance of
HRM and its diff erent functions in anorganization.It examines the
various HR processes that are concerned with attracting, managing,
motivatingand developing employees for the benefi t of the
organization.

The insurance sector employers are indulging into aggressive

recruitments. With around 15million new policies being sold every year,
the insurance sector is picking up fast in India. Dueto its robust growth
there is a need of skilled professionals in the sector. The employers
arelooking forward to hire freshers at junior levels as they are quite
fl exible and ready to work as part time employees as well. Apart from
hiring actuaries and underwriters, the industry isfocusing on hiring
agents. These agents represent the front end of the customer chain and
areresponsible for bringing in new business
.

INSURANCE SECTOR: AN INTROSUCTIONInsurance

is a form of risk management primarily used tohedge against therisk of
a contingent loss.Insurance is defi ned as the equitable transfer of the
risk of a loss, from one entity to another, inexchange for a premium ,
and can be thought of as a guaranteed and known small loss to
preventa large, possibly devastating loss.An
insurer
is a company selling the insurance; an
insured
or
policyholder
is the person or entity buying the insurance.The
insurance rate
is a factor used to determine the amount to be charged for a certain
amountof insurance coverage, called the
premium
.The
six principles
of insurance

are:
1.
Indemnity
Insurance is a contract of indemnity where the insurance
companyindemnifi es the insured against certain risks for a
consideration known as premium.
2.
Insurable interest
means the loss of which will directly aff ect the insured.
3.
Utmost good faith
means that the insured and the insurance company will not
willfullyhide anything from each other
4.

Mitigation
means the insured will not behave irresponsibly and will take due care
sothat the risk of loss or the loss is minimized.
5.
Subrogation
means the insurance company acquires legal rights to act on behalf of
theinsured i.e. the insurance company steps into the shoes of the
insured.
6.
Causa Proxima or Proximate Cause
means the proximate cause of loss to ascertainwhether the loss is
covered under the policy.
HISTORY OF INSURANCE SECTOR IN INDIA
The history of Insurance in India started with life insurance in 1818
when it wasconceived as a means to provide for English Widows.
Interestingly in those days a higher premium was charged for Indian
lives than the non-Indian lives as Indian lives were consideredmore
risky for the coverage.

The Bombay Mutual Life Insurance Society started its business in 1870.
It was the fi rstcompany to charge same premium for both Indian and
non-Indian lives. The Oriental AssuranceCompany was established in
1880. The General Insurance Business in India, on the other hand,can
trace its roots to the Triton (Tital) Insurance Company Limited, the fi rst
general insurancecompany established in the year 1850 in Calcutta by
the British. Till the end of nineteenthcentury insurance business was
almost entirely in the hands of overseas companies.Insurance
regulation formally began in India with the passing of the Life
InsuranceCompanies Act of 1912 and the provident fund Act of 1912.
Several frauds during 1920's and1930's sullied insurance business in
India.
By 1938 there were 176 insurance companies. The fi rst comprehensive
legislation wasintroduced with the Insurance Act of 1938 that provided
strict State Control over insurance business. The insurance business
grew at a faster pace after independence. Indian
companiesstrengthened their hold on this business but despite the
growth that was witnessed, insuranceremained an urban phenomenon.

INSURANCE JOB DESCRIPTION

The insurance job description which is generally assigned to people

working in the insuranceindustry is given below:

To handle all the aff airs of the customer related to the policies or
theservices off ered by the insurance company and to resolve any
confl ictsarising if any.

To work for insurance company or several insurance companies and

fi nding clients inorder to create awareness about the insurance policies
that the insurance company has tooff er.

The job responsibility may include fi nding out if the claim made by the
client for insurance cover warrantees insurance or not.

To investigate whether all the premiums were paid on time and whether
the claim madefalls in the particular insurance policy.

To meet potential customers and sell them the insurance policies being
off ered by theinsurance company.
Competencies required for job in insurance
Any Insurance job seeker must possess the following set of skills:

Public Speaking
: A good insurance professional should have strong communication
aswell as public speaking skills.

Computer knowledge
: Basic knowledge of computers including Microsoft Word,WordPerfect,
Outlook, Excel, PowerPoint, Tally etc would prove to be an asset.

People skills:
An Insurance professional should be able to communicate as well
asinteract with other working professional including colleagues as well
as clients of thecompany.

Organisational skills

: As an insurance job includes organizing work it is necessary tohave

good skills in this department
.

HUMAN RESOURCE MANAGEMENT: AN INTRODUCTION

Human resource management (HRM) is planning personnel needs;

recruiting, selecting,training, and developing capable employees;
placing them in productive work environments; andrewarding their
performance.

Thus, human resource management refers to a set of programmes,

functions andactivities designed and carried out to maximize both,
employee as well as organizationaleff ectiveness. It is concerned with
the people dimensions in the management. Since everyorganization is
made up of people, acquiring their services developing their skills
motivatingthem to higher levels of performance and ensuring that they
continue to maintain their commitment to the organization are
essential to achieving organizational objectives. This is true,regardless
of the type of organization -government, business, education, health,
recreation or social actions.
Human resource is one of the natural resources of any country's
economy. It is thewealth of the country. In the context of banking,
human resource is of greater importance. Thedeployment of human
resource through proper and effi cient selection, training and
development,is called Human Resource Management.The success of any
organization largely depends on effi cient human resource management,
apartfrom operations, marketing and sales, the HR department
manages all the effi cient peopleworking in operations and marketing

divisions in any organization.Thus, HRM refers to a set of programmes,

functions and activities designed and carriedout in order to maximize
both employees as well as organizational eff ectiveness.

Human resource management is based on four fundamental

principles:
1.Human resources are the most important assets important assets an
organization has and their eff ective management is the key to its
success.2.Organizational success is most likely to be achieved if the
personnel policies and proceduresare closely linked to corporate and
strategic plans.

3.Organizational culture, values and climate signifi cantly infl uence

managerial behavior andexert a major infl uence on the achievement of
excellence. Hence, continuous eff ort is neededstarting from the
management in order to make the organisational culture
acceptable.4.Human resource management is concerned with
integrating all members of the organizationinvolved and working
together with a sense of common purpose
An organization is driven by human capital and the quality and
eff ectiveness of the organizationis determined by the quality of the
people that are employed. The resources of men moneymaterial and
machine are collected and coordinated through people. Without people
organizationcan not exist.
Success for most organizations depends on fi nding the employees with
the skills to successfully perform the tasks required to attain the
companys strategic goals.Management decisions and processes for
dealing with employees are critical to ensure that theorganization gets
and keeps the right staff .HRM may be defi ned as a set of policies
practices and programs designed to maximize both personal and
organizational goals and the process of binding people and
organizations together so that the objectives of the each are achieved.
Some defi nitions of HRM are as followsHRM is the management
function that is concerned with getting, training, motivating andkeeping
competent employees.HRM is a most advanced approach in the fi eld
of resource mgmt. talks about optimal utilizationof human capital. The
approach is integrative and supportive.HRM does talk about the
cultivation of a skillful environment in which people or
employeeassociate are able to extract their highest potential.HRM
deals with the day to day operations of the human resources
department. This curriculumwould include business law, compensation,
employee relations, benefi ts, and medical etc
Human Resource Management ("HRM") is a way of management that
links people-related

activities to the strategy of a business or organization. HRM is often

referred to as "strategicHRM". It has several goals:
To meet the needs of the business and management (rather than just
serve the interests of employees);

To link human resource strategies / policies to the business goals and

objectives;

To fi nd ways for human resources to "add value" to a business;

To help a business gain the commitment of employees to its values,

goals and objectives

OBJECTIVES OF HRM
1.
SOCIETALTo be ethically and socially responsible to the needs and challenges of
thesociety.2.
ORGANIZATIONAL
-To bring organizational eff ectiveness and serve other departments.3.
FUNCTIONALTo do the optimal utilization of the resources and respond to the need
of the organization.4.
PERSONAL
-To assist employees in achieving their personal goals to motivate and
retainthem thereby, enhancing the individuals contribution to the
organization.

DEFINITION OF HRD
HRD DEALS WITH DEVLOPMENT & UPGRADATION OF HUMAN
CAPITAL(EXSISTING MAN POWERS UPGRADATION IN AN
ORGANISATION).IT IS A LONGTERM PROCESS.
HRD can be defi ned as A Set of systematic and planned activities
designed by anorganization, to provide its members with the necessary
skills to meet current and future job demands. It is a part of HRM.

Thus,
Human Resource Development deals with the training and the
developmental aspect of employees.

HRM IN INSURANCE
Under present market forces and strict competition, the insurance
companies are forced to becompetitive. Contemporary companies must
seek ways to become more effi cient, productive,fl exible and innovative,
under constant pressure to improve results.The traditional ways of
gaining competitive advantage have to be supplemented
withorganizational capability i. e. the fi rms ability to manage
people.Organizational capability relates to hiring and retaining
competent employees and developingcompetencies through eff ective
human resource management practices.Indeed, developing a talented
workforce is essential to sustainable competitive advantage.High
performance work practices provide a number of important sources of
enhancedorganizational performance. HR systems have important,
practical impacts on the survival andfi nancial performance of fi rms, and
on the productivity and quality of work life of the people inthem.

Objectives and Importance of the Study

Liberalization in the Indian insurance sector has opened the sector to
private competition.The insurance industry forms an integral part of the
global fi nancial market, with insurancecompanies being signifi cant
institutional investors.In recent decades, the insurance sector, like
other fi nancial services, has grown in economicimportance.A number of
foreign insurance companies have set up representative offi ces in India
and havealso tied up with various asset management companies.

All these developments have forced the insurance companies to be

competitive.What makes a fi rm best is not just technology, bright
ideas, masterly strategy or the use of tools, but also the fact that the
best fi rms are better organized to meet the needs of their people,
toattract better people who are more motivated to do a superior job.In
this manner the management of human resources becomes very
crucial.Thus, this study on HRM practices in insurance companies was
taken up.

FUNCTIONS OF HRM IN INSURANCE

HRM consist of several interrelated functions. These functions are
common to all organization

1.)
Human Resource Planning
George Bernard Shaw said: to be in hell is to drift; to be in heaven is to
stee
r
.

Human resource planning has traditionally been used by organizations

to ensure that the right person is in the right job at the right
time. Human resource planning can be
defi ned as the process by which management determines howthe
organization should move from its current manpower position to its
desired position.Through planning, management strives to have the
right number and the right kinds of people, atthe right places, at the
right time, doing things which result in both the organization and
theindividual receiving maximum long-run benefi ts.

Factors Underlying Increased Interest in Human Resource

Planning
Undoubtedly, there are many factors that account for the increased
attention directed to humanresource planning, but environmental
forces-globalization, new technologies, economicconditions, and a
changing work force seem particularly potent.These create complexity
and uncertainty for organizations. Uncertainty can interfere
witheffi cient operations, so organizations typically attempt to reduce
its impact; formal planning isone common tactic used by organizations
to buff er themselves from environmental uncertainty

The Process of Human Resource Management Planning

The human resource planning process, demands the HR manager to
fi rst understand the businessrequirement. Only if he comprehends the
nature and scope of the business, will he be able toemploy those who
will deliver the requiredperformance. When it comes to engaging the
manpower, the manager should have a keen eye for spotting thetalent.
It ensures that the workforce is competent enough the meet the
targets.

Additionally, the existing 'talent pool' in the workplace should be taken

into consideration, sothat people with complimentary skills can be
employed.Thefunctions of the HR manager are varied; he has to assess
the currently employed workforceand their shortcomings. Identifying
these shortcomings goes a long way in choosing an effi cientworkforce.

Human resource planning process, thus, can be considered as one of

the strategic steps for building the strong foundation of an effi cient
workforce in an organization

STEPS IN HUMAN RESOURCE MANAGEMENT PLANNING

1. Determining the numbers to be employed at a new location

If organisations overdo the size of their workforce it will carry surplus
or underutilised staff .Alternatively, if the opposite misjudgment is
made, staff may be overstretched, making it hard or impossible to meet
production or service deadlines at the quality level expected. So the
questionswe ask are:

How can output be improved your through understanding the

interrelation between productivity, work organisation and technological
development? What does this mean for staff numbers?

What techniques can be used to establish workforce requirements?

Have more fl exible work arrangements been considered?

How are the staff s you need to be acquired?

The principles can be applied to any exercise to defi ne workforce

requirements, whether it be a business start-up, a relocation, or the
opening of new factory or offi ce.
2. Retaining your highly skilled staf
Issues about retention may not have been to the fore in recent years,
but all it needs is for organisations to lose key staff to realise that an
understanding of the pattern of resignation isneeded. Thus
organisations should:

monitor the extent of resignation

discover the reasons for it

establish what it is costing the organisation

compare loss rates with other similar organisations.Without this

understanding, management may be unaware of how many good quality
staff is being lost. This will cost the organisation directly through the
bill for separation, recruitment andinduction, but also through a loss of
long-term capability.
Having understood the nature and extent of resignation steps can be
taken to rectify the situation.These may be relatively cheap and simple
solutions once the reasons for the departure of employees have been
identifi ed. But it will depend on whether the problem is peculiar to
your own organisation, and whether it is concentrated in particular
groups (e.g. by age, gender, gradeor skill).

3. Managing an ef ective downsizing programme

This is an all too common issue for managers. How is the workforce to
be cut painlessly, while atthe same time protecting the long-term
interests of the organisation? A question made all theharder by the
time pressures management is under, both because of business
necessities andemployee anxieties. HRP helps by considering:

the sort of workforce envisaged at the end of the exercise

the pros and cons of the diff erent routes to get there

how the nature and extent of wastage will change during the run-down

the utility of retraining, redeployment and transfers

what the appropriate recruitment levels might be.Such an analysis can

be presented to senior managers so that the cost benefi t of various
methodsof reduction can be assessed, and the time taken to meet
targets established.If instead the CEO announces on day one that there
will be no compulsory redundancies andvoluntary severance is open to
all staff , the danger is that an unbalanced workforce will
result,refl ecting the take-up of the severance off er. It is often diffi cult
and expensive to replace lostquality and experience.

4. Where will the next generation of managers come from?

Many senior managers are troubled by this issue. They have seen
traditional career pathsdisappear. They have had to bring in senior staff

from elsewhere. But they recognise that whilethis may have dealt with
a short-term skills shortage, it has not solved the longer term question
of managerial supply: what sort, how many, and where will they come
from? To address thesequestions you need to understand:

the present career system (including patterns of promotion and

movement, of recruitmentand wastage)

the characteristics of those who currently occupy senior positions

the organisations future supply of talent.This then can be compared

with future requirements, in number and type. These will of course
beaff ected by internal structural changes and external business or
political changes. Comparingyour current supply to this revised demand
will show surpluses and shortages which will allowyou to take corrective
action such as:

recruiting to meet a shortage of those with senior management

potential

allowing faster promotion to fi ll immediate gaps

developing cross functional transfers for high fl iers

. hiring on fi xed-term contracts to meet short-term skills/experience
defi cits

reducing staff numbers to remove blockages or forthcoming surpluses.

How can HRP be applied?

The report details the sort of approach companies might wish to take.
Most organisations arelikely to want HRP systems:

which are responsive to change

where assumptions can easily be modifi ed

that recognise organisational fl uidity around skills

that allow fl exibility in supply to be included

that are simple to understand and use

which are not too time demanding.

To operate such systems organisations need:

appropriate demand models

good monitoring and corrective action processes

comprehensive data about current employees and the external labour

market

an understanding how resourcing works in the organisation.

If HRP techniques are ignored, decisions will still be taken, but without
the benefi t of understanding their implications. Graduate recruitment
numbers will be set in ignorance of demand, or management
succession problems will develop unnoticed.
2.)
ORGANISING

Organizing resources can mean a variety of things. First, the manager

is in charge of organizinghuman resources. For example, a manager will
need to be sure the appropriate employees arehired. In addition, it is
the managers responsibility to ensure the employees have the
skillsnecessary for the workplace. Organizing these employees,
according to when they are neededand how they are utilized, is a
critical part of the managers position.
Organizing Occurs Continuously
Organizing is a daily, weekly and yearly task for most managers. In
todays fast-paced businessworld, things change quickly and variations
occur. Managers must remember that the

organizational component is fl uid and forever-changing. Flexible

managers are able to changecourses when necessary and still meet the
clients needs.Change is inevitable. For fi rms that experience change
frequently, the organizing function iseven more crucial. Organizational
changes such as adding new positions or eliminating certain processes
can change the organizational level and structure of the business.

Importance of Organization
People who are organized generally accomplish much more than
disorganized individuals. Thesame is true of organized departments or
businesses. Those managers who can master theorganization function
will enjoy a much smoother tenure in the management position.

3.)

JOB ANALYSIS:

Job Analysis is a process to identify and determine in detail the

particular job duties andrequirements and the relative importance of
these duties for a given job. Job Analysis is a process where judgments
are made about data collected on a job.
The Job; not the person
: An important concept of Job Analysis is that the analysis is
conductedof the Job, not the person. While Job Analysis data may be
collected from incumbents throughinterviews or questionnaires, the
product of the analysis is a description or specifi cations of the job, not
a description of the person.

Determining Training Needs

Job Analysis can be used in training/"needs assessment" to identify or
develop:

training content

assessment tests to measure eff ectiveness of training

equipment to be used in delivering the training

methods of training (i.e., small group, computer-based, video,

classroom...)

Compensation

Job Analysis can be used in compensation to identify or determine:

skill levels

compensable job factors

work environment (e.g., hazards; attention; physical eff ort)

responsibilities (e.g., fi scal; supervisory)

required level of education (indirectly related to salary level)

Selection
Job Analysis can be used in selection procedures to identify or develop:

job duties that should be included in advertisements of vacant

positions;

appropriate salary level for the position to help determine what salary
should be off eredto a candidate;

minimum requirements (education and/or experience) for screening

applicants;

interview questions;

selection tests/instruments (e.g., written tests; oral tests; job

simulations);

applicant appraisal/evaluation forms;

orientation materials for applicants/new hires

Performance Review
Job Analysis can be used in performance review to identify or develop:

goals and objectives

performance standards

evaluation criteria

length of probationary periods

duties to be evaluated

Methods
There are several ways to conduct a job analysis, including: interviews
with incumbents andsupervisors, questionnaires (structured, openended, or both), observation, critical incidentinvestigations, and
gathering background information such as duty statements or
classifi cationspecifi cations. In job analysis conducted by HR
professionals, it is common to use more than oneof these methods.

4.)JOB DESIGN:
Job design refers to the way that a set of tasks, or an entire job, is
organized. Job design helps todetermine: what tasks are done, how the
tasks are done, how many tasks are done, and in whatorder the tasks
are done.It takes into account all factors which aff ect the work, and
organizes the content and tasks so thatthe whole job is less likely to be
a risk to the employee. Job design involves administrative areassuch
as: job rotation, job enlargement, work breaks, and working hours.
A well designed job will encourage a variety of 'good' body positions,
have reasonable strengthrequirements, require a reasonable amount of
mental activity, and helps foster feelings of achievement and selfesteem.

FACTORS AFFECTING JOB DESIGN

Job design is aff ected by organizational, environmental and behavioral

factors. A properlydesigned job will make it more productive and
satisfying .If a job fails on this count, it must beredesigned based on
the feedback. The various factors aff ecting job design are the following

Organizational factors
Organizational factors include characteristics of task, work fl ow,
ergonomics and work practices.
Characteristics of Task
: Job design requires the assembly of a number of tasks into a job or
agroup of jobs. An individual may carry out one main task which
consists of a number of inter-related elements or functions. On the
other hand , task functions may be spilt between a team,working
closely together or strung along an assembly line. In more complex
jobs, individualsmay carry out a variety of connected tasks, each with a
number of functions, or these tasks may be allocated to a group of
workers or divided between them.
Work Flow

: The fl ow of work in an organization is strongly infl uenced by the

nature of the product or service. The product or service usually
suggests the sequence and balance between jobs, if the work is to be
done effi ciently .After the sequence of jobs is determined, the
balance between the jobs is established.

Ergonomics
: Ergonomics is concerned with designing and shaping jobs to fi t the
physicalabilities and characteristics of individuals so that ,they perform
the jobs eff ectively

Work Practices
: Work practices are set ways of performing work .These methods may
arisefrom tradition or the collective wishes of employees.
Environmental factors

Environmental factors aff ect the job design. These factors that have a
bearing on job design areemployees abilities and availability and social
and culture expectations.Employee Abilities and Availability: Effi ciency
consideration must be balanced against theabilities and availability of
the people to do the work.Social and Cultural Expectations: During the
earlier days, securing a job was the primaryconsideration. The worker
was prepared to work on any job and under any working
conditions. Now, it is not the same. Literacy, knowledge and awareness
of workers have improvedconsiderably .So also, their expectations from
the job, Hence, jobs be designed to meet theexpectations of workers.
Behavioral Factors
:Behavioral factors include
feedback
,
autonomy
,
use of abilities and variety.

5.) JOB EVALUATION:

Job evaluation
is the process of systematically determining a relative internal value of
a job inan organization. In all cases the idea is to evaluate the job, not
the person doing it. Job evaluationis the process of determining the
worth of one job in relation to that of the other jobs in acompany so
that a fair and equitable wage and salary system can be established.

Job Evaluation Methods

There are three basic methods of job evaluation: (1) ranking, (2)
classifi cation, (3) factor comparison.
Ranking Method
Perhaps the simplest method of job evaluation is the ranking method.
According to this method, jobs are arranged from highest to lowest, in
order of their value or merit to the organization. Jobsalso can be
arranged according to the relative diffi culty in performing them. The
jobs areexamined as a whole rather than on the basis of important
factors in the job; and the job at thetop of the list has the highest value
and obviously the job at the bottom of the list will have thelowest
value.

Classifi cation Method

According to this method, a predetermined number of job groups or job

classes are establishedand jobs are assigned to these classifi cations.
This method places groups of jobs into job classesor job grades.
Separate classes may include offi ce, clerical, managerial, personnel,
etc.The job classifi cation method is less subjective when compared to
the earlier ranking method.The system is very easy to understand and
acceptable to almost all employees without hesitation.One strong point
in favor of the method is that it takes into account all the factors that a
jobcomprises. This system can be eff ectively used for a variety of
jobs.The weaknesses of the job classifi cation method are:

Even when the requirements of diff erent jobs diff er, they may be
combined into a singlecategory, depending on the status a job carries.

It is diffi cult to write all-inclusive descriptions of a grade.

The method oversimplifi es sharp diff erences between diff erent jobs and
diff erent grades.

When individual job descriptions and grade descriptions do not match

well, theevaluators have the tendency to classify the job using their
subjective judgments.
Factor Comparison Method
A more systematic and scientifi c method of job evaluation is the factor
comparison method.Under this method, instead of ranking complete
jobs, each job is ranked according to a series of factors. These factors
include mental eff ort, physical eff ort, skill needed,
supervisoryresponsibility, working conditions and other relevant
factors. Pay will be assigned in this method by comparing the weights
of the factors required for each job, i.e., the present wages paid for
key jobs may be divided among the factors weighed by importance (the
most important factor, for instance, mental eff ort, receives the highest
weight). In other words, wages are assigned to the job in comparison to
its ranking on each job factor.

Point method
This method is widely used currently. Here, jobs are expressed in terms
of key factors. Points areassigned to each factor after prioritizing each
factor in the order of importance. The points aresummed up to
determine the wage rate for the job. Jobs with similar point totals are
placed insimilar pay grades.
6.)RECRUITMENT

Recruitment is defi ned as, a process to discover the sources of

manpower to meet therequirements of the staffi ng schedule and to
employ eff ective measures for attracting thatmanpower in adequate
numbers to facilitate eff ective selection of an effi cient workforce.

PURPOSE:

Determine the present and future requirements of the organization in

conjunction with its personnel-planning and job-analysis activities.

Increase the pool of job candidates at minimum cost.

Help increase the success rate of the selection process by reducing the
number of visibly,under qualifi ed or overqualifi ed job applicants.

Help reduce the probability that job applicants, once recruited and
selected, will leave theorganization only after a short period of time.

Begin identifying and preparing potential job applicants who will

beappropriate candidates.

Induct outsiders with a new perspective to lead the company.


Infuse fresh blood at all levels of the organization.

Develop an organizational culture that attracts competent people to the

company.

Search for talent globally and not just within the company.
SOURCES OF RECRUITMENT:

The sources of recruitment may be broadly divided into two

categories:1)INTERNAL SOURDES 2) EXTERNAL SOURCES.Both have
their own merits and demerits.
INTERNAL SOURCES:
Persons who are already working in an organization constitute the
internal sources.Retrenched employees, retired employees,
dependents of deceased employees may alsoconstitute the internal
sources. Whenever any vacancy arises, someone from within
theorganization is upgraded, transferred, promoted or even demoted.
EXTERNAL SOURCES:
External sources lie outside an organization. Here the organization
canhave the services of:(a) Employees working in other organizations;
(b) Jobs aspirants registered with employment exchanges;(c) Students
from reputed educational institutions;(d) Candidates referred by unions,
friends, relatives and existing employees;(e) Candidates forwarded by
search fi rms and contractors;(f) Candidates responding to the
advertisements, issued by the organization.

7.) SELECTION:

Selection is the process of picking individuals who haverelevant

qualifi cations to fi ll jobs in an organisation.The basic purpose is to

choose the individual who canmost successfully perform the job from
the pool of qualifi ed candidates.

The size of the labour market, the image of the company, the place of
posting, the nature of job, the compensation package and a host of
other factors infl uence the manner of aspirantsare likely to respond to
the recruiting eff orts of the company. Through the process
of recruitment the company tries to locate prospective employees and
encourages them to applyfor vacancies at various levels. Recruiting,
thus, provides a pool of applicants for selection.

PURPOSE:
The purpose of selection is to pick up the most suitable candidate who
would meet therequirements of the job in an organisation best, to fi nd
out which job applicant will be successful,if hired. To meet this goal,
the company obtains and assesses information about the applicants
interms of age, qualifi cations, skills, experience, etc. the needs of the
job are matched with the profi le of candidates.

THE PROCESS:
The size of the labour market, the image of the company, the place of
posting, the nature of job, the compensation package and a host of
other factors infl uence the manner of aspirantsare likely to respond to
the recruiting eff orts of the company. Through the process
of recruitment the company tries to locate prospective employees and
encourages them to applyfor vacancies at various levels. Recruiting,
thus, provides a pool of applicants for selection.
PURPOSE:
The purpose of selection is to pick up the most suitable candidate who
would meet therequirements of the job in an organisation best, to fi nd
out which job applicant will be successful,if hired. To meet this goal,
the company obtains and assesses information about the applicants
interms of age, qualifi cations, skills, experience, etc. the needs of the
job are matched with the profi le of candidates.
THE PROCESS:
Selection is usually a series of hurdles or steps. Each one must be
successfully cleared before theapplicant proceeds to the next one. The
time and emphasis place on each step will defi nitely varyfrom one
organisation to another and indeed, from job to job within the same
organisation

Types of interviews:

Several types of interviews are commonly used depending on the

nature and importance of the position to be fi lled within an
organization.In a
non directive interview
the recruiter asks questions as they come to mind. There is nospecifi c
format to be followed.In a
patterned interview
, the employer follows a pre-determined sequence of questions.
Herethe interviewee is given a special form containing questions
regarding his technical competence, personality traits, attitudes,
motivation, etc.

In a
structured or situational interview
, there are fi xed job related questions that are presentedto each
applicant.
In a
panel interview
several interviewers question and seek answers fromone applicant.
The panel members can ask new and incisive questions based on their
expertise and experienceand elicit deeper and more meaningful
expertise from candidates.Interviews can also be designed to create a
diffi cult environment where the applicantsconfi dence level and the
ability to stand erect in diffi cult situations are put to test. These
arereferred to as the
stress interview
.This is basically an interview in which the applicant is made
uncomfortable by a series of, often,rude, annoying or embarrassing
questions.
Steps in interview process:
Interview is an art. It demands a positive frame of mind on part of the
interviewers. Interviewersmust be treated properly so as to leave a
good impression about the company in their minds. HR experts have
identifi ed certain steps to be followed while conducting interviews:

Establishing the objective of the interview

Receiving the candidates application and resume


Keeping tests score ready, along with interview assessment forms

Selecting the interview method to be followed

Choosing the panel of experts who would interview the candidates

Identifying proper room for environment

8.)PLACEMENT:
It means assigning suitable jobs to selected candidates so as to match
employees qualifi cationwith job requirement

Placement is a process of assigning a specifi c job to each of the

selected candidates. It involvesassigning a specifi c rank and
responsibility to an individual. It implies matching the requirementsof a
job with the qualifi cations of the candidate.
The signifi cances of placement are as follows: It improves employee morale.2) It helps in reducing employee
turnover.3)It helps in reducing absenteeism.4)It helps in reducing
accident rates.5)It avoids misfi t between the candidate and the job.6)It
helps the candidate to work as per the predetermined objectives of the
organization
9.)INDUCTION:

It involves familiarizing the new employees with company, the work

environment and existingemployees so that the new people feel at
home. Once an employee is selected and placed on anappropriate job,
the process of familiarizing him with the job and the organization is
known asinduction.

Induction is the process of receiving and welcoming an employee when

he fi rst joins thecompany and giving him basic information he needs to
settle down quickly and happily and stars work
Induction is designed to achieve following objectives: 1) To give new comer necessary information.2) To build new employee
confi dence in the organization.3) It helps in reducing labor turnover
and absenteeism.4) It reduces confusion and develops healthy relations
in the organization.5) To ensure that the new comer do not form false
impression and negative attitude towards theorganization.6) To develop
among the new comer a sense of belonging and loyalty to the
organization.7) To help the new comer to overcome his shyness and
overcome his shyness nervousness inmeeting new people in a new
environment.
The advantages of formal induction are: 1) Induction helps to build up a two-way channel of communication
between management andworkers.2) Proper induction facilitates
informal relation and team work among employee.3) Eff ective induction
helps to integrate the new employee into the organization and to
develop asense of belonging.
4) Induction helps to develop good relation.5) A formal induction
programme proves that the company is taking interest in getting him
off togood start.6) Proper induction reduces employee grievances,
absenteeism and labor turnover.7)Induction is helpful in supplying
information concerning the organization, the job andemployee welfare
facilities.
A formal induction programme should provide following information:
1) Brief history and operations of the company.2) The companys
organization structure.3) Policies and procedure of the company.4)
Products and services of the company.5) Location of department and
employee facilities.6) Safety measures.7) Grievances procedures.8)
Benefi ts and services of employee.9) Standing orders and disciplinary
procedures.10) Opportunities for training, promotions, transfer etc.11)
Suggestion schemes.12) Rules and regulations

10.)
PERFORMANCE APPRAISAL:

It refers to employers systematic evaluation of employees with respect

to their performance onthe job and their potential for
developmentPerformance appraisal means evaluating an employees
current or past Performance to certain performance standards.Appraisal
involves:(i) Setting work standards (ii) Assessing the employees actual
performance relative to thesestandards (iii) Providing feedback to the
employees with the aim of motivating that person toeliminate
defi ciencies or to continue to perform above par.Managers usually
conduct the appraisal using a predetermined and formal
method.Various methods of appraisal include:Graphic rating scale method. b) Alternate ranking methodc) Paired
comparison methodd) Forced distribution methode) Critical incident
methodf) Narrative formsg) Behaviorally anchored rating scalesh)
Management by objective (MBO)i) 360 degree feedback
Graphic rating scale method:The graphic rating scale method is the simplest and most popular
technique for appraising performance. A graphic rating scale lists traits
(such as qualityand reliability) and a range of performance values (from
unsatisfactory to outstanding) for eachtrait. Subordinates are rated by
circling of checking the score that best describes his or
her performance for each trait. Then the total of assigned value is
calculated.

Alternate ranking method: This method involves ranking employees from best to worst on
a particular trait, choosing highest, then lowest until all are
ranked.Since it is easier to distinguish between the worst and best
employees and alternate ranking isquite popular. First, list all
subordinates to be rated. Then indicate the employee who is thehighest
on the characteristic being measured and also the one who is lowest.
The processcontinues till all the employees are ranked on similar
fashion.

Paired comparison method: -

Paired comparison method helps make the ranting method

more precise. For every trait (quality of work, quality etc), Pairs are
made and every subordinate iscompared with every other subordinate.

Forced distribution method: Forced distribution method is similar to grading on a curve.With this
method, manager place predetermined percentage or rates in to
performance categories.For example you may decide to distribute
employees as follows:15% high performance20% High average
performance30% average performance20% low average
performance15% low performance

Forced distribution means tow things for employee: Not everyone can
get anA; and ones performance is always rated relative to ones peers.
Onepractical, one practical, if low-tech, way to do this is to write each
employees name on a separate index card.
Then for each trait managers place theemployees card in the
appropriate performance category.
Critical Incident Method: Critical incident method involves keeping a record of uncommonlygood
or undesirable examples of an employees work related behavior and
reviewing it with theemployee at predetermined time.

Narrative Forms: The fi nal written appraisal is often in narrative form. A persons
supervisor is asked (i) to rate the employees performance for each
performance factor or skill (ii) to writedown examples and (iii) an
important plan. This aids the employee to understand where his or her
performance was good or bad and how to improve that performance.
Behaviorally Anchored Rating Scales
is an appraisal method that aims at combining the benefi ts of narrative
critical incidents and quantifi ed ratings by anchoring a quantifi ed scale
withspecifi c narrative example of good and poor performance.

11) TRAINING

It is the process by which employees learn knowledge skills and

attitudes to further organizational and personal goals.In general,
education is 'mind preparation' and is carried out remote from the
actual work area,training is the systematic development of the attitude,
knowledge, skill pattern required by a person to perform a given task or
job adequately and development is 'the growth of theindividual in
terms of ability, understanding and awareness'

Within an organization all three are necessary in order to:

Develop workers to undertake higher-grade tasks;

Provide the conventional training of new and young workers (e.g. as

apprentices, clerks,etc.);

Raise effi ciency and standards of performance

;

Meet legislative requirements (e.g. health and safety);

Inform people (induction training, pre-retirement courses, etc.);

Training and development managers and specialists
create, procure, and conduct training anddevelopment programs for
employees. Increasingly, executives recognize that training off ers away
of developing skills, enhancing productivity and quality of work, and
building worker loyalty.Enhancing employee skills can increase
individual and organizational performance and help toachieve business
results. Increasingly, executives realize that developing the skills
andknowledge of its workforce is a business imperative that can give
them a competitive edge inrecruiting and retaining high quality
employees and can lead to business growth.Other factors involved in

determining whether training is needed include the complexity of

thework environment, the rapid pace of organizational and
technological change, and the growingnumber of jobs in fi elds that
constantly generate new knowledge and, thus, require new skills.
Inaddition, advances in learning theory have provided insights into how
people learn and howtraining can be organized most eff ectively.
Training managers
oversee development of training programs, contracts, and budgets.
They may perform needs assessments of the types of training needed,
determine the best means of delivering training, and create the
content. They may provide employee training in a classroom,computer
laboratory, or onsite production facility, or through a training fi lm, Web
video-on-demand, or self-paced or self-guided instructional guides. For
computer-assisted or recordedtraining, trainers ensure that cameras,
microphones, and other necessary technology platformsare functioning
properly and that individual computers or other learning devices are
confi guredfor training purposes. They also have the responsibility for
the entire learning process, and its
environment, to ensure that the course meets its objectives and is
measured and evaluated tounderstand how learning impacts
performance.
Training specialists
plan, organize, and direct a wide range of training activities. Trainers
consultwith training managers and employee supervisors to develop
performance improvementmeasures, conduct orientation sessions, and
arrange on-the-job training for new employees. Theyhelp employees
maintain and improve their job skills and prepare for jobs requiring
greater skill.They work with supervisors to improve their interpersonal
skills and to deal eff ectively withemployees. They may set up
individualized training plans to strengthen employees existingskills or
teach new ones. Training specialists also may set up leadership or
executivedevelopment programs for employees who aspire to move up
in the organization. These programs are designed to develop or
groom leaders to replace those leaving the organizationand as part of
a corporate succession plan.Trainers also lead programs to assist
employees with job transitions as a result of mergers or consolidation,
as well as retraining programs to develop new skills that may result
fromtechnological changes in the work place.In government-supported
job-training programs, training specialists serve as case managers
and provide basic job skills to prepare participants to function in the
labor force. They assess thetraining needs of clients and guide them
through the most appropriate training. After training,clients may either
be referred to employer relations representatives or receive job
placementassistance.It is the process of developing managerial talent
through programs.
12.)DEVELOPMENT:

It covers not only those activities, which improve job performance, but
also those which bringabout growth of the personality; help individuals
in the progress towards maturity andactualization of their potential
capacities so that they become not only good employees but
better men and woman. In organisational terms, it is intended to equip
persons to earn promotion andhold greater responsibility. Training a
person for higher and bigger job is development. And thismay well
include not only imparting specifi c skills and knowledge but also
inculcating certain personality and mental attitudes.There is more
emphasis on choosing management development methods that are
moreorganizationally relevant and eff ective that they have been in the
past. Various techniques of management development include:-(a)
Management on-the-job training.(b) Off the job training.Managerial
on-the-job training methods
include job-rotation, coaching/understudy approachand action learning.
Job rotation
means moving management trainees from department tobroaden their
understanding of all part of the business and to test theirabilities.
A manager may spend several months in each department. The person
may just bean observer ineach department but more commonly gets
fully involved in its operations.

Coaching/understudy approach:
Here the person workers directly with the senior manager or with the
person he or she is to replace; the latter is responsible for the
executive of certainresponsibilities, giving the trainee a chance to learn
the job.

Of the job training and development techniques

The off the job development techniques for managers include case
study method; managementgames; role playing etc.

Case Study method: Case study method presents a trainee with a written description of
anorganisational problem. The person then analyzes the case,
diagnoses the problem and presentshis or her fi ndings and solutions in
discussion with other trainees.
Management Games: With management games trainees are dividend in to give or six
personsgroup, each of which competes with the others in a stimulated
marketplace. Management gamescan be good development tools.

People learn best by getting involved, and the games can beuseful for
gaining such involvement. They help trainee develop their problem
solving skills, aswell as to focus attention on planning rather than just
putting out fi res. The group also usuallyelects their own offi cers and
organize themselves; they can thus develop leadership skills andfaster
cooperation and team work.

Roll Playing: The aim of role playing is to create a realistic situation and then have
the traineesassume the role of specifi c persons in that situation. When
combined with the general instructionand other roles for the exercise,
role playing can trigger spirited discussions among the role player
trainees. The aim is to develop trainees skills in areas like leadership
and delegation.

13.)COMPENSATION: -

It refers to fair and equitable remuneration to employees for their

contribution to the attainmentof organizational
objectives.Compensation is all forms of fi nancial returns and tangible
services and benefi ts employeesreceive as part of an employment
relationship. An eff ective set of choices about compensationsystems
plays a major role in determining fi rm performance. It is paid in form of
wages, salaries,and employee benefi ts such as paid vacations,
insurance, maternity leave, free travel facility,retirement benefi ts etc.
monetary payments are a direct form of compensating employees &
have
a great impact in motivating employees. The system of compensation
should be designed in sucha way that it achieves following objectives:
(1) Capable employees are attracted towards organisation.(2)
Employees are motivated for better performance.(3) Employees do not
leave employer frequently.
It consists of:

a)Wages and salary administration

Base compensation includes monetary benefi ts to employees in form of
wages or salaries. Theterm wage is used to denote remuneration to
workers doing manual or physical work.Thus wages are given to
compensate the unskilled workers for their services rendered
toorganization Wages may be based on hourly, daily, weekly or even
monthly basisThe term salary means compensation to offi ce
employees, foremen, managers & professional& technical staff .It is
based on weekly, monthly &yearly basis. Thus time period for which
salaries are paid isgenerally higher than in case of wage
payments.Wages may be based on number of units produced (i.e. piece
wage system) or time spent on job.But salary is always based on time
spent on job.
Factors determining pay rates:
1)
Demand and supply: Wage rates of workers depends upon demand and supply force inlabour
market. If the labour is in short supply, the workers will off er the
services only if they are paid well. On the other hand, if the supply is
more then workers available might get ready work at cheaper rates.

2)
Bargaining Power: Where labour unions are strong enough to force the hand of
employers,the wages will be determined at a higher level in comparison
to other units where unions areweak.
3) Cost of living: Wages of workers also depends upon the cost of living of the worker so
as toensure him a decent living wage. Cost of living varies under
defl ationary and infl ationary pressures. Where labour unions are strong
and employer do not show enough awareness, herewage are adjusted
according to cost of living index numbers.
4)
Condition of product market: Degree of competitions prevailing in the market for the product of the
industry will also infl uence the wage level. For e.g. if there is perfect
competitionin the market the wage level may be at par with the value
of net additions made by the workers tothe total output, but may not
reach this level in case of imperfect competition in the market.5)

Comparative Wages: Wages paid by the other fi rms for the same work also infl uence
thewage levels. Wage rates must also be in consistent with the wages
paid by the other fi rms in thesame industry so as to increases the job
satisfaction among the workers.6)
Ability to Pay:Wage rates are infl uenced by the paying ability of industry or fi rms to
itsworkers. Those fi rms which are earning huge profi ts may aff ord to
pay high wages and can provide more facilities to its workers in
comparison to the fi rms earning comparatively low profi ts.(7)
Productivity of labour: Higher productivity will automatically fetch more profi t to thefi rm,
where in turn workers will be paid high wages in comparison to other
fi rms with low productivity.(8)
Job Requirements: If a job requires higher skill, greater responsibility and risk, the
worker placed on that job will naturally get higher wages in
comparison to other jobs which do notrequire the same degree of skill,
responsibility or risk.

(9)
Govt. Policy: Since the bargaining power of the workers is not enough to ensure fair
wagesin all industries, the Govt. has to interfere in regulating wage
rate to guarantee minimum wagerates in order to cover the essentials
of a decent living.(10)
Goodwill of the company: A few employers want to establish themselves as goodemployer in the
society and fi x higher wages for their workers. It attracts qualifi ed
employees.In addition there are other important factors which aff ect
the individual diff erences in wage rates.These are:1). Workers Capacity
and Age2). Educational qualifi cation.3). Work experience.4). Promotion
possibilities.5). Stability of employment6). Demand for product.7).
Profi ts earned by the organisation.8). Hazards involved in work etc.
b)
Employee benefi ts
also called
benefi ts in kind
; also called

fringe benefi ts
,
perquisites
, or
perks
are various non-wage compensations provided to employees in addition
to their normalwages or salaries . Some of these benefi ts are: housing
(employer-provided or employer-paid), group
insurance(health, dental ,life etc.),disability income protection,retirement
benefi ts ,daycare ,tuition reimbursement,sick leave ,vacation (paid and
non-paid),social security , profi t sharing , funding of education, and
other specialized benefi ts. The purpose of the benefi ts is to increase
theeconomic security of employees.

Perquisites:
The term perks is often used colloquially to refer to those benefi ts of a
more discretionary nature.Often, perks are given to employees who are
doing notably well and/or have seniority.
Common perks aretake-home vehicles, hotel stays, free refreshments,
leisure activities on work time (golf ,
etc.),stationery ,allowances for lunch , andwhen multiple choices exist
fi rst choice of such things as job assignments and vacation
scheduling. They may also be given fi rstchance at job promotions when
vacancies exist.

Common perks aretake-home vehicles, hotel stays, free refreshments,

leisure activities on work time (golf ,
etc.),stationery ,allowances for lunch , andwhen multiple choices exist
fi rst choice of such things as job assignments and vacation
scheduling. They may also be given fi rstchance at job promotions when
vacancies exist.
14.)MOTIVATION:

It is the force which instigates an employee to work in a proper

direction.To retain good staff and to encourage them to give of their
best while at work requires attentionto the fi nancial and psychological
and even physiological rewards off ered by the organization asa
continuous exercise.Basic fi nancial rewards and conditions of service
(e.g. working hours per week) are determinedexternally (by national
bargaining or government minimum wage legislation) in many
occupations but as much as 50 per cent of the gross pay of manual
workers is often the result of local negotiations and details (e.g. which
particular hours shall be worked) of conditions of service are often
more important than the basics. Hence there is scope for fi nancial and
other motivations to be used at local levels.

The motivation function is one of the most important, yet probably the
least understood,aspects of the HRM process. Why? Because human
behavior is complex and diffi cult tounderstand. Trying to fi gure out
what motivates various employees has long been a concernof
behavioral scientists. However, research has given some important
insights into employeemotivation.

First of all, one must begin to think of motivation as a multifaceted

process - one that hasindividual, managerial, and organizational
implications. Motivation is not just what theemployee exhibits, but also
a compilation of environmental issues surrounding the job. It has been
proposed that one's performance in an organization is a function of two
factors: abilityand willingness to do the job. Thus, from a performance
perspective, employees need to havethe appropriate skills and abilities
to adequately do the job. This should have beenaccomplished in the
fi rst two phases of HRM, by correctly defi ning the requirements of
the job, matching applicants to those requirements, and training the
new employee on how to dothe job.

But there is also another concern, which is the job design itself. If jobs
are poorly designed, poorly laid out, or improperly described,
employees will perform below their capability.

Consequently, HRM must look at the job. Has the latest technology
being provided in order to permit maximum effi ciency? Is the offi ce
setting appropriate (properly lit and adequatelyventilated, for example)
for the job?

Are the necessary tools readily available for the employee use? For
example, If an employee prints on a laser printer throughout the day,
and the printer is networked to a station twofl oors up, that employee is
going to be less productive that one who has a printer on his
desk.While not trying to belittle the problem with such an example, the
point should be clear.Offi ce automation and Industrial engineering
techniques must be incorporated into the jobdesign. Without such
planning, the best intention of managers to motivate employees may
belost or signifi cantly reduced.

Once the measures have been taken to ensure that jobs have been
properly designed, the nextstep in the motivation process is to
understand the implications of motivational theories.Some motivational
theories are well known by practicing managers, but recent
motivationresearch has given us new and more valid theories for
understanding what motivates peopleat work. Performance standards
for each employee must also be set. While no easy task,managers must
be sure that the performance evaluation system is designed to
providefeedback to employees regarding their past performance, while
simultaneously, addressingany performance weakness the employee
may have.
15.)JOB SATISFACTION:
It is the amount of satisfaction and contentment derived from ones job,
its pay and environment.
Job satisfaction
describes how content anindividual is with his or her job. The happier
peopleare within their job, the more satisfi ed they are said to be. Job
satisfaction is not the same asmotivation, although it is clearly linked.
Job design aims to enhance job satisfaction and performance.Methods
include job rotation, job enlargement and job enrichment. Other
infl uences onsatisfaction include the management style and culture,
employee involvement, empowerment and

autonomous work groups. Job satisfaction is a very important attribute

which is frequentlymeasured by organizations. The most common way
of measurement is the use of rating scaleswhere employees report their
reactions to their jobs. Questions relate to rate of pay,
work responsibilities, variety of tasks, promotional opportunities the
work itself and co-workers. Somequestioners ask yes or no questions
while others ask to rate satisfaction on 1-5 scale (where 1represents
"not at all satisfi ed" and 5 represents "extremely satisfi ed").In todays
world, it is naive to assume that people work primarily to achieve
professionalfulfi llment and job satisfaction. As a matter of fact, they
seem to work because what they get onthe job enables them to achieve
whatever they want to achieve off the job.Todays typical professional
may no longer have an undivided loyalty and commitment towardshis
job. Therefore, it is incorrect to believe that an employees work life is
spent entirely in the pursuit of job satisfaction. Perhaps, he or she is
not actively seeking job satisfaction as much asaspiring towards other
important needs and considerations like own career progression,
standardof living and personal fulfi llment. The job is a means to
achieving the desired ends.One of the typical propositions held by most
people connected with HR is that job satisfaction is positively
associated with job performance. Does a satisfi ed employee always
producemore? It may be wrong to presume and take for granted a
fi ctitious linkage between jobsatisfaction and employee productivity in
all cases.In some cases, one may be shocked to fi nd that while the socalled satisfaction was increasing,the productivity of the individual
was declining. The reason behind this is the mistaken conceptthat a
satisfi ed employee will devote his dedicated attention to his work.A
satisfi ed or happy employee may begin to develop an approach of
self-complacency, andan overall sense of well-being, and consequently,
his temperament may become one of ignorantsubmission and passivity
rather than one of positive action and active involvement. As a result,
itis not too uncommon to see that the productivity of the employee
does not always closely followhis upward satisfaction curve
16.)GRIEVANCE REDRESSAL:
Various problems and confl ict which are amongst the employees should
be properly andcordially handled. A grievance is a sign of an
employee's discontentment with his job or hisrelationship with his
colleagues. Grievances generally arise out of the day-to-day
workingrelations in an organization. An employee or a trade union
protests against an act or policy of themanagement that they consider
as violating employee's rights.One of the eff ective ways of minimizing
and eliminating the source of an employee's grievanceis by having an
open door policy'.An open door policy facilitates upward
communication in the organization where employeescan walk into a
superiors cabin at any time and express their grievances.
17.)CONFLICT MANAGEMENT:

It refers to eff ective and effi cient management of confl ict arising in the
organization. How is theidea of confl ict management related to Human
Resource Management? The answer to thisquestion is much simpler
than one may think. In a broad sense, the Human Resource
Departmentof all business organizations has one primary task: to deal
with the people in the organization.
More specifi cally however, it is HR's job to ensure that productivity,
effi ciency, safety, fairness,and smooth practices are executed both
inside and outside of the organization.With that said successful confl ict
management techniques are essential to ensure that both the broad
and specifi c duties of a Human Resource Department are carried
out.Since all people are diff erent, each individual has diff erent
experiences and possess unique perspectives. Consequently, diff erent
perspectives potentially lead to biases or diff erences inopinion and
these discrepancies are what essentially cause confl ict. Some confl icts
areinsignifi cant compared to others but nonetheless, managing even
the smallest confl icts is no easytask. However, several successful
confl ict management techniques can be utilized at all levels of an
organization in order to ensure that effi ciency, safety, fairness, and
smooth, ethical business practices are executed.One common
misconception about confl ict in general is that all confl ict is bad.
However, this isnot the case in the business setting. Although, if
individuals are physically injuring one another and putting their safety
and the safety of others at risk via this particular confl ict, then it is
safe tosay that "physical" confl ict and altercations are undesirable. The
bottom line from a business perspective is that "healthy" confl ict is
desirable in any organization. "Healthy" confl ict merelyshows that
people are not holding back their ideas and beliefs. Furthermore, the
more ideas and perspectives that are brought to the table, the more
opportunity managers have to make good,well informed decisions that
look at various issues from all angles. An important concept
for managers to remember when faced with confl ict is that confl ict is
neither good nor bad; it ismerely a diff erence in opinion.
18.)PARTICIPATIVE MANAGEMENT:

Participation

of

employees
: Employees should be given a chance to participate in the workingof
the fi rm. Their suggestion should be taken into consideration.Worker
participation in management is an eff ective tool for prevention of
industrial disputes.The level of workers participation can vary from
organization to organization. The basicobjective of worker participation
is to provide an opportunity to the workers to participate in
theorganizational decision-making.By virtue of their participation,
employees are bound to abide by all the decisions taken. Thisalso helps
in boosting the employee morale and enhancing their commitment to
the organization.Some of the common forms of worker participation in
management in India are
workscommittees, joint management councils, joint councils, plant
councils, shop councils
etc.Worker participation in India has achieved only partial success due
to factors like lack of proper education among workers, lack of
understanding between the management and the workers andmultiunionism. A good organizational environment built on mutual trust and
confi dence between the management and the workers would help in
eff ective and successful worker participation in management.
19.)HEALTH, SAFETY and WELFAREHEALTH:
The well- being of the employee in an organization is aff ected by
accidents and ill health both physical and mental.
PHYSICAL HEALTH
: Ill health of employees results in reduced productivity.
Healthyemployees are more productive, more safety conscious, and are
more regular to work. Thisrealization has made many management to
provide health services to their employees like fi rst-aid, complete
medical care, etc. Many progressive organizations have well equipped
dispensarieswith full-time and part-time doctors.

MENTAL HEALTH
: In recent years, mental health of employees, particularly that
of executives, has engaged the attention of management. Mental
breakdowns are common inmodern days because of stress and tension.
This results in reduced productivity and lower profi tsfor the
organization. A mental health service is rendered in following
ways:1.Psychiatric counseling2.Co operation and consultation with
outside psychiatrics3.Education of company personnel in importance of
mental health4.Development and maintenance of eff ective human
resource programme.
SAFETY:
Safety refers to absence of accidents. It is protection of workers from
the dangers of accidents.
NEED FOR SAFETY MEASURESCOST SAVING:
Two

types of cost are incurred by the management when an accident

occurs.These are direct costs in form of compensation payable and
medical expenses incurred in treatingthe patients.
INCREASED PRODUCTIVITY:
Safety promotes productivity. Employees in a safeenvironment can
devote time to improving quality and quantity of output.
MORAL and LEGAL:
Safety is important on humane grounds too. There are legal
provisionsrelating to safety measures which have to be undertaken by
the management.

WELFARE:
Welfare includes anything that is done for the comfort and
improvement of employees and is provided over and above the wages.
Welfare helps in keeping the morale and motivation of theemployees
high so as to retain the employees for longer duration. The welfare
measures need not be in monetary terms only but in any kind/forms.
Employee welfare includes monitoring of working conditions, creation of
industrial harmony through infrastructure for
health,industrial relations and insurance against disease, accident and
unemployment for the workers and their families.Labor welfare entails
all those activities of employer which are directed towards providing
theemployees with certain facilities and services in addition to wages
or salaries.Labor welfare has the following objectives:1.To provide
better life and health to the worker 2.To make the workers happy and

satisfi ed3.To relieve workers from industrial fatigue and to improve

intellectual, cultural andmaterial conditions of living of the workers
The basic features of labor welfare measures are as follows:1.Labor
welfare includes various facilities, services and amenities provided to
workers for improving their health, effi ciency, economic betterment and
social status.2.Welfare measures are in addition to regular wages and
other economic benefi ts availableto workers due to legal provisions and
collective bargaining

3.Labor welfare schemes are fl exible and ever-changing. New welfare

measures are addedto the existing ones from time to time.4.Welfare
measures may be introduced by the employers, government, employees
or byany social or charitable agency.5.The purpose of labor welfare is
to bring about the development of the whole personalityof the workers
to make a better workforce.
PERSONNEL POLICIES

NEED AND IMPORTANCE OF PERSONNEL POLICIES IN INSURANCE SECTOR

The
very objective of insurance is to place the insured in the same fi nancial
position as he was just before the loss.It can be said that the system of
insurance can be explained as social and fi nancial assistance
to business enterprises, fi nancial stability to commerce and industry
and basis of credit.The word personnel in the context of any
organization imply the persons connected with theworking of that
organization or establishment or in other words the person at work.
This denotesthe staff or employees of an organization.The term policy
refers to any guidance to action. Hence policy making are
supplementary andcomplementary to each other.
Personnel policy is the guideline which assists in proper working of the
org. and enables it toachieve its various objectives.Policies are broad
guidelines as to how the objectives of a business are to be achieved.
Policies provide the guidelines which we should keep in view while
achieving the ends. A policy is a predetermined and accepted course of
thought and action to serve as a guide towards certainaccepted

objectives. In other words, we can say that policies are related to the
organizationsoverall purpose and its objectives in the various areas
with which its operations are concerned.Personnel policies lay down the
decision making criteria in line with the overall purpose of
theorganization in the area of human resource management. Personnel
policies are developed by thetop management to assist the managers
at various levels to deal with the people at work.

Personnel policy is the guideline which assists in proper working of the

org. and enables it toachieve its various objectives.Policies are broad
guidelines as to how the objectives of a business are to be achieved.
Policies provide the guidelines which we should keep in view while
achieving the ends. A policy is a predetermined and accepted course of
thought and action to serve as a guide towards certainaccepted
objectives. In other words, we can say that policies are related to the
organizationsoverall purpose and its objectives in the various areas
with which its operations are concerned.Personnel policies lay down the
decision making criteria in line with the overall purpose of
theorganization in the area of human resource management. Personnel
policies are developed by thetop management to assist the managers
at various levels to deal with the people at work.
The Aims and Objectives of personnel policies should be/ are:

(1)To provide such conditions of employment and procedures as will

enable all the employeesto develop a sincere sense of unity with the
enterprise and to carry out their duties in the mostwilling and eff ective
manner;(2)To provide an adequate, competent and trained personnel
for all levels and types of management;(3)To establish the conditions
for mutual confi dence and avoid confusion and
misunderstanding between the management and the workers, by
developing suggestion plans, jointmanagement councils, work
committees, etc., and by performance appraisal discussions;(4)To
provide security of employment to workers so that they may not be
distracted by theuncertainties of the future;
(5) To provide an opportunity for growth within the organization to
persons who are willing tolearn and undergo training to improve their
future prospects;
(6) To provide for the payment of fair and adequate wages and salary to
workers so that their healthy co-operation may be ensured for an
effi cient working of the undertaking;(7) To recognized the work and
accomplishments of the employees by off ering non- monitoryincentives;
and(8) To create a sense of responsibility, on the part of those in
authority for the claims of employees as human beings, who should be
guaranteed protections of their fundamental rightsand off ered enough
scope for developing their potential.

SCOPE OF PERSONNEL POLICIES

Personnel policies must cover all areas of human resource
management. Usually personnel policies are framed with regard to all
functions of human resource management as stated below:
1.Employment Policies
(i)Minimum hiring qualifi cations.(ii)Preferred sources of recruitment.
(iii)Reliance on various selection devices such as tests, reference
checks, andinterviews.
2.Training and development policies
(i)Opportunities for training and development.(ii)Basis for
training(iii)Types of training, viz., on-the-job, off -thejob.
(iv)Programmes of executive development.
3.Transfer and promotion policies
(i)Rationale for transfer.(ii)Periodicity of transfer.(iii)Length of service
and qualifi cations required for promotion.(iv)Weightage to seniority and
merit in promotion.

4.Compensation Policies
(i)Minimum wages and salaries.(ii)Incentive Plans.(iii)Profi t Sharing.
(iv)Non-Monetary Rewards.
5.Integration and Human Relations Policies
(i)Handling of Grievances.(ii)Recognitions of labour unions.(iii)Workers
participation in management.(iv)Discipline.
6.Working conditions and welfare policies
(i)Kinds and standards of working conditions.(ii)Safety programme.
(iii)Types of welfare services.(iv)Financing of employee services

IMPORTANCE OF HRM IN INSURANCE SECTOR

Human resource is one of the natural resources of any country's

economy. It is the wealth of thecountry. In the context of insurance,
human resource is of greater importance. The deployment of human
resource through proper and effi cient selection, training and
development, is calledHuman Resource Management.
The success of any insurance company largely depends on effi cient
human resourcemanagement, apart from operations, marketing and
sales, the HR department manages all theeffi cient people working in
operations and marketing divisions in any organization.
Need for HRD and Its Management in insurance sector
1.
There are many changes in the insurance sector on account of changes
in the industry due tothe entry of new insurance companies. Therefore,
it has become a necessity to recruit, train anddeploy people at all level
effi ciently, for better performance and success. This is the
basicfunction of HRD, which includes the concept of HRM.2. In view of
the changes in the political scene in the recent past, seeping changes
are expected totake place in the insurance industry. It is expected that
only a few insurance companies willremain after a series of
amalgamations and mergers, not only in the Indian insurance
industry, but also at the international level.3. Emergence of new
private sector insurance companies, competition and self-regulation
hasnecessitated effi cient Human Resources Management in insurance
companies. HRM is acontinuous process, involving selection,
recruitment and training on an "on going basis" for thestaff and their
deployment in the right place. The activity is called HR development.

EFFICIENCY IN INSURANCE SECTOR WITH HRM

1.
The crucial factors behind successful insurance companies will be
continuous and sustained build up of skills, knowledge, education and
attitudes among people working in the companies, particularly the
frontline staff , working in the branches.2. It is possible through
professionalization, which is an internal part of HRM. The staff
should be motivated and encouraged to practice professionalism for
their personal growth and thuscontribute to the organization's
growth.3. Building effi ciency is, therefore largely dependent on the best
selection process adopted by theHR department. There is imperative
need to build up skills within an organization for thesuccessful
managing of available HR.4. Insurance companies have vast human
resource specialized in multiple disciplines liketechnology, law, sales,
underwriting, administration, risk management etc.The basic function
of HR is to manage them effi ciently for continuous success.For building
up better effi ciency in insurance sector, HRM have to follow the below
twofunctions

:-1) Emphasis on job description and job Assignment.2) Response to

challenges in future.

1.EMPHASIS ON JOB DESCRIPTION AND JOB ASSIGNMENT

One of the important functions of HR department is to ensure proper
defi nition for workers inthe insurance companies.The staff should know
about the vacant positions and the skills required for those particular
jobs.Accordingly, people should be recruited to that particular job.The
allotment of a job to a right person, who has the required skills is called
job assignment.If this function is not properly performed by the HR
department, people in all departments will be in a chaotic situation.
This will impair their performance and subsequently customer
service.Improvement in performance and skills of existing employees
can be achieved through recruitingthe right person for the right place.
Thus, job description and job assignment are parallel conceptrequiring
attention.
2. RESPONSE TO THE CHALLENGES IN FUTURE
Insurance companies should chalk out a wide range of strategic
responses to the futurechallenges. They have to look into the structure,
procedures and processes of the systems andmake policies accordingly,
to ensure necessary changes. It is the foremost function of
HRM.Insurance companies have to convince their employees that that a
challenge is an opportunity to prove oneself.Companies in India have to
utilize this opportunity before the competition overtakes them
and people in banks have to respond immediately to the
challenges.This requires the HR department to work effi ciently.
Insurance companies are in the serviceindustry, where the raw material
is HR.
HRM, therefore, emerges as a very basic and important element for
strategic response to thechanges that are taking place in the insurance
sector.HR departments should take it seriously to formulate policies to
meet these challenges.HRD is a critical management function. Each
manager should have initiative, awareness, co-ordination and
facilitation to perform his role. This is critical function of HRM.

THE CHANGING INSURANCE ENVIRONMENT and THE ROLE OF HRM

Owing to the changing insurance environment HR department should

call for appropriateresponse in equipping people who have to perform
in the new environment. People should be prepared to 'accept changes.
The upgraded technology might create fear among the staff regarding
their adaptability to the new environment. It is the responsibility of the
HR departmentto properly counsel people and prepare them to face the
challenges before them.
Their mind should be fi ne - tuned to work in the new technological
environment.The main function of HRM is to build up capabilities in
people working and intensify their senseof belonging to the
organization. To improve their performance and increase the
bank's productivity HR must incorporate challenges in routine work.
Team spirit has to be inculcated inthe branches and greater focus
should be on customer care. This would be possible only throughthe
unprecedented eff orts to be put forth by the HR department.
REWARDS, REMUNERATION, INCENTIVES AND PUNISHMENTS
HR department should make eff orts to provide appropriate incentives,
rewards and increaseremuneration to employees. Otherwise,
dissatisfaction may creep into all levels of the bank,resulting in"
ineffi ciency, perfunctory attitude, and poor service standards. These
will ultimatelyaff ect the functioning of the organization.

Therefore, the HR department has to formulate policies with utmost

care taking into account allthese facets.Radical changes are required in
the performance appraisal system to avoid nepotism. HR policieswith
regard to manpower and career planning, and placement policies have
to he revamped. Alevel of professionalism with the help of technology
and scientifi c management has to be broughtin by the HR departments.
Clear policies regarding performance rewards, incentives and
increasein remuneration have to be outlined and implemented.With
regard to the accountability for non-performance and for the mistakes,
the HR department's

intervention is a must for establishing the facts of each case. Proper

judgment "with impartialattitude helps develop satisfaction among the
staff members.Before punishing for mistakes and non-performance, a
certain kind of enquiry is required by theHR department. In the present
scenario, particularly in the new private sector insurancecompanies,
dismissals are taking place arbitrarily without proper enquiry for
accountability. Thiswill impart the effi ciency of the existing staff and
lower dynamism in their performance,ultimately leading to reduced
productivity due to fear and insecurity of losing the job. It is thefi rst
and foremost duty of the HR department to formulate appropriate
policies with regards to punishments. A set of guidelines and
procedures has to be formulated and followed for punishments to staff
in case of any indiscipline.There are certain inevitable situations in

working where the staff needs to experiment in order totake decisions.

In the process mistakes are bound to occur. Committing mistake is a
way of learning. These are not to be treated as sin by the management.
Otherwise, the decision making process will be vitiated.In such
situations the HR department plays a crucial role in adopting proper
strategies and inresponding correctly to the warranted situation.HRM
will play a signifi cant role in handling situations while awarding
punishments toemployees without impairing others' effi ciency.
EMPLOYEE TURNOVER and IMPLEMENTATION OF THE EXIT POLICY

Inhuman resources context,

turnover
or
labor turnover
is the rate at which anemployer gainsand loses employees. Simple
ways to describe it are "how long employees tend to stay" or "therate
of traffi c through the revolving door." Turnover is measured for
individual companies andfor their industry as a whole. If an employer is
said to have a high turnover relative to itscompetitors, it means that
employees of that company have a shorter average tenure than those
of other companies in the same industry. High turnover can be harmful
to a company's productivity if skilled workers are often leaving and the
worker population contains a high percentage of novice workers
In the present scenario, the employee turnover has increased in the
insurance industry,specifi cally in the new private sector companies.2.
The main reason behind the trend is the recruitment of young people
without experience.3. They will be moving to other jobs after gaining
experience, for higher salaries.4. This usually has a bad eff ect on the
work atmosphere of the organization.5. The new private sector
companies have become a training ground for the new and
freshrecruits.

6. It is the responsibility of the HR department to arrest this trend of

employee turnover.7. The HR department should formulate suitable
policies to retain the staff by providing'incentives, rewards, and better
increments every year. These policies will ensure
organizationaleffi ciency.
8. The employee turnover may increase on account of the following:a.
Lacunae in the appraisal systems, b. Non-recognition of talent,c.
Discouragement for the staff ,d. Lack of motivation,e. Lack of
promotions to higher cadre in the organization etc.
9. HR and personnel departments of insurance companies should
realize the importance of allthese aspects and help the organization in
formulating correct policies. In this process, the HR departments of all
banks should realize the importance of recruiting experienced people in
higher positions to ensure utmost effi ciency. It will increase the
productivity and profi tability of theorganization.
How to prevent turnover
Employees are important in any running of a business; without them
the business would beunsuccessful.Continual training and
reinforcement develops a work force that is competent,
consistent,competitive, eff ective and effi cient. Beginning on the fi rst
day of work, providing the individualwith the necessary skills to
perform their job is important.
Networking and strategizing within the company provides ongoing
performance managementand helps build relationships among coworkers. It is also important to motivate employees tofocus on
customer success, profi table growth and the company well-being.
Employers can keeptheir employees informed and involved by including
them in future plans, new purchases, policychanges, as well as
introducing new employees to the employees who have gone above
and beyond in meetings.
Taking the time to listen to employees and making them feel involved
will create loyalty, in turnreducing turnover allowing for growth.
HUMAN RESIURCE RISK:

The HR risk is another important

aspect to be managed by the HR and
Planning department.Let's face it,
owning a business today is about
managing risk. Whether it's the
traditional fi re,wind, hail kind of risk
or the more perplexing and subtle
kind of risk like the economy, we
allhave a huge exposure to elements both within and outside our
immediate control.Of all the sources of risk facing your business today,

none is more immediate and moreemotionally charged than the risk

associated with the actions of your workforce. It's the humanfactor and
you've had it since you hired your fi rst employee. Simply put, the
continued successof your business can well rest on what an employee
says or does. Actions taken, or not taken;words spoken, or not spoken;
deeds done, or not done, whether with or without your knowledgeor
approval can, and most probably will, be used to your detriment if the
outcome is undesirableor fi nancially harmful to someone. In certain
situations the departure of an employee with
specialized skills and knowledge due to resignation, retirement or
removal may bring certainsystems to a halt and may even create
chaos. This is called HR risk.
In this process, the insurance company may have to pay multiple
individuals with similar knowledge and experience to ensure protection
against this risk.Similarly, the company may have to face the risk of
loss of key personnel , which is called therisk of inadequate motivation
among staff who manages the situation.If the management off ers
inadequate incentives or doesn't, give any incentive at all, or
wrongincentives, it may lead to disastrous fi nancial results, provided
the incentives are linked toindividual performance. In such a case, the
personnel will not co-operate in combating the riskysituation. In case a
group incentive is given, individual motivation will be aff ected.
Therefore insuch "HR risk" Situations incentives should be linked to
short-term results and not to long-termsones.It is the responsibility of
the HR department to formulate proper policies to prevent
suchsituations, where "HR risk" may crap up due to the exit of skilled
personnel from insurancecompanies.
The Risk of Human Error
Because human error is a signifi cant risk to businesses everywhere,
management techniqueshave been developed which aff ord protection
for all but the most serious off enses. The fi rst lineof defense for most
managers is the purchase of insurance. However, it is much more
eff ective toavoid the exposure altogether whenever possible. In order
to avoid a risk you must fi rstrecognize the hazard. In this endeavor,
information is key. As it relates to the workforce, thismeans knowing as
much as is legally permitted about an individual before you hire them,
thenacting on that information.

While a thorough background investigation can mean diff erent things to

diff erent people, alleff orts should be focused on answering one basic
question, "Is this person fundamentally whoand what they represent
themselves to be?" There is no "one size fi ts all" answer to this
question.Diff erent jobs demand diff erent levels of investigative
eff ort.Employers are being held liable for the actions of their
employees for what they "should haveknown or could have known," and
the actions they "should have or could have" taken. A fewexamples of
the gravity of this situation can be found in cases such as where a

retail grocer employed a checker who took information from a

customer's personal check and went to her home.This resulted in theft
and physical assault by the employee. The retailer was held liable
andsuccessfully sued. Another large retailer off ering drapery
installation was successfully sued for an employee sexually assaulting
a customer in her home. An independent contractor working asa doorto-door sales person, who had just been released from prison and was
currently on parole,sexually assaulted a woman in her home. The suit
against the company was successful and wasupheld by the Supreme
Court. Whether the action is taken by an employee or an
independentcontractor, employers are being held responsible for the
actions of those who represent their company. Companies most
vulnerable to these types of suits are those whose representativeshave
access to an individual's personal information or direct access to the
customer's home.
Investigate Carefully
As a general rule, entry-level positions don't require the same degree
of screening that skilled positions warrant. Nevertheless, all
investigations should begin with, at a minimum: positiveidentifi cation
of the individual; and a review of criminal records in the individual's
currentcounty of residence.
More involved investigations can include:

Education and employment history verifi cations;

A driving record review;

Testing for the use of illegal substances (drug testing); and

A broad scale research of criminal records in any jurisdiction that an

individual has livedor worked in the past several years.What is done,
and to what extent, is a function of each employer's level of risk
tolerance, timeallotted to the task, and budget.As important as what is
to be done is
who's going to do it?
We've all heard the adage that anindividual who represents themselves
in a court of law has a fool for a client. The same can besaid for
background screening. In almost all cases, background screening
should be contractedout to a professional fi rm.The simple fact is that
while nine out of 10 people may be straightforward and forthcoming,
oneout of 10 isn't.Conducting your own investigation, presenting the

results and defending your actions are muchmore likely to result in

hard feelings and potentially emotionally charged confrontations than
if you can say,"We didn't perform this investigation but we will gladly
give you a copy of the report (asrequired by law) and you can contact
the reporting agency and lodge any complaint you feel
iswarranted."The ability to distance you and your company from the
results of the investigation is atremendous advantage. Even if the
investigation can be performed more economically internally,the
savings will rarely, if ever, off set the added potential for confrontation.
And since we'retalking about risk management, remember that by
outsourcing this service you have every legalright to hold the company
performing the investigation accountable for the accuracy of
their work. Assuming you're dealing with a licensed and reputable fi rm,
their errors and omissionsinsurance will aff ord your company a measure
of protection you simply will not have if you perform the screening
internally
.
CASE STUDIES

1)FUTURE GENERALI INDIA LIFE INSURANCE

The company chosen for the project is

FUTURE GENERALI INDIA LIFE INSURANCE.
The head offi ce of the company is located in Mumbai.
ABOUT COMPANY:
Future Generali India Life Insurance Co. Ltd. is one of the rapidly
growing Insurancecompanies in India. The Company is a joint venture
between the India-based Future Group andthe Italy-based Generali
Group. Future Generali group is present in both the Life and NonLife businesses in India as Future Generali India Life Insurance Co. Ltd.
and Future Generali IndiaInsurance Co. Ltd.Generali Group was
established in Trieste on December 26, 1831. It is an international

groupworking in more than 40 countries with insurance companies,

fi nancial companies and real estatesectors. After doing business in
Central Eastern Europe, Generali Group has started to develop business
in the principal markets of the Far East, including China and India.
Generali Groupranks among the top three insurance groups in Europe
and the 30th largest company in theFortune 500 international ranking.
RECRUITMENT & SELECTION PROCESS:
Their recruitment process includes both internal and external methods.
INTERNAL METHODS:
The company uses: -EMPLOYEE REFERRALS- It is a recruitment method
in which the current employees areencouraged and rewarded for
introducing suitable recruits from amongthe people they know. The
logic behind employee referral is that it takes one to know one.
The post for which they prefer this process is SALES MANAGER, SENIOR
SALES MANAGER,and ASSISTANT SALES MANAGER. Benefi ts of this
method are as follows:

Quality Candidates

Cost savings

Faster recruitment cycles.

Incentives to current employeesOn the other hand it is important for an

organization to ensure that nepotism or favoritism doesnot happen, and
that such aspects do not make inroads into the recruitment process.JOB
POSTING-For job posting they use Intranet.Job Posting is an
arrangement in which a fi rm internally posts a list of open positions
(with their descriptions and requirements) so that the existing
employees who wish to move to diff erentfunctional areas may apply. It
is also known as Job bidding.
It helps the qualifi ed employees working in the organization to scale
newheights, instead of looking for better perspectives outside. It also
helpsorganization to retain its experienced and promising employees.
EXTERNAL METHODS:
1.
FORMER EMPLOYEES- The company hires back its best ex-employees
especially for Senior Sales Manager post.
2.

COLLEGES- From colleges they recruit candidates for Sales Manager &
SalesExecutives posts. The minimum salary package for the freshers is
1.8 lacs for Area SalesManager,2.5 lacs for Sales Manager,3.5 lacs for
Senior Sales Manager.
3.
JOB FAIR -Recruiting method engaged in by a single employer or group
of employers toattract the large number of applicants to one location
for interviews.4. ADVERTISING-

Advertisements are the most common form of external

recruitment.They can be found in many places (local and national
newspapers, notice boards, recruitmentfairs) and should include some
important information relating to the job (job title, pay
package,location, job description, how to apply-either by CV or
application form, etc). Where a businesschooses to advertise will
depend on the cost of advertising and the coverage needed i.e. How
far away people will consider applying for the job. Advertising can be
through both PRINT andELECTRIC MEDIA.
The company uses PASSES technique for selection.P-ProspectAApproachS-SeminarS-ScreeningE-EvaluationS-Selection

PROSPECTThey check whether the candidate is fi t for the job or not

.

APPROACHThe Company approaches with the candidates through emails

or telephone.

SEMINARThe Company then conducts seminar. For major seminars they hire
hotels but for small ones they prefer
companys training room
.

SCREENINGThey communicate the job profi le to the fi ltered candidates.


EVALUATIONThey give them basically the sales target, or evaluate them on the
basisof experience, age factor, communication skills. This is a kind of
WORK SAMPLETESTING.

SELECTIONFinally they select the candidate on the basis of the results of

evaluation
SELECTION
INTERVIEWS:
They prefer STRUCTURED INTERVIEWS in which they prefer questions
regarding family background, work experience and interpersonal skills.
METHODS OF INTERVIEWS:ONE-ON-ONE INTERVIEWApplicant meets one by one with the interviewer.Interview process
takes place as follows:

INITIAL BRANCH LEVEL INTERVIEWBranch manager takes such interviews mainlyto select the localities
and decide who are best suited for the job.

REGIONAL BRANCH INTERVIEW

-Regional branch manager takes the interview & hisdecision to select or
reject the candidate is fi nal.
2.)
MAX NEW YORK LIFE INSURANCEMax

MAX NEW YORK LIFE INSURANCEMax New York Life Insurance Company
Ltd.
is a joint venture between Max India Limited,one of India's leading
multi-business corporations and New York Life International,
theinternational arm of New York Life, a Fortune 100 company. The
company has positioned itself on the quality platform. In line with its
vision to be the most admired life insurance companyin India
, it has developed a strong corporate governance model based on the
core values of excellence, honesty, knowledge, caring, integrity and
teamwork.Incorporated in 2000, Max New York Life started commercial
operation in April 2001. In linewith its values of fi nancial responsibility,
Max New York Life has adopted prudent fi nancial practices to ensure
safety of policyholder's funds. The Company's paid up capital as on
30thApril, 2009 is Rs 1,786 crore.Max New York Life has multi-channel
distribution spread across the country. Agencydistribution is the
primary channel complemented by partnership distribution,
bancassurance,alliance marketing and dedicated distribution for
emerging markets. The Company places a lot of emphasis on its
selection process for agent advisors, which comprises four stages screening, psychometric test, career seminar and fi nal interview. The
agent advisors are trained in-house toensure optimal control on quality
of training. The company currently has around 71,229 agent

advisors at 715 offi ces across 389 cities.The company currently has
more than 10,494 employees.
The SIX Diff erentiators

1)SELECTION PROCESS
The selection process of Max New York Life is designed to help the
candidate and theorganization make a decision in mutual best
interest.The fi rst step in the process is an initial interviewThis is
followed by a test of numerical ability. Candidates who make the cut
are invited to attenda career seminar. The procedure facilitates a
process of discovery, as both sides develop anunderstanding of each
others profi le and requirements.The fi nal stage in the selection process
is an assessment of the candidate's natural market and potential for
growth.
2)TRANING PROCESS
Max New York Life has the fi nest training program for agents in the
industry. They runtraining and development programs for agents
throughout their career.The training consists of a two-year formal
classroom based program. Max New York Lifehas two full-time
professional trainers in each offi ce whose sole job is to train and guide
newagents.

The success of their training programs owes a lot to the strength of

their partner, New York Life. The training program developed by New
York Life in the United States is widelyrecognized as the best in the
insurance industry. They have customized this outstanding program for
the Indian market.In the United States, New York Life had more
members in the Million Dollar Round Table,the worldwide organization
of top professionals in the insurance industry, for 50 consecutiveyears.
Since 2001, Max New York Life has had more qualifi ers for the
prestigious MillionDollar Round Table than all the other private sector
insurance companies taken together.
3)MANAGEMENT LOYALTY
One of the many advantages of working with Max New York Life is that
managers are notallowed to sell insurance products to their own
customers.Compensation in management is derived entirely from the
success of agents and the overallgrowth of the organization.Managers
at all levels are totally committed to the success of agents and do not
pursue anyconfl icting goals.
4)PRODUCT RESEARCH
No organization can claim to have the number one product in the
insurance industry for a long period of time. It is a matter of great
pride that our products have always been rated among the best in the
industry. These products have been developed after extensive research
of the Indianmarket and are designed to meet an individuals needs at
every life stage.
5)CONTRACT
The Agent's Contract is designed to attract effi cient professionals and
retain them for a long time by compensating them generously. As an
agent you can count on the support of Max New York

Life at all times to help you earn a good income today and create a
secure retirement for tomorrow.
6)GREAT WORK ENVIRONMENT
Max New York Life is committed to working in a high-tech environment.
In the United States, New York Life is noted for its leadership in using
technology to provide the very best incustomer service and employee
support. The same systems have been adapted for India to off er simple,
easy-to-understand illustrations for the most complex
products.

Work Profi le

This is an entrepreneurial opportunity with fl exible working hours and

the potential to earnunlimited income without any capital investment.
As an agent with Max New York Life, youare a fi nancial advisor,
businessperson and your own boss. The only limit to your growth is
your own imagination and drive.The Role:

Identify prospects and conduct need analysis

Provide customized solutions for long term fi nancial protection and

wealth creation

Close sales

Deliver the policy

Provide after sales service and build references for future sales
Benefi tsA career at Max New York Life has innumerable advantages.
With low start up investment youcan become a part of a world-class
organization and make a positive diff erence to peoples lives.Our
agents sell more policies and make more money than agents of any
other life insurancecompany. The fi nancial rewards are in the form of

Commissions on new sales

Ongoing renewal commissions

Performance linked bonus

Referral commissions

Training reimbursement
CONCLUSION

The core function of HRM in the insurance industry is to facilitate

performance improvement,measured not only in terms of fi nancial
indicators of operational effi ciency but also in terms of the quality of
fi nancial services provided.Factors like skills, attitudes and knowledge
of the human capital play a crucial role indetermining the
competitiveness of the fi nancial sector. The quality of human resources
indicatesthe ability of insurance companies to deliver value to
customers.Capital and technology are replicable but not the human
capital which needs to be valued as ahighly valuable resource for
achieving that competitive edge. The primary emphasis needs to beon
integrating human resource management strategies with the business
strategy.HRM strategies include managing change, creating
commitment, achieving fl exibility andimproving teamwork. The other
processes representing the overt aspects of HRM, viz.recruitment,
placement, performance management are complementary.HRM has a
crucial role to play in insurance sector. It acts as backbone for the
insurance sector, because it only lays the structure for the
organizations operations, functioning and working. Evenwith the advent
of high technology it will have a prominent role to portray.

ANALYSIS:
As it can be seen from the data collected and from the case studies
that majority of theinsurance companies believe that investing in HRM
is necessary in order to strengthen theinsurance sector.Investing in
HRM practices allows companies to strengthen their human
resources.Human resources are one of the most important resources in
any organisation. Effi cientmanagement of human resources is
necessary for the success of an organisation.Effi cient HRM practices
leads to employee satisfaction. Employees performance improveswhich
benefi ts the entire organisation.Employees are motivated and they
perform better.This will in turn lead to increase in customer satisfaction
and the organisation will be able toincrease its customer base.
RESULT:
Thus our hypothesis investing in human resource can help a fi rm
perform better is

PROVED.Bibliography
1.)
Human Resource Management Text and Cases by K. Ashwathappa
Web Sites visited
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maxnewyorklife.com 5.http://business.mapsofi ndia.com 6.http://scrid.co
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raininganddevelopment.naukrihub.com 10.http://openpdf.com 11.http://w
ww.irdaindia.org/