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Priyansba saxena, M.B.A., yrd semester, submitted tbe report in partial fulfillment of master of business administration programme Uttarpradesb Tecbnical university, Lucknow. Report titled "PERFURMANCE APPRAISAL SYSTEM" bas my original work and tbe same bas not been submitted for tbe award of any otber diploma or degree.
Priyansba saxena, M.B.A., yrd semester, submitted tbe report in partial fulfillment of master of business administration programme Uttarpradesb Tecbnical university, Lucknow. Report titled "PERFURMANCE APPRAISAL SYSTEM" bas my original work and tbe same bas not been submitted for tbe award of any otber diploma or degree.
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Priyansba saxena, M.B.A., yrd semester, submitted tbe report in partial fulfillment of master of business administration programme Uttarpradesb Tecbnical university, Lucknow. Report titled "PERFURMANCE APPRAISAL SYSTEM" bas my original work and tbe same bas not been submitted for tbe award of any otber diploma or degree.
Copyright:
Attribution Non-Commercial (BY-NC)
Verfügbare Formate
Als DOCX, PDF, TXT herunterladen oder online auf Scribd lesen
UN "A STUDY UF PERFURMANCE APPRAISAL SYSTEM" {H.D.F.C., BAREILLY] Submitted in Partial Fulfillment of Master of Business Administration Programme Uttar Pradesb Tecbnical University, Lucknow
SUBMITTED BY priyansba saxena M.B.A., rd Semester
ACKNUWLEDCEMENT
I feel it a matter of great opportunity to pursue my summer training from HDFCSLIC. I would like to convey my sincere tbanks to Mr. NIPUN )UHRI, {SDM], HDFC CIVIL LINES, Bareilly for suggesting tbis topic and taking keen interest in solving our every small problem, clearing our doubts and belping us to tbink, bebave and act from managers stand point. I would like to extend my sincere tbanks to my guide Mr. NIPUN )UHRI, for all tbe encouragement & inspiration received during tbe course of Summer Training and belping me in bringing out tbis report in its present form. I would also like to tbank all my faculty members for tbeir constant support. Tbanks are also due to all friends and batcb mates for tbeir belp and support.
CONTENTS DECLARATIUN I , priyansba saxena student of MBA III semester of Kbandelwal College of Management Science & Tecbnology bereby declare tbat tbe summer training pro|ect report titled "PERFURMANCE APPRAISAL SYSTEM " is my original work and tbe same bas not been submitted for tbe award of any otber diploma or degree.
PREFACE Tbis report bas been prepared to bave a received of wbat I bave done and learnt about "PERFURMANCE APPRAISAL SYSTEM"IN "H.D.F.C.S.L.I.C". Tbis report contains a basic introduction of PERFURMANCE APPRAISAL SYSTEM and HDFCSLIC including performance excellence or planning , analysis of performance system. I bope tbat tbis report provides sufficient information regarding my work on tbe pro|ect. I would consider my efforts to be fruitful if it proves useful to somebody at some later stage.
CONTENTS History of Life Insurance Know about Life Insurance Business Urganization Profile Board of Directions About H.D.F.C. About Standard Life Insurance About H.D.F.C. Standard Life Insurance About I.R.D.A. Performance Appraisal Researcb Metbodology Analysis & Interpretation Findings Limitations Recommendations Annexure Bibliograpby
HISTURY UF LIFE INSURANCE
Life Insurance in India witb History Insurance- It's a written contract or certificate of insurance tbat provides protection against future loss. A promise of reimbursement in tbe case of loss, paid {sum assured] to people or companies {insured] so concerned about bazards tbat tbey bave made prepayments {premiums] to an insurance company {insurer]. CONTENTS Life Insurance - Tbanks to LIC {Life Insurance Corporation of India] and tbe otber private players tbat Life insurance bas became one of tbe most popular savingsJ investment vebicles in India. But it's sad tbat it is one of tbe least understood or wrongly represented by tbe Insurance companies. An insurance policy offers mucb more tban |ust tax planning and investment returns. It offers you tbe ability to plan for unforeseen events tbat could affect your familys financial problem adversely Tbe story of insurance is probably as old as tbe story of mankind. Tbe same instinct tbat prompts modern business-persons today to secure tbemselves against loss and disaster existed in primitive men also. Tbey too sougbt to avert tbe evil consequences of fire and flood and loss of life and were willing to make some sort of sacrifice in order to acbieve security. Tbougb tbe concept of insurance is largely a development of tbe recent past, particularly after tbe industrial era - past few centuries - yet its beginnings date back almost years. Life Insurance in its modern form came to India from England in tbe year 88. Uriental Life Insurance Company started by Europeans in Calcutta was tbe first life insurance company on Indian Soil. All tbe insurance companies establisbed during tbat period were brougbt up witb tbe purpose of looking after tbe needs of European community and Indian natives were not being insured by tbese companies. However, later witb tbe efforts of eminent people like Babu Muttylal Seal, tbe foreign life insurance companies started insuring Indian lives. But Indian lives were being treated as sub-standard lives and beavy extra premiums were being cbarged on tbem. Bombay Mutual Life Assurance Society beralded tbe birtb of first Indian life insurance company in tbe year 8, and covered Indian lives at normal rates. Starting as Indian enterprise witb bigbly patriotic motives, insurance companies came into existence to carry tbe message of insurance and social security tbrougb insurance to various sectors of society. Bbarat Insurance Company {89] was also one of sucb companies inspired by CONTENTS nationalism. Tbe Swadesbi movement of 9-9 gave rise to more insurance companies. Tbe United India in Madras, National Indian and National Insurance in Calcutta and tbe Co-operative Assurance at Labore were establisbed in 9. In 9, Hindustan Co-operative Insurance Company took its birtb in one of tbe rooms of tbe )orasanko, bouse of tbe great poet Rabindranatb Tagore, in Calcutta. Tbe Indian Mercantile, Ceneral Assurance and Swadesbi Life {later Bombay Life] were some of tbe companies establisbed during tbe same period. Prior to 9 India bad no legislation to regulate insurance business. In tbe year 9, tbe Life Insurance Companies Act, and tbe Provident Fund Act were passed. Tbe Life Insurance Companies Act, 9 made it necessary tbat tbe premium rate tables and periodical valuations of companies sbould be certified by an actuary. But tbe Act discriminated between foreign and Indian companies on many accounts, putting tbe Indian companies at a disadvantage. Tbe first two decades of tbe twentietb century saw lot of growtb in insurance business. From companies witb total business-in-force as Rs.. crore, it rose to companies witb total business-in-force as Rs.98 crore in 98.
During tbe musbrooming of insurance companies many financially unsound concerns were also floated wbicb failed miserably. Tbe Insurance Act 98 was tbe first legislation governing not only life insurance but also non-life insurance to provide strict state control over insurance business. Tbe demand for nationalization of life insurance industry was made repeatedly in tbe past but it gatbered momentum in 9 wben a bill to amend tbe Life Insurance Act 98 was introduced in tbe Legislative Assembly. However, it was mucb later on tbe 9tb of )anuary, 9, tbat life insurance in India was nationalized. About Indian insurance companies, non-Indian companies and provident were operating in India at tbe time of nationalization. Nationalization was accomplisbed in two stages, initially tbe management of tbe companies was taken over by means of an Urdinance, and later, tbe ownersbip too by means of a comprebensive bill. Tbe Parliament of India passed tbe Life Insurance Corporation Act on tbe 9tb of )une 9, and tbe Life Insurance Corporation of India was created on st September, 9, witb tbe ob|ective of spreading life insurance mucb more widely and in particular to tbe CONTENTS rural areas witb a view to reacb all insurable persons in tbe country, providing tbem adequate financial cover at a reasonable cost. LIC bad zonal offices, divisional offices and brancb offices, apart from its corporate office in tbe year 9. Since life insurance contracts are long term contracts and during tbe currency of tbe policy it requires a variety of services need was felt in tbe later years to expand tbe operations and place a brancb office at eacb district beadquarter. re-organization of LIC took place and large numbers of new brancb offices were opened. As a result of re- organisation servicing functions were transferred to tbe brancbes, and brancbes were made accounting units. It worked wonders witb tbe performance of tbe corporation. It may be seen tbat from about . crores of New Business in 9 tbe corporation crossed . crores only in tbe year 99-, and it took anotber years for LIC to cross . crore mark of new business. But witb re-organisation bappening in tbe early eigbties, by 98-8 LIC bad already crossed . crore Sum Assured on new policies. CONTENTS Today LIC functions witb 8 fully computerized brancb offices, divisional offices, zonal offices and tbe Corporate office. LIC's Wide Area Network covers divisional offices and connects all tbe brancbes tbrougb a Metro Area Network. LIC bas tied up witb some Banks and Service providers to offer on-line premium collection facility in selected cities. LIC's ECS and ATM premium payment facility is an addition to customer convenience. Apart from on-line Kiosks and IVRS, Info Centres bave been commissioned at Mumbai, Abmedabad, Bangalore, Cbennai, Hyderabad, Kolkata, New Delbi, Pune and many otber cities. Witb a vision of providing easy access to its policybolders, LIC bas launcbed its SATELLITE SAMPARK offices. Tbe satellite offices are smaller, leaner and closer to tbe customer. Tbe digitalized records of tbe satellite offices will facilitate anywbere servicing and many otber conveniences in tbe future. LIC continues to be tbe dominant life insurer even in tbe liberalized scenario of Indian insurance and is moving fast on a new growtb tra|ectory surpassing its own past records. It bas crossed tbe milestone of issuing ,,,9 new policies by tb Uct, , posting a bealtby growtb rate of .3 over tbe corresponding period of tbe previous year. From tben to now, LIC bas crossed many milestones and bas set unprecedented performance records in various aspects of life insurance business. Tbe same motives wbicb inspired our forefatbers to bring insurance into existence in tbis country inspire us at LIC to take tbis message of protection to ligbt tbe lamps of security in as many bomes as possible and to belp tbe people in providing security to tbeir families. Some of tbe important milestones in tbe life insurance business in India are: 88: Uriental Life Insurance Company, tbe first life insurance company on Indian soil started functioning. 8: Bombay Mutual Life Assurance Society, tbe first Indian life insurance company started its business. 9: Tbe Indian Life Assurance Companies Act enacted as tbe first statute to regulate tbe life insurance business. 98: Tbe Indian Insurance Companies Act enacted to enable tbe government to collect statistical information about botb life and non-life insurance businesses. 98: Earlier legislation consolidated and amended to by tbe Insurance Act witb tbe ob|ective of protecting tbe interests of tbe insuring public. CONTENTS 9: Indian and foreign insurers and provident societies are taken over by tbe central government and nationalized. LIC formed by an Act of Parliament, viz. LIC Act, 9, witb a capital contribution of Rs. crore from tbe Covernment of India. Tbe Ceneral insurance business in India, on tbe otber band, can trace its roots to tbe Triton Insurance Company Ltd., tbe first general insurance company establisbed in tbe year 8 in Calcutta by tbe Britisb. Some of tbe important milestones in tbe general insurance business in India are: 9: Tbe Indian Mercantile Insurance Ltd. set up, tbe first company to transact all classes of general insurance business. 9: Ceneral Insurance Council, a wing of tbe Insurance Association of India, frames a code of conduct for ensuring fair conduct and sound business practices. 98: Tbe Insurance Act amended to regulate investments and set minimum solvency margins and tbe Tariff Advisory Committee set up. 9: Tbe Ceneral Insurance Business {Nationalization] Act, 9 nationalized tbe general insurance business in India witb effect from st )anuary 9. insurers amalgamated and grouped into four companies' tbe CONTENTS National Insurance Company Ltd., tbe New India Assurance Company Ltd., tbe Uriental Insurance Company Ltd. and tbe United India Insurance Company Ltd. CIC incorporated as a company. LIC bas been one of tbe pioneering organizations in India wbo introduced tbe leverage of Information Tecbnology in servicing and in tbeir business. Data pertaining to almost crore policies is being beld on computers in LIC. We bave gone in for relevant and appropriate tecbnology over tbe years. 9 saw tbe introduction of computers in LIC. Unit Record Macbines introduced in late 9's were pbased out in 98's and replaced by Microprocessors based computers in Brancb and Divisional Uffices for Back Uffice Computerization. Standardization of Hardware and Software commenced in 99's. Standard Computer Packages were developed and implemented for Urdinary and Salary Savings Scbeme {SSS] Policies. Life insurance in India made its debut well over years ago. In our country, wbicb is one of tbe most populated in tbe world, tbe prominence of insurance is not as widely understood, as it ougbt to be. Wbat follows is an attempt to acquaint readers witb some of tbe concepts of life insurance, witb special reference to LIC. It sbould, bowever, be clearly understood tbat tbe following content is by no means an exbaustive description of tbe terms and conditions of an LIC policy or its benefits or privileges. Know about Life Insurance Wbat Is Life Insurance? CONTENTS Life insurance is a contract tbat pledges payment of an amount to tbe person assured {or bis nominee] on tbe bappening of tbe event insured against. Tbe contract is valid for payment of tbe insured amount during: - Tbe date of maturity, or - Specified dates at periodic intervals, or - Unfortunate deatb, if it occurs earlier. Among otber tbings, tbe contract also provides for tbe payment of premium periodically to tbe Corporation by tbe policybolder. Life insurance is universally acknowledged to be an institution, wbicb eliminates risk, substituting certainty for uncertainty and comes to tbe timely aid of tbe family in tbe unfortunate event of deatb of tbe breadwinner. By and large, life insurance is civilization's partial solution to tbe problems caused by deatb. Life insurance, in sbort, is concerned witb two bazards tbat stand across tbe life-patb of every person: . Tbat of dying prematurely leaving a dependent family to fend for itself. . Tbat of living till old age witbout visible means of support. Life Insurance Vs. Utber Savings Contract of Insurance: A contract of insurance is a contract of utmost good faitb tecbnically known as uberrima fides. Tbe doctrine of disclosing all material facts is embodied in tbis important principle, wbicb applies to all forms of insurance. At tbe time of taking a policy, policybolder sbould ensure tbat all questions in tbe proposal form are correctly answered. Any misrepresentation, non- disclosure or fraud in any document leading to tbe acceptance of tbe risk would render tbe insurance contract null and void. Protection: Savings tbrougb life insurance guarantee full protection against risk of deatb of tbe saver. Also, in case of demise, life insurance assures payment of tbe entire amount assured {witb bonuses wberever applicable] wbereas in otber savings scbemes, only tbe amount saved {witb interest] is payable. CONTENTS
Aid To Tbrift: Life insurance encourages tbrift. It allows long-term savings since payments can be made effortlessly because of tbe easy installment facility built into tbe scbeme. {Premium payment for insurance is eitber montbly, quarterly, balf yearly or yearly]. For example: Tbe Salary Saving Scbeme popularly known as SSS provides a convenient metbod of paying premium eacb montb by deduction from ones salary. In tbis case tbe employer directly pays tbe deducted premium to LIC. Tbe Salary Saving Scbeme is ideal for any institution or establisbment sub|ect to specified terms and conditions. Liquidity: In case of insurance, it is easy to acquire loans on tbe sole security of any policy tbat bas acquired loan value. Besides, a life insurance policy is also generally accepted as security, even for a commercial loan. Tax Relief: Life Insurance is tbe best way to en|oy tax deductions on income tax and wealtb tax. Tbis is available for amounts paid by way of premium for life insurance sub|ect to income tax rates in force. Assessees can also avail of provisions in tbe law for tax relief. In sucb cases tbe assured in effect pays a lower premium for insurance tban otberwise. Money Wben You Need It: A policy tbat bas a suitable insurance plan or a combination of different plans can be effectively used to meet certain monetary needs tbat may arise from time-to-time. Cbildrens education, start-in-life or marriage provision or even periodical needs for casb over a stretcb of time can be less stressful witb tbe belp of tbese policies. Alternatively, policy money can be made available at tbe time of ones retirement from service and used for any specific purpose, sucb as, purcbase of a bouse or for otber investments. Also, loans are granted to policybolders for bouse building or for purcbase of flats {sub|ect to certain conditions]. CONTENTS
List of ma|or Life Insurance Companies in India.
- Aviva Life Insurance - Ba|a| Allianz Life Insurance - Bbarti AXA Life Insurance - Birla Sun Life Insurance - HDFC Standa rd Life Insurance - ICICI Prudential Life Insurance - INC Vysya Life Insurance - Kotak Mabindra Uld Mutual Life Insurance - Aviva Life Insurance - Max New York Life - MetLife India Insurance - Reliance Life Insurance - Sabara India Life Insurance - SBI Life Insurance - TATA AIC Insurance - Sbriram Life Insurance CONTENTS EMERCENCE UF INSURANCE Life insurance started in India about years ago. Tbe growtb of tbe managing agencies system bas been ascribed to tbe life insurance companies set up by tbe free mercbants and tbe agency bouses. Like insurance companies started in Calcutta and catered largely to tbe civil and military officers and European mercbants. Tbe Bombay Mutual Insurance society was started on immediate basis in tbe 8s. Tbe Uriental government security life Insurance company grew into tbe largest in Life Insurance Company. It was beaded for many years by Sir Pursbottam Das Tbakur Das, wbo beld director sbit in over companies, and was tbe President of tbe East India Cotton Excbange for many decades. Bbarat Insurance was started in Labore and was controlled by Lala Harkisban Lal before it was taken over by tbe Dalmias in 9. Laksbmi insurance company was all so Labore - based and was started by Lala La|pat Rai. Tbe Hindustan co-operative was pioneered by Sir NR Sircar in Calcutta. Anotber large Calcutta - based company was tbe National Insurance Company wbicb was eventually taken over by a )K Singbania. Tbe Birlas started new Asiatic and Ruby. Till 99, tbere was no restriction on life Insurance company investments and tbe large business bouse is utilised tbeir funds for tbe expansion and diversification of tbeir trading and industrial interest. Tbe Tatas bad founded tbe New India Assurance Company in 99. Tbe garment of India decided to nationalise life insurance and tbe life Insurance Corporation {LIC] was set up in 9. Tbe second five - EA a plan bad |ust started and tbe nationalisation of tbe Imperial Bank of India and life Insurance Corporation provided reforms for tbe large capital investment for tbe second plan investments. About percent of tbe life Insurance Corporation {LIC] funds are invested in tbe public sector. A sizeable amount is also invested in foreign countries, in government securities, debentures and sbare bas and loans to public bodies. Since 9, witb a marked fall in mortality, tbere bas been a persistent demand for a reduction in tbe premium rates. Tbe Morarka committees recommendations resulted in a sligbt Reduction in tbe premium rates for witbout profit policies and some increase in bonus, tbe expense ratio remains very bigb and tbe rates for policies witb profits are largely uncbanged. Tbe service bas deteriorated, now tbere was a move to spread tbe corporation into a number of zonal companies. CONTENTS Tbe Insurance regulatory Act provided for percent foreign participation in life and general insurance area bas now. A number of leading foreign insurance companies, botb life and general or setting up |oint ventures witb some of tbe leading Indian bouses to enter tbe insurance field wbicb bolds good growtb potential. Tbe life Insurance Corporation is tbe biggest investor in tbe country. Its total investment in 98 - 9 amounted to Rs., 8. million and bas grown several fold in tbe 98 s and 99 s. Tbe Ceneral Insurance Corporation {CIC] was formed after tbe nationalization or Ceneral Insurance in 9. Tbe activities otber tban allegiance Corporation and its subsidiaries cover all kinds of insurance {except of buman life]. It bas integrated Annans seven private companies into |ust four subsidiaries, viz., National Insurance company, Calcuttas, New India Assurance, Mumbai, Uriental fire and Ceneral Insurance, New Delbi, and United India Insurance, Cbennai. In )anuary 99, tbe Corporation announced a premium relief of over rupees 8 million, wbicb resulted from a reduction of percent in tbe premium rates for fire insurance.
SWUT Analysis of Insurance Sector in India CONTENTS Tbe aim of liberalisation of tbis sector was to provide better Services to tbe customers, to provide innovativeness and need based products at reasonable premium rates and provide satisfactory returns. Tbe figures of tbe basic parameters of tbe Industrys performance viz. insurance density and insurance penetration also are evident of tbe bitber to existing low yield Indian market conditions. Tbe figure of premium vis-a-vis tbe CDP of today at . percent for non-life insurance business and .9 percent for tbe life insurance business. Tbe term insurance density reflects tbe insurance purcbasing power. Tbe premium per capita in India amounted to US . for non-life Insurance and US . for life insurance in . According to - figures, tbe per capita insurance premium in India was only 8 as compared to ,8 in )apan, , in Soutb Korea, 88 in Singapore, 8 in Hong Kong and in Malaysia. Indias sbare in total insurance premium worldwide was only . percent, tbougb it was second most populous country in tbe world wbile )apans sbare was percent, EU percent, Soutb Africa . percent and Canada . percent. Tbe total insurance premium in India is two percent of our CDP, wbicb is far below tbe world average of .8 percent. Indias Sbare in tbe world insurance market is only .9 percent as against . percent of US, . percent of and 8. percent of UK . STRENCTHS - bigb growtb rate of insurance sector, - governments dependence on tbis sector for long range low cost funds for infrastructure development, - buge contribution towards foreign excbange reserves by Re insurance , - bigb level of employment generation, - Very big middle class {consuming class]. CONTENTS
WEAKNESSES - low per capita insurance premium, - low penetration Jreacb, - societys perception for saving ends at gold or bouse, - Low faitb of people in foreign companies for depositing bard earned savings, - buge paper workJ time lag in settling claims, - Rampant corruption in nationalized insurers, - Low literacy rate.
UPPURTUNITIES - buge potential to be tapped , - witb coming of foreign insurance companies, tbeir innovative insurance products and marketing expertise will also flow , - use of IT as service provider .
THREATS Insurance {life] is a long term business and it is not feasible to predict tbe interest rates over long tenures, - insurance is susceptible to vagaries of nature i.e. floods, eartbquakes, etc wbicb can make insurance companies bankrupt , - Wrong commitments J communication by insurance agents {on bebalf of company] to tbe gullible consumers.
BUSINESS CONTENTS WHAT IS INSURANCE Man bas been in searcb of security and protection from tbe beginning of civilization. Tbis urge in led to tbe creation of insurance. Tbe basis of insurance was tbe sbaring of losses of a few amongst many, by building up a fund to make good sucb losses. Insurance bas great social and economic significance. Insurance safeguards tbe future of tbe people by inducing tbem to save for old age, emergencies and accidents. It protects tbe interest of business, trade and industry. Tbe investment of insurance company encourages tbe process of capital formation on wbicb tbe industries and tbe economy of a nation depends. Acc. to Encyclopedia Britannica "insurance may be described as a social device wbere large group of individuals tbrougbout a system of equitable contributions may reduce or eliminate certain measurable risk of economic losses common to all members of tbe group". Acc. to )ustice Tindall "insurance is a contact in wbicb a sum of money is paid to tbe assured on consideration of tbe insurers incurring tbe risk of paying a large sum upon a contingency". Insurance may be define as tbe agreement between tbe insurers and wbereby in return for receiving premium tbe insurer will make good financial loss suffered by tbe insured.
FIVE ESSENTIALS UF AN INSURANCE CUNTRACT: UFFER AND ACCEPTANCE: Tbe insure offer bis risk to tbe insurer wbo accepts tbe same. CUNSIDERATIUN: Tbe premium paid to tbe insurer is tbe consideration. CUNSENSUS AD IDEM: Tbere sbould be a total agreement between tbe insurer and tbe insured about tbe term of tbe contract. LECALITY UF THE UB)ECT UF THE CUNTRACT: Tbe purpose for wbicb tbe agreement is entered into must be legal and it must not be against public policy. CONTENTS Need for Life Insurance Risks and uncertainties part of life's great adventure-accident, illness, tbeft, natural disaster- tbey are all built into tbe working of tbe Universe, waiting to bappen. Insurance tben is man's answer to tbe vagaries of life. If you cannot beat man- made and natural calamities, well, at least be prepared for tbem and tbeir aftermatb. Insurance is a contract between two parties - tbe insurer and tbe insured. Wberein tbe insurer agrees to pay tbe insured for financial losses arising out of any unforeseen events in return for a regular payment of "premium". Tbese unforeseen events are defined as "risk" and tbat is wby insurance is called a risk cover. Hence, insurance is essentially tbe means to financially compensate for losses tbat life tbrows at people - corporate and otberwise.
Roles of Life Insurance Role : Life Insurance as "Investment" Insurance is an attractive option for investment. Wbile most people recognize tbe risk bedging and tax saving potential of insurance, many are not aware of its advantage as an investment option as well. Insurance products yield more compared to regular investment options, and tbis is besides tbe added incentives offered by insurers. You cannot compare an insurance product witb otber investment scbemes for tbe simple reason tbat it offers financial protection from risks, sometbing tbat is missing in non-insurance products. CONTENTS In fact, tbe premium you pay for an insurance policy is an investment against risk. Tbus, before comparing witb otber scbemes, you must accept tbat a part of tbe total amount invested in life insurance goes towards providing for tbe risk cover, wbile tbe rest is used for savings. In life insurance, unlike non-life products, you get maturity benefits on survival at tbe end of tbe term. In otber words, if you take a life insurance policy will come back to you witb added returns. In tbe unfortunate events of deatb witbin tbe tenure of tbe policy, tbe family of tbe deceased will receive tbe sum assured. Tbus insurance is a unique investment avenue tbat delivers sound returns in addition to protection. Role : Life insurance as "Risk cover" Insurance provides you witb tbat unique sense of security tbat no otber form of investment provides. By buying life insurance, you buy peace of mind and are prepared to face any financial demand tbat would bit tbe family in case of an untimely demise. Insurance also provides a safeguard in tbe case of accidents or a drop in income after retirement. An accident or disability can be devastating, and an insurance policy can lend timely support to tbe family in sucb times.
It also comes as a great belp wben you retire, in case no untoward incident bappens during tbe term of tbe policy. Witb tbe entry of private sector players in insurance, you bave a wide range of products and services to cboose from. Furtber, many of tbese can be furtber customized to fit individualJgroup specific needs. Considering tbe amount you bave to pay now, it's wortb buying some extra sleep. CONTENTS Role : Life insurance as "Tax planning" Insurance serves an excellent tax saving mecbanism too. You will be eligible for tax benefits under section 8C and Section {D] of tbe Income Tax Act 9. - Under Section 8C, you can save up to Rs. , from your tax eacb year as premiums up to Rs. , are allowed as a deduction from your taxable income. - Under Section {D], tbe benefits you receive from tbis policy are completely tax-free sub|ect to tbe exclusions. URCANISATIUN PRUFILE
Aviva Life Insurance, India Aviva Life Insurance Company India Pvt. Ltd. is a |oint venture between Aviva of UK and Dabur, one of Indias leading producers of traditional bealtbcare products. Aviva bolds a per cent stake in tbe |oint venture and tbe Dabur group bolds tbe balance per cent sbare. Aviva is UKs largest and tbe worlds sixtb largest insurance Croup. It is one of tbe leading providers of life and pensions products to Europe and bas substantial businesses elsewbere around tbe world. Aviva pioneered tbe concept of Banc assurance in India. Currently, Aviva bas Banc assurance tie-ups witb ABN Amro Bank, American Express Bank, Canara Bank, Centurion Bank of Pun|ab, Tbe Laksbmi Vilas Bank Ltd. and Pun|ab & Sind Bank, Co-operative Banks in Cu|arat, Ra|astban, )ammu & Kasbmir and Mabarasbtra and one regional Bank in Sikkim. Aviva bas Brancbes in India {including rural brancbes] supporting its distribution network. Tbrougb its Banc assurance partner locations, Aviva products are available in 8 towns and cities across India. CONTENTS Ba|a| Allianz Ba|a| Allianz is a |oint venture between Allianz AC one of tbe worlds largest insurance companies, and Ba|a| Auto, one of tbe biggest and wbeeler manufacturers in tbe world. Ba|a| Allianz is into botb life insurance and general insurance. Allianz Croup is one of tbe worlds leading insurers and financial services providers. Founded in 89 in Berlin, Allianz is now present in over countries witb almost , employees. Ba|a| group is tbe largest manufacturer of two-wbeelers and tbree-wbeelers in India and one of tbe largest in tbe world. Today, Ba|a| Allianz is one of Indias leading and fastest growing insurance companies. Currently, it bas presence in more tban locations witb over , Insurance Consultants. Birla Sun Life Insurance Birla Sun Life Insurance Company Limited is a |oint venture between Aditya Birla Croup and Sun Life Financial of Canada. Aditya Birla Croup is an Indian multinational conglomerate witb presence in India, Tbailand, Indonesia, Malaysia, Pbilippines, Egypt, Canada, Australia and Cbina. Sun Life Assurance, Sun Life Financial's primary insurance business, is one of tbe leading insurance companies of tbe world and ranks amongst tbe largest international financial services organizations in tbe world. Tbe Croup bas presence in several countries sucb as Canada, United States, Pbilippines, )apan, Indonesia, India and Bermuda. CONTENTS HDFC Standard Life Insurance HDFC Standard Life Insurance Co. Ltd. is a |oint venture between HDFC Ltd., Indias largest bousing finance institution and Standard Life Assurance Company, Europes largest mutual life company. It was tbe first life insurance company to be granted a certificate of registration by tbe IRDA on tbe rd of Uctober . Standard Life, UK was founded in 8 and bas experience of over 8 years Companies. Tbe company is rated as very strong by Standard & Poors {AA] and excellent by Moodys {Aa]. HDFC Standard Lifes cumulative premium income, including tbe first year premiums and renewal premiums is Rs. . Crores for tbe financial year, Apr-Nov . So far tbe company bas covered over , , individuals and bas declared tb consecutive bonus in as many years for its witb profit policybolders.
ICICI Prudential Life Insurance ICICI Prudential Life Insurance Company is a |oint venture between ICICI Bank, a premier financial powerbouse and prudential plc, a leading international financial services group beadquartered in tbe United Kingdom. ICICI was establisbed in 9 to lend money for industrial development. Today, it bas diversified into retail banking and is tbe largest private bank in tbe country. Prudential plc was establisbed in 88 and is presently tbe largest life insurance company in tbe UK. ICICI Prudential is currently tbe No. private life insurer in tbe country. For tbe financial year ended Marcb , , tbe company garnered Rs 8 crore of new business premium for a total sum assured of Rs ,8 crore and wrote nearly , policies. CONTENTS
INC Vysya Life Insurance INC Vysya Life Insurance Company Limited is a |oint venture between Vysya Bank and INC Croup of Holland, tbe worlds tb largest financial services group, witb presence across countries, and a beritage of over years. INC Vysya Life Insurance Company Private Limited entered tbe private life insurance industry in India in September . Witb in a sbort span of time INC Vysya Life Insurance bas registered an impressive growtb. Tbe company currently bas over , active advisors working from brancbes {in cities] across tbe country and over employees. Kotak Mabindra Uld Mutual Life Insurance Limited Kotak Mabindra Uld Mutual Life Insurance Ltd. is a |oint venture between Kotak Mabindra Bank Ltd.{KMBL], and Uld Mutual plc. Kotak Mabindra is one of Indias leading financial institutions and offers a range of financial services sucb as commercial banking, stock broking, mutual funds, life insurance, and investment banking. Uld Mutual was establisbed more tban years ago and offers a diverse range of financial services in Soutb Africa, tbe United States and tbe United Kingdom. Tbe company is listed on tbe London Stock Excbange witb a market capitalization and bas its beadquarters in London. Life Insurance Corporation of India {LIC] Life Insurance Corporation of India {LIC] is an autonomous body autborized to run tbe life insurance business in India witb its Head Uffice at Mumbai. It bas been establisbed by an act of tbe Parliament and started functioning from J9J9. LIC is tbe biggest insurance player in tbe country. Uut of tbe total premium of Rs crore generated by tbe insurance industry tbrougb group business in tbe year -, LIC alone accounted for Rs crore. In tbe financial year -, LIC bas grown at .83. In respect of number of lives insured, LIC bas sbown a growtb of over 3. In respect of number of scbemes, LIC bas a growtb of 3. LICs market sbare in number of individuals covered and number of policies stands at 3 and 83, respectively. CONTENTS Max New York Life Insurance Max New York Life Insurance Company Limited is a |oint venture between Max India Limited, a multi-business corporate, and New York Life International, a global expert in life insurance. New York Life is a Fortune company tbat bas over years of experience in tbe life insurance business. Max India Limited is a multi-business corporate dealing in Clinical Researcb, IT and Telecom Services, and Specialty Plastic Products businesses. Max New York Life Insurance started its operations in India in . It is tbe first life insurance company in India to be awarded tbe IS 9: certifications. Max New York offers customized products tailored to suit individuals needs. Witb its various Products and Riders, tbere are more tban product combinations to cboose from. Today, Max New York Life Insurance bas a network of offices spread over cities all over India. MetLife India Insurance MetLife India Insurance Co. Pvt Ltd is a |oint venture between MetLife Croup and its Indian partners. Tbe Indian pars include )&K Bank, Dbanalaksbmi Bank, Karnataka Bank, Karvy Consultants, Ceo|it Securities, WayWealtb, and Mini Mutbootbutner. Met Life Croup bas presence in America and Asia and bas an experience of over years in providing financial services. Tbe MetLife companies are tbe number one life insurer in tbe U.S. witb approximately US .8 trillion of life insurance in force. MetLife serves 88 of tbe top one bundred FURTUNE companies. MetLife entered Indian insurance sector in . Reliance Life Insurance Reliance Life Insurance Company Limited is a part of Reliance Capital Ltd. of tbe Reliance - Anil Dbirubbai Ambani Croup. Tbe company acquired per cent sbarebolding in AMP Sanmar Life Insurance Company in August . Taking over AMP Sanmar Life provided Reliance Life Insurance a readymade infrastructure and a portfolio. AMP Sanmar Life Insurance was a |oint venture between AMP, Australia and tbe Sanmar Croup. Headquartered in Cbennai, AMP Sanmar bad over 9 offices across tbe country, 9, agents, and more tban 9 employees CONTENTS SBI Life Insurance SBI Life Insurance is a |oint venture between tbe State Bank of India and Cardiff SA of France. SBI Life Insurance is registered witb an autborized capital of Rs crore and a paid up capital of Rs crores. State Bank of India is tbe largest banking francbise in India. Along witb its Associate Banks, SBI Croup bas a network of over , brancbes across tbe country, tbe largest in tbe world. Cardif is a wbolly owned subsidiary of BNP Paribas, wbicb is Tbe Euro Zones leading Bank. BNP is one of tbe oldest foreign banks witb a presence in India dating back to 8. Sbriram Life Insurance Sbriram Life Insurance Company Ltd is a |oint venture between tbe Cbennai- based Sbriram Croup and tbe Soutb African insurance. Sbriram Life bas set a target of acbieving a premium income of Rs crore during tbe first year of operations. Wbile focusing largely on tbe strong network of over , agents and distribution network of more tban brancbes, Sbriram Life is also contemplating banc assurance alliances witb couple of banks. Tata AIC Life Insurance Tata AIC Life Insurance Company Limited is a |oint venture between Tata Croup and American International Croup, Inc. {AIC]. Tata Croup is one of tbe oldest and leading business groups of India. Tata Croup bas bad a long association witb Indias insurance sector baving been tbe largest insurance company in India prior to tbe nationalization of insurance. Tbe Late Sir Dorab Tata, was tbe founder Cbairman of New India Assurance Co. Ltd., a group company incorporated way back in 99. American International Croup, Inc is tbe leading U.S. based international insurance and financial services organization and tbe largest underwriter of commercial and industrial insurance in tbe United States. AIC bas one of tbe most extensive life insurance networks in tbe world.
BUARD UF DIRECTURS CONTENTS
Board of directors CONTENTS Brief profile of tbe Board of Directors
Mr. Deepak S Parekb is tbe Cbairman of tbe Company. He is also tbe Executive Cbairman of Housing Development Finance Corporation Limited {HDFC Limited]. He |oined HDFC Limited in a senior management position in 98. He was inducted as a wbole-time director of HDFC Limited in 98 and was appointed as its Executive Cbairman in 99. He is tbe Cbief Executive Ufficer of HDFC Limited. Mr. Parekb is a Fellow of tbe Institute of Cbartered Accountants {England & Wales].
Mr. Keki M Mistry |oined tbe Board of Directors of tbe Company in December, . He is currently tbe Managing Director of HDFC Limited. He |oined HDFC Limited in 98 and became an Executive Director in 99. He was appointed as its Managing Director in November, . Mr. Mistry is a Fellow of tbe Institute of Cbartered Accountants of India and a member of tbe Micbigan Association of Certified Public Accountants.
Mr. Alexander M Crombie |oined tbe Board of Directors of tbe Company in April, . He bas been witb tbe Standard Life Croup for years bolding various senior management positions. He was appointed as tbe Croup Cbief Executive of tbe Standard Life Croup in Marcb . Mr. Crombie is a fellow of tbe Faculty of Actuaries in Scotland.
Ms. Marcia D Campbell is currently tbe Croup Uperations Director in tbe Standard Life group and is responsible for Croup Uperations, Asia Pacific Development, Strategy & Planning, Corporate Responsibility and Sbared Services Centre. Ms. Campbell |oined tbe Board of Directors in November .
Mr. Keitb N Skeocb is currently tbe Cbief Executive in Standard Life Investments Limited and is responsible for overseeing Investment Process & Cbief Executive Ufficer Function. Prior to tbis, Mr. Skeocb was working witb MJs. )ames Capel & Co. bolding tbe positions of UK Economist, Cbief CONTENTS Economist, Executive Director, Director of Controls and Strategy HSBS Securities and Managing Director International Equities. He was also responsible for Economic and Investment Strategy researcb produced on a worldwide basis. Mr. Skeocb |oined tbe Board of Directors in November .
Mr. Cautam R Divan is a practising Cbartered Accountant and is a Fellow of tbe Institute of Cbartered Accountants of India. Mr. Divan was tbe Former Cbairman and Managing Committee Member of Midsnell Croup International, an International Association of Independent Accounting Firms and bas autbored several papers of professional interest. Mr. Divan bas wide experience in auditing accounts of large public limited companies and nationalised banks, financial and taxation planning of individuals and limited companies and also bas substantial experience in structuring overseas investments to and from India.
Mr. Ran|an Pant is a global Management Consultant advising CEUJBoards on Strategy and Cbange Management. Mr. Pant, until was a Partner & Vice- President at Bain & Company, Inc., Boston, wbere be led tbe worldwide Utility Practice. He was also Director, Corporate Business Development at Ceneral Electric beadquarters in Fairfield, USA. Mr. Pant bas an MBA from Tbe Wbarton Scbool and BE {Honours] from Birla Institute of Tecbnology and Sciences.
Mr. Ravi Narain is tbe Managing Director & CEU of National Stock Excbange of India Limited. Mr. Ravi Narain was a member of tbe core team to set-up tbe Securities & Excbange Board of India {SEBI] and is also associated witb various committees of SEBI and tbe Reserve Bank of India {RBI].
Mr. Deepak M Satwalekar is tbe Managing Director and CEU of tbe Company since November, . Prior to tbis, be was tbe Managing Director of HDFC Limited since 99. Mr. Satwalekar obtained a Bacbelors Degree in Tecbnology from tbe Indian Institute of Tecbnology, Bombay and a Masters Degree in Business Administration from Tbe American University, CONTENTS Wasbington DC.
Ms. Renu S. Karnad is tbe Executive director of HDFC Limited, is a graduate in law and bolds a Masters degree in economics from Delbi University. Sbe bas been employed witb HDFC Limited since 98 and was appointed as tbe Executive Director in . Sbe is responsible for overseeing all aspects of lending operations of HDFC Limited. Croup Companies
Some of our valued banc- assurance partners.
ABUUT HDFC CONTENTS . Uur key strengtbs Financial Expertise As a |oint venture of leading financial services groups, HDFC Standard Life bas tbe financial expertise required to manage your long-term investments safely and efficiently. Range of Solutions We bave a range of individual and group solutions, wbicb can be easily customized to specific needs. Uur group solutions bave been designed to offer you complete flexibility combined witb a low cbarging structure. Track Record so far our gross premium income, for tbe year ending Marcb , 8 stood at Rs. ,89 crores and new business premium income stood at Rs. ,8 crores. Tbe company bas covered over 9, 9, lives year ending Marcb , 8. Uur overall corporate purpose Wby we exist, Uur corporate purpose is to generate sustainable, bigb-quality returns for our sbarebolders.
{Delivery, Efficiency and Upportunity driving sbarebolder value] ABUUT STANDARD LIFE INSURANCE
CONTENTS Tbe Standard Life Insurance Assurance Company - Founded in 8 - Mutual Life Insurance Company since 9 - Largest mutual life insurance company in Europe - Assets under management over Rs 8 crores { 89. bn] Total assets under management : Rs. 8 Crores - New premium income :Rs. Crores - AA rated by Standard & Poor's and Moody's Financial Strengtbs of tbe company - Total assets under management: Rs. , 8, Crores - New premium income :Rs. 8, Crores - AA rated by Standard & Poor's and Moody's About Standard Life Standard Life bas been looking after its customers for over 8 years, and currently over million people rely on tbem for tbeir financial needs. We bave assets under management wbicb are wortb more tban tbe combined market value of Sbell, Reuters, Tesco, Cadbury Scbweppes and Marks & Spencer. Financial Security Standard Life bas tbe financial strengtb to remain secure and competitive. We aim to offer products tbat provide competitive returns to tbeir customers wbile maintaining an adequate level of financial strengtb to ensure tbeir security. Like most people, you want to know tbat your financial future is in good bands. Standard Life places a great deal of importance on getting your money to work bard for you, tbats wby we believe you can bave confidence in us. Standard Life bas been awarded tbe Raising Standards quality mark. Tbis sbows tbat we: - use clear language to describe tbeir products on key documents, - bave appropriate products and - Provide a quality service for our customers. Tbe quality mark covers products bougbt by individuals including pensions, long-term savings and protection. We were independently tested against a number of rigorous standards. And we bave to continue to pass tbese tests every year to keep using tbe quality mark. Standard Life won tbe Money Marketing Company of tbe Year award in Marcb for tbe seventb year running. Utber awards tbe Standard Life group bas CONTENTS received include: Money Marketing Awards - Company of tbe Year every year from 999 to - Best Pension Provider and - Best Croup Pension Provider every year from 998 to - Best Personal Pension Provider every year since 998 to - Best Life Investment Product Provider and - Cold Award in tbe Poster Campaign Category {Advertising] Money facts Investment, Life & Pensions Awards . Best Pension Product , and . Best Pension Service , and Bank ball Acbievement Awards {a] Pension Provider of tbe Year and Financial Adviser Provider Awards A. Uverall Winner in 999, , and B. Pensions Provider of tbe Year 999, , , and C. Pensions Company of tbe Year D. Individual Pensions Company of tbe Year E. Croup Pensions Provider of tbe Year F. Healtb Insurance Company of tbe Year Financial Adviser Service Awards . Company of tbe Year every year from 99 to . Star Life and Pensions Provider every year from 99 to . Star Investment Provider every year from 99 to and CONTENTS Pensions Management Administration and Service Awards {a] Uverall Winner - Personal Pensions {b] Uverall Winner - Stakebolder Pensions and {c] Uverall Winner - Croup Personal Pensions and {d] Member Communications - Personal Pensions, Croup Personal Pensions & Stakebolder Pensions {e] Backup {brancb office] - Personal Pensions {f] Backup {bead office tecbnical support] - Personal Pensions & Stakebolder Pensions Pensions Management Tecbnology Awards - Best extranet accessibility Cuardian & Ubserver Consumer Finance Awards {a] Uverall Winner in Personal & Stakebolder Pension Provider
Professional Adviser AwardS - Best Product Provider Website {adviser zone] Unline Finance Awards - Best online Product Provider {ifazone] - Best online Financial Adviser {ifazone] Head Uffice - Edinburgb, Scotland {UK] Presence United Kingdom: brancbes Canada Ireland Cermany Austria sales office Spain brancbes Hong Kong representative office Cbina representative office CONTENTS
Year Award - Company of tbe Year - Company of tbe Year - Best Personal Pension Provider - Company of tbe Year - 999 Company of tbe Decade - 99-99 Company of tbe year - 99 star service award - 99-9 Uverall best company - 99 star service award - 99 Best mortgage services ABUUT HDFC STANDARD LIFE INSURANCE
HDFC Standard Life Tbe Partnersbip: HDFC and Standard Life first came togetber for a possible |oint venture, to enter tbe Life Insurance market, in )anuary 99. It was clear from tbe outset tbat botb companies sbared similar values and beliefs and a strong relationsbip quickly formed. In Uctober 99 tbe companies signed a -year |oint venture agreement. In Uctober 998, tbe |oint venture agreement was renewed and additional resource made available. Around tbis time Standard Life purcbased 3 of Infrastructure Development Finance Company Ltd. {IDFC]. Standard Life also started to use tbe services of tbe HDFC Treasury department to advise tbem upon tbeir investments in India. Towards tbe end of 999, tbe opening of tbe market looked very promising and botb companies agreed tbe time was rigbt to move tbe operation to tbe next level. Tberefore, in )anuary an expert team from tbe UK |oined a band picked team from HDFC to form tbe core pro|ect team, based in Mumbai. In a furtber development Standard Life agreed to participate in tbe Asset Management Company promoted by HDFC to enter tbe mutual fund market. Tbe Mutual fund was launcbed on tb )uly . CONTENTS
Incorporation of HDFC Standard Life Insurance Company Limited: Tbe company was incorporated on tb August under tbe name of HDFC Standard Life Insurance Company Limited. Uur ambition from as far back as Uctober 99 was to be tbe first private company to re-enter tbe life insurance market in India. Un tbe rd of Uctober , tbis ambition was realized wben HDFC Standard Life was tbe only life company to be granted a certificate of registration. HDFC are tbe main sbarebolders in HDFC Standard Life, witb 8.3, wbile Standard Life owns 8.3. Civen Standard Life's existing investment in tbe HDFC Croup, tbis is tbe maximum investment allowed under current regulations. Uur Mission: We aim to be tbe top new life insurance company in tbe market. Tbis doe's not |ust mean being tbe largest or tbe most productive company in tbe market, ratber it is a combination of several tbings like- Customer service of tbe bigbest order Value for money for customers Professionalism in carrying out business Innovative products to improve service standards Use of tecbnology to improve service standards Increasing market sbare.
Etbics SECURITY: Providing long term financial security to our policy bolders will be our constant endeavor. We will be doing tbis by offering life insurance and pension products. TRUST: We appreciate tbe trust placed by our policybolders in US. Hence, we will aim to manage tbeir investment very carefully and live up to tbis trust. INNUVATIUN: Recognizing tbe different needs of our customers, we will be offering a range of innovative products to meet tbese needs. Uur mission is to be tbe best new life insurance company in India and tbese are tbe values tbat will guide us in tbis. CONTENTS Individual Products Eacb of us leads a unique life and so bas unique needs. HDFC Standard Life offers a range of products and invites you to cboose tbe one tbat suits you best. Saving Plans - Endowment Assurance Plan - Unit Linked Endowment Plan - Money Back Plan - Cbildren's Plan - Unit Linked Young star Plan Investment Plans - Single Premium Wbole Uf Life Plan Protection Plans - Term Assurance Plan - Loan Cover Term Assurance Plan Pension Plan - Personal Pension Plan - Unit Linked Pension Plan SWUT Analysis Uf HDFC SLIC STRENCTH Covered Vast Area. Higb Crade Products. 'AAA' rated by CRISIL and ICRA for eigbt consecutive years. Efficient and effective Management information System Lotus Notes. Un-line program control HDFC SLIC improves customer orientation on a sustained basis. WEAKNESS Not optimum utilization of available resources. Poor advertisements. Upportunities. CONTENTS UPPURTUNITIES Availability of lives and resources is sound. Significant demand pattern and better quality policies like medical policy & services are more in demand. Special drive for awareness of literacy and mass education by Covernment. Upportunity opened for tbe tecbnically superior, upgraded and better- managed mills to go for value added product range, fetcbing bigber realization. THREATS Absence of Covt. Policy leads to uncertainties about long-term availability of tbe resources. Higb power tariff, increasing prices of administrated products bave added to tbe woes of domestic industry competing witb abroad en|oying advantages of economies of scale, advanced tecbnology, low cost of finance, cbeaper power tariff etc. Current per capital consumption of policies in India is far less, tben otber countries. Histo History of )oint Venture - Discussions commenced - )anuary 99 - )oint venture agreement signed - Uctober 99 - )oint venture agreement renewed - Uctober 998 - Life Insurance pro|ect team establisbed - )anuary {Mumbai] - Company officially incorporated - tb August - First private sector Life Insurance company to be granted a certificate of registration - Uctober Sbarebolding - HDFC 8. 3 Standard Life 8.
)oint venture agreement Around tbis time Standard Life purcbased a 3 stake in HDFC, furtber strengtbening tbe CONTENTS Relations Tbe next tbree years were filled witb uncertainty, due to cbanges in government and ongoing delays in getting tbe IRDA {Insurance Regulatory and Development autbority] Act passed in parliament. Despite tbis botb companies remained firmly committed to tbe venture. In Uctober 998, tbe |oint venture agreement was renewed and additional resource made available. Around tbis time Standard Life purcbased 3 of Infrastructure Development Finance Company Ltd. {IDFC]. Standard Life also started to use tbe services of tbe HDFC Treasury department to advise tbem upon tbeir investments in India. Towards tbe end of 999, tbe opening of tbe market looked very promising and botb companies agreed tbe time was rigbt to move tbe operation to tbe next level. Tberefore, in )anuary an expert team from tbe UK |oined a band picked team from HDFC to form tbe core pro|ect team, based in Mumbai. CONTENTS Around tbis time Standard Life purcbased a furtber 3 stake in HDFC and a 3 stake in HDFC Bank. In a furtber development Standard Life agreed to participate in tbe Asset Management Company promoted by HDFC to enter tbe mutual fund market. Tbe Mutual Fund was launcbed on tb )uly . Incorporation of HDFC Standard Life Insurance Company Limited: Tbe company was incorporated on tb August under tbe name of HDFC Standard Life Insurance Company Limited. Tbeir ambition from as far back as Uctober 99 was to be tbe first private company to re-enter tbe life insurance market in India. Un tbe rd of Uctober , tbis ambition was realized wben HDFC Standard Life was tbe only life company to be granted a certificate of registration. HDFC are tbe main sbarebolders in HDFC Standard Life, witb 8.3, wbile Standard Life owns 8.3. Civen Standard Lifes existing investment in tbe HDFC Croup, tbis is tbe maximum investment allowed under current regulations. HDFC and Standard Life bave a long and close relationsbip built upon sbared values and trust. Tbe ambition of HDFC Standard Life is to mirror tbe success of tbe parent companies and be tbe yardstick by wbicb all otber insurance companys in India are measured. Tbeir Mission: Tbey aim to be tbe top new life insurance company in tbe market.Tbis does not |ust mean being tbe largest or tbe most productive company in tbe market, ratber it is a combination of several tbings like- - Customer service of tbe bigbest order - Value for money for customers - Professionalism in carrying out business - Innovative products to cater to different needs of different customers - Use of tecbnology to improve service standards - Increasing market sbare CONTENTS
Tbeir Values: - SECURITY: Providing long term financial security to policy bolders will be tbeir constant Endeavour. We will be doing tbis by offering life insurance and pension products. - TRUST: We appreciate tbe trust placed by tbeir policy bolders in us. Hence, we will aim to manage tbeir investments very carefully and live up to tbis trust. - INNUVATIUN: Recognizing tbe different needs of tbeir customers, we will be offering a range of innovative products to meet tbese needs. Tbeir mission is to be tbe best new life insurance company in India and tbese are tbe values tbat will guide us in tbis About IRDA Wbat is IRDA? Tbe IRDA Regulations, deals witb tbe vast area of rigbts of tbe investors starting witb tbe rigbts to obtain a copy of tbe proposal, tbe free look in period in respect of tbe life policies, a copy of tbe concluded policy to be furnisbed to tbe client and also tbe obligations of tbe insurance company regarding servicing and extending of tbe policy, payment of interest in case of delay settlement of tbe policy claims, etc. Tbe regulations also prescribe a procedure for settlement of tbe grievances including tbe appointments of tbe Insurance Umbudsman at specific centers in India. In addition to tbis, tbe IRDA Act empowers tbe Autbority to look into tbe settlement of tbe grievances and in cases wbere tbe policybolder's approacb tbe Autbority directly, tbe Autbority often intervenes witb tbe insurers for tbe protection of tbeir rigbts. Notification Tbe Autbority bas been receiving in no. of letters from tbe members of tbe public and also from tbe client of insurance companies regarding tbe protection of tbe policies under tbe current regulations. Uften time question are also raised about tbe credibility of tbe insurance companies in tbe private sector as to wbetber tbey will continue to function in India in tbe future also to discbarge liabilities. CONTENTS Tbe Autbority bas been taking steps to indicate to tbe general public tbat no company can carry on any business in India witbout being registered witb tbe IRDA. Tbe process of registration is very long and strict process wbere tbe credibility of be applicants is assessed in regard to tbeir ability of continuing tbe business, tbeir commitment to tbe Indian market and tbeir financial strengtb. In addition, before tbe product is launcbed in tbe market by Insurance Companies tbe proposal of tbe product along-witb tbe entire related document is to be filed witb tbe Autbority for tbe period of tbirty days. Tbe Autbority makes sure from tbe proposal of tbe product filed witb it tbat is tbe product is suitable for tbe Indian market and fulfills all tbe requirement of tbe market. Composition of Autbority under IRDA Act, 999 As per tbe section of IRDA Act' 999, Insurance Regulatory and Development Autbority {IRDA, wbicb was constituted by an act of parliament] specify tbe composition of Autbority. Tbe Autbority is a ten members team consisting of . A Cbairman, . Five wbole-time members, . Four part-time members, {All appointed by tbe Covernment of India] CONTENTS
Duties, Powers and Functions of IRDA Section of IRDA Act, 999 lays down tbe duties, Powers and functions of IRDA.. {] Sub|ect to tbe provisions of tbis Act and any otber law for tbe time being in force, tbe autbority sball bave tbe duty to regulate, promote and ensure orderly growtb of tbe insurance business and re-insurance business. {] Witbout pre|udice to tbe generality of tbe provision contained on sub- section {], tbe powers and functions of tbe Autbority sball include - - Issue to tbe applicant a certificate of registration, renew, modify, witbdraw, suspend or cancel sucb registration. - Protection of tbe interests of tbe policy bolders in matters concerning assigning of policy, nomination by policy bolders, insurable interest, settlement of insurance claim, surrender value of policy and otber terms and conditions of contracts of insurance. - Specifying requisite qualifications, code of conduct and practical training for intermediary of insurance intermediaries and agents. - Specifying tbe code of conduct for surveyors and loss assessors. - Promoting efficiency in tbe conduct of insurance business. - Promoting and regulating professional organizations connected witb tbe insurance and re-insurance business. - Levying fees and otber cbarges for carrying out tbe purposes of tbis Act. - Calling for information from, undertaking inspection of, conducting enquiries and investigations including audit of tbe insurers, intermediaries, insurance intermediaries and otber organizations connected witb tbe insurance business. - Control and regulation of tbe rates, advantages, terms and conditions tbat may be offered by insurers in respect of general insurance business but so controlled and regulated by tbe Tariff Advisory Committee under section U of tbe Insurance Act, 98 { of 98]. - Specifying tbe form and manner in wbicb books of account sball be maintained and statement of accounts sball be rendered by insurers and otber insurance intermediaries. - Regulating investment of funds by insurance companies. - Regulating maintenance of margin of solvency. - Ad|udication of disputes between insurers and intermediaries or insurance intermediaries. CONTENTS - Supervising tbe functioning of tbe Tariff Advisory Committee. - Specifying tbe percentage of premium income of tbe insurer to finance scbemes for promoting and regulating professional organizations referred to in clause {f]. - Specifying tbe percentage of life insurance business and general insurance business to be undertaken by tbe insurer in tbe rural of social sector - Exercising sucb otber powers as may be prescribed. PERFURMANCE APPRAISAL INTRUDUCTIUN TU PERFURMANCE APPRAISAL
Performance Appraisal is a metbod of evaluating tbe bebavior of employees in a work place , normally including botb tbe quantitative and qualitative aspects of |ob performance. Performance bere refers to tbe degree of accomplisbment of tbe tasks tbat make up an individual's |ob. Performance is measured in terms of results . Tbus, Performance appraisal is tbe process of assessing tbe performance or progress of an employee , or a group of employees on tbe given |ob , as well as bis potential for future development . Tbus, Performance appraisal comprises all formal procedures used in organization to evaluate contributions , personality , and potential of individual employees . In otber words , performance appraisal includes tbe comparison of performance scales of different individuals bolding similar areas of work responsibilities and relate to determination of wortb of scales for tbe acbievement of organizational ob|ective .
CONTENTS
PERFURMANCE APPRAISAL PRUCESS It can be said tbat performance appraisal is an important tool of personnel management . It is a |udgment of cbaracteristics , traits , and performance of employees and bas a wide range of utility . Various steps in appraising performance of employees are as follows : . ESTABLISHINC PERFURMANCE STANDARD : Tbe process of evaluation begins witb tbe establisbment of Performance Standards . Wbile designing a |ob and formulating a |ob description , performance standards are usually developed for tbe position . Tbese standards sbould be very clear and vague and ob|ective enougb to be understood and measured . Tbese standards sbould be discussed witb tbe supervisors to find out wbicb different factors are to be incorporated . Weigbts and points to be given to eacb factor and tben tbese sbould be indicated on tbe Appraisal Form , and later on used for appraisal tbe performance of tbe employees. . CUMMUNICATINC PERFURMANCE EXPECTIUNS TU FC's : Tbe next important step is to communicate tbe aforesaid standards to tbe concerned employees . Tbeir |obs and |obs-related bebavior sbould be clearly explained to tbem . It sbould be noted tbat tbe |ob related bebaviors are tbose critical bebaviors tbat constitute |ob success . Tbe employee sbould not presumed to guess wbat is expected from bim . It sbould be noted tbat bere "communication" means tbat tbe standards bave been transmitted to tbe employee and be bas received and understood tbem a two-way communication , i.e., transference of information from tbe manager to tbe subordinate regarding expectations and feedback from tbe subordinate to tbe manager tbat tbis information bas been received and understood in tbe same context and contents . . MEASURINC ACTUAL PERFURMANCE : Tbe tbird step is tbe measurement of actual performance to determine wbat actual performance is , it is necessary to acquire information about it we sbould be concerned witb bow we measure and wbat we measure . Four sources of information are frequently used to measure actual performance : personal observation , statistical reports , oral reports and written reports . . CUMPARINC ACTUAL PERFURMANCE WITH STANDARDS : Tbe next step is comparison of actual performance witb tbe standards . By doing so tbe potentiality for growtb and advancement of an employee can be appraised of and |udged . Efforts are made to find out deviations between CONTENTS ' standard performance ' and ' actual performance ' . . INITIATINC CURRECTIVE ACTIUN : Tbe final step is tbe initiation of corrective action wbenever necessary . immediate corrective action can be of two types . Une is immediate and deals predominantly witb symptoms. Tbe otber is basic and deals into causes . Immediate corrective action is often described as " putting out fires " wbereas basic corrective action gets to source of deviation and seeks to ad|ust tbe difference permanently . Coacbing and counseling may be done or special assignments and pro|ects may be set . Persons may be deputed for formal training courses , and decision making responsibilities and autbority may be delegated to tbe subordinates . Attempts may be also made to recommend for salary increases or promotions , if tbese decisions become possible in tbe ligbt of appraisals. BENEFITS UF PERFURMANCE APPRAISAL . It belps be evaluation of capability of different managerial personnel . . It belps in evaluating tbe relevancy of training programmes being organized for managerial development . It also belps in estimating tbe need of improvement in tbe training programmes . . It belps in tbe promotion of managerial executives . . It provides an opportunity to tbe managerial executives aware of tbeir duties in tbe enterprise . . It provides an opportunity to tbe managerial executives to develop tbemselves so tbat tbey may be promoted to bigber levels . Tbus , it offers a cballenge to tbe managerial executives for development . . It belps feeling of loyalty among tbe managerial executives towards tbe enterprise , wbicb increases tbeir morale . . Un tbe basis of results of managerial appraisal , modern tecbniques of management may easily and effectively be implemented in tbe enterprise . CONTENTS
RULE UF PERFURMANCE APPRAISAL Performance Appraisal bas been considered as a most significant and indispensable tool for an organization . Tbe information it provides is bigbly useful in making decisions regarding various aspects sucb as promotions . Performance measures also link information gatbering and decisions-making processes wbicb provides a basis for |udging tbe effectiveness of personnel sub-divisions sucb as recruiting , selection , training , and compensation . Accurate information plays a vital role in tbe organization as a wbole . Tbey belp to pinpoint weak areas in tbe primary systems . It is easier for managers to see wbicb employees need training or counseling . . FUR MANITAININC INVENTURY : Performance appraisal enables an organization to maintain an inventory of tbe number and quality of all managers and to identify and meet tbeir training needs and aspirants . . FUR DETERMININC INCREMENTS : Tbis metbod aims at determining increment , rewards and provide a reliable index for promotions and transfer to positions of greater responsibility . . FUR MAINTAININC INDIVIDUAL AND CRUUP DEVELUPMENT : Tbe ob|ective of performance appraisal is to maintain individual and group development by informing tbe employees of bis performance standards . . FUR SUCESSTINC WAYS UF IMPRUVEMENT : Tbis system belps in suggesting ways of improving tbe employees performance wben be is not found to be up to tbe mark during tbe review period . . FUR IDENTIFYINC TRAININC NEEDS : Tbe aim of performance appraisal is to identifying training and development needs and to evaluate effectiveness of training and development programmes . . FUR PLANNINC CAREER DEVELUPMENT : Tbe otber ob|ective of performance appraisal is to plan career development planning based on potentialities .
IMPURTANCE UF THE SELF APPRAISAL AS A F.C : CONTENTS - Cbance to measure own skills and performance. - Upportunity to document accomplisbments and identify areas for improvement. - Upportunity to write goals for coming year. - Helps facilitate appraisal meeting. AS A MANACER : - Cives you insigbt into FC's view of bisJber own strengtbs and weaknesses. - Helps you gauge FC's understanding of expectation and standards. - Reminds you of forgottenJoverlooked accomplisbments.
STEPS UF THE PERFURMANCE APPRAISAL PRUCESS
. PREPARE YUUR EVALUATIUN Tbe appraisal you write will be in tbe FC's personnel file for years to come. You bave a responsibility, tberefore, to write an evaluation tbat is accurate, ob|ective, fair, and free of exaggerations about tbe FC's performance. - Try to give specific examples to support your rating{s]. - Review tbe FC's performance tbrougb tbe entire evaluation period of time, refer to notes made tbrougbout tbe year, if necessary. - Complete tbe appropriate appraisal form, including all ratings, rating |ustifications, development plans, etc. - Review tbe appraisal witb your supervisorJmanager and obtain all necessary signatures prior to delivery. . SCHEDULE THE REVIEW - Cboose a private place for tbe review meeting, free from distractions andJor interruptions. - Notify tbe FC of tbe date and time. - Prepare in advance. Develop a game plan of points to cover and anticipate problems. CONTENTS
. CUNDUCT THE FACE-TU-FACE PERFURMANCE APPRAISAL MEETINC - Welcome tbe FC by putting tbem at ease and setting a positive tone. - Introduce tbe topic of tbe meeting by explaining tbe process and reasons for discussion. Stress tbat tbis is an opportunity to belp tbe FC grow. Invite tbeir questions.
. INTRUDUCTIUN
Performance appraisal is one of tbe traditional and most universal practices of tbe management. It is a systematic and ob|ective way of |udging tbe relatives wortb or ability of an employee in performing bis PERF0RNANCE APPRAISAL Lask Modern managemenL refers Lo an appralsal sysLem ln whlch Lhe employee's merlL llke lnlLlaLlve dependablllLy personallLy eLc are compared wlLh oLhers and ranked and raLed 1he Lrend now a day ls ln Lhe dlrecLlon of aLLempLlng Lo measure whaL Lhe man does (performance appralsal) raLher Lhan whaL he ls (merlL raLlng) Lmployees also wlsh Lo know Lhelr poslLlon ln Lhe organlzaLlon erformance appralsal helps Lo ldenLlfy Lhose who are performlng Lhelr asslgned Lasks well and Lhose who are noL and Lhe reason for such performance Appralsals are [udgmenLs of characLerlsLlcs LralLs and performance of oLhers on Lhe basls of whlch we assess Lhe worLh or value of oLhers and ldenLlfy whaL ls good and bad
Accordlng Lo lllppo erformance appra|sa| |s the systemat|c per|od|c and an |mpart|a| rat|ng of an emp|oyee's exce||ence |n matters perta|n|ng to h|s present [ob and h|s potent|a| for a better [ob"
CONTENTS A performance appralsal ls an lmporLanL Lool for measurlng managerlal efflclency organlzaLlonal effecLlveness monlLorlng and measurlng Lhe performance of employees
MLANING CI LkICkMANCL AkAISAL
erformance appralsal ls Lhe process of evaluaLlng Lhe performance and quallflcaLlons of Lhe employees ln Lerms of Lhe requlremenLs of Lhe [ob for whlch he ls employed for purposes of admlnlsLraLlon lncludlng placemenL selecLlon for promoLlons provldlng flnanclal rewards and oLher acLlons whlch requlre dlfferenLlal LreaLmenL among Lhe members of a group as dlsLlngulshed from acLlon affecLlng all members equally"
ln a nuLshell we can say LhaL performance appra|sa| |s an ob[ect|ve assessment of an |nd|v|dua|'s performance aga|nst we|| def|ned benchmarks" CONTENTS
C8ILC1IVL
Appralsals serve Lo monlLor Lhe efforL of lndlvlduals Lo lnLegraLe and coordlnaLe lndlvldual's efforL lnLo a cooperaLlve endeavor and glve feedback Lo Lhe lndlvldual Lo provlde a means of correcLlng or commandlng Lhe efforLs of lndlvlduals and Lo provlde an equlLable and conslsLenL basls of dlsLrlbuLlng rewards and penalLles lL malnly concerns lLself wlLh Lhe followlng Lhree purposes
CONTENTS
a) ADMINIS1kA1IVL DLCISICNS
lL can serve as a basls for [ob change or promoLlon
erformance appralsal can be used Lo deLermlne wheLher P8 programmes such as selecLlon Lralnlng and Lransfers have been effecLlve or noL
b) LMLCLL DLVLLCMLN1
y ldenLlfylng Lhe sLrengLhs and weakness of an employee lL serves as a gulde for formulaLlng a sulLable Lralnlng and developmenL programme Lo lmprove hls quallLy of performance ln hls presenL work lL serves as a feedback Lo Lhe employee y leLLlng Lhe employee know how well he ls dolng or where he sLands wlLh hls supervlsors lL Lells hlm whaL he can do Lo lmprove hls presenL performance and go up ln Lhe managemenL hlerarchy
c) LkSCNNLL kLSLAkCn
1hls lnvolves generaLlon of manpower lnformaLlon
USES OR IMPORTANCE OF PERFORMANCE APPRAISAL
CONTENTS erformance appralsal ls a slgnlflcanL elemenL of Lhe lnformaLlon and conLrol sysLem ln Lhe organlzaLlon lL can be puL Lo several uses concernlng Lhe enLlre specLrum of human resource managemenL funcLlons Some common appllcaLlons of performance appralsal are glven below
erformance appralsal prov|des va|uab|e |nformat|on for personne| dec|s|ons such as pay lncreases promoLlons demoLlons Lransfers and LermlnaLlons
lL helps to [udge the effect|veness of recru|tment se|ect|on p|acement and or|entat|on systems of Lhe organlzaLlon lL ls useful ln analyzlng tra|n|ng and deve|opment needs
lL can be used Lo |mprove performance through appropr|ate feedback worklng and counsellng employees
erformance appralsal faclllLaLes human resources p|ann|ng career p|ann|ng and success|on p|ann|ng
lL promoLes a pos|t|ve work env|ronment whlch conLrlbuLes Lo producLlvlLy
A compeLlLlve splrlL ls creaLed and emp|oyees are mot|vated to |mprove the|r performance
SysLemaLlc appralsal of performance helps to deve|op conf|dence among emp|oyees
PR0CESS 0F PERF0RNANCE APPRAISAL-
CONTENTS
1hls process of performance appralsal has many sLages and lnvolves mulLlple acLlvlLles Lo be underLaken by an organlzaLlon 1hese are usually formaL deLermlnaLlon sharlng evaluaLlon deslgnlng organlzaLlonal lnpuLs and reward admlnlsLraLlon
There are number of performance criteria which may be used to measure the proficiency of an employee. It can be classified into two main categories.
OBJECTIVE CRITERIA AND SUBJECTIVE CRITERIA-
Comparlng Lhe sLandards CONTENTS
OB1ECTIVE CRITERIA Amount and quality oI production, ork sample tests, length oI service, amount oI training necessary, absenteeism, accidents etc..
SU8ILC1IVL CkI1LkIA 8aLlng of employee's [ob proflclency by Lhelr superlor peers and subordlnaLes exLenL of upward communlcaLlon of ldeas degree of knowledge abouL corporaLe goal conLrlbuLlon Lo soclo culLural values eLc
ESSENTIALS OF AN EFFECTIVE PERFORMANCE APPRAISAL SYSTEM
1. Mutual trust 2. Clear objectives 3. Standardization 4. Training 5. Job relatedness CONTENTS 6. Documentation 7. Feedback and participation 8. Individual diIIerences 9. Post appraisal intervie 10.Revie and appeal
MODELS OF PERFORMANCE APPRAISAL-
CONTENTS Many form of raLlng are presenLly avallable each namlng lLs sLrong polnLs as well as llmlLaLlons 1hey may be classlfled lnLo Lwo broad caLegory
1) kat|ng method 1he oldesL and slmplesL meLhod of performance appralsal ls Lo compare one man wlLh all oLher men and place ln a slmple rank order ln Lhls way orderlng ls done from besL Lo worsL of all lndlvlduals comprlslng Lhe group 1hls meLhod Lakes lnLo accounL raLlng by more Lhan one anoLher raLer 1he ranks asslgned are Lhen averaged and relaLlve ls deLermlned for each member
1hls meLhod has Lwo advanLages of slmpllclLy and naLurallsLlc or naLuralness uL lL has dlsadvanLages of belng sub[ecLlve and Lhe ranklng becomes dlfflculL when Lhere are even LwenLy or LhlrLy cases Also Lhe magnlLude of Lhe dlfference ln ablllLy beLween ranks ls noL equal aL dlfferenL poslLlons As an answer Lo Lhe lasL problem Lhe palred comparlson Lechnlque of ranklng has been evolved ln Lhls meLhod Lhe raLer compares each man ln hls group wlLh every oLher man wlLh Lhe flnal ranklng of each worker deLermlned by Lhe number of Llme he was [udged beLLer Lhan oLhers
CONTENTS 1) kat|ng sca|e method This method provides a kind oI scale Ior measuring absolute diIIerences beteen individuals. This is method is oI to types-
I) Discrete- the characteristic job knoledge` may be divided into Iive categories on a discrete scale 'exceptionally good, 'above average, 'average, 'belo average and 'poor. The rater can tick mark category, hich describes best he person being rated. II) Continuous or graphic- here just above the category notation an interrupted line is provided. The rater can tick at any point along its length.
There are Iour kinds oI standards used in rating scales, namely numerical or alphabetical, descriptive adjective, man-to-man and behavior sample. In man- to-man rating scale the standards are very concrete because these are neither numbers nor alphabets (hich do not convey same meaning to all) nor descriptive adjective but are persons, oI varying ability hom the rater has selected and ranked in the ability under consideration.
Thus a scale oI men is created Ior each trait. The objective to this scale is that its construction involves diIIicult and laborious procedure. Persons used as standards by diIIerent raters are diIIerent.
In behavior sample standards, a series oI actual description oI behavior are employed hich is supposed to indicate varying amounts oI the characteristic being rated. The use oI actual descriptions oI behavior reduces some oI the diIIerences in interpretation usually Iound among diIIerent raters.
Frequently there is a tendency Ior the rater to pile up the ratings either at he middle or at the highest end oI the scale. To meet this the 'Iorced distribution CONTENTS system is used here the rater is instructed about the percentage oI cases, hich should Iall in each category. For example, job knoledge the Iolloing percentage must be used: poor-10, belo average-20, average-40, above average-20 and exceptionally good-10.
2) Checklist method-
This consists oI a list consisting oI a number oI statements about the orker and his behavior. Each statement on this list is assigned a value, hich are derived Irom preliminary research in hich the pooled judgments oI person Iamiliar ith the job are used. The rater is asked to place a plus sign or a question mark in Iront oI each statement depending on hether he Ieels the description applies, does not apply or there is doubt. The method has the advantages oI requiring only a report oI Iacts Irom the rater. Final rating is average oI the scale value oI the statement, hich the superior had checked.
Since the value assigned to diIIerent statements do not appear on the list the rater does not kno ho highly he has rated a given individual. He also does not have to distinguish among various categories Ior each oI the several traits considered Ior each the several employees orking under him. The rater is more precise and less ambiguous in his expression oI the orthiness oI the individual. The extent oI constant and halo error are also minimized.
3) Forced choice method- The Iorced choice rating Iorm contains a series oI groups or statements. The rater checks ho eIIectively the statements describe each individual being evaluated. Each statement carries eight, hich is not indicated to the rater. There are a number oI variations. Sometimes all the statements may be either Iavorable or unIavorable. In another, Irom Iour statements to CONTENTS positive and to negative the rater picks the most appropriate and the most inappropriate respectively. It makes the perIormance evaluation more objective.
4) Critical incident technique-
It involves three steps. A list oI noteorthy (good or bad) on the job behavior, usually oI speciIic instances is Iirst prepared hich are vital Ior success or Iailure on job. A group oI experts then assigns scale values to them, depending upon the degree oI desirability Ior the job.
The third step is constructing a checklist that includes incidents, hich deIine good` and bad` orkers. This method helps to identiIy key areas in hich employees are eak or strong. It emphasizes rating on the subjective evaluation oI traits. Finally, the supervisor Iinds counseling easier since he knos his subordinates eakness.
5) Confidential report-
This is a traditional Iorm oI appraisal used in most government organizations. A conIidential report is a report prepared by the employee`s immediate superior. It covers the strengths and eaknesses, main achievements and Iailure, personality and behavior oI the employees. But it involves a lot oI subjectivity because appraisal is based on impressions rather than on data.
6) Free form or essay method-
CONTENTS Dnder Lhls meLhod Lhe evaluaLor wrlLes a shorL essay on Lhe employee's performance on Lhe basls of overall lmpresslon 1he descrlpLlon ls expecLed Lo be as facLual and concreLe as posslble An essay can provlde a good deal of lnformaLlon abouL Lhe employee especlally lf Lhe evaluaLor ls asked Lo glve examples of each one of hls [udgmenLs
7) Stra|ght rank|ng method
ln Lhls Lechnlque Lhe evaluaLor asslgns relaLlve ranks Lo all Lhe employees ln Lhe same work unlL dolng Lhe same [ob Lmployees are ranked from Lhe besL Lo Lhe pooresL on Lhe basls of overall performance 1he 'whole man ls compared wlLh Lhe whole man' wlLhouL analyzlng performance 1he relaLlve poslLlon of an employee ls reflecLed ln hls numerlcal rank
8) a|red compar|son method
This is a modiIied Iorm oI man to man ranking. Herein, each employee is compared ith all the others in pairs one at a time. The number oI times an employee is judged better than the other determines his rank. Comparison is made on the basis oI overall perIormance. The number oI comparisons to be decided on the basis oI the Iolloing Iormula- N (N-1)\2
9) Group appraisal method-
Under this method, a group oI evaluators assesses employees. This group consists oI the immediate superior oI the employee, other supervisors having close contact ith the employee`s ork, head oI the department and a personnel expert. The group determines the CONTENTS standards oI perIormance Ior the job, measures actual perIormance oI an employee, analyses the cause oI poor perIormance and other suggestions Ior improvement in Iuture.
10) Field review method- In this method, a training oIIicer Irom the HR department intervies line supervisors to evaluate their respective subordinates. The intervieer prepares in advance the questions to be asked. By ansering these questions a supervisor gives his opinion about the level oI perIormance oI his subordinate, the subordinate`s ork progress, his strengths and eakness, promotion potential, etc. The evaluator takes detailed notes oI the anser, hich are then approved by the concerned supervisor. These are then placed in the employee`s personal service Iile.
CONTENTS
MODERN METHODS OF PERFORMANCE APPRAISAL:
1) Assessment centers-
An assessment center is a group oI employees dran Irom the diIIerent ork units. These employees ork together on an assignment similar to the one they ould be handling hen promoted. Evaluators observe and rank the perIormance oI all the participants. Experienced managers ith proven ability serve as evaluators. This group evaluates all employees both individually and collectively by using simulation techniques like role playing, business games and in basket exercises. Employees are evaluated on job related characteristics considered important Ior job success.
2) Human resources accounting method-
HR is a valuable asset oI the organization. This asset can be valued in terms oI money. When component and ell-trained employees leave an organization the human asset is decreased and vice versa. Under this method, perIormance is judged in terms oI cost and contribution oI employees. Costs oI HR consist oI expenditure on HR planning, recruitment, selection, induction, training, compensation, etc. contribution oI HR is the money value oI labor productivity or value added by HR. diIIerence beteen cost and contribution ill reIlect the perIormance oI employees.
This method combines graphic rating scales ith critical incidents method. BARS are description oI various degrees oI behavior relating to speciIic perIormance dimensions. Critical areas oI job perIormance and the most eIIective behavior Ior getting results are determined in advance. The rater records the observable job behavior oI an employee and compares these observations ith BARS. In this ay, an employee`s actual job behavior is judged against the desired behavior. The steps involved in constructing BARS are as Iollos- a) IdentiIy critical incidents b) Select perIormance dimensions c) Retranslate the incidents d) Assign scales to incidents e) Develop Iinal instrument
4) Appraisal by results or MBO- The concept oI management by objective (MBO) as developed by Peter Drucker in 1954. He called it management by objective and selI-control`. Since then MBO has become an eIIective and operational technique oI perIormance appraisal and a poerIul philosophy oI managing. It is also knon as work planning and review or goal setting approach to appraisal.
MBO has been deIined as ' a process hereby the superior and subordinate managers oI an organization jointly identiIy its common goals, deIine each individual`s major areas oI responsibility in terms oI results expected oI him and use these measures as guides Ior operating the unit and assessing the contributions oI each oI its members
The main steps involve din perIormance appraisal through MBO are as Iollos- a) Set organizational goals b) DeIining perIormance targets c) PerIormance revies CONTENTS d) Feedback
MBO is superior to other methods oI perIormance appraisal. It oIIers the Iolloing beneIits: Ends-means chain Role clarity Objective appraisal Motivation and commitment Management development Coordination
MBO suIIers Irom the Iolloing drabacks: DiIIiculty in goal setting Problem oI participation ack oI understanding Time consuming and expensive InIlexibility
5) The 360-degree appraisal technique -
PerIormance appraisal has come to occupy a pivotal place in human resource Iunction. The traditional merit rating hich Iocused on personality traits as replaced by perIormance appraisal ith Iocus on ork results. The concept oI M30 transIormed it into a participative process. This led ultimately to the introduction oI 360-degree Ieedback system in the United States. 360-degree system involves evaluation oI a manager by everyone above, alongside and belo him. Structured questionnaires are used to collect responses about a manager Irom his bosses, peers and subordinates. Several parameters relating to perIormance and behavior are used in questionnaires. Each manager is judged by a minimum oI IiIteen colleagues, at least to oI them being his bosses, Iour oI them peer, and six oI them subordinates. The responses are presented collectively to the assesees in the Iorm oI charts and graphs. Comments and interpretations are CONTENTS presented later. Counseling sessions are arranged to solve the eaknesses identiIied in the 360- degree assessment. The 360-degree assessment program is eIIective hen used Irom the top don. The Iact that the manager at the top has also been administered the test convinces and they illing to go through it as ell.
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SDL8lC8 EMPLOYEE SU8CkDINA1L
PEER PEER CONTENTS
LIMITATIONS OF PERFORMANCE APPRAISAL
The main problems involved in perIormance appraisal are as Iollos:
1) Lrrors |n rat|ng PerIormance appraisal may not be valid indicator oI perIormance and potential oI employees due to the Iolloing types oI errors: a) nolo effect lL ls Lhe Lendency Lo raLe an employee conslsLenLly hlgh or low on Lhe basls of overall lmpresslon Cne LralL of Lhe employee lnfluences Lhe raLer's appralsal on all oLher LralLs
b) teteotyploq Lhls lmplles formlng a menLal plcLure of a person on Lhe basls of hls sex age casLe or rellglon
c) eottol teoJeocy lL means asslgnlng average raLlng Lo all Lhe employees ln order Lo avold commlLmenL or lnvolvemenL 1hls ls adopLed because Lhe raLer has noL Lo [usLlfy or clarlfy Lhe average raLlngs
CONTENTS J) oostoot ettot some evaluaLors Lend Lo be lenlenL whlle oLhers are sLrlcL ln assesslng performance ln flrsL case performance ls overraLed whlle ln second case lL ls underraLed
e) 9etsoool blos performance appralsal may become lnvalld because Lhe raLer dlsllkes Lhe employee Such blas may arlse on Lhe basls of reglonal or rellglous bellefs and hablLs or lnLerpersonal confllcLs CONTENTS
RESEARCH METHUDULUCY
RESEARCH METHUDULUCY UB)ECTIVES Tbe topic of tbis pro|ect is "A STUDY UF PERFURMANCE APPRASIAL UF FINANCIAL CUNSULTANT . In order to acbieve tbe above stated sub|ect various ob|ectives were set. THESE UB)ECTIVES WERE: . To examine tbe, determination underlying tbe F.C'S preferences towards selling of insurance policy. . To study tbe relative importance of various factors tbat influences tbe F.C's in selling insurance policy . To study tbe impact of social, culture and demograpbic factors on F.C's preferences towards insurance policy. . To frame guidelines for formulating marketing strategies for united insurance a. Policy dependent on market analysis based on certain factors viz. demograpbic b. Policy related, premium etc. . To determine tbe message content and media most appropriate to be cbosen for promoting insurance policy. Like i.e. tbat HDFC SDLIC. . To examine tbe market sbare of insurance policy. . To examine tbe consumer satisfaction to words HDFC SDLIC policy. CONTENTS RESEARCH DESICN A researcb design is purely and simply tbe framework of plan for a study tbat guides tbe collection and analysis of data researcb design is some statement or specification of procedures for collecting and analyzing tbe information required for tbe solution of some specific problem. It provides scientific framework for conducting some researcb investigation. Anticipating and specification are tbe main cbaracteristics in a researcb design. It provides information for decision making. Decision regarding wbat, wbere, wben and bow mucb and by wbat means concerning an enquiry as a researcb study constitutes in researcb design. For defining tbe problem conclusive researcb design was used. Tbe first reason for selecting sucb design is tbat we seek to estimate tbe proportions of people in a specified population wbo bebave a certain way witb respect to insurance policy". Tbe researcb design must be able to explain tbe reason wby readers exbibit tbis particular buying bebavior. It can be explained by sbowing or finding tbe cause and effect relationsbip among various factors. Researcb design Data Source Primary data ,Secondary data Researcb approacb Telepbonic Metbod
Researcb instrument Scbedule Tecbnique Sample Areas Bareilly Contact Metbod Tbrougb Personal Interviews done Tbrougb scbedule
ANALYSIS & INTERPRETATIUN CONTENTS
FINANCIALCUNSULTANTS SURVEY Cender of tbe F.C. .
PRUFESSIUN UF F.C'S & amp, amp, amp, nbsp,
Professionals 3 Utbers 3
ACE UF F.C. & ,nbs p,
- 93 > 3
Income group UF F.C PERSUNS < , , - , , - , , < CONTENTS
EDUCATIUNAL QUALIFICATIUN UF THE F.C Frequency Percent Inter .9 Craduate .8 Professional .8 Total .