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Birla Sunlife Insurance 100
Birla Sunlife Insurance 100
ON
ORGANIZATIONAL STUDY
M.P.BIRLA INSTITUTE OF
MANAGEMENT
Associate Bharatiya Vidya Bhavan
# 43, Race Course
Road
Bangalore-560001
July - August
2007
This is to certify that the organization study on Birla Sun Life Insurance,
Bangalore, prepared by Mr. Rama Krishna Raju T bearing the
registration no.06XQCM6101 is a bonafide work done, carried under my
guidance and supervision during the academic year 2006-08 in partial
requirement for the award of MBA degree by Bangalore University. To the
best of my knowledge this report has not formed the basis for the award of
any other degree or diploma.
project, under my guidance during Jul& Aug 2007on the topic titled
“Organization
study”
His Conduct was during this period.
Place: BANGALORE
Date: Signature
Name
Designation
of the guide
Office Seal
I also declare that this report is a result of my own effort and has not been
submitted earlier for the award of any degree or diploma of Bangalore
University or any other University.
At the outset, I would like to express my deep sense of gratitude and sincere
thanks to Dr. Mallavali, Principal, M.P.BIRLA INSTITUTE OF MANAGEMENT,
Bangalore, for providing an opportunity to discover the corporate world, from a
close perspective.
Prof. Rudra Murthy, my professor and internal guide for this project to whom I
am deeply grateful for his constant support and guidance without which it would
not have been possible for me to complete this project in time.
I would also like to express my heartfelt wishes to BSLI, for making these 2
months a stepping-stone for my career.
I convey my gratitude to all the staff members of Marketing Division for their
kind cooperation through out my project.
The company chosen was Birla Sun Life Insurance ( BSLI) . The reason
behind this was to understand the expertise it has developed and skills it has
owned, especially in the field of marketing its products as it is the booming
industries in India.
Learning really takes place outside the classroom. I stand a witness to this
statement. The in sight of knowledge that I acquired in the two months of
internship with BSLI was quite impressive. The opportunity I received to
apply my knowledge and skills in the organization gave me a practical view
point to the whole system of learning.
i i) W h o l e l i f e in su r a n c e plans:
W h o l e l i f e p o l i ci e s r e q u i r e th e p o l i c y h o l d e r to pay
premium throughout his/ her l i fe and cover r isk for the
w h o l e l i fe. T h e p o l i ci e s w i t h o u t p r o f i t s a r e cheaper.
i i i) E n d o w m e n t in su ra nc e plan:
Endowment policies are costliest and among this group, money back
policies involve paying highest premium. They give customers
maturity benefits ( normally, sum
assured) and additional profits by way of bonus,
guaranteed additions, loyalty bonus, etc
2 ) Endowment:
E n d o w m e n t p o l i ci e s c o ve r t h e r i s k f o r a s p e c i f i e d period
at the end of whi ch the sum assu red is paid back to the
p o l i c y h o l d e r a l o n g w i t h t h e b o n u s a c c u m u l a t e d during
3 ) Money back:
Unlike endowment plans, in money back policies, the
p o l i c y h o l d e r g e t s p e r i o d i c su r v i va l b e n e f i t s d u r i n g the
term of the poli cy and a lump sum amount on surviving
i t s term. I n t h e e ve n t o f d e a t h d u r i n g t h e t e r m o f the
policy, the beneficiary gets th e full su m assured,
w i t h o u t a n y d e d u c t i o n s f o r th e a m o u n t s p a i d t i l l date,
and no further premiums are required to be paid.
I n s u ra n ce S e c t o r
Reforms :
B i r l a Su n l i f e I n su r a n c e C o m p a n y i s h e a d quartered
a t M u m b a i a n d h a s e s t a b l i sh e d a s tr o n g p r e s e n c e i n the
c i t i e s o f A h m e d a b a d , Baroda, B a n g a l o r e Chandigarh,
Chenni, Gurgaon, Hyderabad, Indore, Jaipur,
Kanchipuram, Kanpur, Kolkata, Lucknow, Meerut,
Mysore, New Delhi, Noida, Patna, Pune, Rajkot, Surat,
Varanasi and Visakhapatnam.
B a ck g ro u n d a n d i n ce p ti o n o f company:
Sun Life Financial
I n I n d i a t h e g r o u p i s t h e s i n g l e l a r g e s t p r o d u c e r of
- V i s c o se f i l a m e n t yarn
- Aluminum
- Grey cement
F o r s e ve r a l d e c a d e s now, t h e A d i t ya B i r l a Group
h a s w o n t h e t r u s t a n d r e sp e c t o f i t s 72 , 000 employees
a n d 8 l a k h investors. T h e group’ s t u r n o ve r exceeds Rs.
260 b i l l i o n a n d h a s a n a s se t base, w h i c h i s in e x c e s s o f
Rs. 257 billion.
T h e A d i t y a B i r l a g r o u p h a s o ve r 75 b u s i n e s s units
in India and overseas. I t has operations in Canada,
U. S. A; U. K, Thailand, Phil ippine s, M a l a y s i a a n d Egypt.
I t s i n t e r n a t i o n a l o p e r a t i o n s co n t r i b u t e g r e a t l y t o India’ s
g r o w t h a n d t o t h a t o f S o u th E a s t Asia, m a k i n g i t India’ s
f i r s t t r u l y m u l t i n a t i o n a l con glomera te .
T h e f l a g s h i p c o m p a n i e s o f t h e A d i tya B i r l a Group
i n c l u d e s o m e o f t h e l a r g e s t a n d w e l l kn o w n companies
i n I n d i a s u c h a s Gr a s i m In d u s tr i e s Ltd;
Hindalco Industries Ltd; I n d i a n A l u m i n u m Company
Ltd; Indian Rayon Industries Ltd, Indo Gulf Corporation
T h e t u r n o v e r o f t h e g r o u p i s g r o w i n g a t a steady
rate and is currently estimated to be in excess of
N a t u r e o f b u si n e ss carried:
While the Aditya Birla Group contributes i
ts
kn o w l e d g e o f th e In d i a n market, S u n L i f e Financials
o f fe r s i t s g l o b a l e x p e r t i s e i n th e a r e a s o f p r o te ct i o n
of wealth m a n a g e m e n t services. Both the partners
are already engaged in the busine ss of asse t
management, r e t a i l d i s t r i b u t i o n a n d s t o c k broking. T h i s
partnership
has been now extended to Life Insurance after
Privatization of this sector.
A j o i n t ve n tu r e b e t w e e n t h e A d i t y a B i r l a G r o u p and
S u n L i f e f inancial, Birla’ s s u n l i f e i n su r a n c e f o r a ye d
into t h e l i f e i n su r a n c e a n d r e t i r e m e n t p l a n n i n g b u s i n e s s
by p i o n e e r i n g t h e u n i q u e unit- l i n ke d so l u t i o n s i n India.
In
just 2 yea rs of i ts launch the com pany ha s catapulted to
se c o n d p o s i t i o n i n n e w b u si n e s s p r e m i u m i n t h e highly
co m p e ti ti ve p r i va t e l i f e i n su r a n c e i n d u s t r y b a se d o n i ts
Vision:
“ To be provider of f inancial security to individuals and corporate”.
Mission:
To be the f i rst preference of our customers as a leading integrated
insurance provider of Insurance solutions superior value creation and
technology.
Quality Policy:
B i r l a S u n L i fe h a s p u t i n c a r e f u l l y d e s i g n e d s t r a te g i e s to
move to the leading position in the l i f e insurance
i n d u s t r y t h r o u g h p r o d u c t innovation, customer focus,
and cutting edge technology.
1 ) F le x i L i f e L i n e
Plan:
Unique Features:
g) S u r r e n d e r th e p o l i c y w i t h o u t p e n a l t y a n y t i m e a f t e r 4
policy years.
2 ) F l e x i S a v e P l u s E n d o w m e n t Plan:
Unique Features:
a) T h e p l a n i s a u n i t l i n k e d n o n p a r ti c i p a t i n g p l a n giving
efficient earnings in the long term.
c) F l e x i b i l i t y t o m a k e a d d i t i o n a l l u m p su m investments
( top ups) to increase the savings portion of policy.
e) O p t i o n s t o m a k e t a x f r e e P a r t i a l W i t h d r a w a l s f rom
fund Value, any t ime after three years.
f) ) Su r r e n d e r t h e p o l i c y w i t h o u t p e n a l t y a n y t i m e a fte r
4
policy years.
g ) I n c r e a se t h e S u m A s s u r e d d u r i n g t h e p r e m i u m paying
period dependi ng on your requirements.
3 ) F l e x i C a s h F l o w M o n e y B a c k Plan:
Unique Features:
a) T h e p l a n i s a u n i t l i n k e d non- p a r t i ci p a t i n g p l a n to give
efficient returns.
b) Tax free lump sum pay- outs, to take care of recurring needs.
f ) O p t i o n s t o m a k e tax- f r e e P a r t i a l W i t h d r a w a l s fund
Value anytime after three years.
4 ) B i r l a S u n L i f e T e r m Plan:
Unique Features:
a) T h e p l a n h a s b e e n d e s i g n e d f o r p e o p l e w h o w a n t to
a va i l o f t h e b e n e f i t s o f l i f e i n su r a n c e a t l o w cost. I t i s a
l o w premium, p u r e r i s k co v e r a g e p l a n w h i c h t a k e s care
b) R i d e r s - A c c i d e n t a l D e a t h & D i s m e m b e r m e n t Rider,
Critical I l l n e s s Rider, Waiver Of Premium Riders
a va i l a b l e a l o n g w i t h t h e plan, o n e ca n a v a i l o f r iders
even in the case of Single Premium Policy.
5 ) C l a s s ic L if e premier:
Unique Features:
a ) T h e p l a n i s a u n i t l i n ke d n o n p a r t i c i p a t i n g plan
b ) O n e h a s t h e ch o i c e o f s i x In ve s tm e n t F u n d Options
w i t h t h e f l e x i b i l i t y t o a l l o c a te th e p r e m i u m s i n varying
p r o p o r t i o n s i n to th e d i f f e r e n t F u n d O p t i o n s o r even
switch from one or more Investment Fund( s) to
other Investment Fund( s).
c) One can top up Fund Value wheneve r one has
a d d i t i o n a l savings. T h e m i n i m u m a m o u n t o f t o p ups
w i l l b e Rs. 10 , 000
d) T h e plan offers further benefits in the form of
a d d i t i o n a l units, w h i c h w i l l b e a d d e d to the Fund
A r e a s o f Operation:
Ownership pattern:
The Aditya Birla group holds 74 % of the equity in Birla Sun Life
Insurance while the Sun Life group holds the balance 26 %. Both the
companies are committed to enhance the capital of the plan
projections.
Competitors’ information:
The company faces two types of competitors:
• D i r e c t Competitors
• I n d i r e c t Competitors
Infrastructure Facilities
:
1 . All branches are computerized and l inked in a wide
area network
2. There is inter branch connectivity a well as
connectivity with the head office
3. The main back and policy ad mi n i str a ti on is a
Rs. 6000 based COBOL- java system running on AIX with
DB 2 d a ta b a s e a n d a H T M L f r o n t end
4. The sales i l lustration system is an interface system
w i t h Ja va classes. T h e a c c o u n t i n g s y s t e m u s e d i s Sun
Accounting system, which interfaces with the Rs. 6000
5. Birla Sun Life would provide Sales I l
lustration
S y s t e m s t o e ve r y d i s tr i b u t o r a n d i t ca n b e l o a d e d on
laptops also.
6. B S L I w o u l d b e h a r n e s s i n g t h e I T a d v a n ta g e for
improving the effectiveness and efficiency of i ts
distribution channels.
VP VP VP CHANNEL
MKT DSF CFO GROUP SALES
REGIONA
L
MANAGE BRANCH BRANCH BRANCH
R MANAGER MANAGER MANAGER
APPLICATION
ADDITION OF RIDERS
REQUIREMENT
ADDITION OF RIDERS
CHEQUE DISHONOUR
DISPATCH
REFUND
CLIENT SERVICES ID
COMMUNICATION CELL
2 ) Addition of riders:
3 ) Requirement:
5 ) Dispatch:
When the underwriter is fully satisfied with the
customer, h e d e c i d e s th a t h e co u l d b e g i v e n insurance
cover. T h e n t h e p o l i c y d o cu m e n t s t a t i n g t h a t c l i e n t is
insured by Sun Life is se n t to th e clients mailing
address. T h i s i s t e r m e d a s dispatch.
6 ) Refund:
O n c e t h e cl i e n t r e c e i v e s t h e p o l i c y d o cu m e n t h e is
g i v e n 15 d a y s o f t i m e c a l l e d “ F r e e l o o k period” , during
w h i ch h e c o u l d g i ve a s e c o n d t h o u g h t fo r h i s decision
a n d i f h e t h i n k s th a t h e doesn’ t r e q u i r e t h e p o l i c y , he
could return ba ck the poli cy document . Then hi s entire
money that he ahs paid to the company would be
r e t u r n e d t o h i m . T h i s i s t e r m e d a s refund.
I f t h e c u s t o m e r doesn’ t r e tu r n t h e p o l i c y document
w i t h i n t h e f r e e l o o k period, t h e n i t m e a n s t h a t h e has
a c c e p te d t h e p o l i c y a n d t h e r e f o r e h i s l o g i n I D and
p a s s w o r d r e q u i r e d t o a c c e s s h i s p o l i c y d e t a i l s o n l i n e is
sent to his mailing address.
8 ) C o mmu n i ca t i o n Cel
l:
B i r l a S u n L i fe h a s a c a l l c e n t e r w h i c h t h e customer
can call anytime to get any information regarding his policy.
F u t u r e G r o w t h a n d P rospects :
T h e Bi r l a Su n L i fe C o m p a n y i s e x p a n d i n g i t s e l f all
o ve r I n d i a t h r o u g h i t s branches. I t s a l r e a d y p r e se n t
in
more than 1000 t o w n s in India. I t has a huge
recruitment plan to meet i ts grow ing demand for
manpower. Through the kind of business that the
co m p a n y h a s d o n e t i l l now, i t i s b e c o m i n g t h e f i
rst
i n s u r a n c e c o m p a n y i n I n d i a t o a ch i e ve b r e a k e v e n point.
ACTUARY:
A n e f f i c i e n t a n d su c c e s s f u l l i f e i n s u r a n ce business
i s d e p e n d e n t o n k e y f u n c t i o n s o f r i s k management.
Our team o f p r o fe s s i o n a l a c t u a r i e s i s a m o n g t h e b e s t i n
the
industry and is dedicated to create so u n d r
isk
assessment and pricing structure.
CLIENT SERVICING:
I t services an existing base of over 1 lakh
policyholders w h i ch is constantly growing at a
compounding rate. The team is continuously evolving
efficiency levels n order to meet i ts committ ed
standards.
PRODUCT DEVELOPMENT:
A team dedicated to conceptualizing, product
features, s e t u p t h e i m p l e m e n t a t i o n a n d l e a d i t t o the
product launch with the active support of the other core functions.
HUMAN RESOURCE:
In an ever grow ing and expand ing company the key
r o l e o f r e cr u i t i n g a n d r e ta i n i n g t h e r i g h t t a l e n t and
efficient performance management system i s a crucial
differentiator between a leader and any other company.
INFORMATION TECHNOLOGY:
BSLI boasts of the most advanced software
t e ch n o l o g y i n t h e L i f e I n su r a n c e industry. B e i n g a unit
l i n ke d product offering with
cu stomi zation, t
he
technology and back- end processing is done on the
u n i ve r sa l p l a t f o r m o n t h e w o r l d c l a s s i n g e n i o u s system.
W i t h t h i s technology, cu s t o m e r s c a n e v e n t r a c k their policy
a n d f u n d d e t a i l s o n t h e internet.
INVESTMENT:
T h e u n i t l i n ke d p r o d u c t s offer the f lexibility
of choosing f r o m va r i o u s i n v e s t m e n t options. A n efficient
i n v e s t m e n t s t r a te g y w i t h i n t h e f r a m e w o r k o f t h e IRDA
g u i d e l i n e s i s a cr u c i a l f a c t o r co n t r i b u t i n g t o t h e success
o f u n i t l i n ke d p r o d u c t s i n t h e m a r k e t place.
Skill:
Off the job training:
I n I n s u r a n ce i n d u s t r y i t ’ s th e c u s t o m e r w h o is
su p r e m e a n d company’ s r e ve n u e w o u l d d i r e c t l y depend
o n i t . S o i t r e q u i r e s t h e D i r e c t S a l e s f o r ce o f the
co m p a n y t o h a v e g o o d c o m m u n i c a t i o n skills, s i n ce they
d i r e c t l y i n t e r a c t w i t h t h e customer. T o c a te r t o t h i s need
t h e o r g a n i z a t i o n p r o v i d e s f o r e x c l u si v e com munication
s k i l l i m p r o v e m e n t t r a i n i n g f r o m r e p u t e d o r g a n i z a t i o n s so
t h a t t h e i r D i r e c t S a l e s F o r ce w o u l d i n t e r a c t i n a
better way
with the cu s t o m e r s and emerge su c c e s s f u l in
g e t t i n g b u s i n e s s f r o m him.
BSLI would be harnessing the IT advantage for
improving the effectiveness and efficiency of i ts
On the job
tr aining:
After completion of off the job t raining, the
a d v i so r s w o u l d a c co m p a n y a g e n c y m a n a g e r s f o r a few
m e e t i n g s w i t h th e customer, so th a t th e a d v i s o r could
understand the way he need s to put forth the product to
the customer. In the same way the new agency
managers woul d acco mpany the senior managers in
t h e i r c l i e n t m e e t i n g s t o k n o w h o w b e s t t h e y co u l d sell
t h e product.
Style:
Top down Participative Decision Making:
I n B i r l a S u n L i fe t h e d e c i si o n r e g a r d i n g products,
company policies etc. is taken by the top level
m a n a g e m e n t w h i ch w i l l h a v e t o b e f o l l o w e d b y t h e low
level management namely branch mangers, agency
managers and advisors in all the branches. The
d e c i si o n c o u l d b e t a ke n a t t h e s t a r t o f e v e r y f inancial
A. P r o d u c t Inn ovation:
a ) N e w p r o d u c t t o b e launched: B i r l a S u n L i f e is
planning to Launch a product which as 100 % equity exposure.
b ) C u s to m i za t i o n of products: Birla Sun L i fe has
undertaken Customization of products to meet the varying
needs of diverse customers.
b) A u t o m a t i c p r e m i u m loan: B e f o r e t1
s July, 2006
automatic premium loan was there. But now
a c c o r d i n g t o n e w I R D A g u i d e l i n e s t h i s f e a t u r e has
been removed.
c) A n y t i m e premium: D u r i n g t h e f i r s t 3 ye a r s o f the
policy period the customer has to pay premiums regularly. But
after 3 years he could pay premiums for every 2 years to keep
the policy in force.
f ) F r e e l o o k period: Bi r l a S u n L i fe w a s t h e f i rst
c o m p a n y i n I n d i a t o i n tr o d u c e t h e co n ce p t o f f ree
l o o k p e r i o d i n w h i c h t h e cu s t o m e r u p o n receiving
t h e p o l i c y d o c u m e n t i s g i v e n t i m e o f 15 days,
d u r i n g w h i c h h e co u l d r e tu r n t h e p o l i c y t o B i r l a Sun
Life, i f h e ch a n g e s h i s m i n d . I n t h a t ca s e t h e entire
money what the customer had paid to company will
be paid ba ck to him.
D. Pricing strategy:
b) B i r l a S u n l i f e p r o d u c t s h a v e t h e l e a s t
mortality
charges in the market.
M P BIRLA INSTITUTE OF MANAGEMENT 49
c) Birla Sun l i fe has the least Fund Management
charges in the market.
S y st e m s i n BSLI:
I n ve n t o r y co n t r o l S y s t e m i n BSLI:
From the head quarters situated at Mumbai, to
every branch in India, inventory l ike product brochures, applications,
etc., are dispatched. At the local level a count of all these is
maintained to minimize wastage.
M e r it R a t i n g S y st e m in BSLI :
F o r e a c h i n d i vi d u a l i n t h e o r g a n i z a t i o n t h e r e i s a
par ti cular team in Human Re source Department which
monitors every individual performance on certain
parameters. Based on that the individual is promoted or
demoted.
U n d e r w r i t i n g S ys t e m in BSLI:
Introduction:
T o u n d e r w r i t e m e a n s to a s s e s s a n d a p p r o v e an
a p p l i c a t i o n f o r co v e r a g e t h u s a c ce p t i n g l i a b i l i t y should
a l o s s occur?
1 . A cc e p t t h e p ro p o s a l a t t h e company’ s
published
r a t e s f o r t h e p la n a n d t e r m OR
2 . A cc e p t o n mo d i f i e d te r m s s u b je c t t o additional
financial or more detailed medical examination OR
4 . D e c l i n e t h e case.
Staff in BSLI:
ACTUARY:
A n e f f i c i e n t a n d su c c e s s f u l l i f e i n s u r a n ce business
is dependent on ke y functions of r i sk management.
O u t te a m o f p r o f e s si o n a l a c t u a r i e s i s a m o n g the
b e s t i n t h e i n d u s t r y a n d i s d e d i ca t e d t o c r e a t e sound
r i s k a s s e s s m e n t a n d p r i c i n g structure.
UNDERWRITING:
The underwriting team performs the key function of
assessing the r isk on world class underwriting
standards. The team along with a nationwide panel of
Medical Evidence Providers acts as the backbone of the company.
CLIENT SERVICING:
I t se r v i ce s an existing base of o ve r 10 lakh
PRODUCT DEVELOPMENT:
A team dedicated to conceptualizing, product
features, s e t u p t h e i m p l e m e n t a t i o n a n d l e a d i t t o the
HUMAN RESOURCE:
In an ever grow ing and expand ing company the key
r o l e o f r e cr u i t i n g a n d r e ta i n i n g t h e r i g h t t a l e n t and
efficient performance management system i s a crucial
differentiator between a leader and any other company.
I M P L E M E N T A T I O N A D M I NI S T R A T I O N & CONTROL:
BSLI is the f i rst company in the insurance industry to
implement “ BCP – Business Continuity Plan” to take care of any
disaster which can strike the organization. Under this plan, all the
critical business data is mapped off- site to another Birla Sun Life
Insurance location in another city. In case of any disaster, the BSLI
team can be up and running in less than 12 hours.
INFORMATION TECHNOLOGY:
Strengths:
1) ) B i r l a S u n L i f e I n s u r a n ce i s t h e o n l y c o m p a n y t o give
3 % guarantee on investments in ULIPS.
2) ) T h e l a r g e p r o d u c t l i n e o f B S L I catering to the
needs o f c u s t o m e r s o f d i f f e r e n t a g e a n d r i s k a p p e t i t e
h a s been strength of BSLI For example,
a) People who are looking for more returns can invest
m a x i m u m p e r c e n t a g e i n equities.
b ) P e o p l e w h o a r e l o o k i n g f o r s a fe r e t u r n s c a n invest
into govt. securities and nominal percentage of
equities.
c) A s B S L I i n v e s t t h e i r f u n d i n d i ve r s i f i e d p o r t f o l i o so
t h e r i s k i s low.
Weaknesses:
1 ) I n t h i s i n d u s t r y cu s t o m e r i s s u p r e m e a n d revenues a r e
d i r e c t l y d e p e n d e n t o n t h e n u m b e r o f cu s t o m e r s BSLI c a n
get insured. This requires BSLI to have very
e f fe c t i v e a d v e r t i si n g s t r a t e g y so a s to p o p u l a r i ze their products
among the masses. BS L I is found lacking in
t h i s d o m a i n w h e r e e v e n t h o u g h t h e i r p o l i c i e s a r e as
p o w e r f u l a s a n y o th e r compe ti tor s, t h e i r advertising
s t r a t e g y i s n o t a t a l l effective.
3 ) B i r l a S u n L i f e doesn’ t h a v e a fu n d t h a t i n v e s t s 100
p e r ce n t i n to equities. S o a c u s t o m e r w h o w o u l d l i ke to
Opportunities:
3 ) T h e g r o w i n g kn o w l e d g e a b o u t U L I P S a m o n g people
would only mean that BSLI has grater opportunities to grow in coming
years.
Threats:
1) ) Directly the co m p a n y shall h a ve to face the
onslaught of LIC. The large customer base,
accumulated funds, well- e stab l i sh e d m a r ke t i n g
m a c h i n e r y etc.
2) ) T h i s is just half of the story; there would be
the r e c e n t l y “ o f f – the- b l o c k insurers” w h o w o u l d b e
coming o u t w i t h a v a r i e t y o f p r o d u c t variations. Many
o f them w i t h p a r a l l e l f i n a n c i a l a c t i vi t i e s a n d s i m i l a r
products. J u s t t o name few: ICICI – Prudential,
HDFC- Standard
M P BIRLA INSTITUTE OF MANAGEMENT 57
T h e se n e w e r c o m p e t i t o r s a r e l i ke l y t o b e aggressive
a n d innovative. T h i s d i r e c t compe ti tion , o n t h e f l i p side,
co u l d r e su l t i n m a r ke t expansion. T h e C o m p a n y shall
a l s o b e f a ci n g c o m p e t i t i o n i s m o r e damaging. Indirect
competition show s up in terms of other f inancial
i n s t r u m e n t s l i ke B a n k FSs, PPF, NSCs, ULIP, Stocks
land other similar savings instruments
Achievements:
1 ) Recruitment policies:
The recruitment is carried out f rom internal are: both external &
1. . Present
employees 2 .
E m p l o ye e referrals 3 .
Former employees.
E x t e r n a l Sources:
The following external sources are: 1 .
Campus recruitment
2. . P r i n t media
3. . E l e c tr o n i c media
2 ) Selection
Selection is carried out in three major stages: 1 .
Preliminary interview
2. . S e l e c t i o n test
3. . H R Interview
4 ) SALARY
Attractive salaries and other extra incentives based on their
performance.
5 ) Reimbursement policy
R e i m b u r s i n g t h e t e l e p h o n e a n d , e l e c t r i c i t y b i l l s etc.
6 ) Leave policy
Gi vi n g l e a v e s i n ce r t a i n o c ca s i o n s a n d e ve n t o u r offers
t o e m p l o y e e s t o f o s t e r i n t e r e s t i n t h e m fo r organization.
Recruitment process
Right people at the r ight place at the r ight t ime plays a
major role in the recruitment process in any
organization. B e c a u s e o f e x t r e m e co m p e t i t i o n i n today’ s
world, o r g a n i z a t i o n s n e e d t o h a v e a ve r y e f f i c i e n t and
e f fe c t i v e r e c r u i t m e n t process, w h i c h s a ve s t i m e a n d in
t u r n r e s u l t s i n r e d u c i n g t h e co s t o f r e c r u i t m e n t process.
Internal recruitment
I n te r n a l r e c r u i t m e n t seeks, a p p l i ca n t s f o r t h e positions
t h o s e w h o a r e c u r r e n t l y employed. I n t e r n a l sources
i n c l u d e p r e se n t employees, e m p l o y e e referrals,
former employees and former applicants .
There are three major advantages of internal
recruitment.
1 Firstly, i t is less costly that external recruitment.
2 Secondly, organizations t y p i ca l l y have a better
knowledge of the internal candidate’ s . skills and
abilities than the ones acquired through external
recruiting.
3 Thirdly, an o r g a n i z a t i o n p o l i c y o f p r o m o t i n g f rom
w i t h i n ca n e n h a n c e employee’ s morale, organizational
commitment and job satisfaction. Good performance is rewarded
T h e r e a r e f e w d i sa d va n ta g e s o f i n t e r n a l recruitment.
Orientation
O r i e n ta t i o n i s a l s o c a l l e d induction, i s d e s i g n e d to
p r o vi d e a n e w e m p l o ye e w i t h t h e i n f o r m a t i o n h e o r she
n e e d s t o f u n c t i o n co m f o r t a b l y a n d e f f i ci e n t l y i n the
organization .
Purpose of orientation
O r g a n i z a t i o n s a r e o f t e n kn o w n t o s p e n d f e w w e e k s or even
months on orientation programme the idea is to
make the employee feel at home. In the new
e n v i r o n m e n t i t i s w e l l kn o w n f a c t t h a t e m p l o y e e s feel
a n x i o u s o n e n t e r i n g i n organization, i n d u c t i o n i s a
method to redu ce this anxiety.
H u m a n R e s o u r c e D e v e lo p m e n t g o a ls include
1 ) D e v e l o p t h e i n d i v i d u a l t o r e a l i z e h i s p o te n t i a l a s an
i n d i v i d u a l t o th e m a x i m u m extent;
2 ) D e v e l o p t h e individual’ s c a p a b i l i t i e s t o p e r fo r m
his
present job better;
3 ) D e v e l o p t h e ca p a b i l i t i e s t o h a n d l e f u t u r e l i ke l y
H R D Instruments, P r o ce s s e s a n d Outcomes
H u m a n R e s o u rc e s I n f o r ma t io n System
Human resources information or Management
Information systems ( MIS) helps in determining
organization’ s major human resources needs strategies
and philosophies.
HR PRINCIPLES
T h e o r g a n i z a t i o n b e l i e v e s t h a t d e ve l o p m e n t o f employee
i s i n i t s o w n interest. T h e o r g a n i za t i o n w i l l provide
opportunities and conditions for the development and
optimization of human resources.
1. . T h e m a n a g e m e n t i s willing to invest adequate t
ime and resour ces for the development of the
employees and personally participate in the
develop ment.
2. . Manager s have concer n for grow th of subordinates.
3. . Employees are willing to a va i l of given
opportunities for growth and receive such help from the
managers as may be necessar y for this development and
improving
M P BIRLA INSTITUTE OF MANAGEMENT 75
The main objective of the HRD department is to create a
l e a r n i n g e n v i r o n m e n t a n d d e ve l o p m e n t c l i m a te i n the
organization. By learning environment is meant a
cu l t u r e w h e r e e m p l o ye e s c o n t i n u o u s l y l e a r n f r o m their
o w n e xp e r i e n c e a n d t h e va r i o u s l e a r n i n g oppor tuni tie s
t h e o r g a n i za t i o n provides. T h e H R D d e p a r t m e n t should
crea te an . enabling Culture ca lled Appolo Cul ture where
t h e e m p l o ye e s a r e a b l e t o m a k e t h i n g s h a p p e n a n d in
t h e p r o c e s s d i sco ve r a n d u t i l i z e t h e i r potential.
The most f requently used instruments are the following:
Performance Appraisal
Performance Appraisal data forms basi s for decisions
f o r d e ve l o p i n g t h e p o t e n t i a l e m p l o y e e fo r higher. Level
jobs and is basis for feedback and counseling. Performance
Appraisal data indicates the job t raining needs of each individual
the main appraisal method used by Birla Sun Life is 360 degree
T h e r e a r e t w o m a j o r w a y s o f p e r f o r m a n c e appraisal
1 ) Past- o r i e n t e d methods
2 ) Future- orient ed methods
Each group has several techniques. Some of them are
e x p l a i n e d i n th e f o l l o w i n g Section.
The term use d to describe a performance rating that
f o c u se s o n sp e c i f i c b e h a v i o r s o r se t s a s i n d i ca to r s of
e f fe c t i v e o r i n e f f e c t i ve perfor mance , r a th e r t h a n on
S y st e m o f appraisa l
Employee benefits:
Employee benefits and services include any benefits
that an employee receives in addition to direc
t
remuneration. Employee benefits embrace a
broad
r a n g e o f b e n e f i t s a n d se r v i ce s t h a t e m p l o y e e s receive
a s a p a r t o f t h e i r l o ca l co m p e n sa t i o n package. Pa y and
d i r e c t l y com p en sa tio n s i t i s b a s e d o n c r i t i ca l j o b factors
a n d per forman ce. B e n e f i t s a n d services, however, are
indirect compensation because they are usually
intended as a condition of employment and o r not
C a r e e r P l a n n i n g ( CP)
C a r e e r P l a n n i n g d a t a a r e u se d f o r h u m a n resources
a u d i t s a n d ca r e e r p l a n n i n g a n d h e l p i n conducting
research on promotion patterns for Organization
Development programmers.
Rewards
P e r f o r m a n ce D a t a i s u s e d f o r r e w a r d s a n d r e w a r d data
are entered for development
Grievance
Grievance procedure is one of the techniques of
r e so l vi n g disputes. A l l l a b o r a g r e e m e n t s co n t a i n some
form of grievance procedure. And i f people follow i t
s t r i c t l y a n y d i s p u te c a n b e r e s o l v e d ve r y easily. Terms
w h i ch g i v e r i se t o g r i e va n c e s is:
1) ) V i o l a t i o n o f law
2) ) V i o l a t i o n o f c o m p a n y rules
3) ) V i o l a t i o n o f h e a l t h a n d s a fe t y measures
4) ) A c h a n g e in w o r ki n g co n d i t i o n or past company
practices
5) ) V i o l a t i o n o f t h e i n te n t o f t h e p a r t i e s a s stipulated
d u r i n g c o n t r a c t negotiations.
T h e r e a r e f e w o th e r t e ch n i q u e s a v a i l a b l e a s collective
bargaining and code of discipline.
PERFORMANCE APPRAISAL
P e r f o r m a n ce a p p r a i s a l m a y b e d e fi n e d a s a structured
formal interaction b e tw e e n a subordinate and
supervisor, t h a t u su a l l y t a ke s th e fo r m o f a periodic
i n te r vi e w ( a n n u a l o r semi- annual), i n w h i ch t h e work
performance of the subordinate is examined and
discussed, w i t h a vi e w t o i d e n t i f y i n g w e a kn e s se s and
s t r e n g t h s a s w e l l a s o p p o r t u n i t i e s f o r i m p r o v e m e n t and
Basic Purposes
Effective performance appraisal systems contain two basic systems
operating in conjunction: an evaluation system and a feedback
system.
The main aim of the evaluation system is to identify the performance
gap ( i f any).
T h i s g a p i s t h e sh o r t f a l l t h a t o c c u r s w h e n performance
d o e s n o t m e e t t h e s t a n d a r d se t b y t h e o r g a n i za t i o n as
acceptable. T h e m a i n a i m o f t h e f e e d b a c k s y s t e m i s to
i n f o r m t h e e m p l o y e e a b o u t t h e q u a l i t y o f h i s o r her
performance.
Employee Viewpoint:
From the employee viewpoint, the purpose of
pe r fo r ma n ce a p p r a i s a l i s four- fold:
( 1 ) Tell me what you want me to do
( 2 ) Tell me how well I have done i t
(3) ) Help me improve my performance
(4) ) Reward me for doin g well.
Organizational Viewpoint:
F r o m th e organi za tion ' s viewpoint, o n e o f t h e most
important reason s for having a system of performance
a p p r a i s a l i s to e s t a b l i s h a n d u p h o l d t h e p r i n c i p l e
of accountability.
For decades i t has been known to resear chers that one
o f t h e c h i e f ca u s e s o f o r g a n i z a t i o n a l f a i l u r e i s " non-
alignment of responsibility and accoun tabi lity. "
Nonalignment occurs where employees are given
r e s p o n si b i l i t i e s a n d duties, b u t a r e n o t h e l d accountable
F o r m a l v e r s u s In f o r ma l
ap praisa l
Formal appraisals usually occur at specified t
ime
periods- o n c e o r t w i c e a year. O r m a l a p p r a i s a l s a r e most
o f te n r e q u i r e d b y t h e o r g a n i za t i o n f o r t h e p u r p o se
of employee evaluation. Informal performance appraisal
ca n o c cu r w h e n e v e r t h e s u p e r vi s o r f e e l s t h e n e e d s
for communication. Man y organizations en courage a f
ixture o f b o t h f o r m a l a n d i n f o r m a l appraisals. The
formal a p p r a i s a l i s m o s t o f t e n se e d a s p r i m a r y
evaluation. However, t h e i n f o r m a l a p p r a i s a l i s ve r y
h e l p f u l f o r more performance feedback. Informal
appraisals should not take pla ce of formal Performance
evaluation
Problems of rating
P e r f o r m a n ce a p p r a i s a l s a r e su b j e c t to a w i d e va r i e t y
of inaccuracies a n d b i a se s r e fe r r e d t o a s . r a t i n g errors..
These errors occur in the rater’ s observations,
judgments, and information processing, and can
seriously affect assessment
Results: The most common rating errors are
1 ) L e n i e n c y o r severity
2 ) Central tendency
Methods of Appraisals
T h e l a s t t o b e a d d r e s s e d i n t h e p r o ce s s o f d e s i g n i n g an
appraisal programme is to determine method( s) of
evaluation. N u m e r o u s m e t h o d s h a ve b e e n d e vi s e d to
measure the quantity a n d q u a l i t y o f employee’ s job
performance.
E a ch o f t h e m e t h o d s d i s cu s s e d co u l d b e e f f e c t i v e for
some purposes, for some organizations. None should be dismissed or
accepted as appropriate except as they
Forced Distribution
The term used to describe an appraisal system similar to grading on a
curve.
T h e e v a l u a to r s a r e a s ke d t o r a te e m p l o y e e s i n some
f ixed distribution of categories. One wa y to do this is to
type the name o f each employee on a card and ask the
e va l u a to r s t o s o r t t h e ca r d s i n t o p i l e s co r r e sp o n d i n g to
rating.
Ranking
The term ranking has been used to describe an
alternative method of performance appraisal where the
su p e r vi so r has been asked to order his or her
e m p l o ye e s i n t e r m s o f p e r f o r m a n c e f r o m h i g h e s t to
lowest.
Weighted Checklist
The term used to describe a performance appraisal
method where su p e r v i so r s or personnel specialists
f a m i l i a r w i t h t h e j o b s b e i n g e v a l u a t e d p r e p a r e d a large
l ist of descriptive statements about effective and
i n e f fe ct i ve b e h a v i o r o n jobs.
F i n d i n g s o f th e S t u d y
1 ) I t can be i nferred by t he study tha t the employe es are aware of
the present Performance appraisal System followed in the
company.
2 ) Most of the executives are satisfied with the
performance appraisal system followed in the
company. This shows that the present performance
appraisal system is satisfactory
3 ) Further improvement in th e sys tem c an be made i n
order to attain full satisfaction of the
employees/ e xe cu ti ve s o f t h e company.
4) ) Greater part a grees t hat th e perfo rmance s
tandards set are clear and achievable..
5) ) M a j o r i t y of the employees f a vo r e d t raining for
the a p p r a i s e r s t o c a r r y a p p r a i sa l programme..
6) ) In r e sp o n s e to the company spending of
con sider able t ime and attention for the performance
appraisal system, most of the employees felt that the
company sp e n d s th e n e c e s sa r y t i m e a n d a t t e n t i o n i n
following
I R D A u s e t r a d i t i o n a l m o d e o f t r a i n i n g and
m a r k e t i n g w h i c h s h o u l d b e r e p l a ce d w i t h t h e u s e
of latest e m e r g i n g technologies.
Regular feedback is recommended to know the l ike & dislike
and also expectations of the Customers.
Proper weightage should be given to improve the
communication skill of the advisors so as to improve
customer relations.
D u r i n g t r a i n i n g t o a d vi s o r s i m p o r t a n c e s h o u l d be
g i v e n to p r o v i d e th e m o s t i m p o r t a n t i n f o r m a t i o n to
them l ike making well aware about the products
of their organization.
Marketing materials received before the
advisor reaches the customer should add value to the
product preparing more awareness in customers.