EXECUTIVE SUMMARY "If you want 10 days of happiness, grow grain. If you want 10 years of happiness, grow a tree. If you want 100 years of happiness, grow people."

OBJECTIVE OF THE STUDY The phenomenal expansion of insurance sector: The major insurance companies in our country have expanded their branches phenomally in the last few decades. Also, many new insurance companies are being established all over the country. The objective of the study is therefore, to examine the insurance companies, their functioning and asses their viability. IMPORTANCE OF THE STUDY

The need to make profits: commercial organization.

Profits are essential for the survival and growth of every

Increasing emphasis on profitability: The profitability aspect of the insurance companies has gotten a lot of attention in the recent years. Employee satisfaction: Along with the increasing emphasis on profitability, employee satisfaction has also been generating considerable interest. This study has thus been undertaken to examine the importance human resource management in insurance companies.

HYPOTHESIS STAEMENT Investments in HRM practices can help a firm perform better.

INTRODUCTION Competitive advantage of a company can be generated from human resources (HR) and company performance is influenced by a set of effective HRM practices. In this study, we intended to assess the HR practices in insurance companies Every organization is composed of people and utilizing their services, developing their skills, motivating them to enhance their levels of performance and ensuring that they remain committed to the organization are essential for the accomplishment of organizational objectives. This is true for all types of organizations - government, business, education, health, recreation or social action. Organizations that can do this will be both effective as well as efficient. Inefficient or ineffective organizations face the danger of stagnating or going out of business. The emphasis on proper and effective human resource management has increased in the recent

times. It has come to be identified as an important factor in the successful management of an organization. With the growing importance of knowledge workers to organizations and the rising expectations of employees, it is essential to have a good human resource management system in place. Human Resource Management (HRM) consists essentially of four functions – acquiring, developing, motivating and retaining human resources. The acquisition function starts with planning for the number and categories of employees required, and end with staffing. The development function has three dimensions – employee training, management development, and career development. The motivation function includes identifying the individual motivational needs of employees and finding ways to motivate them. The retention function is concerned with providing a work environment conducive to the employees and nurturing them to make them feel committed and attached to the organization. Human resources are the most valuable and unique assets of an organization. The successful management of an organization's human resources is an exciting, dynamic and challenging task, especially at a time when the world has become a global village and economies are in a state of flux. The scarcity of talented resources and the growing expectations of the modern day worker have further increased the complexity of the human resource function. Even though specific human resource functions/activities are the responsibility of the human resource department, the actual management of human resources is the responsibility of all the managers in an organization. It is therefore necessary for all managers to understand and give due importance to the different human resource policies and activities in the organization. Human Resource Management outlines the importance of HRM and its different functions in an organization. It examines the various HR processes that are concerned with attracting, managing, motivating and developing employees for the benefit of the organization.

The insurance sector employers are indulging into aggressive recruitments. With around 15 million new policies being sold every year, the insurance sector is picking up fast in India. Due to its robust growth there is a need of skilled professionals in the sector. The employers are looking forward to hire fresher’s at junior levels as they are quite flexible and ready to work as part time employees as well. Apart from hiring actuaries and underwriters, the industry is focusing on hiring agents. These agents represent the front end of the customer chain and are responsible for bringing in new business.

INSURANCE SECTOR: AN INTROSUCTION Insurance is a form of risk management primarily used to hedge against the risk of a contingent loss. Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for a premium, and can be thought of as a guaranteed and known small loss to prevent a large, possibly devastating loss. An insurer is a company selling the insurance; an insured or policyholder is the person or entity buying the insurance. The insurance rate is a factor used to determine the amount to be charged for a certain amount of insurance coverage, called the premium. The six principles of insurance are:
1. Indemnity – Insurance is a contract of indemnity where the insurance company

indemnifies the insured against certain risks for a consideration known as premium.
2. Insurable interest – means the loss of which will directly affect the insured. 3. Utmost good faith – means that the insured and the insurance company will not willfully

hide anything from each other.

4. Mitigation – means the insured will not behave irresponsibly and will take due care so

that the risk of loss or the loss is minimized.
5. Subrogation – means the insurance company acquires legal rights to act on behalf of the

insured i.e. the insurance company steps into the shoes of the insured.
6. Causa Proxima or Proximate Cause – means the proximate cause of loss to ascertain

whether the loss is covered under the policy.

HISTORY OF INSURANCE SECTOR IN INDIA The history of Insurance in India started with life insurance in 1818 when it was conceived as a means to provide for English Widows. Interestingly in those days a higher premium was charged for Indian lives than the non-Indian lives as Indian lives were considered more risky for the coverage. The Bombay Mutual Life Insurance Society started its business in 1870. It was the first company to charge same premium for both Indian and non-Indian lives. The Oriental Assurance Company was established in 1880. The General Insurance Business in India, on the other hand, can trace its roots to the Triton (Tital) Insurance Company Limited, the first general insurance company established in the year 1850 in Calcutta by the British. Till the end of nineteenth century insurance business was almost entirely in the hands of overseas companies. Insurance regulation formally began in India with the passing of the Life Insurance Companies Act of 1912 and the provident fund Act of 1912. Several frauds during 1920's and 1930's sullied insurance business in India. By 1938 there were 176 insurance companies. The first comprehensive legislation was introduced with the Insurance Act of 1938 that provided strict State Control over insurance business. The insurance business grew at a faster pace after independence. Indian companies strengthened their hold on this business but despite the growth that was witnessed, insurance remained an urban phenomenon.

INSURANCE JOB DESCRIPTION The insurance job description which is generally assigned to people working in the insurance industry is given below:

To handle all the affairs of the customer related to the policies or the services offered by the insurance company and to resolve any conflicts arising if any.

To work for insurance company or several insurance companies and finding clients in order to create awareness about the insurance policies that the insurance company has to offer.

The job responsibility may include finding out if the claim made by the client for insurance cover warrantees insurance or not. To investigate whether all the premiums were paid on time and whether the claim made falls in the particular insurance policy. To meet potential customers and sell them the insurance policies being offered by the insurance company.

Competencies required for job in insurance Any Insurance job seeker must possess the following set of skills:

Public Speaking: A good insurance professional should have strong communication as well as public speaking skills. Computer knowledge: Basic knowledge of computers including Microsoft Word, WordPerfect, Outlook, Excel, PowerPoint, Tally etc would prove to be an asset. People skills: An Insurance professional should be able to communicate as well as interact with other working professional including colleagues as well as clients of the company.

Organisational skills: As an insurance job includes organizing work it is necessary to have good skills in this department.


“Human resource management (HRM) is planning personnel needs; recruiting, selecting, training, and developing capable employees; placing them in productive work environments; and rewarding their performance. “ Thus, human resource management refers to a set of programmes, functions and activities designed and carried out to maximize both, employee as well as organizational effectiveness. It is concerned with the people dimensions in the management. Since every organization is made up of people, acquiring their services developing their skills motivating them to higher levels of performance and ensuring that they continue to maintain their commitment to the organization are essential to achieving organizational objectives. This is true, regardless of the type of organization -government, business, education, health, recreation or social actions.

Human resource is one of the natural resources of any country's economy. It is the wealth of the country. In the context of banking, human resource is of greater importance. The deployment of human resource through proper and efficient selection, training and development, is called Human Resource Management. The success of any organization largely depends on efficient human resource management, apart from operations, marketing and sales, the HR department manages all the efficient people working in operations and marketing divisions in any organization. Thus, HRM refers to a set of programmes, functions and activities designed and carried out in order to maximize both employees as well as organizational effectiveness. Human resource management is based on four fundamental principles: 1. Human resources are the most important assets important assets an organization has and their effective management is the key to its success. 2. Organizational success is most likely to be achieved if the personnel policies and procedures are closely linked to corporate and strategic plans.

3. Organizational culture, values and climate significantly influence managerial behavior and exert a major influence on the achievement of excellence. Hence, continuous effort is needed starting from the management in order to make the organisational culture acceptable. 4. Human resource management is concerned with integrating all members of the organization involved and working together with a sense of common purpose.

An organization is driven by human capital and the quality and effectiveness of the organization is determined by the quality of the people that are employed. The resources of men money

material and machine are collected and coordinated through people. Without people organization can not exist. Success for most organizations depends on finding the employees with the skills to successfully perform the tasks required to attain the company’s strategic goals. Management decisions and processes for dealing with employees are critical to ensure that the organization gets and keeps the right staff. HRM may be defined as a set of policies practices and programs designed to maximize both personal and organizational goals and the process of binding people and organizations together so that the objectives of the each are achieved.

Some definitions of HRM are as follows “HRM is the management function that is concerned with getting, training, motivating and keeping competent employees.” “HRM is a most advanced approach in the field of resource mgmt. talks about optimal utilization of human capital. The approach is integrative and supportive.” “HRM does talk about the cultivation of a skillful environment in which people or employee associate are able to extract their highest potential.” HRM deals with the day to day operations of the human resources department. This curriculum would include business law, compensation, employee relations, benefits, and medical etc. Human Resource Management ("HRM") is a way of management that links people-related activities to the strategy of a business or organization. HRM is often referred to as "strategic HRM". It has several goals: • To meet the needs of the business and management (rather than just serve the interests of employees);

• • •

To link human resource strategies / policies to the business goals and objectives; To find ways for human resources to "add value" to a business; To help a business gain the commitment of employees to its values, goals and objectives

OBJECTIVES OF HRM 1. SOCIETAL- To be ethically and socially responsible to the needs and challenges of the society. 2. ORGANIZATIONAL-To bring organizational effectiveness and serve other departments. 3. FUNCTIONAL- To do the optimal utilization of the resources and respond to the need of the organization. 4. PERSONAL-To assist employees in achieving their personal goals to motivate and retain them thereby, enhancing the individual’s contribution to the organization.

DEFINITION OF HRD HRD DEALS WITH DEVLOPMENT & UPGRADATION OF HUMAN CAPITAL (EXSISTING MAN POWER’S UPGRADATION IN AN ORGANISATION).IT IS A LONG TERM PROCESS. HRD can be defined as ‘A Set of systematic and planned activities designed by an organization, to provide its members with the necessary skills to meet current and future job demands’. It is a part of HRM. Thus, Human Resource Development deals with the training and the developmental aspect of employees.

HRM IN INSURANCE Under present market forces and strict competition, the insurance companies are forced to be competitive. Contemporary companies must seek ways to become more efficient, productive, flexible and innovative, under constant pressure to improve results. The traditional ways of gaining competitive advantage have to be supplemented with organizational capability i. e. the firm’s ability to manage people. Organizational capability relates to hiring and retaining competent employees and developing competencies through effective human resource management practices. Indeed, developing a talented workforce is essential to sustainable competitive advantage. High performance work practices provide a number of important sources of enhanced organizational performance. HR systems have important, practical impacts on the survival and financial performance of firms, and on the productivity and quality of work life of the people in them. Objectives and Importance of the Study Liberalization in the Indian insurance sector has opened the sector to private competition. The insurance industry forms an integral part of the global financial market, with insurance companies being significant institutional investors. In recent decades, the insurance sector, like other financial services, has grown in economic importance. A number of foreign insurance companies have set up representative offices in India and have also tied up with various asset management companies.

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

FUNCTIONS OF HRM IN INSURANCE HRM consist of several interrelated functions. These functions are common to all organization.

1.) Human Resource Planning George Bernard Shaw said: ‘to be in hell is to drift; to be in heaven is to steer’.

Human resource planning has traditionally been used by organizations to ensure that the right person is in the right job at the right time. Human resource planning can be defined as the process by which management determines how the organization should move from its current manpower position to its desired position. Through planning, management strives to have the right number and the right kinds of people, at the right places, at the right time, doing things which result in both the organization and the individual receiving maximum long-run benefits. Factors Underlying Increased Interest in Human Resource Planning Undoubtedly, there are many factors that account for the increased attention directed to human resource planning, but environmental forces-globalization, new technologies, economic conditions, and a changing work force seem particularly potent. These create complexity and uncertainty for organizations. Uncertainty can interfere with efficient operations, so organizations typically attempt to reduce its impact; formal planning is one common tactic used by organizations to buffer themselves from environmental uncertainty.

The Process of Human Resource Management Planning The human resource planning process, demands the HR manager to first understand the business requirement. Only if he comprehends the nature and scope of the business, will he be able to employ those who will deliver the required performance. When it comes to engaging the manpower, the manager should have a keen eye for spotting the talent. It ensures that the workforce is competent enough the meet the targets. Additionally, the existing 'talent pool' in the workplace should be taken into consideration, so that people with complimentary skills can be employed. The functions of the HR manager are varied; he has to assess the currently employed workforce and their shortcomings. Identifying these shortcomings goes a long way in choosing an efficient workforce. Human resource planning process, thus, can be considered as one of the strategic steps for building the strong foundation of an efficient workforce in an organization


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

How can output be improved your through understanding the interrelation between productivity, work organisation and technological development? What does this mean for staff numbers?

• • •

What techniques can be used to establish workforce requirements? Have more flexible work arrangements been considered? How are the staffs you need to be acquired?

The principles can be applied to any exercise to define workforce requirements, whether it be a business start-up, a relocation, or the opening of new factory or office.

2. Retaining your highly skilled staff Issues about retention may not have been to the fore in recent years, but all it needs is for organisations to lose key staff to realise that an understanding of the pattern of resignation is needed. Thus organisations should:
• • • •

monitor the extent of resignation discover the reasons for it establish what it is costing the organisation compare loss rates with other similar organisations.

Without this understanding, management may be unaware of how many good quality staff is being lost. This will cost the organisation directly through the bill for separation, recruitment and induction, but also through a loss of long-term capability. Having understood the nature and extent of resignation steps can be taken to rectify the situation. These may be relatively cheap and simple solutions once the reasons for the departure of employees have been identified. But it will depend on whether the problem is peculiar to your own organisation, and whether it is concentrated in particular groups (e.g. by age, gender, grade or skill).

3. Managing an effective downsizing programme This is an all too common issue for managers. How is the workforce to be cut painlessly, while at the same time protecting the long-term interests of the organisation? A question made all the harder by the time pressures management is under, both because of business necessities and employee anxieties. HRP helps by considering:
• • • • •

the sort of workforce envisaged at the end of the exercise the pros and cons of the different routes to get there how the nature and extent of wastage will change during the run-down the utility of retraining, redeployment and transfers what the appropriate recruitment levels might be.

Such an analysis can be presented to senior managers so that the cost benefit of various methods of reduction can be assessed, and the time taken to meet targets established. If instead the CEO announces on day one that there will be no compulsory redundancies and voluntary severance is open to all staff, the danger is that an unbalanced workforce will result, reflecting the take-up of the severance offer. It is often difficult and expensive to replace lost quality and experience.

4. Where will the next generation of managers come from? Many senior managers are troubled by this issue. They have seen traditional career paths disappear. They have had to bring in senior staff from elsewhere. But they recognise that while this may have dealt with a short-term skills shortage, it has not solved the longer term question of managerial supply: what sort, how many, and where will they come from? To address these questions you need to understand:

the present career system (including patterns of promotion and movement, of recruitment and wastage)

• •

the characteristics of those who currently occupy senior positions the organisation’s future supply of talent.

This then can be compared with future requirements, in number and type. These will of course be affected by internal structural changes and external business or political changes. Comparing your current supply to this revised demand will show surpluses and shortages which will allow you to take corrective action such as:
• • • • •

recruiting to meet a shortage of those with senior management potential allowing faster promotion to fill immediate gaps developing cross functional transfers for high fliers hiring on fixed-term contracts to meet short-term skills/experience deficits reducing staff numbers to remove blockages or forthcoming surpluses.

How can HRP be applied? The report details the sort of approach companies might wish to take. Most organisations are likely to want HRP systems:
• • • • • •

which are responsive to change where assumptions can easily be modified that recognise organisational fluidity around skills that allow flexibility in supply to be included that are simple to understand and use which are not too time demanding.

To operate such systems organisations need:
• •

appropriate demand models good monitoring and corrective action processes

• • •

comprehensive data about current employees and the external labour market an understanding how resourcing works in the organisation.

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


Organizing resources can mean a variety of things. First, the manager is in charge of organizing human resources. For example, a manager will need to be sure the appropriate employees are hired. In addition, it is the manager’s responsibility to ensure the employees have the skills necessary for the workplace. Organizing these employees, according to when they are needed and how they are utilized, is a critical part of the manager’s position.

Organizing Occurs Continuously Organizing is a daily, weekly and yearly task for most managers. In today’s fast-paced business world, things change quickly and variations occur. Managers must remember that the

organizational component is fluid and forever-changing. Flexible managers are able to change courses when necessary and still meet the client’s needs. Change is inevitable. For firms that experience change frequently, the organizing function is even more crucial. Organizational changes such as adding new positions or eliminating certain processes can change the organizational level and structure of the business. Importance of Organization People who are organized generally accomplish much more than disorganized individuals. The same is true of organized departments or businesses. Those managers who can master the organization function will enjoy a much smoother tenure in the management position.


Job Analysis is a process to identify and determine in detail the particular job duties and requirements and the relative importance of these duties for a given job. Job Analysis is a process where judgments are made about data collected on a job. The Job; not the person: An important concept of Job Analysis is that the analysis is conducted of the Job, not the person. While Job Analysis data may be collected from incumbents through interviews or questionnaires, the product of the analysis is a description or specifications of the job, not a description of the person.

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

training content assessment tests to measure effectiveness of training equipment to be used in delivering the training methods of training (i.e., small group, computer-based, video, classroom...)

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

skill levels compensable job factors work environment (e.g., hazards; attention; physical effort) responsibilities (e.g., fiscal; supervisory) required level of education (indirectly related to salary level)

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

job duties that should be included in advertisements of vacant positions; appropriate salary level for the position to help determine what salary should be offered to a candidate; minimum requirements (education and/or experience) for screening applicants; interview questions; selection tests/instruments (e.g., written tests; oral tests; job simulations); applicant appraisal/evaluation forms; orientation materials for applicants/new hires

• • • • •

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

goals and objectives performance standards evaluation criteria length of probationary periods duties to be evaluated

Methods There are several ways to conduct a job analysis, including: interviews with incumbents and supervisors, questionnaires (structured, open-ended, or both), observation, critical incident investigations, and gathering background information such as duty statements or classification specifications. In job analysis conducted by HR professionals, it is common to use more than one of these methods.

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

FACTORS AFFECTING JOB DESIGN Job design is affected by organizational, environmental and behavioral factors. A properly designed job will make it more productive and satisfying .If a job fails on this count, it must be redesigned based on the feedback. The various factors affecting job design are the following Organizational factors Organizational factors include characteristics of task, work flow, ergonomics and work practices. Characteristics of Task: Job design requires the assembly of a number of tasks into a job or a group of jobs. An individual may carry out one main task which consists of a number of interrelated elements or functions. On the other hand , task functions may be spilt between a team, working closely together or strung along an assembly line. In more complex jobs, individuals may carry out a variety of connected tasks, each with a number of functions, or these tasks may be allocated to a group of workers or divided between them. . Work Flow: The flow of work in an organization is strongly influenced by the nature of the product or service. The product or service usually suggests the sequence and balance between jobs, if the work is to be done efficiently .After the sequence of jobs is determined, the balance between the jobs is established. Ergonomics: Ergonomics is concerned with designing and shaping jobs to fit the physical abilities and characteristics of individuals so that ,they perform the jobs effectively . Work Practices: Work practices are set ways of performing work .These methods may arise from tradition or the collective wishes of employees. Environmental factors

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


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

Job Evaluation Methods There are three basic methods of job evaluation: (1) ranking, (2) classification, (3) factor comparison. Ranking Method Perhaps the simplest method of job evaluation is the ranking method. According to this method, jobs are arranged from highest to lowest, in order of their value or merit to the organization. Jobs also can be arranged according to the relative difficulty in performing them. The jobs are examined as a whole rather than on the basis of important factors in the job; and the job at the top of the list has the highest value and obviously the job at the bottom of the list will have the lowest value. Classification Method According to this method, a predetermined number of job groups or job classes are established and jobs are assigned to these classifications. This method places groups of jobs into job classes or job grades. Separate classes may include office, clerical, managerial, personnel, etc. The job classification method is less subjective when compared to the earlier ranking method. The system is very easy to understand and acceptable to almost all employees without hesitation. One strong point in favor of the method is that it takes into account all the factors that a job comprises. This system can be effectively used for a variety of jobs. The weaknesses of the job classification method are:

Even when the requirements of different jobs differ, they may be combined into a single category, depending on the status a job carries. It is difficult to write all-inclusive descriptions of a grade. The method oversimplifies sharp differences between different jobs and different grades. When individual job descriptions and grade descriptions do not match well, the evaluators have the tendency to classify the job using their subjective judgments.

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Factor Comparison Method A more systematic and scientific method of job evaluation is the factor comparison method. Under this method, instead of ranking complete jobs, each job is ranked according to a series of factors. These factors include mental effort, physical effort, skill needed, supervisory responsibility, working conditions and other relevant factors. Pay will be assigned in this method by comparing the weights of the factors required for each job, i.e., the present wages paid for key jobs may be divided among the factors weighed by importance (the most important factor, for instance, mental effort, receives the highest weight). In other words, wages are assigned to the job in comparison to its ranking on each job factor. Point method This method is widely used currently. Here, jobs are expressed in terms of key factors. Points are assigned to each factor after prioritizing each factor in the order of importance. The points are summed up to determine the wage rate for the job. Jobs with similar point totals are placed in similar pay grades.


Recruitment is defined as, “a process to discover the sources of manpower to meet the requirements of the staffing schedule and to employ effective measures for attracting that manpower in adequate numbers to facilitate effective selection of an efficient workforce.”

PURPOSE: • • • • • • • • • Determine the present and future requirements of the organization in conjunction with its personnel-planning and job-analysis activities. Increase the pool of job candidates at minimum cost. Help increase the success rate of the selection process by reducing the number of visibly, under qualified or overqualified job applicants. Help reduce the probability that job applicants, once recruited and selected, will leave the organization only after a short period of time. Begin identifying and preparing potential job applicants who will be appropriate candidates. Induct outsiders with a new perspective to lead the company. Infuse fresh blood at all levels of the organization. Develop an organizational culture that attracts competent people to the company. Search for talent globally and not just within the company.


The sources of recruitment may be broadly divided into two categories: 1) INTERNAL SOURDES 2) EXTERNAL SOURCES. Both have their own merits and demerits. INTERNAL SOURCES: Persons who are already working in an organization constitute the ‘internal sources’. Retrenched employees, retired employees, dependents of deceased employees may also constitute the internal sources. Whenever any vacancy arises, someone from within the organization is upgraded, transferred, promoted or even demoted.

EXTERNAL SOURCES: External sources lie outside an organization. Here the organization can have the services of: (a) Employees working in other organizations; (b) Jobs aspirants registered with employment exchanges; (c) Students from reputed educational institutions; (d) Candidates referred by unions, friends, relatives and existing employees; (e) Candidates forwarded by search firms and contractors; (f) Candidates responding to the advertisements, issued by the organization.


Selection is the process of picking individuals who have relevant qualifications to fill jobs in an organisation. The basic purpose is to choose the individual who can most successfully perform the job from the pool of qualified candidates.

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

PURPOSE: The purpose of selection is to pick up the most suitable candidate who would meet the requirements of the job in an organisation best, to find out which job applicant will be successful, if hired. To meet this goal, the company obtains and assesses information about the applicants in terms of age, qualifications, skills, experience, etc. the needs of the job are matched with the profile of candidates. THE PROCESS: Selection is usually a series of hurdles or steps. Each one must be successfully cleared before the applicant proceeds to the next one. The time and emphasis place on each step will definitely vary from one organisation to another and indeed, from job to job within the same organisation. Types of interviews: Several types of interviews are commonly used depending on the nature and importance of the position to be filled within an organization. In a non directive interview the recruiter asks questions as they come to mind. There is no specific format to be followed. In a patterned interview, the employer follows a pre-determined sequence of questions. Here the interviewee is given a special form containing questions regarding his technical competence, personality traits, attitudes, motivation, etc.

In a structured or situational interview, there are fixed job related questions that are presented to each applicant. In a panel interview several interviewers question and seek answers from one applicant. The panel members can ask new and incisive questions based on their expertise and experience and elicit deeper and more meaningful expertise from candidates. Interviews can also be designed to create a difficult environment where the applicant’s confidence level and the ability to stand erect in difficult situations are put to test. These are referred to as the stress interview. This is basically an interview in which the applicant is made uncomfortable by a series of, often, rude, annoying or embarrassing questions. Steps in interview process: Interview is an art. It demands a positive frame of mind on part of the interviewers. Interviewers must be treated properly so as to leave a good impression about the company in their minds. HR experts have identified certain steps to be followed while conducting interviews: • • • • • • Establishing the objective of the interview Receiving the candidates application and resume Keeping tests score ready, along with interview assessment forms Selecting the interview method to be followed Choosing the panel of experts who would interview the candidates Identifying proper room for environment

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

Placement is a process of assigning a specific job to each of the selected candidates. It involves assigning a specific rank and responsibility to an individual. It implies matching the requirements of a job with the qualifications of the candidate.

The significances of placement are as follows: 1) It improves employee morale.

2) It helps in reducing employee turnover. 3) It helps in reducing absenteeism. 4) It helps in reducing accident rates. 5) It avoids misfit between the candidate and the job. 6) It helps the candidate to work as per the predetermined objectives of the organization.


It involves familiarizing the new employees with company, the work environment and existing employees so that the new people feel at home. Once an employee is selected and placed on an appropriate job, the process of familiarizing him with the job and the organization is known as induction. Induction is the process of receiving and welcoming an employee when he first joins the company and giving him basic information he needs to settle down quickly and happily and stars

work. Induction is designed to achieve following objectives: -

1) To give new comer necessary information.

2) To build new employee confidence in the organization. 3) It helps in reducing labor turnover and absenteeism. 4) It reduces confusion and develops healthy relations in the organization. 5) To ensure that the new comer do not form false impression and negative attitude towards the organization. 6) To develop among the new comer a sense of belonging and loyalty to the organization. 7) To help the new comer to overcome his shyness and overcome his shyness nervousness in meeting new people in a new environment. The advantages of formal induction are: 1) Induction helps to build up a two-way channel of communication between management and workers.

2) Proper induction facilitates informal relation and team work among employee.

3) Effective induction helps to integrate the new employee into the organization and to develop a sense of belonging.

4) Induction helps to develop good relation.

5) A formal induction programme proves that the company is taking interest in getting him off to good start.

6) Proper induction reduces employee grievances, absenteeism and labor turnover. 7) Induction is helpful in supplying information concerning the organization, the job and employee welfare facilities.

A formal induction programme should provide following information: 1) Brief history and operations of the company. 2) The company’s organization structure. 3) Policies and procedure of the company. 4) Products and services of the company. 5) Location of department and employee facilities. 6) Safety measures. 7) Grievances procedures. 8) Benefits and services of employee. 9) Standing orders and disciplinary procedures. 10) Opportunities for training, promotions, transfer etc. 11) Suggestion schemes. 12) Rules and regulations


It refers to employers’ systematic evaluation of employees with respect to their performance on the job and their potential for development Performance appraisal means evaluating an employee’s current or past Performance to certain performance standards. Appraisal involves: (i) Setting work standards (ii) Assessing the employee’s actual performance relative to these standards (iii) Providing feedback to the employees with the aim of motivating that person to eliminate deficiencies or to continue to perform above par. Managers usually conduct the appraisal using a predetermined and formal method.

Various methods of appraisal include:a) Graphic rating scale method. b) Alternate ranking method c) Paired comparison method d) Forced distribution method e) Critical incident method f) Narrative forms g) Behaviorally anchored rating scales h) Management by objective (MBO) i) 360 degree feedback.

Graphic rating scale method:- The graphic rating scale method is the simplest and most popular technique for appraising performance. A graphic rating scale lists traits (such as quality and reliability) and a range of performance values (from unsatisfactory to outstanding) for each trait. Subordinates are rated by circling of checking the score that best describes his or her performance for each trait. Then the total of assigned value is calculated. Alternate ranking method: - This method involves ranking employees from best to worst on a particular trait, choosing highest, then lowest until all are ranked. Since it is easier to distinguish between the worst and best employees and alternate ranking is quite popular. First, list all subordinates to be rated. Then indicate the employee who is the highest on the characteristic being measured and also the one who is lowest. The process continues till all the employees are ranked on similar fashion.

Paired comparison method: - Paired comparison method helps make the ranting method more precise. For every trait (quality of work, quality etc), Pairs are made and every subordinate is compared with every other subordinate. Forced distribution method: - Forced distribution method is similar to grading on a curve. With this method, manager place predetermined percentage or rates in to performance categories. For example you may decide to distribute employees as follows: 15% high performance 20% High average performance 30% average performance 20% low average performance 15% low performance Forced distribution means tow things for employee: Not everyone can get an A; and ones performance is always rated relative to ones peers. One practical, one practical, if low-tech, way to do this is to write each

employee’s name on a separate index card. Then for each trait managers place the employee’s card in the appropriate performance category. Critical Incident Method: - Critical incident method involves keeping a record of uncommonly good or undesirable examples of an employee’s work related behavior and reviewing it with the employee at predetermined time. Narrative Forms: - The final written appraisal is often in narrative form. A person’s supervisor is asked (i) to rate the employees performance for each performance factor or skill (ii) to write down examples and (iii) an important plan. This aids the employee to understand where his or her performance was good or bad and how to improve that performance. Behaviorally Anchored Rating Scales is an appraisal method that aims at combining the benefits of narrative critical incidents and quantified ratings by anchoring a quantified scale with specific narrative example of good and poor performance. 11.) TRANING:

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

Within an organization all three are necessary in order to:
• •

Develop workers to undertake higher-grade tasks; Provide the conventional training of new and young workers (e.g. as apprentices, clerks, etc.); Raise efficiency and standards of performance; Meet legislative requirements (e.g. health and safety); Inform people (induction training, pre-retirement courses, etc.);

• • •

Training and development managers and specialists create, procure, and conduct training and development programs for employees. Increasingly, executives recognize that training offers a way of developing skills, enhancing productivity and quality of work, and building worker loyalty. Enhancing employee skills can increase individual and organizational performance and help to achieve business results. Increasingly, executives realize that developing the skills and knowledge of its workforce is a business imperative that can give them a competitive edge in recruiting and retaining high quality employees and can lead to business growth. Other factors involved in determining whether training is needed include the complexity of the work environment, the rapid pace of organizational and technological change, and the growing number of jobs in fields that constantly generate new knowledge and, thus, require new skills. In addition, advances in learning theory have provided insights into how people learn and how training can be organized most effectively. Training managers oversee development of training programs, contracts, and budgets. They may perform needs assessments of the types of training needed, determine the best means of delivering training, and create the content. They may provide employee training in a classroom, computer laboratory, or onsite production facility, or through a training film, Web video-ondemand, or self-paced or self-guided instructional guides. For computer-assisted or recorded training, trainers ensure that cameras, microphones, and other necessary technology platforms are functioning properly and that individual computers or other learning devices are configured for training purposes. They also have the responsibility for the entire learning process, and its

environment, to ensure that the course meets its objectives and is measured and evaluated to understand how learning impacts performance. Training specialists plan, organize, and direct a wide range of training activities. Trainers consult with training managers and employee supervisors to develop performance improvement measures, conduct orientation sessions, and arrange on-the-job training for new employees. They help employees maintain and improve their job skills and prepare for jobs requiring greater skill. They work with supervisors to improve their interpersonal skills and to deal effectively with employees. They may set up individualized training plans to strengthen employees’ existing skills or teach new ones. Training specialists also may set up leadership or executive development programs for employees who aspire to move up in the organization. These programs are designed to develop or “groom” leaders to replace those leaving the organization and as part of a corporate succession plan. Trainers also lead programs to assist employees with job transitions as a result of mergers or consolidation, as well as retraining programs to develop new skills that may result from technological changes in the work place. In government-supported job-training programs, training specialists serve as case managers and provide basic job skills to prepare participants to function in the labor force. They assess the training needs of clients and guide them through the most appropriate training. After training, clients may either be referred to employer relations representatives or receive job placement assistance. It is the process of developing managerial talent through programs.


It covers not only those activities, which improve job performance, but also those which bring about growth of the personality; help individuals in the progress towards maturity and actualization of their potential capacities so that they become not only good employees but better men and woman. In organisational terms, it is intended to equip persons to earn promotion and hold greater responsibility. Training a person for higher and bigger job is development. And this may well include not only imparting specific skills and knowledge but also inculcating certain personality and mental attitudes.

There is more emphasis on choosing management development methods that are more organizationally relevant and effective that they have been in the past. Various techniques of management development include:(a) Management on-the-job training. (b) Off the job training. Managerial on-the-job training methods include job-rotation, coaching/understudy approach and action learning. Job rotation means moving management trainees from department to broaden their understanding of all part of the business and to test their abilities. A manager may spend several months in each department. The person may just bean observer in each department but more commonly gets fully involved in its operations.

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

Action learning programmers give managers and others released time to work full time on projects, analysis and solving problems in departments other than their own trainees meet periodically in four or five person project groups to discuss their findings. Several trainees may work together as a project group or compare notes and discuss each other’s projects.

Off the job training and development techniques The off the job development techniques for managers include case study method; management games; role playing etc. Case Study method: - Case study method presents a trainee with a written description of an organisational problem. The person then analyzes the case, diagnoses the problem and presents his or her findings and solutions in discussion with other trainees. Management Games: - With management games trainees are dividend in to give or six persons group, each of which competes with the others in a stimulated marketplace. Management games can be good development tools. People learn best by getting involved, and the games can be useful for gaining such involvement. They help trainee develop their problem solving skills, as well as to focus attention on planning rather than just putting out fires. The group also usually elects their own officers and organize themselves; they can thus develop leadership skills and faster cooperation and team work.

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


It refers to fair and equitable remuneration to employees for their contribution to the attainment of organizational objectives. Compensation is all forms of financial returns and tangible services and benefits employees receive as part of an employment relationship. An effective set of choices about compensation systems plays a major role in determining firm performance. It is paid in form of wages, salaries, and employee benefits such as paid vacations, insurance, maternity leave, free travel facility, retirement benefits etc. monetary payments are a direct form of compensating employees & have

a great impact in motivating employees. The system of compensation should be designed in such a way that it achieves following objectives: (1) Capable employees are attracted towards organisation. (2) Employees are motivated for better performance. (3) Employees do not leave employer frequently. It consists of: a) Wages and salary administration Base compensation includes monetary benefits to employees in form of wages or salaries. The term ’wage’ is used to denote remuneration to workers doing manual or physical work. Thus wages are given to compensate the unskilled workers for their services rendered to organization Wages may be based on hourly, daily, weekly or even monthly basis The term ‘salary’ means compensation to office employees, foremen, managers & professional & technical staff. It is based on weekly, monthly &yearly basis. Thus time period for which salaries are paid is generally higher than in case of wage payments. Wages may be based on number of units produced (i.e. piece wage system) or time spent on job. But salary is always based on time spent on job.

Factors determining pay rates: 1) Demand and supply: - Wage rates of workers depends upon demand and supply force in labour market. If the labour is in short supply, the workers will offer the services only if they are paid well. On the other hand, if the supply is more then workers available might get ready work at cheaper rates.

2) Bargaining Power: - Where labour unions are strong enough to force the hand of employers, the wages will be determined at a higher level in comparison to other units where unions are weak. 3) Cost of living: - Wages of workers also depends upon the cost of living of the worker so as to ensure him a decent living wage. Cost of living varies under deflationary and inflationary pressures. Where labour unions are strong and employer do not show enough awareness, here wage are adjusted according to cost of living index numbers. 4) Condition of product market: - Degree of competitions prevailing in the market for the product of the industry will also influence the wage level. For e.g. if there is perfect competition in the market the wage level may be at par with the value of net additions made by the workers to the total output, but may not reach this level in case of imperfect competition in the market. 5) Comparative Wages: - Wages paid by the other firms for the same work also influence the wage levels. Wage rates must also be in consistent with the wages paid by the other firms in the same industry so as to increases the job satisfaction among the workers. 6) Ability to Pay:- Wage rates are influenced by the paying ability of industry or firms to its workers. Those firms which are earning huge profits may afford to pay high wages and can provide more facilities to its workers in comparison to the firms earning comparatively low profits. (7) Productivity of labour: - Higher productivity will automatically fetch more profit to the firm, where in turn workers will be paid high wages in comparison to other firms with low productivity. (8) Job Requirements: - If a job requires higher skill, greater responsibility and risk, the worker placed on that job will naturally get higher wages in comparison to other jobs which do not require the same degree of skill, responsibility or risk.

(9) Govt. Policy: - Since the bargaining power of the workers is not enough to ensure fair wages in all industries, the Govt. has to interfere in regulating wage rate to guarantee minimum wage rates in order to cover the essentials of a decent living. (10) Goodwill of the company: - A few employers want to establish themselves as good employer in the society and fix higher wages for their workers. It attracts qualified employees. In addition there are other important factors which affect the individual differences in wage rates. These are: 1). Worker’s Capacity and Age 2). Educational qualification. 3). Work experience. 4). Promotion possibilities. 5). Stability of employment 6). Demand for product. 7). Profits earned by the organisation. 8). Hazards involved in work etc.
b) Employee benefits also called benefits in kind; also called fringe benefits, perquisites, or

perks are various non-wage compensations provided to employees in addition to their normal wages or salaries. Some of these benefits are: housing (employer-provided or employer-paid), group insurance (health, dental, life etc.), disability income protection, retirement benefits, daycare, tuition reimbursement, sick leave, vacation (paid and non-paid), social security, profit sharing, funding of education, and other specialized benefits. The purpose of the benefits is to increase the economic security of employees. Perquisites: The term perks is often used colloquially to refer to those benefits of a more discretionary nature. Often, perks are given to employees who are doing notably well and/or have seniority.

Common perks are take-home vehicles, hotel stays, free refreshments, leisure activities on work time (golf, etc.), stationery, allowances for lunch, and—when multiple choices exist—first choice of such things as job assignments and vacation scheduling. They may also be given first chance at job promotions when vacancies exist.


It is the force which instigates an employee to work in a proper direction. To retain good staff and to encourage them to give of their best while at work requires attention to the financial and psychological and even physiological rewards offered by the organization as a continuous exercise. Basic financial rewards and conditions of service (e.g. working hours per week) are determined externally (by national bargaining or government minimum wage legislation) in many

occupations but as much as 50 per cent of the gross pay of manual workers is often the result of local negotiations and details (e.g. which particular hours shall be worked) of conditions of service are often more important than the basics. Hence there is scope for financial and other motivations to be used at local levels. • The motivation function is one of the most important, yet probably the least understood, aspects of the HRM process. Why? Because human behavior is complex and difficult to understand. Trying to figure out what motivates various employees has long been a concern of behavioral scientists. However, research has given some important insights into employee motivation.

First of all, one must begin to think of motivation as a multifaceted process - one that has individual, managerial, and organizational implications. Motivation is not just what the employee exhibits, but also a compilation of environmental issues surrounding the job. It has been proposed that one's performance in an organization is a function of two factors: ability and willingness to do the job. Thus, from a performance perspective, employees need to have the appropriate skills and abilities to adequately do the job. This should have been accomplished in the first two phases of HRM, by correctly defining the requirements of the job, matching applicants to those requirements, and training the new employee on how to do the job.

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

Consequently, HRM must look at the job. Has the latest technology being provided in order to permit maximum efficiency? Is the office setting appropriate (properly lit and adequately ventilated, for example) for the job?

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

Once the measures have been taken to ensure that jobs have been properly designed, the next step in the motivation process is to understand the implications of motivational theories. Some motivational theories are well known by practicing managers, but recent motivation research has given us new and more valid theories for understanding what motivates people at work. Performance standards for each employee must also be set. While no easy task, managers must be sure that the performance evaluation system is designed to provide feedback to employees regarding their past performance, while simultaneously, addressing any performance weakness the employee may have.

15.) JOB SATISFACTION: It is the amount of satisfaction and contentment derived from ones job, its pay and environment. Job satisfaction describes how content an individual is with his or her job. The happier people are within their job, the more satisfied they are said to be. Job satisfaction is not the same as motivation, although it is clearly linked. Job design aims to enhance job satisfaction and performance. Methods include job rotation, job enlargement and job enrichment. Other influences on satisfaction include the management style and culture, employee involvement, empowerment and

autonomous work groups. Job satisfaction is a very important attribute which is frequently measured by organizations. The most common way of measurement is the use of rating scales where employees report their reactions to their jobs. Questions relate to rate of pay, work responsibilities, variety of tasks, promotional opportunities the work itself and co-workers. Some questioners ask yes or no questions while others ask to rate satisfaction on 1-5 scale (where 1 represents "not at all satisfied" and 5 represents "extremely satisfied"). In today’s world, it is naive to assume that people work primarily to achieve professional fulfillment and job satisfaction. As a matter of fact, they seem to work because what they get on the job enables them to achieve whatever they want to achieve off the job. Today’s typical professional may no longer have an undivided loyalty and commitment towards his job. Therefore, it is incorrect to believe that an employee’s work life is spent entirely in the pursuit of job satisfaction. Perhaps, he or she is not actively seeking job satisfaction as much as aspiring towards other important needs and considerations like own career progression, standard of living and personal fulfillment. The job is a means to achieving the desired ends. One of the typical propositions held by most people connected with HR is that job satisfaction is positively associated with job performance. Does a “satisfied” employee always “produce” more? It may be wrong to presume and take for granted a fictitious linkage between job satisfaction and employee productivity in all cases. In some cases, one may be shocked to find that while the so-called “satisfaction” was increasing, the productivity of the individual was declining. The reason behind this is the mistaken concept that a satisfied employee will devote his dedicated attention to his work. A “satisfied” or “happy” employee may begin to develop an approach of self-complacency, and an overall sense of well-being, and consequently, his temperament may become one of ignorant submission and passivity rather than one of positive action and active involvement. As a result, it is not too uncommon to see that the productivity of the employee does not always closely follow his upward satisfaction curve.

16.) GRIEVANCE REDRESSAL: Various problems and conflict which are amongst the employees should be properly and cordially handled. A grievance is a sign of an employee's discontentment with his job or his relationship with his colleagues. Grievances generally arise out of the day-to-day working relations in an organization. An employee or a trade union protests against an act or policy of the management that they consider as violating employee's rights. One of the effective ways of minimizing and eliminating the source of an employee's grievance is by having an ‘open door policy'. An ‘open door policy facilitates upward communication in the organization where employees can walk into a superiors’ cabin at any time and express their grievances.


It refers to effective and efficient management of conflict arising in the organization. How is the idea of conflict management related to Human Resource Management? The answer to this question is much simpler than one may think. In a broad sense, the Human Resource Department of all business organizations has one primary task: to deal with the people in the organization.

More specifically however, it is HR's job to ensure that productivity, efficiency, safety, fairness, and smooth practices are executed both inside and outside of the organization. With that said successful conflict management techniques are essential to ensure that both the broad and specific duties of a Human Resource Department are carried out. Since all people are different, each individual has different experiences and possess unique perspectives. Consequently, different perspectives potentially lead to biases or differences in opinion and these discrepancies are what essentially cause conflict. Some conflicts are insignificant compared to others but nonetheless, managing even the smallest conflicts is no easy task. However, several successful conflict management techniques can be utilized at all levels of an organization in order to ensure that efficiency, safety, fairness, and smooth, ethical business practices are executed. One common misconception about conflict in general is that all conflict is bad. However, this is not the case in the business setting. Although, if individuals are physically injuring one another and putting their safety and the safety of others at risk via this particular conflict, then it is safe to say that "physical" conflict and altercations are undesirable. The bottom line from a business perspective is that "healthy" conflict is desirable in any organization. "Healthy" conflict merely shows that people are not holding back their ideas and beliefs. Furthermore, the more ideas and perspectives that are brought to the table, the more opportunity managers have to make good, well informed decisions that look at various issues from all angles. An important concept for managers to remember when faced with conflict is that conflict is neither good nor bad; it is merely a difference in opinion.


Participation of employees: Employees should be given a chance to participate in the working of the firm. Their suggestion should be taken into consideration. Worker participation in management is an effective tool for prevention of industrial disputes. The level of workers’ participation can vary from organization to organization. The basic objective of worker participation is to provide an opportunity to the workers to participate in the organizational decision-making. By virtue of their participation, employees are bound to abide by all the decisions taken. This also helps in boosting the employee morale and enhancing their commitment to the organization. Some of the common forms of worker participation in management in India are works committees, joint management councils, joint councils, plant councils, shop councils etc. Worker participation in India has achieved only partial success due to factors like lack of proper education among workers, lack of understanding between the management and the workers and multi-unionism. A good organizational environment built on mutual trust and confidence between the management and the workers would help in effective and successful worker participation in management.


The well- being of the employee in an organization is affected by accidents and ill health – both physical and mental. PHYSICAL HEALTH: Ill health of employees results in reduced productivity. Healthy employees are more productive, more safety conscious, and are more regular to work. This realization has made many management to provide health services to their employees like firstaid, complete medical care, etc. Many progressive organizations have well equipped dispensaries with full-time and part-time doctors. MENTAL HEALTH: In recent years, mental health of employees, particularly that of executives, has engaged the attention of management. Mental breakdowns are common in modern days because of stress and tension. This results in reduced productivity and lower profits for the organization. A mental health service is rendered in following ways: 1. Psychiatric counseling 2. Co operation and consultation with outside psychiatrics 3. Education of company personnel in importance of mental health 4. Development and maintenance of effective human resource programme.

SAFETY: Safety refers to absence of accidents. It is protection of workers from the dangers of accidents. NEED FOR SAFETY MEASURES COST SAVING: Two types of cost are incurred by the management when an accident occurs. These are direct costs in form of compensation payable and medical expenses incurred in treating the patients. INCREASED PRODUCTIVITY: Safety promotes productivity. Employees in a safe environment can devote time to improving quality and quantity of output.

MORAL and LEGAL: Safety is important on humane grounds too. There are legal provisions relating to safety measures which have to be undertaken by the management. WELFARE: Welfare includes anything that is done for the comfort and improvement of employees and is provided over and above the wages. Welfare helps in keeping the morale and motivation of the employees high so as to retain the employees for longer duration. The welfare measures need not be in monetary terms only but in any kind/forms. Employee welfare includes monitoring of working conditions, creation of industrial harmony through infrastructure for health, industrial relations and insurance against disease, accident and unemployment for the workers and their families. Labor welfare entails all those activities of employer which are directed towards providing the employees with certain facilities and services in addition to wages or salaries.

Labor welfare has the following objectives: 1. To provide better life and health to the worker 2. To make the workers happy and satisfied 3. To relieve workers from industrial fatigue and to improve intellectual, cultural and material conditions of living of the workers.

The basic features of labor welfare measures are as follows: 1. Labor welfare includes various facilities, services and amenities provided to workers for improving their health, efficiency, economic betterment and social status. 2. Welfare measures are in addition to regular wages and other economic benefits available to workers due to legal provisions and collective bargaining

3. Labor welfare schemes are flexible and ever-changing. New welfare measures are added to the existing ones from time to time. 4. Welfare measures may be introduced by the employers, government, employees or by any social or charitable agency. 5. The purpose of labor welfare is to bring about the development of the whole personality of the workers to make a better workforce.


NEED AND IMPORTANCE OF PERSONNEL POLICIES IN INSURANCE SECTOR The very objective of insurance is to place the insured in the same financial position as he was just before the loss. It can be said that the system of insurance can be explained as social and financial assistance to business enterprises, financial stability to commerce and industry and basis of credit. The word personnel in the context of any organization imply the persons connected with the working of that organization or establishment or in other words the person at work. This denotes the staff or employees of an organization. The term policy refers to any guidance to action. Hence policy making are supplementary and complementary to each other.

Personnel policy is the guideline which assists in proper working of the org. and enables it to achieve its various objectives. Policies are broad guidelines as to how the objectives of a business are to be achieved. Policies provide the guidelines which we should keep in view while achieving the ends. A policy is a predetermined and accepted course of thought and action to serve as a guide towards certain accepted objectives. In other words, we can say that policies are related to the organization’s overall purpose and its objectives in the various areas with which its operations are concerned. Personnel policies lay down the decision making criteria in line with the overall purpose of the organization in the area of human resource management. Personnel policies are developed by the top management to assist the managers at various levels to deal with the people at work.

The Aims and Objectives of personnel policies should be/ are: (1) To provide such conditions of employment and procedures as will enable all the employees to develop a sincere sense of unity with the enterprise and to carry out their duties in the most willing and effective manner; (2) To provide an adequate, competent and trained personnel for all levels and types of management;

(3) To establish the conditions for mutual confidence and avoid confusion and misunderstanding between the management and the workers, by developing suggestion plans, joint management councils, work committees, etc., and by performance appraisal discussions;

(4) To provide security of employment to workers so that they may not be distracted by the uncertainties of the future;

(5) To provide an opportunity for growth within the organization to persons who are willing to learn and undergo training to improve their future prospects;

(6) To provide for the payment of fair and adequate wages and salary to workers so that their healthy co-operation may be ensured for an efficient working of the undertaking; (7) To recognized the work and accomplishments of the employees by offering non- monitory incentives; and (8) To create a sense of responsibility, on the part of those in authority for the claims of employees as human beings, who should be guaranteed protections of their fundamental rights and offered enough scope for developing their potential.

SCOPE OF PERSONNEL POLICIES Personnel policies must cover all areas of human resource management. Usually personnel policies are framed with regard to all functions of human resource management as stated below: 1. Employment Policies (i) (ii) (iii) Minimum hiring qualifications. Preferred sources of recruitment. Reliance on various selection devices such as tests, reference checks, and interviews. 2. Training and development policies (i) (ii) (iii) (iv) Opportunities for training and development. Basis for training Types of training, viz., on-the-job, off-the–job. Programmes of executive development.

3. Transfer and promotion policies (i) (ii) (iii) (iv) Rationale for transfer. Periodicity of transfer. Length of service and qualifications required for promotion. Weightage to seniority and merit in promotion.

4. Compensation Policies (i) (ii) (iii) (iv) Minimum wages and salaries. Incentive Plans. Profit Sharing. Non-Monetary Rewards.

5. Integration and Human Relations Policies (i) (ii) (iii) (iv) Handling of Grievances. Recognitions of labour unions. Workers’ participation in management. Discipline.

6. Working conditions and welfare policies (i) (ii) (iii) (iv) Kinds and standards of working conditions. Safety programme. Types of welfare services. Financing of employee services.


Human resource is one of the natural resources of any country's economy. It is the wealth of the country. In the context of insurance, human resource is of greater importance. The deployment of human resource through proper and efficient selection, training and development, is called Human Resource Management.

The success of any insurance company largely depends on efficient human resource management, apart from operations, marketing and sales, the HR department manages all the efficient people working in operations and marketing divisions in any organization.

Need for HRD and Its Management in insurance sector

1. There are many changes in the insurance sector on account of changes in the industry due to the entry of new insurance companies. Therefore, it has become a necessity to recruit, train and deploy people at all level efficiently, for better performance and success. This is the basic function of HRD, which includes the concept of HRM.

2. In view of the changes in the political scene in the recent past, seeping changes are expected to take place in the insurance industry. It is expected that only a few insurance companies will remain after a series of amalgamations and mergers, not only in the Indian insurance industry, but also at the international level.

3. Emergence of new private sector insurance companies, competition and self-regulation has necessitated efficient Human Resources Management in insurance companies. HRM is a continuous process, involving selection, recruitment and training on an "on going basis" for the staff and their deployment in the right place. The activity is called HR development.

EFFICIENCY IN INSURANCE SECTOR WITH HRM 1. The crucial factors behind successful insurance companies will be continuous and sustained build up of skills, knowledge, education and attitudes among people working in the companies, particularly the frontline staff, working in the branches.

2. It is possible through professionalization, which is an internal part of HRM. The staff should be motivated and encouraged to practice professionalism for their personal growth and thus contribute to the organization's growth.

3. Building efficiency is, therefore largely dependent on the best selection process adopted by the HR department. There is imperative need to build up skills within an organization for the successful managing of available HR.

4. Insurance companies have vast human resource specialized in multiple disciplines like technology, law, sales, underwriting, administration, risk management etc. The basic function of HR is to manage them efficiently for continuous success. For building up better efficiency in insurance sector, HRM have to follow the below two functions:-

1) Emphasis on job description and job Assignment.

2) Response to challenges in future.


One of the important functions of HR department is to ensure proper definition for workers in the insurance companies. The staff should know about the vacant positions and the skills required for those particular jobs. Accordingly, people should be recruited to that particular job. The allotment of a job to a right person, who has the required skills is called job assignment. If this function is not properly performed by the HR department, people in all departments will be in a chaotic situation. This will impair their performance and subsequently customer service. Improvement in performance and skills of existing employees can be achieved through recruiting the right person for the right place. Thus, job description and job assignment are parallel concept requiring attention.

2. RESPONSE TO THE CHALLENGES IN FUTURE Insurance companies should chalk out a wide range of strategic responses to the future challenges. They have to look into the structure, procedures and processes of the systems and make policies accordingly, to ensure necessary changes. It is the foremost function of HRM. Insurance companies have to convince their employees that that a challenge is an opportunity to prove oneself. Companies in India have to utilize this opportunity before the competition overtakes them and people in banks have to respond immediately to the challenges.

This requires the HR department to work efficiently. Insurance companies are in the service industry, where the raw material is HR.

HRM, therefore, emerges as a very basic and important element for strategic response to the changes that are taking place in the insurance sector. HR departments should take it seriously to formulate policies to meet these challenges. HRD is a critical management function. Each manager should have initiative, awareness, coordination and facilitation to perform his role. This is critical function of HRM.


Owing to the changing insurance environment HR department should call for appropriate response in equipping people who have to perform in the new environment. People should be prepared to 'accept changes. The upgraded technology might create fear among the staff regarding their adaptability to the new environment. It is the responsibility of the HR department to properly counsel people and prepare them to face the challenges before them. Their mind should be fine - tuned to work in the new technological environment. The main function of HRM is to build up capabilities in people working and intensify their sense of belonging to the organization. To improve their performance and increase the bank's productivity HR must incorporate challenges in routine work. Team spirit has to be inculcated in the branches and greater focus should be on customer care. This would be possible only through the unprecedented efforts to be put forth by the HR department.

REWARDS, REMUNERATION, INCENTIVES AND PUNISHMENTS HR department should make efforts to provide appropriate incentives, rewards and increase remuneration to employees. Otherwise, dissatisfaction may creep into all levels of the bank, resulting in" inefficiency, perfunctory attitude, and poor service standards. These will ultimately affect the functioning of the organization. Therefore, the HR department has to formulate policies with utmost care taking into account all these facets. Radical changes are required in the performance appraisal system to avoid nepotism. HR policies with regard to manpower and career planning, and placement policies have to he revamped. A level of professionalism with the help of technology and scientific management has to be brought in by the HR departments. Clear policies regarding performance rewards, incentives and increase in remuneration have to be outlined and implemented.

With regard to the accountability for non-performance and for the mistakes, the HR department's

intervention is a must for establishing the facts of each case. Proper judgment "with impartial attitude helps develop satisfaction among the staff members.

Before punishing for mistakes and non-performance, a certain kind of enquiry is required by the HR department. In the present scenario, particularly in the new private sector insurance companies, dismissals are taking place arbitrarily without proper enquiry for accountability. This will impart the efficiency of the existing staff and lower dynamism in their performance, ultimately leading to reduced productivity due to fear and insecurity of losing the job. It is the first and foremost duty of the HR department to formulate appropriate policies with regards to punishments. A set of guidelines and procedures has to be formulated and followed for punishments to staff in case of any indiscipline.

There are certain inevitable situations in working where the staff needs to experiment in order to take decisions. In the process mistakes are bound to occur. Committing mistake is a way of learning. These are not to be treated as sin by the management. Otherwise, the decision making process will be vitiated. In such situations the HR department plays a crucial role in adopting proper strategies and in responding correctly to the warranted situation.

HRM will play a significant role in handling situations while awarding punishments to employees without impairing others' efficiency.


In human resources context, turnover or labor turnover is the rate at which an employer gains and loses employees. Simple ways to describe it are "how long employees tend to stay" or "the rate of traffic through the revolving door." Turnover is measured for individual companies and for their industry as a whole. If an employer is said to have a high turnover relative to its competitors, it means that employees of that company have a shorter average tenure than those of other companies in the same industry. High turnover can be harmful to a company's productivity if skilled workers are often leaving and the worker population contains a high percentage of novice workers.

1. In the present scenario, the employee turnover has increased in the insurance industry, specifically in the new private sector companies.

2. The main reason behind the trend is the recruitment of young people without experience.

3. They will be moving to other jobs after gaining experience, for higher salaries.

4. This usually has a bad effect on the work atmosphere of the organization.

5. The new private sector companies have become a training ground for the new and fresh recruits.

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

7. The HR department should formulate suitable policies to retain the staff by providing 'incentives, rewards, and better increments every year. These policies will ensure organizational efficiency.

8. The employee turnover may increase on account of the following: a. Lacunae in the appraisal systems, b. Non-recognition of talent, c. Discouragement for the staff, d. Lack of motivation, e. Lack of promotions to higher cadre in the organization etc.

9. HR and personnel departments of insurance companies should realize the importance of all these aspects and help the organization in formulating correct policies. In this process, the HR departments of all banks should realize the importance of recruiting experienced people in higher positions to ensure utmost efficiency. It will increase the productivity and profitability of the organization. How to prevent turnover Employees are important in any running of a business; without them the business would be unsuccessful. Continual training and reinforcement develops a work force that is competent, consistent, competitive, effective and efficient. Beginning on the first day of work, providing the individual with the necessary skills to perform their job is important.

Networking and strategizing within the company provides ongoing performance management and helps build relationships among co-workers. It is also important to motivate employees to focus on customer success, profitable growth and the company well-being. Employers can keep their employees informed and involved by including them in future plans, new purchases, policy changes, as well as introducing new employees to the employees who have gone above and beyond in meetings. Taking the time to listen to employees and making them feel involved will create loyalty, in turn reducing turnover allowing for growth.


The HR risk is another important aspect to be managed by the HR and Planning department. Let's face it, owning a business today is about managing risk. Whether it's the traditional fire, wind, hail kind of risk or the more perplexing and subtle kind of risk like the economy, we all have a huge exposure to elements both within and outside our immediate control. Of all the sources of risk facing your business today, none is more immediate and more emotionally charged than the risk associated with the actions of your workforce. It's the human factor and you've had it since you hired your first employee. Simply put, the continued success of your business can well rest on what an employee says or does. Actions taken, or not taken; words spoken, or not spoken; deeds done, or not done, whether with or without your knowledge or approval can, and most probably will, be used to your detriment if the outcome is undesirable or financially harmful to someone. In certain situations the departure of an employee with

specialized skills and knowledge due to resignation, retirement or removal may bring certain systems to a halt and may even create chaos. This is called HR risk.

In this process, the insurance company may have to pay multiple individuals with similar knowledge and experience to ensure protection against this risk.

Similarly, the company may have to face the risk of loss of key personnel, which is called the risk of inadequate motivation among staff who manages the situation.

If the management offers inadequate incentives or doesn't, give any incentive at all, or wrong incentives, it may lead to disastrous financial results, provided the incentives are linked to individual performance. In such a case, the personnel will not co-operate in combating the risky situation. In case a group incentive is given, individual motivation will be affected. Therefore in such "HR risk" Situations incentives should be linked to short-term results and not to long-terms ones. It is the responsibility of the HR department to formulate proper policies to prevent such situations, where "HR risk" may crap up due to the exit of skilled personnel from insurance companies. The Risk of Human Error Because human error is a significant risk to businesses everywhere, management techniques have been developed which afford protection for all but the most serious offenses. The first line of defense for most managers is the purchase of insurance. However, it is much more effective to avoid the exposure altogether whenever possible. In order to avoid a risk you must first recognize the hazard. In this endeavor, information is key. As it relates to the workforce, this means knowing as much as is legally permitted about an individual before you hire them, then acting on that information.

While a thorough background investigation can mean different things to different people, all efforts should be focused on answering one basic question, "Is this person fundamentally who and what they represent themselves to be?" There is no "one size fits all" answer to this question. Different jobs demand different levels of investigative effort. Employers are being held liable for the actions of their employees for what they "should have known or could have known," and the actions they "should have or could have" taken. A few examples of the gravity of this situation can be found in cases such as where a retail grocer employed a checker who took information from a customer's personal check and went to her home. This resulted in theft and physical assault by the employee. The retailer was held liable and successfully sued. Another large retailer offering drapery installation was successfully sued for an employee sexually assaulting a customer in her home. An independent contractor working as a door-to-door sales person, who had just been released from prison and was currently on parole, sexually assaulted a woman in her home. The suit against the company was successful and was upheld by the Supreme Court. Whether the action is taken by an employee or an independent contractor, employers are being held responsible for the actions of those who represent their company. Companies most vulnerable to these types of suits are those whose representatives have access to an individual's personal information or direct access to the customer's home. Investigate Carefully As a general rule, entry-level positions don't require the same degree of screening that skilled positions warrant. Nevertheless, all investigations should begin with, at a minimum: positive identification of the individual; and a review of criminal records in the individual's current county of residence. More involved investigations can include: • • • Education and employment history verifications; A driving record review; Testing for the use of illegal substances (drug testing); and

A broad scale research of criminal records in any jurisdiction that an individual has lived or worked in the past several years.

What is done, and to what extent, is a function of each employer's level of risk tolerance, time allotted to the task, and budget. As important as what is to be done is who's going to do it? We've all heard the adage that an individual who represents themselves in a court of law has a fool for a client. The same can be said for background screening. In almost all cases, background screening should be contracted out to a professional firm. The simple fact is that while nine out of 10 people may be straightforward and forthcoming, one out of 10 isn't. Conducting your own investigation, presenting the results and defending your actions are much more likely to result in hard feelings and potentially emotionally charged confrontations than if you can say, "We didn't perform this investigation but we will gladly give you a copy of the report (as required by law) and you can contact the reporting agency and lodge any complaint you feel is warranted." The ability to distance you and your company from the results of the investigation is a tremendous advantage. Even if the investigation can be performed more economically internally, the savings will rarely, if ever, offset the added potential for confrontation. And since we're talking about risk management, remember that by outsourcing this service you have every legal right to hold the company performing the investigation accountable for the accuracy of their work. Assuming you're dealing with a licensed and reputable firm, their errors and omissions insurance will afford your company a measure of protection you simply will not have if you perform the screening internally. CASE STUDIES


The company chosen for the project is “FUTURE GENERALI INDIA LIFE INSURANCE”. The head office of the company is located in Mumbai. ABOUT COMPANY: Future Generali India Life Insurance Co. Ltd. is one of the rapidly growing Insurance companies in India. The Company is a joint venture between the India-based Future Group and the Italy-based Generali Group. Future Generali group is present in both the Life and Non-Life businesses in India as Future Generali India Life Insurance Co. Ltd. and Future Generali India Insurance Co. Ltd. Generali Group was established in Trieste on December 26, 1831. It is an international group working in more than 40 countries with insurance companies, financial companies and real estate sectors. After doing business in Central Eastern Europe, Generali Group has started to develop business in the principal markets of the Far East, including China and India. Generali Group ranks among the top three insurance groups in Europe and the 30th largest company in the Fortune 500 international ranking.

RECRUITMENT & SELECTION PROCESS: Their recruitment process includes both internal and external methods.

INTERNAL METHODS: The company uses: EMPLOYEE REFERRALS- It is a recruitment method in which the current employees are encouraged and rewarded for introducing suitable recruits from among the people they know. The logic behind employee referral is that “it takes one to know one”. The post for which they prefer this process is SALES MANAGER, SENIOR SALES MANAGER, and ASSISTANT SALES MANAGER. Benefits of this method are as follows: • • • • Quality Candidates Cost savings Faster recruitment cycles. Incentives to current employees

On the other hand it is important for an organization to ensure that nepotism or favoritism does not happen, and that such aspects do not make inroads into the recruitment process. JOB POSTINGFor job posting they use ‘Intranet’. Job Posting is an arrangement in which a firm internally posts a list of open positions (with their descriptions and requirements) so that the existing employees who wish to move to different functional areas may apply. It is also known as Job bidding. It helps the qualified employees working in the organization to scale new heights, instead of looking for better perspectives outside. It also helps organization to retain its experienced and promising employees. EXTERNAL METHODS:
1. FORMER EMPLOYEES-The company hires back its best ex-employees especially for

Senior Sales Manager post.

2. COLLEGES-From colleges they recruit candidates for Sales Manager & Sales

Executives posts. The minimum salary package for the freshers is 1.8 lacs for Area Sales Manager,2.5 lacs for Sales Manager,3.5 lacs for Senior Sales Manager.
3. JOB FAIR-Recruiting method engaged in by a single employer or group of employers to

attract the large number of applicants to one location for interviews. 4. ADVERTISING- Advertisements are the most common form of external recruitment. They can be found in many places (local and national newspapers, notice boards, recruitment fairs) and should include some important information relating to the job (job title, pay package, location, job description, how to apply-either by CV or application form, etc). Where a business chooses to advertise will depend on the cost of advertising and the coverage needed i.e. How far away people will consider applying for the job. Advertising can be through both PRINT and ELECTRIC MEDIA. The company uses PASSES technique for selection. P-Prospect A-Approach S-Seminar S-Screening E-Evaluation S-Selection
• •

PROSPECT-They check whether the candidate is fit for the job or not. APPROACH-The Company approaches with the candidates through emails or telephone.

SEMINAR-The Company then conducts seminar. For major seminars they hire hotels but for small ones they prefer company’s training room.

• •

SCREENING-They communicate the job profile to the filtered candidates. EVALUATION-They give them basically the sales target, or evaluate them on the basis of experience, age factor, communication skills. This is a kind of WORK SAMPLE TESTING.

SELECTION-Finally they select the candidate on the basis of the results of evaluation.

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

INITIAL BRANCH LEVEL INTERVIEW-Branch manager takes such interviews mainly to select the localities and decide who are best suited for the job.

REGIONAL BRANCH INTERVIEW-Regional branch manager takes the interview & his decision to select or reject the candidate is final.


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

advisors at 715 offices across 389 cities. The company currently has more than 10,494 employees.

The SIX Differentiators 1) SELECTION PROCESS The selection process of Max New York Life is designed to help the candidate and the organization make a decision in mutual best interest. The first step in the process is an initial interview This is followed by a test of numerical ability. Candidates who make the cut are invited to attend a career seminar. The procedure facilitates a process of discovery, as both sides develop an understanding of each other’s profile and requirements. The final stage in the selection process is an assessment of the candidate's natural market and potential for growth.


Max New York Life has the finest training program for agents in the industry. They run training and development programs for agents throughout their career.

The training consists of a two-year formal classroom based program. Max New York Life has two full-time professional trainers in each office whose sole job is to train and guide new agents.

The success of their training programs owes a lot to the strength of their partner, New York Life. The training program developed by New York Life in the United States is widely recognized as the best in the insurance industry. They have customized this outstanding program for the Indian market. In the United States, New York Life had more members in the Million Dollar Round Table, the worldwide organization of top professionals in the insurance industry, for 50 consecutive years. Since 2001, Max New York Life has had more qualifiers for the prestigious Million Dollar Round Table than all the other private sector insurance companies taken together.

3) MANAGEMENT LOYALTY One of the many advantages of working with Max New York Life is that managers are not allowed to sell insurance products to their own customers. Compensation in management is derived entirely from the success of agents and the overall growth of the organization. Managers at all levels are totally committed to the success of agents and do not pursue any conflicting goals.

4) PRODUCT RESEARCH No organization can claim to have the number one product in the insurance industry for a long period of time. It is a matter of great pride that our products have always been rated among the best in the industry. These products have been developed after extensive research of the Indian market and are designed to meet an individual’s needs at every life stage. 5) CONTRACT The Agent's Contract is designed to attract efficient professionals and retain them for a long time by compensating them generously. As an agent you can count on the support of Max New York

Life at all times to help you earn a good income today and create a secure retirement for tomorrow.

6) GREAT WORK ENVIRONMENT Max New York Life is committed to working in a high-tech environment. In the United States, New York Life is noted for its leadership in using technology to provide the very best in customer service and employee support. The same systems have been adapted for India to offer simple, easy-to-understand illustrations for the most complex products.

Work Profile This is an entrepreneurial opportunity with flexible working hours and the potential to earn unlimited income without any capital investment. As an agent with Max New York Life, you are a financial advisor, businessperson and your own boss. The only limit to your growth is your own imagination and drive. The Role:
• • • • •

Identify prospects and conduct need analysis Provide customized solutions for long term financial protection and wealth creation Close sales Deliver the policy Provide after sales service and build references for future sales

Benefits A career at Max New York Life has innumerable advantages. With low start up investment you can become a part of a world-class organization and make a positive difference to people’s lives. Our agents sell more policies and make more money than agents of any other life insurance company. The financial rewards are in the form of
• • • • •

Commissions on new sales Ongoing renewal commissions Performance linked bonus Referral commissions Training reimbursement


The core function of HRM in the insurance industry is to facilitate performance improvement, measured not only in terms of financial indicators of operational efficiency but also in terms of the quality of financial services provided. Factors like skills, attitudes and knowledge of the human capital play a crucial role in determining the competitiveness of the financial sector. The quality of human resources indicates the ability of insurance companies to deliver value to customers. Capital and technology are replicable but not the human capital which needs to be valued as a highly valuable resource for achieving that competitive edge. The primary emphasis needs to be on integrating human resource management strategies with the business strategy. HRM strategies include managing change, creating commitment, achieving flexibility and improving teamwork. The other processes representing the overt aspects of HRM, viz. recruitment, placement, performance management are complementary. HRM has a crucial role to play in insurance sector. It acts as backbone for the insurance sector, because it only lays the structure for the organizations operations, functioning and working. Even with the advent of high technology it will have a prominent role to portray.

ANALYSIS: As it can be seen from the data collected and from the case studies that majority of the insurance companies believe that investing in HRM is necessary in order to strengthen the insurance sector. Investing in HRM practices allows companies to strengthen their human resources. Human resources are one of the most important resources in any organisation. Efficient management of human resources is necessary for the success of an organisation. Efficient HRM practices leads to employee satisfaction. Employee’s performance improves which benefits the entire organisation. Employees are motivated and they perform better. This will in turn lead to increase in customer satisfaction and the organisation will be able to increase its customer base.

RESULT: Thus our hypothesis investing in human resource can help a firm perform better is PROVED. Bibliography 1.) Human Resource Management Text and Cases by K. Ashwathappa.

Web Sites visited 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11.

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