Chapter-1

INTRODUCTION ____________________________________

INTRODUCTION

MEANING OF INCENTIVES
Incentive refers to performance linked compensation paid to improve motivation and productivity of employees. Since human beings are purposeful creatures, the study of incentive structures is central to the study of all economic activity (both in terms of individual decision-making and in terms of co-operation and competition within a larger institutional structure). Economic analysis, then, of the differences between societies (and between different organizations within a society) largely amounts to characterizing the differences in incentive structures faced by individuals involved in these collective efforts. Ultimately, incentives aim to provide value for money and contribute to organizational success.

Categories
Incentives can be classified according to the different ways in which they motivate agents to take a particular course of action. One common and useful taxonomy divides incentives into four broad classes:

CLASS

Remunerative incentives: are said to exist where an agent can expect some form of material reward especially money in exchange for acting in a particular way.
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Financial incentives: are said to exist where a particular choice is widely regarded as the right thing to do, or as particularly admirable, or where the failure to act in a certain way is condemned as indecent.

Moral incentives: A person acting on a moral incentive can expect a sense of selfesteem, and approval or even admiration from his community; a person acting against a moral incentive can expect a sense of guilt, and condemnation or even ostracism from the community.

Coercive incentives: are said to exist where a person can expect that the failure to act in a particular way will result in physical force being used against them (or their loved ones) by others in the community - for example, by inflicting pain in punishment, or by imprisonment, or by confiscating or destroying their possessions.

Natural Incentives: such as curiosination, mental or physical exercise, admiration, fear, anger, pain, joy, or the pursuit of truth, or the control over things in the world or people or oneself.

There is another common usage in which incentive is contrasted with coercion, as when economic moralists contrast incentive-driven worksuch as entrepreneurship,

employment, or volunteering motivated by remunerative, moral, or personal incentives with coerced worksuch as slavery or serfdom, where work is motivated by the threat or use of violence, pain and/or deprivation. In this usage, the category of "coercive incentives" is excluded. For the purposes of this article, however, "incentive" is used in the broader sense defined above.

Other forms

These categories do not, by any means, exhaust every possible form of incentive that an individual person may have. In particular, they do not encompass the many other forms of incentivewhich may be roughly grouped together under the heading of personal incentiveswhich motivate an individual person through their tastes, desires, sense of duty, pride, personal drives to artistic creation or to achieve remarkable feats, and so on. The reason for setting these sorts of incentives to one side is not that they are less important to understanding human actionafter all, social incentive structures can only exist in virtue of the effect that social arrangements have on the motives and actions of individual people. Rather, personal incentives are set apart from these other forms of incentive because the distinction above was made for the purpose of understanding and contrasting the social incentive structures established by different forms of social interaction. Personal incentives are essential to understanding why a specific person acts the way they do, but social analysis has to take into account the situation faced by any individual in a given position within a given society which means mainly examining the practices, rules, and norms established at a social, rather than a personal, level.

Social pressure

It's also worth noting that these categories are not necessarily exclusive, one and the same situation may, in its different aspects, carry incentives that come under any or all of these categories. In modern American society, for example, economic prosperity and social esteem are often closely intertwined; and when the people in a culture tend to admire those who are economically successful, or to view those who are not with a certain
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amount of contempt (see also: classism, protestant work ethic), the prospect of for example getting or losing a job carries not only the obvious remunerative incentives (in terms of the effect on the pocketbook) but also substantial moral incentives such as honour and respect from others for those who hold down steady work, and disapproval or even humiliation for those who don't or can't.

What is Sales Promotion?

Sales promotion is a promotional marketing technique designed to create sales for a product over a defined period of time. Sales promotion activities are measurable in terms of products moved, coupons redeemed, number of contest entries, or other quantifiable count. Sales Promotion Theory is the study of increasing short-term sales revenue. This study can be conducted readily and effectively as the results can be measured quickly and, because of the narrow focus of the promotion, other factors can be tightly controlled for. Sales promotions are a source of some debate, as some argue that increasing short-term sales does not lead to long-term profitability. Others argue that the benefits of creating more income for the company in the short term allows that company to more rapidly grow to gain a larger market share. While promotions come in many different forms, most fall into three categories: Push, Pull, and Combination. 1.

Push Promotions
Using the Push Theory, you can increase sales by creating incentives to wholesalers or retailers to sell more of your product. In this method you would offer discounts to wholesalers or retailers who buy your product in bulk. This leaves them with more opportunity and interest to include themselves in your project.

1. Sales Promotion Planning

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Sales promotion includes short term cents-off coupon and discount activities, contests and sweepstakes, promotional logoed products, product sampling, and in-store promotional collateral materials. All sales promotion activities are designed to generate sales over a defined time. Sales promotions are most often directed at consumers. Sales promotions are also developed for the trade industry or for internal sales staffs. Manufacturers will create sales promotions for the trade industry such as its distributor network for the same strategic reasons as for consumers, which is to generate short term sales.

2. Coupons and Price Discounts

Price discounts and cents-off coupons are primary tactics used for sales promotion. Price discounts may be promoted in printed circulars distributed in store or mailed as well as weekly price specials deals displayed on shelf. Price discounts may also be provided in rebates. Coupons have a defined dollar value and expiration date and are distributed in newspapers, magazines and online.

3. Contests and Sweepstakes

Manufacturers like contests and sweepstakes as they can create excitement and interest in a product as consumers vie to win the prize. Contests and sweepstakes rules follow strict legal regulations for who can participate and the odds of winning. Some states have regulations that prevent residents from participating in a promoted contest or sweepstakes. Another legal regulation is not requiring a purchase of the product to enter (known as "consideration") and that alternative methods of entry are provided such as snail mailing a form as opposed to completing it online.
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Promotional Products
There is a plethora of logoed promotional products distributed by both large and small companies. Promotional products can include logoed T-shirts, cups, pens, notebooks, water bottles and anything else used to keep the product or company name in front of important audiences such as the Trade.

Sampling
o

merchandise on hand and drives them to sell more of your product. Giving them the discount "pushes" them to buy more of your product at a lower price to increase the amount of money they make. In turn they must "push" your products to customers because they will make a better return on them than on similar products supplied to them by your competitors.

Pull Theory
o

The Pull Theory is about trying to market directly to customers to increase their demand for your product. Advertising and tie-ins with other products or services is the key to this strategy. The theory goes that if you increase the demand for your product by consumers, they will in turn demand the product from retailers, retailers will demand more of your product from wholesalers and wholesalers will demand more products from you. This is a way to increase your sales without decreasing the sale value of your merchandise. Most of the costs are in advertising, so using a tie-in with a related product or service can disperse this cost across both companies.

Combination Theory
o

This theory requires both of the above theories working together. The "push" is used to get more product into the hands of retailers and wholesalers while advertising and product tie-ins with other products are used as a "pull" to get more people to want to buy the product. Grocery stores often use this tactic. They fill stores with products they have a high profit margin on (the push) and run comercials that advertise the store ("A great place to shop" or "Your hometown grocery") rather than a specific product (the pull). The car industry provides an excellent example of combination sales promotion theory. Manufacturers advertise and tie-in with television shows to market directly to customers (pull) and offer deals to dealerships to move more products (push). This leads to "dealer overstocks" and special "factory deals" while the commercials generate more interest in the car brand.

Objectives of Study:-

To have an understanding of specialities of service industry, particularly

insurance Industry. To study the nature and types of incentive schemes provided by hdfc to its sales force. To assess the viewpoints of sales executives about the incentives offered by hdfc. To know about the specific proposals of sales executives to improve incentive schemes. To assess the effect of incentive scheme on sales of hdfc.

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Limitations of the study:

In attempt to make this study authentic and reliable, every possible aspects of thetopic were kept in mind. But also there were certain limitations to the study whichare as follows:

The main source of data for the study was primary data with the help of selfadministered Questionnaires. Hence, the chance of unbiased information is less.

People were hesitant to disclose the true facts. The chance of bi ased response cant be eli mi nat ed t hough al l necessar y steps were taken to avoid the same.

Study and survey done in a particular office of hdfc life only. Hence the opinions of employees working there may not represent the exact attitude of all the employees working elsewhere.

Randomly selected sample taken.

Time Constraint.

This study is based on the historical data and information provided in the annual reports therefore it may not be a future indicator. There may be some fractional differences in the calculated ratios. Time constraint - Due to lack of time other areas could not be well focused.
Financial constraints

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Chapter-2
Company Profile

____________________________________
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INTRODUCTION TO HDFC LIFE

HDFC Standard Life Insurance Company Ltd. is one of India's leading private insurance companies, which offers a range of individual and group insurance solutions. It is a joint venture between Housing Development Finance Corporation Limited (HDFC Ltd.), It is India's leading housing finance institution and a Group Company of the Standard Life, UK. HDFC as on March 31, 2007 holds 81.9 per cent of equity in the joint venture. At HDFC Standard Life, they offer a bouquet of insurance solutions to meet every need. The company caters to both, individuals as well as to companies looking to provide benefits to their employees. For individuals, they have a range of protection, investment, pension and savings plans that assist and nurture dreams apart from providing protection. There are a range of products to suit every life-stage and needs. For organisations they have a host of customized solutions that range from Group Term Insurance, Gratuity, Leave Encashment and Superannuation Products. These affordable plans apart from providing long term value to the employees help in enhancing goodwill of the company.. Analysis of performance of HDFC Standard life in financial year 2004-2005 The company has achieved a total sum of Rs 1,266 crore on its individual insurance, individual pensions and group insurance business nationally and has covered 44.311 lives. The total sum assured in the first quarter of the current financial year is Rs 800 cr. HDFC Standard life is also the first new life insurance company to declare a bonus on its with profits policies. The company has declared a lower interim bonus of 7 % on single premium policies and 3.75% on regular premium policies. HDFC Standard life has declared a non-recurring founders bonus. The company has earned Rs 789 crore from its individual life insurance and pension business, of 13

which 20% has come from the HDFC personal pension plan, which was introduced in February 2004. Of the individual policies, endowments from 52%, while single premium policies brought in business worth Rs 10crore.

HDFC GROUP OF COMPANIES

HDFC Limited HDFC Bank HDFC Asset Management Co. Limited HDFC Securities Limited HDFC Standard Life Insurance Company Intelnet Global CIBIL Credit Information Bureau Investigation Ltd HDFC Chubb General Insurance

GROTH & DEVELOPMENT

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HDFC LIMITED

HDFC was incorporated in 1977 with the primary objective of meeting a social need that of promoting home ownership by providing long-term finance to households for their housing needs. HDFC was promoted with an initial share capital of Rs. 100 million.

The primary objective of HDFC is to enhance residential housing stock in the country through the provision of housing finance in a systematic and professional manner, and to promote home ownership. Another objective is to increase the flow of resources to the housing sector by integrating the housing finance sector with the overall domestic financial markets.

HDFC's main goals are to: develop close relationships with individual households, maintain its position as the premier housing finance institution in the country, transform ideas into viable and creative solution provide consistently high returns to shareholders, and e) to grow through diversification by leveraging off the existing client base.

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STANDARD LIFE GROUP

The Standard Life Assurance Company ("Standard Life") was established in 1825 and the first Standard Life Assurance Company Act was passed by Parliament in 1832. Standard Life was reincorporated as a mutual assurance company in 1925.The Standard Life group originally operated only through branches or agencies of the mutual company in the United Kingdom and certain other countries. Its Canadian branch was founded in 1833 and its Irish operations in 1838. This largely remained the structure of the group until 1996, when it opened a branch in Frankfurt, Germany with the aim of exporting its UK life assurance and pensions operating model to capitalize on the opportunities presented by EC Directive 92/96/EEC (the Third Life Directive) and offer a product range in that market with features which local providers were unable to offer. In the 1990s, the group also sought to diversify its operations into areas which complemented its core life assurance and pensions business, with the intention of positioning itself as a broad range financial services provider. HDFC Standard Life Insurance Co. Ltd was incorporated on 14th august 2000. It is a joint venture between Housing Development Finance Corporation Limited (HDFC Ltd.) India And UK based Standard Life Company. Both the joint venture partners being one of the leaders in their respective areas came together in this 81.4:18.6 joint venture to form HDFC Standard Life Insurance Company Limited. HDFC Standard Life Insurance India boasts of covering around 8.7 lakh lives by March'2007.

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VISION STATEMENT The most successful and admired life insurance company, which mean that we are the most trusted company, offer the best value for money, and set the standards in the industry. In short, The most obvious choice for all. Admired mean the company should be known for its standards. Not only customers, but also the competing life insurance companies should benchmark against HDFC SLI a nutshell, even the IRDA
HEALTH PLANS These plans secure the health costs, gives financial independence while illness and helps in meeting medical expenses effortlessly. it includes HDFC critical care plan and HDFC surgicare plan. CHILDREN PLANS These plans help you to secure your Childs dream, provides economic support when your child needs it more and funding major milestone. it includes HDFC Unit linked young star ii, HDFC Unit linked young star plus and HDFC Unit linked young star champion. PROTECTION PLANS You can protect your family against the loss of your income or the burden of a loan in the event of your unfortunate demise, disability or sickness. These plans offer valuable peace of mind at a small price. Our Protection range includes our term assurance plan, home loan protection Plan. SAVING AND INVESTMENT PLANS

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Its single premium whole life plan is well suited to meet your long term investment needs. They provide you with attractive long term returns through regular bonuses. Their Savings Plans offer you flexible options to build savings

PENSION PLANS Their Pension Plans help you secure your financial independence even after retirement. Their Pension range includes personal pension plan, unit linked pension Plus, unit linked pension maximiser and immediate annuity.

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Chapter-3
Sales Incentive Schemes and Contest at HDFC Life

____________________________________

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Numerous schemes and contest are introduced at hdfc life to speed up sales. Following is the list of sales schemes introduced for sales executives by hdfc life from the month of january to june.

Straight drive Rising Star striker Scratch to win Cash stroke Golden Eagle

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General terms and conditions of these schemes:

1. The contest is open to all licensed FCs of the agency, business leader, emerging market and HNI channel. If an FC ceases to be a CFC with hdfc life or has given notice, the eligibility of reward will cease. 2. Company reserve the right to claw back the given reward in case of cancellation of any policy considered in the contest. 3. FYFP is the first premium received in the first year of the policy (first year top-up excluded) less reversals received for business done during the contest period due to look-in cancellations and withdrawals after conversion. (FYFP = first premium-negotiations). 4. A live is defined as customer sourcing FYFP of Rs 10,000 and above per policy during the contest period. 5. Advanced premium of monthly policies will not be counted as FYFP. 6. Please note that service tax & education cess component of the premium will not be included in FYFP.

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Straight drive
Duration : logins -1st january to 31st january 2012 and conversions till 11th february Applicability: FCs of agency,BL,HNI & emerging market channel Criteria and reward: FYFP slab 5,00,000 Reward LG 26 LH20 LCD GV OR Rs. 25,000

10,00,000

CANNON digital camera DSLR 500 D OR Rs. 50,000

20,00,000

Bajaj pulsar 180-Ex showroom price or Rs. 1,00,000

50,00,000

COX AND KINGS INTERNATIONAL HOLIDAY GV or Rs. 2,25,000

1,00,00,000

MARUTI SWIFT Vxi EX-showroom mumbai or Rs. 7,00,000

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Rising
Duration: logins- 01st february to 28th february and conversions till 07th march 2012 Applicability: FCs of agency, BL, emerging markets & HNI channel FYFP slab 20,000,000 15,000,000 10,000,000 Reward BMW X1 or 22,50,000 rupees Toyota corolla altis or 10,50,000 rupees. Skoda fabia elegance diesel or 7,00,000 rupees. 5,000,000 Maruti suzuki A star Lxi or 3,50,000 rupees. 2,000,000 1,000,000 7,50,000 Bajaj pulsar 220 cc or 1,00,000 rupees. Mahindra flyte scooter or 50,000 rupees. LG 26 lcd or 25,000 rupees.

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Star striker
Duration: logins- 01st march 2012 to 31st march 2012 and conversions till 15th april 2012 Applicability: FCs of agency, BL, emerging markets & HNI channel FYFP slab 1,00,000 5,00,000 15,00,000 Reward Reebok sunglass aviator or 1500 rupees. Mahindra flyte scooter or 45,000 rupees. Hero honda splendor or 55,000 rupees + tanishq gift voucher worth Rs. 16,000. 25,00,000 Bajaj pulsar 180 cc or 85,000 rupees + tanishq gift voucher worth Rs. 25,000. 50,00,000 1,00,00,000 2,00,00,000 & more Maruti suzuki Alto or 3,00,000 rupees. Maruti Ertiga or 5,50,000 rupees. Ford Endevour or 10,50,000 rupees.

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Scratch to win
Applicability: FCs of agency, BL, HNI, emerging markets channel. Logins : 01st april 2012 to 30th of april 2012 and conversions till 05th may 2012. Login a proposal with minimum FYFP of Rs. 20,000 and win a SCRATCH CARD having following assured gifts to be won: Tanishq gift voucher. Tupperware rainbow tumbler Sandisk 8 GB pen drive Blackberry curve mobile 26 LCD TV Philips bar blender Reebok sunglass aviator Bajaj pulsar 150 cc I pad 2 Dell laptop Cox and king holiday pack for Thailand.

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Cash Stroke
Duration:01st may 2012 to 31st may 2012 and conversions till 15th june 2012. Applicability: FCs of agency, BL, emerging markets & HNI channel. Criteria and reward: Fyfp slab 10,000 20,000 50,000 1,00,000 2,00,000 3,00,000 4,00,000 Reward 1,000 rupees 2,000 rupees 5,000 rupees 10,000 rupees 20,000 rupees 30,000 rupees 40,000 rupees

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Golden Eagles
Duration: 01st june 2012 to 30th june 2012 and conversions till 18th july 2012. Applicability: FCs of agency, BL, HNI, Emerging market channels. Criteria & Reward : FYFP slab 10,000 30,000 50,000 1,00,000 2,00,000 5,00,000 10,00,000 Reward 2,000 rupees. 3,000 rupees + reebok aviator sunglass 5,000 rupees + 1 gram gold 10,000 rupees + 2 gram gold 20,000 rupees + 4 gram gold 50,000 rupees + 10 gram gold 1,00,000 rupees + 25 gram gold

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Chapter-4
RESEARCH METHODOLOGY ____________________________________

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Research Methodology
Research methodology is a way to systematically solve the research problem. The research methodology included various methods and techniques for conducting a research. The purpose of research is to discover answers to the questions through the application of scientific procedure. My research project has a specified framework for collecting the data in an effective manner. Such framework is called research methodology.

Research Design
This chapter covers Problem Identification, Survey of Existing Literature- Statement of Problem, Objectives of the study-Hypothesis, Universe of Study, Sampling Design, Period of Study- Data collection and data analysis, Tools and techniques for analysis of sales incentives and Limitations of the study.

1.

Descriptive Research Design:-Descriptive studies generally take raw data and

summarize it in a useable form. Can also be qualitative in nature if the sample size is small and data are collected from questionnaires, interviews or observations.

2.

Experimental Research Design: -

The art of planning and implementing an

experiment in which the research has control over some of the conditions where the study takes place and control over some aspects of the independent variable(s) (presumed cause or variable used to predict another variable). An experiment consists of a series of tests of the experimental manipulation or independent variable. The series of tests must be carefully planned and designed. The choice of design, or planned series of tests, affects analysis

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3. Experimental Design:

A form of experimental research. One in which the

researcher cannot control at least one of the three elements of an experimental design, Environment, Intervention (program or practice) and Assignment to experimental and control groups

4. Historical Research Design: Collection and evaluation of data related to past events that are used to describe causes, effects and trends that may explain present or future events. Data are often archival. Data includes interviews.

Research process which was followed by me consisted following steps.

Defining the problem & Research Objectives It is said, A problem well defined is half solved. The step is to define the project under study and deciding the research objective. The definition of problem includes study of effect of

incentives to sales executives on sales of services of hdfc life .

Developing the Research Plan: The second stage of research calls for developing the efficient plan for gathering the needed information. Designing a research plan calls for decision on the data sources, research approach, research instruments, and contacts methods. The research is descriptive in nature and is aimed at analysing techniques used by the company for cash management.

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Hypothesis: - A hypothesis is a special proposition, formulated to be tested in a certain

given situation as a part of research which states what the researcher is looking for. In the research study, two hypothesis have been tested as under:1. Null Hypothesis (H0): states that there are no real cause-and-effect relationships in the experiment. 2. Alternative Hypothesis (H1): states the alternative is that the Null Hypothesis is rejected, that a cause-and-effect relationship may exist.

Null Hypothesis: - There is no any significant difference in the sales of the company
when different types of sales incentives are provided to sales executives.
The acceptance of the null hypothesis would suggest that there is no significant difference between the sales of selected services when incentive schemes based on sales are introduced by the company and in contrast, the rejection of the Null hypothesis will reveal that there is significant variance between sales on introduction of different incentive schemes.

Hypothesis Testing:1. The basis for the statistical analysis of an experiment is hypothesis testing. 2. Hypothesis A formally stated guess as to the outcome of the experiment, which data collected during the course of the experiment can be used to support or reject. 3. Conclusions can only be drawn if the hypothesis is rejected.

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Errors in Hypothesis Testing:1.

Type I Error when a statistical test has indicated a pattern or relationship even if there actually is no real pattern. P (type I error) = P (reject H0/ H0 true)

2.

Type II Error when a statistical test has not indicated a pattern or relationship even if there actually is a real pattern. P (type II error) = P (not reject H0/ H0 false)

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Data Collection Tools

1. Ration Analysis:-Ratio is well known and most widely tool of financial analysis can be defined as the indicated quotient of two mathematical expression. as operation definition or ratio is the relationship between one item to another in a simple mathematical form. a ratio is simply one number expressed interims of anther. It is found by dividing one number the base into the others. a) The percentage method: - Analysis use ratio to connecting different parts of the financial statements in to find clues about the status of particular aspects of the sales of business. b) The Phrase method: - Ratio is useful analysis for financial statement. It is conveniently and clearly capsulate the data in a form that is easily understood interpreted as ratio are simply a means of highlighting in arithmetical term s, the relationship between figures drawn from financial statements 2. Statistical Tools: - Statistical tools are utilized for data analysis and interpretation of the firm. A brief outline of the various statistical techniques being used for present study those are: a) Index Numbers: - Index number as a number which is used to measure the level of a given phenomenon as compared to the level of the same phenomenon at same standard date Index numbers nothing more than a relative number, or a relative which expresses the relationship between two figures. b) Standard Deviation: - Standard deviation may be defined as positive square root of the variance. While the variance of a sample is the average square deviation of values from the mean.
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c) Diagrammatic and Graphical Presentation of Data: - The ratio of different companies was presented through graphs and some diagrams were used to make presentation understandable.

Research instrument
A questionnaire was constructed for my queries. A Questionnaire consisting of a set of questions was presented to respondents for their answers. 1. Sampling Plan - The sampling plan calls for three decisions. 1.1. Sampling unit: - Who is to be interviewed? The target person must be defined that has to be interviewed. It is necessary so as to gather information so that person interviewed has full knowledge about the information.

Data Sources
Two types of data were taken into consideration i.e. Primary data and Secondary data. My major emphasis was on gathering the primary data. The secondary data has been used to make things more clear. Primary Data: Direct collection of data from the source of information, including personal interviewing from the Branch Manager in finance and other finance officers in the company. Secondary Data: Indirect collection of data from sources containing past or recent information like, Annual Publications, Books, Newspaper and Magazines etc

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Collecting the information The collection of data is a tedious task. For conducting any sort of research data was needed. So for my research, there was plenty of primary data and for increasing the validity of information collected, some books, journals, pamphlets, information about the company were studied and taken into considerations. After this, I have collected the information from the respondents with the help of questionnaire. 1. Collection of Primary Data: Primary Data is the data collected from the original source. In my study, there was optimum availability of primary data because every aspect was witnesses carefully at each point. Questionnaire and personal interviews were the main instruments, which were used for collecting primary data. 2. Collection of Secondary Data: Secondary Data is the one which has already been collected by someone else and some other person is using that information. The source of secondary data was, some related books and websites related to the company. The competent staff of the company helped me a lot in providing information about the company. Analyse the Information The next step is to extract the pertinent findings from the collected data. I have tabulated the collected data and developed frequency distributions. Thus the whole data was grouped aspect wise and was presented in tabular form. Thus, frequencies, comparison and percentages were prepared to render impact of the study.

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Chapter-5
Analysis and Findings ____________________________________

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1. Comparison of sales of services in different months by the sales executives of hdfc life.
Table:
MONTH JANUARY FEBRUARY MARCH APRIL MAY JUNE SALES 25 30 35 15 18 27 ( FIGURES IN LACS )

Graph:
SALES 40 35 30 25 20 15 10 5 0 JANUARY FEBRUAY MARCH APRIL MAY JUNE SALES

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INTERPRETATION:
From the above chart it is clear that sales of insurance products have increased rapidly from the month of January to march. The reason for this is that at this period of year people want to save their taxes and they voluntarily go for insurance. Again from the chart it is clear that sales have fallen drastically in april because people are no more self-enthusiast to buy insurance. Again when the company launches sales incentives for sales executives then due to their effort sales are increasing but not in the same volume as compared to taxation period.

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2. Comparison of amount of incentive paid by the company in different months:

Table: MONTH JANUARY FEBRUARY MARCH APRIL MAY JUNE Graph:
INCENTIVE 4.5 4 3.5 3 2.5 2 1.5 1 0.5 0

SALES INCENTIVE (IN LACS) 2.5 3.0 4.0 1.5 1.8 2.2

INCENTIVE

UA RY

AR CH

UA RY

AP R

JA N

FE

BR

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JU NE

IL

AY

INTERPRETATION:
From the above chart and data available to us it is quite clear that the sales executives have been able to earn incentives considerably from the period of January to march as the volume of sales have grown up during this period. The company is able to generate good sales during these three months. Now for april to june quarter the company has to provide relatively greater amount of incentives per service product as in this case customers are not much enthusiast about buying the services in this period of year. Hence the company is providing more incentives per insurance in these period.

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3. Responses of sales executives when they were asked if they have performance based payment system in their organization or not: Table:
Yes 160 No 30 Cant Say 10

Graph:

5% 15%

yes no can't say

80%

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INTERPRETATION: When employees were asked confidentially that whether they are having performance based sales incentive or not , around 80% of the sales executives accepted that hdfc life is having performance based sales incentive schemes. Only 15% of the employees said no to this. This means that even the employees of the organisation feel that the sales executives are not treated discriminately and they were treated fairly and the company is providing them equal amount of incentives and opportunities.

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4. Responses of sales executives when they were asked whether Incentives packages are very attractive proposition for management or not :
Table: Yes 180 no 10 Can`t say 10

Graph:

5.2
5%

5%

yes no can't say

90%

INTERPRETATION:

90% of the sales force accept that the sales incentives are very attractive propositions for management and the management is going to continuously provide them with these incentives in near future also. The sales executives are having a fair amount of belief in management
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5 Responses when sales executives were asked whether sales incentives lead to inducement & motivation for higher sales or not:

Table:
Yes 180 No 10 Cant Say 10

Graph:

5.3
5% 5%

yes no can't say

90%

INTERPRETATION: From the above pie chart it is quite clear that the sales executives feel that they gets motivated and enthusiastic whenever these incentive schemes are launched by the company to increase the sales of insurance products of HDFC life. The sales executives feel that these sales schemes energise them to work with more dedication and they put their extra effort whenever these schemes are launched.
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6. Responses of sales executives about their belief that these sales incentives help them in enhancing their earning.
Table: Strongly Agree 170 Agree 30 Neither Agree Disagree Nor Disagree 0 0 Strongly Disagree 0

Graph:

0% 0% 0%

5.4

15%

Strongly Agree Agree Neither Agree nor Disagree Disagree Strongly Disagree

85%

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INTERPRETATION: 85% of the sales executives strongly believe that the sales incentive schemes launched do help them in increasing their earnings and they are able to complete their extra need with the help of these incentives from sales. Hence the sales executives believe that these sales incentives are one of the reasons for their loyalty towards the company. While 15% of the sales executives accept this fact but not so convincingly.

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7. Sales executives responses when they were questioned if more effective incentive plans should be implemented as a part of management strategy. Table: Strongly Agree 60 Agree 30 Neither Agree Disagree Nor Disagree 40 50 Strongly Disagree 20

Graph:

Chart Title
10% 30% 20%

strongly agree agree neither agree nor disagree disagree strongly disagree

15% 25%

INTERPRETATION: The sales executives are having varied opinion on whether these sales incentive schemes should be a part of management strategy or not. 30% of the sales executives strongly agree that this should be a part of management strategy while 25% agree but with less emphasis. Around 30% of the sales executives dont feel so. Hence it means that sales executives are having varied opinion on this issue.

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8. Different types of sales incentives which the sales executives want to receive on their good performance of sales of insurance in hdfc life. Table: cash incentive 60 gold 30 Tour package 50 Electronic gadgets 40 Increase position 20 in

Graph:

cash gold tour gadgets position

Interpretation:
From the data available above it is quite clear that there is a mix of opinion regarding the form of sales incentives which the sales executives want to receive. While 30% of them want sales incentives in the form of cash ,15% want it in the form of gold,25% of them wants tour packages , 20% want electronic gadgets like cellphones lcd etc and around 10% want an increase in the position based on their sales performance.

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9. Sales executives suggestion and perceptions regarding requirements for the effective incentive system.
Table: Reward should be linked to individual or group efforts 70 Scheme should operate by Scheme should be properly well-defined and easily Installed and maintained understood formula 60 70

Graph:

Chart Title

35%

35%

Reward should be linked to individual or group efforts Scheme should operate by well-defined & easily understood formula Scheme should be properly installed & maintained

30%

INTERPRETATION: When sales executives were asked to give their suggestion towards these sales incentive schemes, 35% of the sales executives said that these schemes should be linked to individual as well as group efforts. 30% of the sales executives asked for a transparent and easily understandable formula and guidelines for these schemes. while 35% sales executives laid emphasis on proper installation, monitoring and maintenance of these sales incentive schemes.
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10. Data of sales incentive (in Rs.) distributed to sales force and sales of services of the branch during introduction of different incentive schemes from January 2012 to June 2012.

Table: Month Incentive scheme January straight drive Incentive distributed 250000 300000 400000 150000 180000 220000 2500000 3000000 4000000 1500000 1800000 2700000 Sales

February rising March April May June star striker scratch to win cash stroke golden eagle

Graph:

4500000 4000000 3500000 3000000 2500000 2000000 1500000 1000000 500000 0 straight drive rising star striker march scratch to win april cash stroke may golden eagle june incentive distributed sales

january february

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Interpretation:
From the above chart we can conclude that in the month of march 2012 sales of hdfc life is maximum and in the very next month of april its sales is minimum despite of the fact that sales incentive schemes were not drastically modified or changed. Hence we can assume that sales incentives lonely are not the factor responsible for sales of insurance products. From the above chart we can easily understand that the company shares its revenue generation with the sales executives as we can see that incentives ratio with sales in all the six months are nearly 10 % constantly. It must be noted that these sales incentives are provided in addition to the regular commission payment and credit on every unique life policies.

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Chapter-6
Conclusions and Suggestions

____________________________________
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The study was done on 200 financial consultants and the result showed a mix of their different opinions and expectations. In this marketing research project my aim was to find the most suitable and attractive scheme combination which is most desired by the financial consultants and which can stimulate the sales of the hdfc life. In the research their opinion, expectations and suggestions were asked in the form of questionnaire and interview. All the financial consultants actively participated in the project and cooperatively answered the questions and expressed their opinions and suggestions. With the kind of response and suggestions offered by them it can be said that hdfc life is not only having a very enthusiastic sales force but the sales force is also loyal and believes in making customer happy to the limit that they are even ready to share their incentives with their clients as they wish to bond with the customers for a long term. This research study demonstrated that sales incentive programs can be very effective in delivering positive results from the standpoint of bottom-line measures. Whenever the company introduces some sales schemes the financial consultants feel enthusiast to procure business for hdfc life as there is an opportunity to earn an extra income besides the regular commissions. However as every phenomenon has some positive as well as some negative aspects, The study also found that sales incentives appear to generate delayed sales effects. While there is a declining trend before the incentive period, possibly indicative of a holding back of sales until the incentive period, sales remain at a level higher than baseline sales during the post-contest phase. It means the sales force get so much used to these sales incentives that during the period in which there is no such scheme, even if they can get a business (by selling insurance policy ) they delay the deal in the hope of incentives. Such behaviour can affect the sales as the consumer might want the policy at that time only resulting in their switching to another company. This type of attitude of the sales executives also damages the image of the company as consumers think that the company is not efficient in handling paper works in proper time frame and if such is the

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condition at the time of proposal acceptance then what will be the condition at the settlement of claim. Some of the financial consultants were not happy about the delay in disposal of the sales incentives by the company. Usually the company takes at least two months to provide these sales incentives to the financial consultants. Another surprised finding was that the sales force wanted incentives in some other forms too. This research project helped me to conclude that Noncash programs are more effective for eight of the 10 organizational objectives, including reinforcing organizational values; creating positive internal communications/buzz; improving teamwork; increasing customer satisfaction; motivating specific behaviours; and increasing retention/loyalty whereas Cash-based programs were seen as more effective for increasing sales and improving customer acquisition. Cash awards is the biggest motivating force for driving sales and increasing consumer base. The study found that sales incentive programs generate strong, positive increase in sales. Some of the sales expressed their dissatisfaction over the hidden terms and conditions of these schemes. They complained that sometimes the company do not provide the exact benefits which they had been promised in the promotional sales schemes. Some financial consultants also expressed their dissatisfaction over the non-sharing attitude of the sales managers of hdfc life (the financial consultants think that if due to their hard work the managers are getting any incentive then the managers should share it with them).

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Suggestions & recommendations:

Terms and conditions of the sales incentive schemes should be clear and stated in simple words. The benefits of the schemes should be made available or transferred in the accounts of the financial consultants in maximum 10 days. The financial consultants should be provided with opportunities to become a full time permanent employee of the hdfc if they achieve a specific sales target. There should be freedom to financial consultant to select the type of incentive of their choice. Suppose if a financial consultant do not want a tour package then he should be given the option to take same amount of cash or gold or any other form of incentive having the same monetary value. The operations department should be made more efficient and accountable at the branch as this would help in reducing the time taken by them in issuing premium receipts, policy documents, disposal of schemes, clearances of cheques and would check misrepresentation. Financial consultants should be treated as an employee and they should be made available all office accessories with ease and without discrimination. The company should organise a ceremony type event in which the financial consultants who achieve impressive targets should be honoured. If a financial consultant is having some issue with any sales or branch manager then the authorities above it should listen and act accordingly without any bias and discrimination. This will ensure trust among sales force and benefit hdfc life in long run as happy employees makes happy customers.

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QUESTIONNAIRE:
Name of the financial consultant:

License number:

Address:

Phone number:

Q.1
NOT?

HDFC LIFE IS HAVING PERFORMANCE BASED INCENTIVE SYSTEM OR

ANS:

YES

NO CANT SAY

Q.2 WHETHER INCENTIVE SCHEMES ARE ATTRACTIVE PROPOSITION FOR MANAGEMENT OR NOT?

ANS:

YES

NO CANT SAY

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Q.3 WHETHER SALES INCENTIVES LEAD TO INDUCEMENT & MOTIVATION FOR HIGHER SALES OR NOT?

ANS:

YES

NO CANT SAY

Q.4 WHETHER THESE SALES INCENTIVES HELP YOU TO ENHANCE YOUR EARNINGS OR NOT?

ANS:

STRONGLY AGREE

AGREE

NEITHER AGREE NOR DISAGREE

STRONGLY DISAGREE

DISAGREE

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Q.5 IF MORE INCENTIVE SCHEMES SHOULD BE INTRODUCED TO BOOST MORALE OF FINANCIAL CONSUULTANTS AND THUS INCREASE SALES?

ANS:

STRONGLY AGREE

AGREE

NEITHER AGREE NOR DISAGREE

STRONGLY DISAGREE

DISAGREE

Q.6 WHICH TYPE OF SALES INCENTIVE DO YOU WANT TO RECEIVE?

ANS:

GOLD

CASH

TOUR PACK

ELECTRONIC GADGET

INCREASE IN POSITION

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Q.7 GIVE AT LEAST THREE SUGGESTIONS FOR AN EFFECTIVE AND EFFICIENT SALES INCENTIVE SYSTEM.

ANS:

SUGGESTION 1 SUGGESTION 2 SUGGESTION 3

Q.8 DOES YOUR BRANCH SALES MANAGERS TREAT YOU LIKE AN EMPLOYEE OF HDFC LIFE OR NOT?

ANS:

YES

NO

Q.9 HAVE YOU EVER HAD PROBLEM WITH YOUR SALES MANAGER IN GETTING YOUR REMUNERATIONS ON TIME ?

ANS:

YES

NO

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Q.10 IF THERE WAS SOME PROBLEM, WHETHER YOUR PROBLEM WAS SOLVED BY HIGHER AUTHORITIES OR NOT ?

ANS:

YES

NO

Q.11 ARE YOU HAPPPY WITH THE SYSTEM ADOPTED BY HDFC LIFE TO PROVIDE SALES INCENTIVES AFTER TWO MONTHS?

ANS:

YES

NO

Q.12 IF NO, THEN WITHIN HOW MANY DAYS YOU WANT YOUR INCENTIVES IN YOUR ACCOUNT?

ANS: ____________________________________________________________________

Q.13 DO YOU THINK SALES INCENTIVES STIMULATES YOUR WORKING CAPACITY?

ANS:

YES

NO

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BIBLIOGRAPHY _____________________________________

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BIBLIOGRAPHY
Books: -Marketing Management -Management Accounting -Management Accounting -Financial Management -Research Methodology - Philip Kotler - R.K.Sharma & Shashi K.Gupta -S.N.Maheshwary -Khan and Jain -K.R.Kothari

Internet Sites:
http\\:www.google.com http\\:www.hyundai.co.in http\\:www.googlefinance.com http\\:www.scribd.com http\\:www.wikipedia.org http\\:www.amazon.org

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63

Annexure B

EVALUATION SHEET FOR SUMMER TRAINING PROJECT REPORT

STUDENTS NAME

____________________________

ROLL NO.

____________________________

EVALUATORS FEEDBACK

____________________________ ____________________________

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____________________________ ____________________________

DID THE STUDENT CONTACT YOU REGULARLY FOR DISCUSSION? : YES/NO (Please tick) MARKS AWARDED ____________________________

SIGNATURE OF EVALUATOR NAME: DATE:

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Annexure C

ATTENDANCE FOR SUMMER TRAINING PROJECT REPORT NAME OF THE STUDENT CLASS ROLL NO. NAME OF THE SUPERVISOR S.NO. DATE TIME : PROGRESS OF REPORT (REMARKS) SIGNATURE OF STUDENT SIGNATURE OF SUPERVISOR : : :

[Dr. SUBHASH KAKKAR] PROJECT GUIDE 66

BPIBS

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