Meaning of Business:: Services To Others Who Want or Need Them. When Many People Think of Business

Role of HRM in insurance sector with reference to LIC & ICICI Prudential
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Meaning of Business:
A business can be defined as an organization that provides goods and
services to others who want or need them. When many people think of business
careers, they often think of jobs in large we1althy corporations. Many business
related careers, however, exist in small businesses, non-profit organizations,
government agencies, and educational settings. Furthermore, you dont need a
degree in business to obtain many of these positions. In short, every sector of our
economy needs people with strong overall skills that can be applied to businesstype careers. There are a wide variety of career areas that exist in business settings.
Some of these include:
Accounting
Administrative Management
Business Management
Finance
Human Resources
Information Systems
Insurance
Marketing
Operations Management
Public Relations
Purchasing / Merchandising
Retail Management
Sales
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Sales
Sales
&&
Marketing
Marketing
Finance
Finance
And
And
Account
Account
Administration
and
Administration
and
ITIT
Research
&&
Research
Development
Development
Functions
ofof
Functions
Business
Business
Human
Human
Resources
Resources
Production
/ /
Production
Operations
Operations
Customer
Service
Customer
Service
Human Resource [HR]

HR is an acronym for Human Resources, that element within a company
which deals with the human aspects / need of workers. Many companies have HR
department, which may provide a broad range of services to its employees.
Human means human being and resources means something
which is useful. Humans are considered as resources because without
them no work can be done. Thats why they are termed as resources.
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HUMAN RESOURCE MANAGEMENT

Wendell French describes human resource management as the philosophy,
policies, procedures, & practices related to the management of people within the
organization.
Human resource is one of the natural resources of any country's economy. It
is the wealth of the country. Human resource management is about managing
people. It is a process of binding people & organizations together so that the
objectives of each are achieved.
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.
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Features/Characteristics/Nature of HRM:
1. HRM involves management functions like planning, organizing, directing
and controlling
2. It involves procurement, development, maintenance of human resource
3. It helps to achieve individual, organizational and social objectives
4. HRM is a mighty disciplinary subject. It includes the study of management
psychology communication, economics and sociology.
5. It involves team spirit and team work.
Importance/Significance/Need of HRM:
HRM becomes significant for business organization due to the following reasons.
1. Objective:
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HRM helps a company to achieve its objective from time to time by creating
a positive attitude among workers. Reducing wastage and making maximum use of
resources etc.
2. Facilitates professional growth:
Due to proper HR policies employees are trained well and this makes them
ready for future promotions. Their talent can be utilized not only in the company in
which they are currently working but also in other companies which the employees
may join in the future.
3. Better relations between union and management:

Healthy HRM practices can help the organization to maintain co-ordinal
relationship with the unions. Union members start realizing that the company is
also interested in the workers and will not go against them therefore chances of
going on strike are greatly reduced.
4. Helps an individual to work in a team/group:
Effective HR practices teach individuals team work and adjustment. The
individuals are now very comfortable while working in team thus team work
improves.
5. Identifies person for the future:
Since employees are constantly trained, they are ready to meet the job
requirements. The company is also able to identify potential employees who can be
promoted in the future for the top level jobs. Thus one of the advantages of HRM
is preparing people for the future.
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6. Allocating the jobs to the right person:

If proper recruitment and selection methods are followed, the company will
be able to select the right people for the right job. When this happens the number
of people leaving the job will reduce as the will be satisfied with their job leading
to decrease in labour turnover.
7. Improves the economy:
Effective HR practices lead to higher profits and better performance by
companies due to this the company achieves a chance to enter into new business
and start new ventured thus industrial development increases and the economy
improves.
Role of Human Resource Management in Insurance:

Services sectors like insurance are entirely dependent on the knowledge,
expertise, skills, attitudes and quality of human resources for growth and success.
Hence effective management of human resources is extremely critical in banks and
insurance companies.
Human resource management in insurance concentrates on building
employee capabilities. Employee capabilities serve as the trigger and create growth
opportunities for the organization.
As an employee capability is the key link to success in insurance companies,
the HR department becomes a strategic capabilities unit. Some key functions of
the HR department in insurances are:
1. The use of the individual, team and organization learning for serving the
customer in a better way.
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2. Ensuring that employees knowledge and skills are kept up-to date.
3. Aligning the HR development and learning strategies with the overall strategies
of the insurance.
4. Devising strategies to motivate the employees by means of a suitable
compensation structure.
Scope of Human Resource Management:

The scope of human resource management is very vast. It is connected with
all major activities in the working life of a worker. HRM is connected with every
other department as human resources are the requirement of all departments in the
organization.
1. Personnel aspect: This is concerned with manpower planning, recruitment,
selection, placement, transfer, promotion, training and development, layoff and
retrenchment, remuneration, incentives, productivity etc.
2. Welfare aspect: It deals with working conditions and amenities such as
canteens, rest and lunch rooms, housing, transport, medical assistance,
education, health and safety, recreation facilities, etc.
3. Industrial relations aspect: This covers union-management relations, joint
consultation, collective bargaining, grievance and disciplinary procedures,
settlement of disputes, etc.
Human Resource Management Functions:

Human resource management involves a large number of functions or
activities. This number varies according to the size & needs of the organization
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internally. However the external environment affects HRM functions. The major
functions of human resource management are:
1. Human Resource Planning:
Human resource planning is the process of assessing the organizations
human resources needs in the light of organizational goals & changing conditions
& making plans to ensure that a competent, motivated work force is employed.
Human resource planning is very important in these modern times where
everything is fluid & changes are occurring at great speed.
2. Organizational & job design:
An important activity of HRM is developing an organization which caters
for all the activities required, groups them together in a way which encourages
integration, co-operation, & provides for effective communication & decision
making.
Job design is concerned with deciding on the content & accountabilities of
jobs in order to motivate employees & maximize job satisfaction.
3. Staffing:
Staffing or acquisition of human resources is another activity of human
resource management. Staffing activities determine the composition of an
organizations human resource.
Staffing activities includes attracting qualified people to the organization,
selecting candidates, reassigning employees through transfer, promotion, or
demotion & ultimately managing the employees separation through resignation,
discharge or retirement.
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4. Training & development:

This activity of HRM focuses on improving the performance of individuals
& groups within the organization. These activities aim to help employees learn
new skills or refine existing skills.
5. Performance appraisal & review:
Performance appraisal & review is an ongoing evaluation of individuals &
group contributions to the organization & the communication of those evaluations
to the persons involved.
It also carries out number of activities like: to provide feedback about
performance, to determine the need for training, to make decision about
promotions, pay increases & so on.
6. Compensation & reward:

Organizations compensate employees through wages & salaries, bonuses, &
benefits, such as health insurance, vacation time, & pension programs. The
presence or absence of rewards & recognition is important to employee morale &
performance.
Compensation decisions include determining: ensuring fair & equitable pay
differences among employees, designing a pay packages relative to that of its
competitors, forms of compensation & so on.
7. Maintaining effective employer-employee relationship:
An important function of HRM is to promote harmonious relationships
between the management & employees. The aim of HRM is to increase cooperation, trust & to involve employees actively in the companys affairs.
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8. Health & safety management:

This function of HRM includes activities & events that serve to protect
organization members from illness & physical dangers in the workplace & to assist
them with their physical & emotional health.
For many organizations, protecting the health & safety of human resources
is a prime social responsibility. This HRM functions serves to preserve the human
resources of the organization.
9. Employee participation:
This is a relatively new function of HRM. Employee participation focuses on
giving employees a voice, sharing information with them & consulting them on
matters of mutual interest. Employee participation is an important step in
establishing industrial democracy.
10.
Organization improvement:
Organizations must constantly improve themselves due to the emergence of new

ideas regarding productivity, rapidly changing technology & competition from
other organizations.
The function of human resources manager is to ensure the flow of events
through which people in the organization improve the organizations effectiveness.
He has to constantly lookout for ways to improve the organization through
employee training implementing work redesign programs & so on.
Structure of Human Resources Department:
A human resources department is becoming an integral part of every organization.
Two important factors that strongly influence the establishment of the human
resources department are:
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1. Size of the organization: The larger the organization, the more is the need to
set up a HR department.
2. Management Philosophy: The importance the management of the organization
places on its human resource & sees it as a vital factor towards attainment of
organizational objectives significantly influences their decision to set up a HR
department.
Other factors that influence establishment & structure of human resources
department are:
1. The extent to which the organizations operations are decentralized.
2. The type of work carried out.
3. The kind of people employed.
4. The role assigned to the HR function.
5. The type of services the HR department is expected to provide.
The human resource department is typically responsible for the effective
management of the various personnel systems. However, the human resource
managers usually share responsibility for personnel activities with other managers.
These activities are usually performed in cooperation with other managers from
other departments throughout the organization.
The following diagram illustrates the common structure of the human
resource department:
PRESIDENT/DIRECTOR (HUMAN RESOURCES)
Manager
Manager
Manager
Manager
Manager
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Recruitment
&
Selection
Training
&
Development
Compensation
&
Benefits
Employee
Employee
Welfare
Relations
All managers have to perform the activities or functions assigned to them by

the President/Director.
The most important principle about the organization of the HR department is
that it should fit the needs of its business. There is no best structure to adopt but the
choice of the structure should be made on the basis of an analysis of what the
organization wants by way of HRM guidance & services.
Human Resource Development:

Employee education, training & development have now become a vital &
extremely important part of organizational strategy. A 2000 survey of human
resource managers in large organizations discovered that these managers
considered training & development as their most important function.
The increasing focus on the development of human resources has resulted in
Human Resource Development (HRD) becoming a key & vital aspect of the HRM.
HRD is defined as a set of systematic & planned activities designed by an
organization to provide its members with the opportunities to learn necessary
skills to meet current & future job demands.
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HRD activities begin when an employee joins an organization. These

activities continue throughout his career; it does not matter whether the employee
is an executive or a worker. Learning is at the core of all HRD activities.
According to the American Society for Training & Development (ASTD),
Human Resource Development (HRD) has three primary functions:
1. Training & development
2. Organizational development, &
3. Career development.
1. Training & Development:
Training is the process of providing employees the knowledge & skills
needed to do a particular task or job.
Development is the process of preparing employees for future work
responsibilities & also increasing their capacities to perform current job. In
contrast to training, development is more focused on the long term needs of the
employees & the organization.
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It is the work of HRD professionals to coordinate the training &

development programs & ensure that people in the organization have the necessary
knowledge & skills to be effective in their position.
2. Organizational Development:
Organizational development (OD) focuses on:
a) Macro organizational changes: These changes are aimed at ultimately
improving the effectiveness of the organization.
b) Micro organizational changes: These changes are directed towards
improving the effectiveness of individuals, small groups, & teams within the
organization.
The role of HRD manager is to act as a change agent in the OD process.
3. Career Development:
Career development involves two processes:
a) Career planning: It involves helping the employee develop a realistic career
plan. This is done by assessing the skills & abilities of the employee with the
assistance of an expert.
b) Career management: The focus here is on taking the necessary steps to
achieve the career plan. The emphasis is on what the organization can do to
help in the employees career development.
Qualities of a good Human Resource Manager:

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In a fast changing opportunities world where burnouts happen faster than

promotions, where loyalties trade more than shares, where commitment depends
on convenience & where stress in the workplace has become a companion, the job
of an HR manager has become as extremely difficult & challenging one.
The success or failure of an HR manager depends on his personal qualities,
job related knowledge & experience. The following is a list of some important
qualities that a HR manager must possess:
1. Intelligence:
HR mangers require a high level of intelligence to quickly understand
the changes taking place in the external environment & respond with an
appropriate plan of action.
2. Empathy:
Empathy refers to the ability to look at situations from the other
persons perspective & experience similar feelings. In order to do so, the HR
manager must learn to put himself in the shoes of the other person.
3. Motivating abilities:
Not only a HR manager must be self-motivated but he must also be
able to motivate others. He should be able to motivate talented employees to
join the organization, get the best of his subordinates & encourage them to take
challenging assignments.
4. Analytical abilities:
HR managers must possess the ability to understand situations quickly
& accurately. They must be able to separate the important & the unimportant &
get quickly to the core of the problem.
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5. A holistic approach:
HR mangers must have a holistic approach. As per the holistic
approach:
a) Managers must not merely look at problems & issues as isolated events but
in terms of their impact on the whole organization. Managers must look at
people-organization relationships carefully.
b) Managers need to think in terms of what impact a decision will have on the
whole person, whole group, whole organization & whole social system.
6. Good understanding of human nature & social environment:
A good HR manager must have a good knowledge & understanding
of human psychology. He must know what motivates & drives people. A good
knowledge of the differences across cultures can also greatly enhance the
effectiveness of a HR professional.
HUMAN
RESOURCE
PLANNING,
RECRUITMENT,
SELECTION & INDUCTION:

Human Resource Planning:
Human resource planning is referred to as personnel planning or Manpower
planning. However the term human resource planning is more widely used today
as it more broad based & comprehensive.
Stainer defines human resource planning as a strategy for the acquisition,
utilization, improvement & preservation of an organizations human resources.
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Human resource planning is based on the belief that people are an

organizations most important strategic resource. It attempts to address the human
resource needs of an organization both in quantitative & qualitative terms. Human
resource planning is also concerned with how people are employed & developed in
order to improve organizational effectiveness.
Characteristics/Nature of Human Resource Planning:

1. Futuristic: Like most other kinds of planning, human resource planning is
forward looking. Human resource planning is concerned with forecasting the
future manpower needs of the organization so that adequate & timely provisions
may be made to meet those needs.
2. Continuous Process: Human resource planning is an ongoing process. It is not
a onetime process, as the demand & supply of human resource undergoes
frequent changes. Hence human resource plans needs to be reviewed & revised
as per the changing needs of the organization & the environment.
3. Part of corporate planning: Human resource planning is an integral part of

corporate planning. Human resource plans are in tune with the corporate plans
& are aimed at meeting organizational requirements.
4. Quantitative & qualitative: Human resource planning focuses not merely on
maintaining the right number of people (quantitative aspect) but also on
ensuring that the organization has the right kind of people (qualitative aspect).
5. Long term & short term plans: The human resource plans are long term as
well as short term in nature. Short terms plans are concerned with filling
existing jobs & recruitment & selection of the right personnel. The long term
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plans are usually for a period of 5 years or more & are prepared on the basis of
trends in the economy, labor market & production.
Need for Human Resource Planning:

Human resource planning is not a matter of choice but a necessity for modern
organizations. Human resource planning is essential for the following reasons:
1. Smooth & efficient working of organizations: An organization needs
personnel with suitable qualifications, skills, knowledge, work experience &
aptitude in order to carry out its various operations smoothly 7 efficiently.
Human resource planning fulfills the organizational need for quality workforce.
2. Filling gaps in manpower: People in the organization needs to be replaced
because the existing ones have either retired, died, resigned or are no longer
capable due to physical or mental ailments. Human resource planning makes
provision for the replacement of personnel.
Human resource planning identifies gaps in existing manpower in
terms of quality & talent & takes steps to fill these gaps.
3. Expansion & diversification: Organizational plans for growth through
expansion & diversification will not bear fruits in the absence of the required
human resources. In order to meet the needs of expansion & diversification
programs, human resource planning is unavoidable.
4. Challenges of changing technology: Rapid changes in production technology,
marketing & management methods have created problems of redundancies,
retraining & relocation of personnel. Systematic human resource planning is
needed to resolve these problems.
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5. Increased employee mobility: Employees no longer spend their whole life

working for a single organization. There has been a marked increase in
employee mobility. Effective human resource planning is vital to meet this
shortfall & for retaining talented employees.
6. Shortage of skills: As organizational become increasingly complex, they
require people with a wide-range of specialized skills. Sometimes these skills
are in short supply & problems arise when employees with such skills leave the
organization. Hence human resource planning is vital to deal with problems
arising from shortage of skills.
RECRUITMENT
The acquisition of human resource for the organization takes place through
the process of recruitment & selection. After the human resource needs of the
organization are identified through human resource planning, the next step is that
of recruitment & selection. One of the most difficult tasks of the human resource
manager is that of recruitment & selecting the right kind of people for the
organization.
Recruitment is the first step towards procuring qualified manpower for the
organization. The process of acquiring human resource beings with recruitment
continues with selection & ceases with placement.
According to Edwin Flippo, recruitment is the process of searching for
prospective employees & stimulating & encouraging them to apply for jobs in an
organization.
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A number of factors such as the size of the organization, the employment

condition in the community, reputation of the organization, working conditions &
salary & benefits offered by the organization affect the recruitment process. In very
large organization, recruitment is a complex & continuing process that demands
extensive planning & effort.
Sources of Recruitment
The various sources of recruitment may be broadly classified in to two broad
categories i.e. Internal & External sources. Some organizations draw their human
resource internally i.e. from within the organization while other draw externally i.e.
from outside the organization.
Internal Sources of Recruitment:

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The internal sources of recruitment focus on finding qualified applicants within the
organization. The organization itself is the best source of applicants for position
above the entry level. The internal source of recruitment may be of the following
types:
1. Promotions
2. Transfers
3. Job posting (internal advertisements)
4. Recall of retired & ex-employees
5. Employee referrals
6. Skills Inventories
A new development in this area is the Human Resource Information System
(HRIS). It is a computerized system that assists in the processing of HRM
information. It provides skill inventory information. The HRIS is designed to
quickly fulfill the personnel information needs of the organization. It permits the
organizational to track most information about an employee & about jobs &
retrieve that when it is needed. HRIS is extremely useful for storing employment,
training & compensation information on each employee.
External Sources of Recruitment

Organizations turn to external sources of recruitment when the internal
sources fall short. New organizations rely largely on external sources to meet their
recruitment needs. However even well established organizations turn to external
sources when candidates with the desired skills, knowledge & qualifications are
not available in the organization or in order to introduce new blood in the
organization.
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The external sources of recruitment are:

1. Campus recruitment
2. Advertisement
3. Employment agencies
4. Employee recommendations
5. Professional bodies
6. E-recruitment/On line recruitment
SELECTION
Once an effective recruitment program has been carried out & supplied
enough job applicants, the next step is that of choosing the best candidates for
specific jobs. Selection is the next logical step in the human resource process after
recruitment.
Selection is the process of choosing the most suitable person out of all the
applicants. It is the process of choosing individuals possessing the required
qualifications & skills to perform the job successfully.
According to Thomas Stone, selection is the process of differentiating
between applicants in order to identify & hire those with a greater likelihood of
success on the job.
Selection involves screening of candidates. Screening is a process of
reducing the number of applicants to a few by way of rejecting the candidates who
are not found eligible as per the qualifications prescribed. Selection of employees
is a managerial decision. It is the management which fixes the criteria for selection.
Difference between Recruitment & Selection

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Often the terms recruitment & selection are used interchangeably & are
confused with each other. Selection is, however, different from recruitment. There
is a fine line of distinction between the two.
The following are the main differences between recruitment & selection:
1. Recruitment is the process of identifying & encouraging prospective employees
to apply for jobs. Selection, on the other hand, is the process of choosing the
best out of those recruited.
2. Recruitment involves attracting & searching for candidates whereas selection
involves comparing & choosing candidates.
3. Recruitment is positive in its approach as it aims at increasing the number of
applicants for a wider choice. In contrast, selection is negative as it rejects a
large number of applicants to identify the few who are suitable for the job.
INDUCTION:
When an employee joins the organization, the first few days are ones of
great uncertainty. Even the calmest & most competent employee feels a little
nervous & insecure. This is because he is unfamiliar with the new surroundings;
new coworkers 7 new job procedures. Induction programs are also commonly
referred to as orientation programs.
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Michael Armstrong defines induction as the process of receiving &

welcoming employees when they first join the company & giving them the basic
information they need to settle down quickly & happily & start work.
Induction is the process of familiarizing the new employee with the job &
the organization. It includes introducing the new employee to his or her work unit.
According to Armstrong, induction has 5 main aims:
1. To put the new employee at ease.
2. To create employee interest in the job & the organization.
3. To provide basic information about working conditions.
4. To indicate the standards of performance & behavior expected from the
employee.
5. To tell the employee about training arrangements & how he or she can
progress in the company.
TRAINING & DEVELOPMENT

Training is basically the management of learning. The objective of training
& development is to raise the level of performance in one or more aspects. This is
achieved either by providing new knowledge & information relevant to a job or by
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teaching new skills or by imbibing an individual with new attitudes, values,
motivates & other personality characteristics.

According to Edwin Flippo, training is the act of increasing the
knowledge & skill of an employee for doing a particular job.
Training prepares employees to perform their present job even better & more
efficiently. It also prepares the employee for higher position with increased
responsibilities. Development refers to those learning opportunities designed to
help employees grow.
Importance of Training in Insurance Companies

Insurance business is very different from other types of business & financial
services. The following features of insurance make it standout from other
businesses:
1. Insurance is a contingent product whose utility is tested only in the event of
an accident or disaster. In contrast, in most other businesses the benefits of
purchase are often immediately realized.
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2. Insurance usually has negative implications in the mind of the buyer.

3. Often insurance products have a lot of legal jargon which makes it difficult
to understand.
4. Insurance products have to be resold annually to the same buyer.
5. In insurance both the contractual parties are silent unless an unfortunates
claim arises.
6. The claim amounts very substantially & often both the parties look at each
others interests, motivates & actions with suspicion.
These unique features of the insurance business highlight the need for a well
trained workforce. Not only do they need to have sound knowledge of the product
& services offered by their organization but the right attitude while dealing with
the customer assumes utmost importance. Gaining credibility & winning trust of
the customer is vital.
Training Objectives
Training objectives are one of the most important parts of training program.
While some people think of training objective as a waste of valuable time. The
counterargument here is that resources are always limited and the training
objectives actually lead the design of training. It provides the clear guidelines and
develops the training program in less time because objectives focus specifically on
needs. It helps in adhering to a plan.
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Training objective tell the trainee that what is expected out of him at the end
of the training program. Training objectives are of great significance from a
number of stakeholder perspectives,
1. Trainer
2. Trainee
3. Designer
4. Evaluator
1. Trainer:
The training objective is also beneficial to trainer because it helps the trainer
to measure the progress of trainees and make the required adjustments. Also,
trainer comes in a position to establish a relationship between objectives and
particular segments of training.
2. Trainee:
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The training objective is beneficial to the trainee because it helps in reducing

the anxiety of the trainee up to some extent. Not knowing anything or going to a
place which is unknown creates anxiety that can negatively affect learning.
Therefore, it is important to keep the participants aware of the happenings, rather
than keeping it surprise.
Secondly, it helps in increase in concentration, which is the crucial factor to
make the training successful. The objectives create an image of the training
program in trainees mind that actually helps in gaining attention.
Thirdly, if the goal is set to be challenging and motivating, then the
likelihood of achieving those goals is much higher than the situation in which no
goal is set. Therefore, training objectives helps in increasing the probability that the
participants will be successful in training.
3. Designer:
The training objective is beneficial to the training designer because if the
designer is aware what is to be achieved in the end then hell buy the training
package according to that only. The training designer would then look for the
training methods, training equipments, and training content accordingly to achieve
those objectives. Furthermore, planning always helps in dealing effectively in an
unexpected situation. Consider an example; the objective of one training program
is to deal effectively with customers to increase the sales. Since the objective is
known, the designer will design a training program that will include ways to
improve the interpersonal skills, such as verbal and non verbal language, dealing in
unexpected situation i.e. when there is a defect in a product or when a customer is
angry.
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Therefore, without any guidance, the training may not be designed

appropriately.
4. Evaluator:
It becomes easy for the training evaluator to measure the progress of the
trainees because the objectives define the expected performance of trainees.
Training objective is an important to tool to judge the performance of participants.
PERFORMANCE APPRAISAL
Performance Appraisal is a process supporting the use of human resource in
an organization. It is possibly managements most powerful tool in controlling
performance and productivity of human resources in the organization. Used
effectively, it can have tremendous strategic potential for governing employee
behavior and in turn, organizations direction through its dynamic links to
selection, training, career-path planning and reward systems.
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Performance appraisal is the process of evaluating the employees

performance on the job in terms of requirements of the job. It identifies the
differences among the employees in terms of their performance.
Need, Importance and Advantages of Performance Appraisal

1. Scientific basis for judging the merit or worth of employees.
2. Sound basis for promotion, demotion, transfer or termination of employees.
3. Helps in distinguishing between efficient and inefficient workers.
4. It reveals the defects in the selection procedure.
5. Helps to know the potentials of the subordinates systematically.
6. Helps correct placements.
7. It helps in constructively guiding the employees.
8. It prevents grievances and develops a sense of confidence.
9. Protects the management against the charges of discrimination.
Factors that hamper Performance Appraisal

The different factors that hamper a proper performance appraisal:
1. Employee Resistance:
Performance appraisal is not very popular & faces considerable resistance in
its implementation. A major source of difficulty is employees who do not anticipate
a favorable rating. Such employees view the evaluation process as a personal threat
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& are likely to bring considerable group pressure on the managers & the
supervisors to keep appraisals.
2. Lack of time:
Managers often have many responsibilities & numerous subordinates. Hence
they often lack the time to gather sufficient information & conduct a proper
performance appraisal.
3. Lack of reward:
All thought organizations emphasize the importance of good performance
appraisals; there are no rewards to the appraisers for doing a job well. Neither are
there any sanctions (penal action) for inaccurate appraisals. Hence there is no
motivation for the appraisers to take their work seriously.
4. Appraisal politics:
In organizations where all raters are inflating the rating of their subordinates,
a good rater has to play politics in order to protect and enhance the career prospects
of his subordinates.
5. Lack of training:
Managers often lack the required training and experience to conduct a proper
and fair appraisal. Due to lack of training they often conduct the appraisal in an
unscientific manner commit difference types of errors.
6. Poor appraisal form:
Many appraisal forms are very ambiguous (vague) and extremely complex
in nature .Raters are often not sure what they are evaluating. Some appraisal forms
are deficient some vital aspect of job performance is missing .at time the
appraisal forms are contaminated they contain irrelevant performance dimension.
7. Avoid negative reaction:
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Poor ratings result in defensive and hostile reactions from the subordinates that
create a stressful situation for the rater. In order to avoid such managers tend to
give uniformly high ratings to all the subordinates.
8. Organizational needs:
Organizational need high ratings to guarantee promotions, salary increases, &
provide employees with other valued rewards. Low rating would result in
employees being deprived of these rewards. Managers are often motivated to
obtain these rewards for their subordinates which results in inflated ratings.
9. Poor reflection on the manger:
The ratings of the subordinates are often considered as a reflection of the
managers ability to develop his juniors. Thus while high ratings make the mangers
look good, poor rating of the subordinates show the manger in poor light. Hence in
order to show that they are doing a good job, managers are tempted to give high
ratings to their subordinates.
Life Insurance Corporation of India

Overview:
The Life Insurance Corporation of India (LIC) is the largest life insurance
company in India, and also the country's largest investor. It is fully owned by the
Government of India. It also funds close to 24.6% of the Indian Government's
32
Life Insurance
expenses. It has assets estimated of Rs. 8 trillion (US$ 178.4 billion). It was
founded in 1956.
Headquartered in Mumbai, which is considered the financial capital of India,
the Life Insurance Corporation of India currently has 8 zonal Offices and 101
divisional offices located in different parts of India, at least 2048 branches located
in different cities and towns of India along with satellite Offices attached to about
some 50 Branches, and has a network of around 1.2 million agents for soliciting
life insurance business from the public. The recent Economic Times Brand Equity
Survey rated LIC as the No. 1 Service Brand of the Country.
In the financial year 2006-07 Life Insurance Corporation of India's number
of policy holders are said to have crossed a whopping 200 million (fourth in terms
of population of the countries of the world). Its subsidiaries include Life Insurance
Corporation of India International, LIC Nepal, LIC Lanka, LIC Housing Finance
and LICHFL Care Homes.
LIC saw computers in 1964. Today the company is on the Internet and is
utilizing Information Technology in servicing its clients. It has bagged various
award including Loyalty Awards 2008 in Insurance Sector, NDTV Profit Business
Leadership Award 2007, CNBC Awaaz Consumer Awards 2007 and Outlook
Money NDTV Profit Awards 2007. LIC provides a rewarding career as sales
agents. It offers world class training, freedom to work and unmatched financial
strength.
The Objectives of the LIC are to:

1. Spread life insurance and provide life insurance protection to the masses at
reasonable cost.
33
Life Insurance
2. Mobilize peoples' saving through insurance-linked savings schemes.

3. Invest the funds to serve the best interests of both the policy holders and the
nation.
4. Conduct business with maximum economy, always remembering that the
money belongs to the policy holders.
5. Act as trustees of the policy holders and protect their individual and
collective interests.
6. Innovate and adapt to meet the changing life insurance needs of the
community.
7. Involve all the people working in the corporation to ensure efficient and
courteous service to the insured public.
8. Promote amongst all agents and employees of the Corporation a sense of
pride and job satisfaction through dedicated service to achieve the corporate
objective.
Mission
"Explore and enhance the quality of life of people through financial security by
providing products and services of aspired attributes with competitive returns, and
by rendering resources for economic development."
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Life Insurance
Vision
"A trans-nationally competitive financial conglomerate of significance to societies
and Pride of India."
Awards:
INDY's Silver Award for best Corporate Film.
World Brand Congress Award
OUTLOOK MONEY -- NDTV PROFIT AWARD 2009 in " BEST LIFE

INSURER CATEGORY "
NDTV PROFIT BUSSINESS LEADERSHIP, AWARDS 2009
CNBC AWAAZ CONSUMER AWARD 2009 for" Most preferred insurance
company "
ASIA PACIFIC HRM Congress, 2009 Award for INNOVATIVE HR
PRACTICES
Brand Equity Most Trusted Brand 2009 Top in Insurance
Category
Golden Peacock Innovative Product / Service Award 2009
Loyalty Award 2009
Reader's Digest Trusted Brand Award, 2009 ( Platinum category )
Business Superbrand India 2009
ASIA BRAND CONGRESS BRAND LEADERSHIP AWARD, 2008
Pitch Award -" Rank 1 " India's Top 50 Service Brands
Golden Peacock Innovative Product / Service Award 2009
Management Team
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Life Insurance
T.S. Vijayan - Chairman

D.K. Mehrotra - MD, LIC
Thomas Mathew T - MD, LIC
A K Dasgupta - MD, LIC
Arun Ramanathan - Secretary, Financial Services, Dept. of Financial
Services, Ministry of Finance, Govt of India
Sindhushree Khullar - Addl. Secretary, Dept of Economic Affairs, Ministry
of Finance
Yogesh Lohiya - Chairman cum MD, GIC of India
T.C. Venkat Subramanian - Chairman & MD, Export Import Bank of India.
ICICI Prudential Life Insurance Company Ltd.

Overview:
36
Life Insurance
ICICI Prudential Life Insurance Company is a joint venture between ICICI

Bank - one of India's foremost financial services companies & prudential plc - a
leading international financial services group headquartered in the United
Kingdom. Total capital combination stands at Rs. 47.80 billion, with ICICI Bank
holding a stake of 74% and Prudential plc holding 26%.
ICICI Prudential began their operations in December 2000 after receiving
approval from Insurance Regulatory Development Authority (IRDA). Today, there
nation-wide reach includes 1,960 branches (inclusive of 1,096 micro-offices), over
237,000 advisors; and 6 bancassurance partners.
For three years in a row, ICICI Prudential has been voted as India's Most
Trusted Private Life Insurer, by The Economic Times - AC Nielsen ORG Marg
survey of 'Most Trusted Brands'. As they grow their distribution, product range and
customer base, they continue to tirelessly uphold their commitment to deliver
world-class financial solutions to customers all over India.
Distribution:
ICICI Prudential Life has one of the largest distribution networks amongst
private life insurers in India. It has a strong presence across India with 1,960
branches (including 1,096 micro-offices) and an advisor base of over 230,000 (as
on December 31, 2009).
The company has 6 bancassurance partners having tie-ups with ICICI Bank,
Jalgaon Peoples Co-op Bank, Ratanagiri District Central Co-op Bank, Ballia
Kshetriya Co-operative Bank, Renuka Nagrik Sahakari Bank, Bhandara Urban Cooperative Bank.
About the Promoters

37
Life Insurance
ICICI Bank
ICICI Bank Ltd is India's largest private sector bank and the second largest
bank in the country with consolidated total assets of about US$ 102 billion as of
June 30, 2009. ICICI Banks subsidiaries include Indias leading private sector
insurance companies and among its largest securities brokerage firms, mutual
funds and private equity firms. ICICI Banks presence currently spans 19 countries,
including India.
Prudential Plc
Established in London in 1848, Prudential plc, through its businesses in the
UK, Europe, US, Asia and the Middle East, provides retail financial services
products and services to more than 21 million customers, policyholder and unit
holders and manages over 249 billion of funds worldwide (as of March, 2009). In
Asia, Prudential is the leading Europe-based life insurer with life operations in
China, Hong Kong, India, Indonesia, Japan, Korea, Malaysia, the Philippines,
Singapore, Taiwan, Thailand, and Vietnam. Prudential is one of the largest asset
management companies in terms of overall assets sourced in Asia ex-japan, with
36.8 billion funds under management (as of March, 2009) and operations in ten
markets including China, Hong Kong, India, Japan, Korea, Malaysia, Singapore,
Taiwan, Vietnam and United Arab Emirates.
Vision
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Life Insurance
To be the dominant Life, Health and Pensions player built on trust by world-class
people and service.
This they hope to achieve by:

Understanding the needs of customers and offering them superior products
and service.
Leveraging technology to service customers quickly, efficiently and
conveniently
Developing and implementing superior risk management and investment
strategies to offer sustainable and stable returns to our policyholders.
Providing an enabling environment to foster growth and learning for our
employees
And above all, building transparency in all our dealings
They do believe that they are on the doorstep of an exciting new opportunity,
where they can play a significant role in redefining and reshaping the sector. Given
the quality of their parentage and the commitment of their team, there are no limits
to their growth.
Values
Every member of the ICICI Prudential team is committed to 5 core values:
Integrity, Customer First, Boundary less, Ownership, and Passion. These values
shine forth in all they do, and have become the keystones of their success.
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Life Insurance
Awards
The first runner up award for the Best Defect Elimination in Service &
Transaction category at Asian Six Sigma Excellence Summit 2009.
The International Service Excellence Awards 2009.
Insurance brand in the Brand Equity "Most Trusted Brands 2009" survey.
ICICI Prudential Life Insurance was awarded with the coveted 'ICAI Award for
Excellence in Financial Reporting' by the Institute of Chartered Accountants of
India (ICAI) for the financial year ended March 31, 2008.
ICICI Prudential Life was awarded the Life Insurance Company of the Year at
the12th Asia Insurance Industry Awards 2008.
ICICI Prudential Life was awarded with two Bronze Effie's in the services
category for its corporate campaign and Retirement Number campaign.
ICICI Prudential Life Insurance won the award for the Best Life Insurer-Runner
up at the Outlook Money & NDTV Profit Awards 2008.
ICICI Prudential Life was awarded the SAP ACE 2008 Best Business Objects
Award for its IT practices.
ICICI Prudential Life won the ICICI Group Marketing Excellence Award 2008
in three key categories for its marketing initiatives.
India's Most Customer Responsive Insurance Company. Avaya Global Connect
-Economic Times. Customer Responsiveness Awards, 2007.
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Life Insurance
COMPARATIVE STUDY OF LIC & ICICI PRUDENTIAL LIFE

INSURANCE
Human Resource Planning At LIC
"PEOPLE ARE OUR MOST VALUABLE ASSET" IS WHAT THE HR
MANAGER OF LIC SAID TO US.
The penalties for not being correctly staffed are costly.
Understaffing loses the business economies of scale and specialization,
orders, customers and profits.
Overstaffing is wasteful and expensive, if sustained, and it is costly to
eliminate because of modern legislation in respect of redundancy payments,
consultation, minimum periods of notice, etc. Very importantly, overstaffing
reduces the competitive efficiency of the business.
Planning staff levels requires that an assessment of present and future needs of the
organization be compared with present resources and future predicted resources.
Appropriate steps then be planned to bring demand and supply into balance.
Human resource planning At ICICI Prudential life Insurance

Like all good plans, HR manager of ICICI Prudential Life Insurance builds
employment plans on premises basic assumptions for employment requirement by
forecasting three things:
The supply of inside candidates;
Personnel needs;
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Life Insurance
The supply of outside candidates according to their company requirements
By the utilization of their resources, firstly it is checked that either there is any job
placement or company is expanding their business so that new jobs are open for
new candidates. All these issues are tackled by the HR manger and their respective
staff. If staff is required then company tries to find them inside the company by
upgrading their employees if it not possible then new jobs are created and fill by the
outside market.
Recruitment At LIC:
Recruitment at LIC is done by the Central Office at Mumbai. The recruitment
process for Assistant Administrative Officers (AAOs) at LIC begins with the
placing of administrative in popular national & regional newspapers across the
country.
Candidates applying for the post of AAOs should be between 21 & 28 years
of age. They should hold a graduate/postgraduate degree in any subject with
minimum of 50% marks. Candidates from certain background (SC, ST, and OBC)
are given some concessions with regard to age & marks.
Short-listed candidates are asked to appear for an entrance examination. The
entrance examination has two papers one is of an objective type & the other an
essay type. The objective type paper tests intelligence, aptitude, mathematical
knowledge, logical reasoning, general knowledge, & awareness of political &
cultural events.
After the written test, candidates have to appear for interviews, which are
conducted by LIC offices across the country. Based on their performance,
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Life Insurance
candidates are selected.
The main sources of Recruitment are:

1. Internal promotion and internal introductions (at times desirable for morale
purposes)
2. Careers officers (and careers masters at schools)
3. University appointment boards
4. Agencies for the unemployed
5. Advertising (often via agents for specialist posts) or the use of other local
media (e.g. commercial radio)
Interviewing can be carried out by individuals, by panels of interviewers or in the
form of sequential interviews by different experts and can vary from a five minute
'chat' to a process of several days. Ultimately personal skills in judgment are
probably the most important, but techniques to aid judgment include selection
testing for:
Aptitudes (particularly useful for school leavers)
Attainments
General intelligence
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Life Insurance
Recruitment Process at ICICI Prudential Life Insurance Company Ltd:

1.
8.
Insurance
Head
Branch
Advisor
2.
7.
Recruitment
Cashier
Officer
6.
3.
BDOPS
Unit
Department
Manager
4.
5.
Receptio
n
Sales
Manager
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Life Insurance
1. Insurance Advisors: Insurance Advisors is the Financial Advisors / Financial

Agent of the company. Recruitment process starts with Recruitment of financial
Advisors. Basically Financial Advisors deals with various policies of the
company. The Application Form which is known as FSP form will be given to
Insurance Advisors for the Post of Financial Advisors and that form is submitted
to Recruitment Officers after the signature done by Insurance Advisors. There
are 16 signature was taken from the Insurance Advisors.
2. Recruitment Officers: Recruitment Officers is the Person who recruits the
Insurance Advisors in the long period of time. The FSP form will be properly
fill-up by the Recruitment Officer.
3.
Unit Manager: Unit Manager is the Person who recruits the Recruitment
Officers i.e. all the Recruitment Officers will be under the Unit Manager of the
company. And also all Financial Advisors are also under the Unit Manager of the
Company. In this case, The FSP form will properly sign and again check by the
Unit Manager and if there is any rejection in case then that will be solve by the
Unit Manager of the company.
4. Sales Manager: Sales Manager is the Person who takes the Personal Interview
of Insurance Advisors and that FSP form is send to Sales Manager. In Practically
Sales Manager is not needed for the Recruitment Process.
5. Reception: The FSP form is send to receptionist for check out the rejection if
any i.e. The FSP form is login to receptionist before 4.30 p.m. according to the
rules and regulation of the company.
6. BDOPS Department: Bibliographic Databases Operations department.
BDOPS Department is the department who finalized the FSP form and accepts
the form, if there is no rejection. If there is any rejection then that rejection
Form is directly sends to Unit Manager of the Company.
7. Cashier: Cashier is the Person who gives the Acknowledgement Slip after the
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Life Insurance
form will be accepted.

8. Head Branch: Head Branch of the ICICI Prudential Life Insurance Company is
at Amboli (Andheri). Finally, the FSP form is send to Head Branch and the
Exam Centre will be decided by the Head Branch.
The company follows various sources of recruitment. These are:
1. Campus recruitment: For this the company goes to the various colleges across
the country and they recruit fresh candidates from there.
2. Media: The Company also recruits through media. For this the company uses
sources like newspapers, magazines etc. They prefer this media basically when
large volume of people is required.
3. Web- based recruitment: The Company also gives recruitment notice in the
web and they recruit through the web.
4. Employee reference: The Company also recruits from friends and relatives of
present employees.
5. Consultancy: Whenever necessary the company takes the help of the
consultancy for recruiting candidates. This is also an important source for them.
Preferred sources of recruitment

Although there are various sources of employment, followed by the company,
i.e. external and internal sources but the company mostly prefers the external
source for recruiting the candidate.
Reservation of jobs for SCs, STs, etc.

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Life Insurance
The company does not follow any reservation policy for SCs and STs etc for
recruiting the candidates. They only look for the eligible candidates.
Selection at LIC:
Selection of candidates will be based on performance in Group Discussion /
Interview and or written test, if need arise. Candidates will be tested for their
knowledge in General Awareness, Financial Products, Marketing Skills,
Aptitude, Flair for interaction with customers, etc. Candidates qualifying in the
Group Discussion/Interview and/or written test shall appear for a pre-selection
medical examination. Candidates found medically fit in the pre-selection
medical examination will be engaged as Senior Marketing Executives.
Selection procedures followed by LIC & ICICI Prudential Life

Insurance:
The Main Objective of a selection procedure in LIC & ICICI Prudential Life
Insurance is to determine whether an applicant meets the qualification for a specific
job, and then to choose the applicant who is most likely to perform well in that job.
The entire process of selection begins with an initial screening interview and
concludes with a final employment decision. When a selection policy is formulated,
requirement like technical and professional dimensions are kept in mind.
Steps in selection procedure

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Life Insurance
1. Application form: Many companies formulate their own style of application

form depending upon the size and nature of business carried on, type and level
of the job etc. Information is generally required on the following items in the
form: personal background, educational attainments, work experience references
etc.
2. Written test: Written test is conducted for the qualified candidates after they are
screened on the basis of application form to measure the candidates ability
towards the job, his aptitude reasoning, knowledge in various disciplines,
English language etc.
3. Preliminary Interview: The next step that tag along the selection procedure is a
preliminary interview wherein the applications are scrutinized so as to eliminate
unqualified applications. Preliminary Interviews are short. This interview thus
provides information about the candidate related to the job or personal
specifications.
4. Selection Test: After passing through the interview the next stage that applicant
has to prove himself on are the selection tests. There are different types of
selection tests for different levels of the organization and that too is further
differentiated within different types of organizations. Some of the most common
and well-known tests that an applicant has to go through are;
a. Ability test
b. Aptitude test
c. Personality tests
d. Medical Tests
5. References and background checks: Many employer request names, address,
and telephone numbers or references for the purpose of verifying information
and, perhaps, gaining additional background information on an applicant.
6. Selection Decision: After collecting data from all the preceding steps, this is the
most crucial step in the entire selection process. The main difference between
the preceding stages and this is that former is used to short list the number of
candidates and later one is to make a final decision from the pool of individuals
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Life Insurance
who pass the tests, interviews and reference checks. The view of line manager
will be generally considered in the final selection because it is he/she who is
responsible for the performance of the new employee. The HR manager plays a
crucial role in the final decision.
7. Physical Examination: After the selection decision and before the job offer is
made, the candidate is required to undergo a physical fitness test. The result of
the medical fitness test is recorded in a statement and is preserved in the
personal records. The main objectives of this test are as follows:
To detect if the individual carries any infectious diseases.
To determine whether an applicant is physically fit to perform the work.
It helps to determine if there are any physical capabilities which differentiate
successful and less successful employees.
Medical checkup protects applicants with health defects from undertaking
work that could be detrimental to them or might otherwise endanger the
employers property.
Last, but not the least such examination will protect the employer from
workers compensation claims that are not valid because the injuries or illness
was present when the employee was hired.
8. Job offer: The next step is selection process is Job offer for those applicants
who had passed the previous stage. Job offer is made through a letter of
appointment. Such a letter usually contains the date by which the appointee must
report on duty. Appointee must be given a reasonable time for reporting because
it may be quite possible that the appointee is employed in some other company
or must be residing in some other city and for such other reasons. Company may
also want the appointee to delay in joining the job because the job may require
undergoing some training program.
9. Contract of employment: After the job offer is made and the candidates accept
the offer, certain documents need to be executed by the employer and the
candidate. One such document is Attestation (confirmation) form. This form
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Life Insurance
contains vital details about the candidate, which are authenticated and attested
by him/her, which could be used for future reference.
Another document is contract of employment. This document contains the terms
and conditions of employment like designation, term of job and so on. The
information written in the contract may vary according to the level of the job.
10.
Concluding the selection process: The selection process will not end with
executing the employment contract. The step is reassuring the candidates who have
not been selected. Such candidates must be told that they were not selected, not
because of any serious deficiencies in their personalities, but because their profiles
did not match the requirements of the organization.
11. Evaluation of selection process: The broad test if the effectiveness of the
selection process is the quality of the personnel is hired. An organization must have
competent and committed personnel. The selection process, if properly done, will
ensure availability of such employees. Audit must be conducted by the people who
work independent of the HR department.
New methods of selection:

360 degree selection or participative selection: Normally supervisors
administer the selection test and interview. They judge the fit between the job
and the candidate. But the employee skills, knowledge and performance affect
not only superiors but also subordinates and the employees of the same level.
Hence the organization started involving the subordinates and the employees of
the same level in administrating the employment tests and interviews. This type
of selection program is called 360 degree program.
Employee leasing: The client company leases employees from a third party, not
on temporary basis but on a full time basis and for long help. An interesting
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Life Insurance
feature is that the client company need not perform personnel activities such as
hiring compensation or record keeping. Employees working elsewhere are
leased. They are not directly employed by the company where they are working.
Employees not recruited by one client are sent to another.
Selection by invitation: Management observes the performance of the key
executives of competitors. If the performance of the key executives is excellent
or the key executives are the change agents, the management invites them to
join the organization by offering attractive salary and benefits. Thus, the
significant performance of the executives forms basis for selecting them by
invitation.
Training & Development at ICICI Prudential Life Insurance

Company
In the ICICI Prudential Life Insurance, rapid expansion has created about 5
lakh job opportunities approximately in the past five years. These openings are
mainly in the field of insurance advisors or marketing agents. The eligibility criteria
for these jobs is graduation with some experience in marketing or become insurance
agents after completing school but this needs some relevant training.
Earlier there were no training programs as such for insurance agents but onthe-job training only that was given once the new agent was appointed. But now the
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Life Insurance
scenario has been changed, with the coming up of big players like ICICI Lombard,
HDFC Life Insurance, Tata AIG General Insurance, etc in this sector, people
who've had some formal training are preferred while recruitment because it can be
helpful in the insurance field. However, only the insurance degree in this field does
not guarantee success. To be successful an agent must have strong interpersonal,
networking, and communication skills.
Training at LIC:
Our agents go through both generic and specific, professional programs that
help them remain well-informed and knowledgeable about the companys products
in the market. There is a further focus on soft skills such as communication,
managing long-term relationships and selling skills, which are very relevant in a
service-driven industry like life insurance.
State of the art infrastructure training facilities coupled with an excellent
faculty, guarantee an exceptional learning environment. For agents who might be
occupied with their daily business/professional routines.
A 17-18 day training schedule covers the mandatory IRDA training
requirements and LIC product-training module. Revision session ensure that the
candidates thoroughly understand the course contents and are well prepared for the
licensing examination. Theoretical training is interspersed with practical
appointment settings with potential customers, giving agents a feel of how their
business will work from the very first day. All through, the Development Officer
and the management provide continuous support to the advisors in achieving
independence towards garnering business.
Designing training is far more than devising courses; it can include activities
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Life Insurance
such as:
Learning from observation of trained workers.
Receiving coaching from seniors;
Discovery as the result of working party, project team membership or attendance
at meetings;
Job swaps within and without the organization;
Undertaking planned reading, or follow from the use of selfteaching texts and
video tapes;
Learning via involvement in research, report writing and visiting other works or
organizations.
So far as group training is concerned in addition to formal courses there are:
Lectures and talks by senior or specialist managers;
Discussion group (conference and meeting) activities;
Briefing by senior staffs;
Role-playing exercises and simulation of actual conditions;
Video and computer teaching activities;
Case studies (and discussion) tests, quizzes, panel 'games', group forums,
observation exercises and inspection and reporting techniques.
Evaluation of the effectiveness of training is done to ensure that it is cost
effective, to identify needs to modify or extend what is being provided, to reveal
new needs and redefine priorities and most of all to ensure that the objectives of the
training are being met.
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Life Insurance
There are seven steps to developing a human resource strategy and the active
involvement of senior line managers should be sought throughout the approach.
Training Process in Insurance Company:

Every company has a specific training procedure, depending upon its requirements.
A general training procedure is explained below along with diagram:
Determining training need of employee
Select a target group for training
Preparing trainers
Developing training packages
Presentation
Performance
Follow up
1. Determining training needs of employee:

In the very 1st step of training procedure, the HR department,
identifies the
number of people required training, specific area in which they need training, the
age group of employee, the level in
organization etc. in some cases the employee
may be totally new to the organization. Here the general introduction training is
required. Some employees may have problems in specific areas; here the training
must be specific. This entire information is collected by HR department.
2. Selecting target group:
Based on information collected in step 1 the HR department divides
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Life Insurance
employee into groups based on the following age group:

The area of training
Level in the organization
The intensity of training etc.
3. Preparing trainers:
Once the employees have been divided into groups, the HR
arranges for trainers. Trainers can be in house trainers
or
department
specialized
trainers
from outside. The trainers are given details by HR department, like number of
people in group, their age, their level in organization, the result desired at the end of
training, the area of training, the number of days of training, the training budget,
facilities available etc.
4. Preparing training packages:
Based on the information provided by trainers, he prepares
entire
training schedule i.e. number of days, number of sessions each day, topics to be
handled each day, depth of which the subject should be covered, the methodology
for each session, the test to be given foe each session, handout/printed material to
be given in each session.
5. Presentation:
On the first day of training program the trainer introduces himself and
specifies the need and objective of the program and then actually stars the program.
The performance of each employee
is tracked by the trained and necessary
feedback is provided.
6. Performance:
At the end of training program the participants reports back
to
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Life Insurance
their office or branches. They prepare report on the entire

and what they have learned. They the start using
training
program
whatever they have learned
during their training. Their progress and performance is constantly tracked and
suitable incentives are given if the participant is able to use whatever he has learned
in training.
7. Follow up:
Based on the employees performance, after training, the HR
is able to identify what is exactly wrong with training
program
department
and
suitable
correction is made.
Performance Appraisal at LIC:

Performance appraisal in LIC will be conducted annually of all employees.
This will be conducted twice in a year in April & October to cover employees
joining in both the half a year.
Increment & promotion will be given based on the performance & other
parameters of appraisal at the sole discretion of the management. Performance
appraisal will be conducted after the training & contract period.
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Life Insurance
Performance Appraisal at ICICI Prudential Life Insurance:

The company follows the principle of MBO i.e. Management by Objectives.
Goals are set at the year beginning and individuals are evaluated based on their
achievement. This is done by their immediate seniors. Also there is a balance
scorecard for each employee and the performance is rated on scale of 1 to 6 where,
1 refers to excellent performance, 2 as very good, 3 as good, and 4 as average, 5 as
poor and 6 as nil performance. Balance score card is a very old technique followed
by the company. It is very difficult to place an employee in a particular scale and at
the same time very vague (unclear). Also chances of biased opinions are possible as
it is evaluated by immediate senior.
Process of Performance appraisal:

The performance appraisal process may vary from organization to
organization. However most performance appraisal processes involve the following
six steps as shown in the diagram:
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Life Insurance
1. Establishing performance standards:

The first step in the process of performance appraisal is the setting up of the
standards which will be used to as the base to compare the actual performance of
the employees. This step requires setting the criteria to judge the performance of the
employees as successful or unsuccessful and the degrees of their contribution to the
organizational goals and objectives. The standards set should be clear, easily
understandable and in measurable terms. In case the performance of the employee
cannot be measured, great care should be taken to describe the standards.
2. Communicating the standards:
Once set, it is the responsibility of the management to communicate the
standards to all the employees of the organization.
The employees should be informed and the standards should be clearly
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Life Insurance
explained to them. This will help them to understand their roles and to know what
exactly is expected from them. The standards should also be communicated to the
appraisers or the evaluators and if required, the standards can also be modified at
this stage itself according to the relevant feedback from the employees or the
evaluators.
3. Measuring the actual performance:
The most difficult part of the Performance appraisal process is measuring the
actual performance of the employees that is the work done by the employees during
the specified period of time. It is a continuous process which involves monitoring
the performance throughout the year. This stage requires the careful selection of the
appropriate techniques of measurement, taking care that personal bias does not
affect the outcome of the process and providing assistance rather than interfering in
an employees work.
4. Comparing the actual with the desired performance:
The actual performance is compared with the desired or the standard
performance. The comparison tells the deviations in the performance of the
employees from the standards set. The result can show the actual performance
being more than the desired performance or, the actual performance being less than
the desired performance depicting a negative deviation in the organizational
performance. It includes recalling, evaluating and analysis of data related to the
employees performance.
5. Discussing results:
The result of the appraisal is communicated and discussed with the
employees on one-to-one basis. The focus of this discussion is on communication
and listening. The results, the problems and the possible solutions are discussed
59
Life Insurance
with the aim of problem solving and reaching consensus. The feedback should be
given with a positive attitude as this can have an effect on the employees future
performance. The purpose of the meeting should be to solve the problems faced and
motivate the employees to perform better.
6. Decision making:
The last step of the process is to take decisions which can be taken either to
improve the performance of the employees, take the required corrective actions, or
the related HR decisions like rewards, promotions, demotions, transfers etc.
Conclusion
The core function of HRD in the banking 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.
60
Life Insurance
The quality of human resources indicates the ability of banks 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.
REFERENCE:
Bibliography:
Personnel & Human Resource Management A.H. Sharma [5th revised edition
2005] Himalaya publishing house
Strategic HR technologies [keys to managing people] Ashok chanda
61
Life Insurance
Human Resource Management and Industrial Relations P. Subba Rao

Human Resource Management K. Ashwathapa
Human Resource Management P. V. Rao
The future of Human Resource Management - K. Ashwathapa
Human Resource and Personnel Management William Wrether
Search Engine:
www.google.com
www.yahoo.co.in
www.wikipedia.com
Websites:
http://www.articlesbase.com/college-and-university-articles/lic-recruitment2010-commences-for-ados-2104415.html
http://licrecruitment.662873.free-press-release.com/
http://expertscolumn.com/
62
Life Insurance
http://www.scribd.com/doc/26858387/Handbook-of-Human-ResourceManagement-Practice-0749446315
http://www.articlesbase.com/college-and-university-articles/class-noteshuman-resource-management-recruitment-selection-procedure-872443.html
http://www.icmrindia.org/courseware/Intro%20to%20Hrm/hrm-DS7.htm
http://www.soulcast.com/post/show/146991/Selection-Process-in-HumanResource-Management
http://www.successcds.net/Career/life-insurance-corporation-lic-recruitmentapprentice-development-officers.html
http://traininganddevelopment.naukrihub.com/training-scenario/bankinginsurance/
http://www.licindia.in/
http://www.iciciprulife.com/public/default.htm
63

Meaning of Business:: Services To Others Who Want or Need Them. When Many People Think of Business

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Role of HRM in insurance sector with reference to LIC & ICICI Prudential

Human Resource [HR]

HUMAN RESOURCE MANAGEMENT

3. Better relations between union and management:

6. Allocating the jobs to the right person:

Role of Human Resource Management in Insurance:

Scope of Human Resource Management:

Human Resource Management Functions:

4. Training & development:

6. Compensation & reward:

8. Health & safety management:

Organizations must constantly improve themselves due to the emergence of new

All managers have to perform the activities or functions assigned to them by

Human Resource Development:

HRD activities begin when an employee joins an organization. These

It is the work of HRD professionals to coordinate the training &

Qualities of a good Human Resource Manager:

In a fast changing opportunities world where burnouts happen faster than

SELECTION & INDUCTION:

Human resource planning is based on the belief that people are an

Characteristics/Nature of Human Resource Planning:

3. Part of corporate planning: Human resource planning is an integral part of

Need for Human Resource Planning:

5. Increased employee mobility: Employees no longer spend their whole life

A number of factors such as the size of the organization, the employment

Internal Sources of Recruitment:

External Sources of Recruitment

The external sources of recruitment are:

Difference between Recruitment & Selection

Michael Armstrong defines induction as the process of receiving &

TRAINING & DEVELOPMENT

teaching new skills or by imbibing an individual with new attitudes, values,

motivates & other personality characteristics.

Importance of Training in Insurance Companies

2. Insurance usually has negative implications in the mind of the buyer.

The training objective is beneficial to the trainee because it helps in reducing

Therefore, without any guidance, the training may not be designed

Performance appraisal is the process of evaluating the employees

Need, Importance and Advantages of Performance Appraisal

Factors that hamper Performance Appraisal

Life Insurance Corporation of India

The Objectives of the LIC are to:

2. Mobilize peoples' saving through insurance-linked savings schemes.

World Brand Congress Award

OUTLOOK MONEY -- NDTV PROFIT AWARD 2009 in " BEST LIFE

T.S. Vijayan - Chairman

ICICI Prudential Life Insurance Company Ltd.

ICICI Prudential Life Insurance Company is a joint venture between ICICI

About the Promoters

This they hope to achieve by:

COMPARATIVE STUDY OF LIC & ICICI PRUDENTIAL LIFE

Human resource planning At ICICI Prudential life Insurance

The supply of outside candidates according to their company requirements

candidates are selected.

The main sources of Recruitment are:

Recruitment Process at ICICI Prudential Life Insurance Company Ltd:

1. Insurance Advisors: Insurance Advisors is the Financial Advisors / Financial

form will be accepted.

Preferred sources of recruitment

Reservation of jobs for SCs, STs, etc.

Selection procedures followed by LIC & ICICI Prudential Life

Steps in selection procedure

1. Application form: Many companies formulate their own style of application