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EXECUTIVE SUMMERY

The module of the assignment being submitted is known as Management of People in


Organizations. The assignment is based on selecting an organization from any type of
industry. It could be gaming, film making, telecommunications or even the music
industry. The organization I have chosen is from the Insurance Industry, and the company
is Union Assurance Ltd. The reasons behind choosing this company are that it’s currently
the best and leading Insurance agent in the whole of Sri Lanka. Once the organization has
been chosen, we are then asked to conduct a research on the organization using articles,
newspaper, journals, Internet sources and even Interviews based on resource availability.
The research has mainly all been done using Interviews and also the Internet with the aid
of text books. All topics covered in this assignment are all geared towards Human
Resource Management (HRM). The three main HRM topics covered were: Human
Resources Planning, Recruitment and Selection and finally Appraising and Improving
Performance.

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LIST OF FIGURES

FIGURE 1: HRP AND STRATEGIC PLANNING..................................................................................10


FIGURE 2: SELECTION PROCESS AT UAL.........................................................................................22

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TABLE OF CONTENTS

EXECUTIVE SUMMERY............................................................................................................................1
.........................................................................................................................................................................1
LIST OF FIGURES........................................................................................................................................2
TABLE OF CONTENTS...............................................................................................................................3
1. INTRODUCTION....................................................................................................................................4
1.1 ABOUT THE COMPANY................................................................................................................................4
1.2 ROLES AND DIVISIONS................................................................................................................................5
1.4 HUMAN RESOURCES MANAGEMENT – AN INTRODUCTION ...............................................................................8
1.5 HUMAN RESOURCE FUNCTIONS....................................................................................................................9
2. HUMAN RESOURCES PLANNING ................................................................................................10
2.1 HUMAN RESOURCES PLANNING (HRP).....................................................................................................10
2.2 HRP AND STRATEGIC PLANNING...............................................................................................................10
2.3 ENSURING THE FIT BETWEEN HR AND STRATEGY.........................................................................................11
2.4 STRATEGIC FLEXIBILITY ...........................................................................................................................11
2.5 HRP AND ENVIRONMENTAL SCANNING ......................................................................................................12
2.6 FORECASTING DEMAND FOR EMPLOYEES.....................................................................................................15
2.7 FORECASTING SUPPLY OF EMPLOYEES ........................................................................................................16
3. RECRUITMENT AND SELECTION ..............................................................................................18
3.1 RECRUITMENT.......................................................................................................................................18
3.1.1 Recruiting from within the Organization ....................................................................................18
3.1.2 Internal Methods used to Locate Qualified Job Candidates.......................................................19
3.1.3 Other Outside Sources of Recruitment .......................................................................................19
3.1.4 External Recruitment Considerations..........................................................................................20
3.1.5 Issues in Recruiting Protected Classes .....................................................................................21
3.2 SELECTION............................................................................................................................................22
3.2.1 Selection Considerations at Union Assurance............................................................................22
3.2.2 The Selection Process at Union Assurance.................................................................................22
3.2.3 The effectiveness of the Selection Methods used at Union Assurance.........................................23
3.2.4 Employee Gestation Period at Union Assurance .......................................................................23
3.2.5 Background Investigations used at Union Assurance.................................................................23
3.2.6 Employment Tests Used at Union Assurance..............................................................................24
3.2.7 Interviewing Methods used at Union Assurance.........................................................................24
3.2.8 Selection Decision Models...........................................................................................................25
3.2.9 Final Decision.............................................................................................................................25
4. APPRAISING AND IMPROVING PERFORMANCE .....................................................................26
4.1 RATE OF APPRAISAL OF EMPLOYEES IN UNION ASSURANCE...........................................................................26
4.2 CRITICAL SOURCES USED TO APPRAISE EMPLOYEES......................................................................................26
4.3 COMMON APPRAISAL PROBLEMS FACED .....................................................................................................26
4.4 SOURCES OF PERFORMANCE APPRAISAL.......................................................................................................26
4.5 ASPECTS OF THE PERFORMANCE APPRAISAL FORM ......................................................................................27
4.6 RATER ERRORS THAT HAVE TAKEN PLACE DURING APPRAISALS.......................................................................28
4.7 APPRAISAL METHODS USED AT UNION ASSURANCE......................................................................................28
4.8 FOLLOW UP OF APPRAISAL METHODS .........................................................................................................30
5. CONCLUSION........................................................................................................................................31
BIBLIOGRAPHY.........................................................................................................................................32

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1. INTRODUCTION

1.1 About the Company

Union Assurance Ltd defines its mission as always to be acknowledged as being


'the most efficient, profitable and stable insurer in Sri Lanka.'

Union Assurance is a composite insurer transacting both Life and General


business including personal insurance, in operation since 1987. A Public Quoted
Company, UAL entered the insurance arena at the time the private sector was
permitted to set up in insurance, following the enactment of the Control of Insurance
(Amendment) Act No. 42 of 1986. Committed to pursuing the highest standards of
service and security, UAL is backed by the corporate might of blue chip companies
John Keells and Carson Cumber-batch. The 15% stake of IFC (International finance
Corporation) in UAL changed hands recently with Eagle Insurance purchasing the
15% of UAL Share holding held by IFC. The IFC stake was equally acquired by
Eagle policyholder’s fund, Eagle general fund and Eagle shareholder fund. This is
further testimony to the strength and stability of UAL.

Union Assurance is well placed to provide a caring and efficient service to its
clientele, which include many of the largest trading and industrial organizations in Sri
Lanka as well as individuals from all walks of life, through an extensive network of
44 branches island-wide, strategically located throughout the country. It was, in fact,
the first insurer to open a branch office in Jaffna. UAL branches are linked to a
centralized computer system in the head office in Colombo, which enables all
branches to provide a complete insurance service to customers, without the necessity
of a visit to Colombo. These IT initiatives support the company's commitment to
operate efficiently and cost-effectively, which gives it the edge in terms of speed and
efficiency. The Union Assurance Center in Colombo, built and owned by UAL, is
also equipped with all modern facilities and designed as a 'one stop' insurance center,
at which UAL's customers could transact all their insurance business. A significant

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milestone in UAL’s progress and expansion was the opening of the Union Assurance
Center at Kurunegala in March 2003. The Center is the largest and most modern
building in Kurunegala, with a training facility that caters to UAL branches in the
region.

Union Assurance Ltd's re-insurers are world leaders, chosen for their
dependability and total security. In short, they are the best in the business. The
company's Paid Up Capital as at 31 December 2003 is Rs 250 million and Net Asset
base, Rs 821 million, also indicators of its financial stability and strength, which place
it firmly at the apex of private insurance service providers in Sri Lanka.

1.2 Roles and Divisions

General Insurance Division


Headed by Mr. Ainsley Alles, General Manager – General

Servicing customers in relation to all "General Insurance" matters. The main


functions of this division include accepting insurance proposals, issuing policies and
settlement of claims, insuring risks undertaken with other insurance companies (this
is done to spread the risks of the Company), assisting and advising clients on how to
protect their assets and minimize risks, carrying out policy reviews, portfolio reviews
etc.

Life Insurance Division


Headed by Ms. Jayaseeli Dissanaike, General Manager – Life

Operational aspects of Life Business and Customer service, including Life New
Business underwriting and policy issuance, policy-holder servicing, and claims
processing. Also deals with the development and operational aspects of new products

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Finance and Planning
Headed by Mr. Dirk Pereira, General Manager - Finance & Planning.

This division is responsible for all the financial and administration functions of UAL.

Marketing Division
Headed by Mr. Ramal Jasinghe, General Manager – Marketing

Its main responsibility is the marketing and promotion of General and Life Insurance
business as well as attracting customers to the organization. Other business aspects
include all corporate advertising, public relations and corporate communications,
direct marketing, branch management and product development. All branch offices
come under the Marketing division.

Information Technology Department (IT)


Headed by Mr. Chandana Jayasooriya, General Manger – IT

Mainly responsible for deployment of IT resources and advancements to achieve


corporate objectives while maintaining high level of quality IT services to its internal
and external customers. It includes routine IT operations, maintenance of insurance
application systems, wide-area-network inclusive of data/voice communication and
business resumption planning.

Customer Relationship Management (CRM)


Headed by Mr. Asaf Khan, General Manager – CRM

Provides corporate customers with a close and personalized service and coordinates
with Public Relations on Corporate matters. The objective of this division can be
summarized as, "To provide value addition in service to our corporate clientele and
build long term profitable relationship".

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Human Resource Development Department (HRD)
Headed by Mr. Rohan Aturaliya, General Manager - Human Resources

Human Resource Development (HRD) recognizes the people of the organization as


its most important resource, and efforts are made to create conditions enabling staff to
grow to their full potential and encourage them to contribute their best towards the
overall success of the organization.

Investment Department

This is a fully-fledged division, which presently manages a portfolio worth Rs 2.4 Bn.

The division consists of a team of professionals with an in-depth knowledge on


portfolio and fund management. Our investment decisions are based on findings and
recommendations of a team of professionals and analysts who have undergone
specialized training in fund management.

Investments in money market activities are made upon statistical and market analysis
of interest rates at the time of investment, as well as future expectations/ behaviour of
interest rates. Our strong rapport with Primary Dealers/ Bankers and Money & Stock
Brokers will be of distinct advantage when identifying investment avenues and in
negotiating terms for investment. All investment decisions as well as fund
performance will be reported to the client on a regular basis. With many years of
specialized experience in fund management, we are well equipped to earn a superior
return according to your investment needs.

Other services carried out by us include company and market research activities,
corporate finance and real estate activities.

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1.4 Human Resources Management – An Introduction

The Human Resources Management (HRM) function includes a variety of


activities, and key among them is deciding what staffing needs you have and whether
to use independent contractors or hire employees to fill these needs, recruiting and
training the best employees, ensuring they are high performers, dealing with
performance issues, and ensuring your personnel and management practices conform
to various regulations. Activities also include managing your approach to employee
benefits and compensation, employee records and personnel policies. Usually small
businesses (for-profit or nonprofit) have to carry out these activities themselves
because they can't yet afford part- or full-time help. However, they should always
ensure that employees have -- and are aware of -- personnel policies which conform
to current regulations. These policies are often in the form of employee manuals,
which all employees have.

Note that some people distinguish a difference between HRM (a major


management activity) and HRD (Human Resource Development, a profession).
Those people might include HRM in HRD, explaining that HRD includes the broader
range of activities to develop personnel inside of organizations, including, e.g., career
development, training, organization development, etc.

There is a long-standing argument about where HR-related functions should


be organized into large organizations, e.g., "should HR be in the Organization
Development department or the other way around?"

The HRM function and HRD profession have undergone tremendous change
over the past 20-30 years. Many years ago, large organizations looked to the
"Personnel Department," mostly to manage the paperwork around hiring and paying
people. More recently, organizations consider the "HR Department" as playing a
major role in staffing, training and helping to manage people so that people and the
organization are performing at maximum capability in a highly fulfilling manner.

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1.5 Human Resource Functions

There are many functions that are a part of HRM, and we will take three
functions from the following functions and evaluate them with regard to how Union
Assurance has managed to control all their HR Functions and what their shortcomings
are and how they plan to improve it etc.

Key Human Resource Functions


- Human Resource Planning
- Recruitment and Selection
- Compensation and Benefits
- Performance Appraisal
- Training and Development

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2. HUMAN RESOURCES PLANNING

2.1 Human Resources Planning (HRP)

This is known as the process of anticipating and making provision for the
movement (flow) of people into, within, and out of an organization.

HRP’s purpose is the effective deployment of human resources through:

- Anticipating organizational labour supply and demand


- Providing expanded employment opportunities for women, minorities, and the
disabled.
- Guiding the development and training the workforce

2.2 HRP and Strategic Planning

Union Assurance has integrated Human Resources Planning and Strategic


Planning. The advantages behind integrating Human Resources Planning and
Strategic planning is that; Firstly, you can have a strategic analysis, e.g. Union
Assurance can find out how much human resources are currently available in their
department and how much more they would need. Secondly, you can have a
Strategic Formulation. This is where Union Assurance finds out what are the factors
and inputs that would be required and necessary in order to support the human
resources. Finally, you can have Strategic Implementation; where Union Assurance
will decide how they can allocate all their human resources in the best possible
manner while at the same time, cutting down costs in every aspect.

Figure 1: HRP and Strategic Planning

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2.3 Ensuring the Fit between HR and Strategy

There are 2 types of Fits that can be found between HR and Strategy, one is
known as the External Fit which is also known as the External Alignment, the other is
known as the Internal Fit which is also known as the Internal Alignment. In Union
Assurance, the External Fit is what’s mostly found, and therefore how they work their
practices in da External Fit are given below.

External Fit (External Alignment)


This is the part which focuses on the connection between the business
objectives, and the major initiatives in HR. In the case of Union Assurance, their
main business objectives are to be the leading insurance agent to all types of people
irrelevant of their colour, race or religion and be able to support them with the best
possible policies and in the cheapest manner possible. The HR department is always
striving to ensure the realization of the vision of the company through optimum
contribution of all the employees in the company. While taking care of the needs of
the people, the HR department also takes care of the needs and personal issues of its
employees and helps with character development and the enrichment of their skills as
well.

2.4 Strategic Flexibility


In the strategic flexibility model, there are 3 types of flexibility that can be
found. Union Assurance has all 3 of these flexibility methods that could be
implemented at any given moment.

[1] Organizational Flexibility


Union Assurance is well established and has been in the business of insurance for a
very long time, also with the fact of having 16 Main Branches, 3 Sub Branches and
23 Development Centers island-wide, they have full capacity and resources to act and

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change at their own will in pursuit of sustainable and competitive advantage over
their fellow competitors.

[2] Co-ordination Flexibility


When it comes to co-ordination, Union Assurance is very efficient. All the main
branches island-wide, are inter-connected through a Network and they all have 24 Hr
computer and Internet access, and all information can be relayed through a well
developed network, so the transfer rate of data is fast, and also the inter-department
co-ordination is also very efficient, with each floor having it’s own department along
with a receptionist as well, with the most modern facilities which enables quick and
efficient co-ordination flexibility.

[3] Resource Flexibility


When it comes to resource allocation in the HR department of Union Assurance,
currently they are not utilizing the full 100% of all their resources, they feel that they
are not yet about to the full standard which can be called “the best HR department
ever”, they feel they are only working at 70% which is sync with the mission
statement and the balance 30% needs to be still worked out. However, they have
enough human resources who can do many things in different ways. This would mean
that they have ideal resource flexibility, as they always hire employees who are multi
talented and multi skilled in many ways.

2.5 HRP and Environmental Scanning

Environmental Scanning
The environmental scanning method is done by Union Assurance to
systematically monitor all the major external forces influencing the organization. This
method is purely done to asses all the external factors that can influence the
organization, while the internal factors are accesses in a different method. There are
few factors that are the most important in this method, and they have been given
below:

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- Economic Factors: Currently the economic situation of Sri Lanka is starting to
have an upward trend as the Inflation rate has gradually gone down to 9%, and the
GDP real growth rate 5.2%, unemployment rate is 8%, Literacy Rate of 92.3% so
there will be a good chance for Union Assurance to develop during this time
period and make sure they have a good capital established, and are at full strength
in case of a sudden recession in the economy.
- Competitive Trends: Coming up with new processes, innovations and services is
what the Research and Development department is currently doing. Their main
objective is to make sure they overshadow any rival ideas that may arise from
their rival competitors. Union Motor Star goes with “Drive Safe and Save More”
this is targeted at Ceylinco’s “Ceylinco VIP” and Janashakthi’s “Janaratha Full
Option”. While the other two policies are giving on-site payment and extra
benefits, Union Assurance is beating them by promoting safe driving, and saving
lives rather than allowing the damage to happen.
- Technological Changes: With the development of new technological methods,
Union Assurance is always maintaining high standards with office automation,
where every employee has his/her own desktop machine, while even Managers
have their own Laptop machines to do work at their own will and convenience.
- Political and Legislative Issues: Union Assurance has it’s own Law Department,
which comprises a top range of lawyers who work full time at the company to
make sure that all the laws and administrative rulings are properly adhered to, and
the external forces cannot interrupt the progress of Union Assurance in any sort of
manner.
- Social Concerns: Being socially responsible is the main criteria of Union
Assurance. They have a special Family Benefit Policy which will look after the
entire family and children as well. Child Care programs and educational programs
are also held by Union Assurance to enable them to be among the children and
educate them as well.

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- Demographic Trends: All demographic issues are carefully taken into
consideration before implementing any new ideas or a policy, thereby ensuring
the external environment is also well looked after.

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Internal Environment Scanning
Internal Environment Scanning is done by two methods, either by doing
Cultural Audits or by doing Benchmarking. Sometimes both methods are
implemented, but they can be very time consuming, so therefore it’s usually mainly
one of these two methods, and Union Assurance uses Benchmarking as the method to
do Internal Environment Scanning.

Benchmarking: Union Assurance has set of top quality strategic analysts that do the
process of benchmarking. This process is where they compare the organization’s
process and practices with those of other companies. This method is the most efficient
even though it’s highly time consuming, as it gives the organization in immediate
picture as to where they currently lie, in terms of keeping standards.

2.6 Forecasting Demand for Employees


To forecast the demand for employees, there are two methods used. The first one is
known as the Quantitative Approach, and the second one is known as the Qualitative
Approach. Union Assurance adopts both these methods, as they need to analyze all
aspects to come to a correct solution.

Quantitative Approach
To do the quantitative approach, Union Assurance uses the Trend Analysis method.
For example, to forecast labour demand on an organizational index such as sales, they
first select a business factor that best predicts human resource needs, and then plot the
business factor in relation to the number of employees to determine the labour
productivity ratio, then compute the productivity ratio for the last 5 or even 10 years
depending on the need, Calculate human resources demand by: Business Factor X
Productivity Ratio, finally project human resources demand out to the target years.

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Qualitative Approach
There are two main methods of doing the Qualitative Approach of forecasting, one
method is known as the Management Forecasts, and the other is known as the Delphi
Technique.

- Management Forecasts: The opinions and judgments of supervisors, department


managers, experts or others knowledgeable about the organization’s future
employment needs. This is done on quarterly basis in Union Assurance, and the
results are all then analyzed twice over to make sure no bias or any kind of mis-
analysis had taken place during the forecasting.
- Delphi Technique: An attempt to decrease the subjectivity of forecasts by
soliciting and summarizing the judgments of a pre-selected group of individuals.
This technique is not always utilized by Union Assurance, but there have been a
few instances where they have used the Delphi technique as well for their
forecasting.

2.7 Forecasting Supply of Employees

Internal Labour Supply and Demand Forecasting


These are known as the techniques and methods to forecast the Internal Labour
Supply, and also the tolls used to forecast the Internal Demand. The External Labour
Supply has other factors that influence them, but below are the main methods of
forecasting the internal labour supply.

- Staffing Tables
- Markov Analysis
- Skill Inventories
- Replacement Charts
- Succession Planning

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Out of the above mentioned methods, Union Assurance uses Staffing Tables, Skill
Inventories and also Succession Planning as their methods to forecast the Internal
Labour Supply and also the Internal Demand.

[1] Staffing Tables


The staffing tables are a graphic representation of all the organizational jobs, along
with the numbers of employees currently occupying these jobs and future (in the case
of Union Assurance, its Yearly) employment requirements.

[2] Skill Inventories


Skill Inventories are files of personnel education, experience, interests, and skills etc
that allow the managers quickly to match job openings with employee backgrounds.
These are fully computerized into the systems network of Union Assurance, and
therefore access is easy, quick and simple, convenient.

[3] Succession Planning


This is the process of identifying, developing and tracking key individuals for
executive positions, Union Assurance does this on a quarterly basis as well, thereby
ensuring that all the positions are fulfilled to the maximum, and also the development
of individuals is also done regularly, in order to ensure the organization has
individuals in the best positions and working at full capacity.

External Labour Supply and Demand Forecasting


The external labour supply is forecasted by Union Assurance using the following
factors:
- Demographic Changes in the Population
- Educational level of the workforce
- Demand for specific employee skills
- Government Policies
- Population Mobility

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3. RECRUITMENT AND SELECTION

3.1 Recruitment

3.1.1 Recruiting from within the Organization

There are many advantages and dis-advantages of having a “recruitment


from within” policy. Union Assurance feels they somehow strike a balance in this
aspect, and they usually do recruit from within the organization unless of course
there is a real lack of talent, and unskilled workers. Union Assurance feels this
method is good and the benefits if this are more and would create a good
environment among the organization, and would even make them all unite and feel
at home.

The benefits of a “promotion from within” policy

[1] It capitalizes on past investments in current employees. That would be all the
amount of time spent on the recruiting, selecting, training and even developing will
not be gone to waste as the amount spent as Input on the employee will now not be
a factor as to the amount the employee gives in return as output.

[2] It rewards past performance and encourages continued commitment to the


organization. The employees will be more motivated to work even harder than
before and come up with more outstanding performances as well. Speaking to one
of the employees, it was evident that this system was really motivating him to work
harder and somehow he has become more committed to the organization and he’s
willing to stay on as long as he can to show his loyalty.

[3] It signals to employees that similar efforts by them will lead to promotion. This
too is a big incentive for the employees to work hard and achieve their best, as

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promotions are the key to getting a better pay, and that itself is a huge incentive, so
as the incentives rise, the work output levels are increased as well.

[4] Finally it also fosters the advancement of members of protected classes within
an organization. In the case of Union Assurance, there are Women employed, and a
lot of members from the Minority as well, so this is a good way to help them
advance.

3.1.2 Internal Methods used to Locate Qualified Job Candidates

Human Resources Information System (HRIS)


Union Assurance uses a Human Resources Information System (HRIS) as a method
to locate qualified job candidates. This is a Database system which contains the
records and qualifications of each employee that can be accessed to identify and
screen the correct candidates for an internal job opening. They also do Job Posting
and Bidding as well, but the main method used is by using the HRIS.

3.1.3 Other Outside Sources of Recruitment


The most frequently used outside sources of recruitment for Union Assurance are:
- Advertisements
- Employee Referrals
- Unsolicited applications and resumes
- Labour Unions
- Internet Recruiting (Not always done, but sometimes used to receive resumes)

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3.1.4 External Recruitment Considerations

Requirements of Effective Recruiters


There is a certain criteria needed to be taken into consideration before employees
can be recruited. Union Assurance uses a professional team of HR recruiters and
Work Team members as well not only the HR department managers, even the IT
department Managers are involved while the outside HR recruiters are busy
analyzing the potential new candidates for the department. The HR recruiter’s
posses training as interviewers, and they possess knowledge of the job’s
requirement and organizational aspects and methods. They are also very personable
and competent to represent the organization. Therefore we can say that Union
Assurance is well placed when it comes to making sure the criteria is well matched
for this aspect of external recruitment consideration.

Realistic Job Previews (RJP)


Union Assurance always believes in informing applicants about all aspects of the
job, including both its desirable and undesirable facts. They have found out that this
method has resulted in improved employee job satisfaction, more communication
with more honesty and openness, and the employees also tend to have more realistic
job expectations.

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3.1.5 Issues in Recruiting Protected Classes
Currently in Union Assurance there are Women and Minorities that are mostly
working among the protected classes, they do not have any disabled employees or
older people, not because they are biased and do not want to hire them, but so far
they haven’t come across anyone who was part of that category who had wanted to
be a part of the organization. This is also taken from the statistics from the recent
past. Union Assurance always ensures that there is no stereo typing or gender
conflicts allowed to arise, as they even allow females to become managers. As for
the minorities, they are always given fair treatment and always made to feel like
they are among the others and a part of the organization in everyway possible, as all
the festivals are celebrated equally, Christmas parties are held, and special
celebrations for Thai Pongal and even Deepavali are also part of the main
attractions of Union Assurance. This fosters a very good environment among the
organization.

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3.2 Selection

Selection is the process of choosing individuals who have relevant


qualifications to fill existing or projected job openings.

3.2.1 Selection Considerations at Union Assurance


The selection considerations are divided into two, one is known as the Person-
Job Fit and the other is known as the Person-Organization Fit.

Person Job-Fit: Job Analysis identifies required individual competencies (KSAOs)


for job success. This what Union Assurance takes into consideration, they feel this
is what’s most required for their needs. They do not take the Person-Organization
fit into main criteria unlike this method.

3.2.2 The Selection Process at Union Assurance


Figure 2: Selection Process at UAL

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3.2.3 The effectiveness of the Selection Methods used at Union Assurance
There are a few main selection methods that are being used at Union
Assurance, and speaking to the Managers, it was evident that from the interviews
and surveys they had conducted, as to which was the most effective method and
which was the least effective method. Given below are the top five selection
methods which yielded the best results from the point of view of the managers of
Union Assurance.
[1] Unstructured Interviews
[2] Structured Interviews
[3] Work Samples
[4] Aptitude Tests
[5] Personality Tests

3.2.4 Employee Gestation Period at Union Assurance


Usually all positions are filled relatively quickly at Union Assurance. There
are two main interviews held, depends on the job, and vacancy level etc, there’s
also an aptitude test and at times also a final interview with the CEO. Most of the
employees are recruited on their character quality as they feel this would be a huge
aspect in the building of quality employees who will abide by the rules and
regulations. It takes about 6 months for the employee to come onboard and become
productive on the job, and it’s expected that between 2 to 3 months, the employee
should settle down in the job, and after 6 months, the job is confirmed, and
depending on the performance appraisals, he/she will rewarded or given
promotions accordingly.

3.2.5 Background Investigations used at Union Assurance


The procedure of background Investigations is done at Union Assurance in a
formal manner, where firstly they check the References, which would include the
letters of reference, mail and telephone checks, and other references to see if the
applicant’s information is valid. Furthermore, Graphology is also used in some
cases, but very rarely where they sample the applicant’s handwriting to make an

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employment decision. Finally the medical examinations are done. These are done at
the final stage due to the cost factors, and mainly this is done to ensure the health of
an applicant is adequate to meet the job requirements.

3.2.6 Employment Tests Used at Union Assurance


Union Assurance used a few famous employment tests, the most commonly
used methods are given below:
- Cognitive Ability Test: which includes the Aptitude Test – this test measures the
person’s ability to learn or acquire skills. Also the achievement Tests, which is the
measure of what a person knows or can do right now.
- Physical Ability Test: It will be related to essential functions of the job.
- Job Knowledge Test: This test is the most frequently used one at Union Assurance
as it measures a person’s level of understanding about a particular job.
- Work Sample Test: This requires the applicant to perform tasks that are actually a
part of the work required on the job.

3.2.7 Interviewing Methods used at Union Assurance


There are three main interviewing methods used in Union Assurance, and
they have been given below according to the order of importance.

[1] Structured Interview


This interview is used almost 95% of the time and it’s used at the starting point of
the selection process, and it’s usually very effective, but at times it cannot analyze
the mind set of the applicant. This interview has a set of standardized questions and
an established set of answers is used.

[2] Situational Interview


This is an interview which gives the applicant a hypothetical incident and is asked
how he or she would respond to it. This interview is far less structured than the
“structured interview”, but it gives the interviewer a much better analysis of the

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thinking pattern of the applicant and the applicant’s mind set. Union Assurance uses
this for the HR applicants, and also the Marketing Department applicants.

[3] Panel Interview


This is where a board of interviewers questions and observes a single candidate.
This is the usually used as the Final Interview for all the applicants of Union
Assurance. Sometimes if the job is of managerial stature, even the CEO of Union
Assurance will be a part of the panel of interviewers.

3.2.8 Selection Decision Models


There are 3 main models in the Statistical Approach (Objective Method) used
at Union Assurance.
[1] Compensatory Model
This method permits a high score in one area to make up for a low score in another
area. This model is not always used, but it’s used from time to time.

[2] Multiple Cutoff Model


This method requires an applicant to achieve a minimum level of proficiency on all
selection dimensions. This is the method that is used almost all the time, as they feel
it gives better results than the other two methods.

[3] Multiple Hurdle Model


This method allows only applicants with sufficiently high scores at each selection
stage to go on to subsequent stages in the selection process. This method too is very
rarely used in Union Assurance.

3.2.9 Final Decision


The final selection of the applicant is determined by the CEO and the head
of the department and also the main Manager of the department. Once that is done,
the notification of selection is done by the HR department.

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4. APPRAISING AND IMPROVING PERFORMANCE

4.1 Rate of Appraisal of Employees in Union Assurance


Performance appraisals are done twice a year at Union Assurance. One is the
mid year appraisal which is held every June, and the other is the Annual Appraisal
which is done every December.

4.2 Critical Sources Used to Appraise Employees


Currently there are two main systems, one system is for non executives, that
include all the people upto the assistant manager level, and the other is for the
executives, meaning everyone at Manager Level, Senior Managers. There’s not much
difference in the forms, only slight variations.

4.3 Common Appraisal Problems Faced


- Inadequate preparation on the part of the manager
- Employee is not given clear objectives at the beginning of performance period
- Managers sometimes are unable to observe performance or have all the information.
- Performance standards are sometimes unclear
- Subjective or vague language in written appraisals

4.4 Sources of Performance Appraisal


There are many methods/sources of doing performance appraisals, but there are
only three methods that are used a lot in Union Assurance.

[1] Manager and/or Supervisor


The appraisal is done by the employee’s manager and reviewed by a manager one
level higher. This method is the most commonly used method in most of the
departments, but it can tend to have bias, so it’s not always favourable in every
occasion.

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[2] Self-Appraisal Performance
This is where the employee is evaluated by way of an Appraisal form which will be
completed by the employee prior to the performance interview. This method is slowly
catching up and gaining more popularity, as it gives all the employees equal
opportunity and far less favoritism and bias when the appraisals are being conducted.

[3] Team Appraisal


This is done when teams work together and perform together as unit where the
appraisal is based on TQM concepts, recognizing team accomplishment rather than
individual performance. This done all the time at Union Assurance especially in the
Research and Development Department as Teams are always working together tom
come forward with all their ideas to improve the company.

4.5 Aspects of the Performance Appraisal Form


The following criteria given below are what is used at Union Assurance to
appraise all the employees of all the departments. The criteria given below apply to
both the mid year and also yearly appraisal forms for both the top level and middle
level line of workers.

Main Areas
- Knowledge of Work
- Quality of Work
- Quality of Output (Volume)
- Relationships with Customers

Sub Areas
- Attitudes
- Skills
- Training

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4.6 Rater Errors that have taken place during Appraisals
During performance appraisals, Rater errors can tend to happen as well. In
Union Assurance, Rater Errors are very rare, but at times they have taken place, and
given below are the two rater errors that did take place.

[1] Recency Error


This is a rating error in which appraisal is based largely on an employee’s most recent
behaviour rather than on behaviour throughout the appraisal period. This can tend to
happen as sometimes the appraisals are rushed through due to time constraints, and
also the mind tends to remember the most recent events rather than events further
back in time, so the chances of this error happening is always more than most of the
other errors.

[2] Error of Central Tendency


This is a rating error in which all employees are rated about average. This usually
happens when the rater is afraid to commit himself either-way and give a good rating
or give a bad rating due to many factors. This is not helpful as even though his/her
rating won’t be a biased rating, it will hinder all the employees who deserve more
opportunities and benefits and chances of coming up in the organization, and at the
same time, allow employees who under performing to get a level of “Average” which
will benefit them on the short run, but ruin them further on the long run.

4.7 Appraisal Methods Used at Union Assurance


There are 3 main appraisal methods used worldwide, which are known as the
Trait Methods, Behavioral Methods and Results Methods. Union Assurance uses all 3
of these methods as they feel they can get the best out of all 3 methods by using all of
them and getting maximum benefit from each method.

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[1] Trait Methods

Graphic Rating Scale Method


In the Trait Methods, Union Assurance uses the most of the time, where the each
employee is rated according to a scale of individual characteristics. This method is
used most of the time as the employees are geared towards answering all the
questions asked in this method.

Forced Choice Method


The other method used at Union Assurance is the forced choice method which
requires the rater to choose from statements designed to distinguish between
successful and unsuccessful performance.

[2] Behavioral Methods

Behaviorally Anchored Rating Scale (BARS)


This is the main method used in the behavioral methods in Union Assurance, it’s
known as the BARS method which is a performance appraisal that consists of a series
of vertical scales, one for each dimension of job performance.

[3] Results Methods

Management by Objectives (MBO)


In the Results Methods, at Union Assurance the MBO is used, which is a philosophy
of management that rates performance on the basis of employee achievement of goals
set by mutual agreement of employee and Manager.

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4.8 Follow up of Appraisal Methods
Apart from all the appraisal methods and appraisal forms, there are weekly
meetings held at Union Assurance, where they go through the dash board (an excel
work sheet with four different colours) which has all the key areas listed and which
will measure each employee’s performances. Each month a meeting of the top
management is held where they look at the computed graph which shows all the
performance levels and how the company is performing and how they can improve
etc.

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5. CONCLUSION

The shift from traditional personnel management to human resource


management has mirrored a growing realization by organizations of the important
contribution that employees make within the organization and that by consolidating
this contribution the organization can maximize strategic objectives.

Union Assurance realizes the need of a very good Human Resources Plan, and
they are doing every method possible to develop all their weak areas, as soon as
possible. The main concerns right now for them is that they feel that even though they
have sufficient work force, they are unable to align their HR department 100% to be
fully in sync with everything in their mission statement. They realize that what is
good today won’t be good tomorrow, so they are continuously trying to find means
and ways of improving each and every employee’s output and performance towards
the company, by ways of proper appraisals and proper employee benefits and
incentive schemes, as the most important aspect of any organization is it’s ability to
keep it’s workforce fully motivated, and fully people oriented as this field as all about
people, and dealing with their problems and doing the best possible actions to resolve
all their issues. The managers always have shown care and concern to all their
employees, and if needed always help them to achieve all the tasks as they feel it’s
their help that would in turn help the employees to give better output.

In Conclusion, I feel that the Human Resources Planning of Union Assurance is


very good, and they are not having any weak points at this current moment, as even
their Recruitment and Selection strategies are all very good, and even their
Performance Appraisal methods are all of international standard. Currently Union
Assurance is doing very well against all the rising competition and I feel if they
improve further, they would be an unbeatable organization, and all the competitors
would really struggle to have chance to beat the achievements of Union Assurance.

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BIBLIOGRAPHY

Bohlander and Snell, Managing Human Resources, 13th Edition, Chapter 4 pp 120 – 145
Ibid Chapter 5 pp 150 – 167
Ibid Chapter 8 pp 200 – 225

Lecture Notes, Managing of People in Organizations, Chapter 4 pp 1 – 6


Ibid pp 20 – 25
Ibid pp 30 – 34

The Internet
http://www.tech.clayton.edu/forrest/Powerpoint/ch04_files/frame.htm
http://www.tech.clayton.edu/forrest/Powerpoint/ch05_files/frame.htm
http://www.tech.clayton.edu/forrest/Powerpoint/ch08_files/frame.htm
http://www1.ualink.lk/

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